[Federal Register Volume 63, Number 174 (Wednesday, September 9, 1998)]
[Notices]
[Pages 48188-48191]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-24172]


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

DEPARTMENT OF COMMERCE

International Trade Administration
[C-423-806]


Cut-to-Length Carbon Steel Plate From Belgium Preliminary Results 
of Countervailing Duty Review

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

ACTION: Notice of preliminary results of countervailing duty 
administrative review.

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

SUMMARY: The Department of Commerce is conducting an administrative 
review of the countervailing duty order on certain steel products from 
Belgium for the period January 1, 1996 through December 31, 1996. We 
preliminarily determine the net subsidy to be de minimis. For 
information on the net subsidy for non-reviewed companies, please see 
the Preliminary Results of Review section of this notice. If the final 
results remain the same as these preliminary results of administrative 
review, we will instruct the U.S. Customs Service to assess 
countervailing duties as detailed in the Preliminary Results of Review 
section of this notice. Interested parties are invited to comment on 
these preliminary results.

EFFECTIVE DATE: September 9, 1998.

FOR FURTHER INFORMATION CONTACT: Lorenza Olivas or Gayle Longest, 
Office CVD/AD Enforcement VI, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202) 
482-2786.

SUPPLEMENTARY INFORMATION:

Background

    On August 7, 1993, the Department published in the Federal Register 
(58 FR 42749) the countervailing duty order on certain steel products 
from Belgium. On August 4, 1997, the Department published a notice of 
``Opportunity to Request Administrative Review'' (62 FR 41925) of this 
countervailing duty order. We received a timely request for review and 
we initiated the review, 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), this review covers only those 
producers or exporters of the subject merchandise for which a review 
was specifically requested. Accordingly, this review covers Fabrique de 
Fer de Charleroi, S.A. (Fabfer). This review covers 28 programs.
    On April 13, 1998, we extended the period for completion of the 
preliminary results pursuant to section 751(a)(3) of the Tariff Act of 
1930, as amended. See Cut-to-Length Carbon Steel Plate From Belgium; 
Extension of Time Limit for Countervailing Duty Administrative Review 
(63 FR 17990). The deadline for the final results of this review is no 
later than 120 days from the date on which these preliminary results 
are published in the Federal Register.
    On August 13, 1998, Fabfer submitted a claim that the research and 
development loan provided under the Economic Expansion Law of 1970 
constitutes a non-actionable green-light subsidy and therefore is not 
countervailable. The Government of Belgium (GOB) provided no support 
for this claim, and information in the record is not sufficient to 
determine whether the program under which the loan is provided 
satisfies the criteria in section 771(5B)(i) of the Act. Given the 
timing of Faber's claim and the deficiency of required information, we 
are denying Fabfer's request for green-light status in this review.

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. All citations to the 
Department's regulations reference 19 CFR Part 351 et. seq., 
Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296 (May 
19, 1997), unless otherwise indicated.

[[Page 48189]]

Scope of the Review

    The products covered by this review are certain cut-to-length 
carbon steel plate. These products include hot-rolled carbon steel 
universal mill plates (i.e., flat-rolled products rolled on four faces 
or in a closed box pass, of a width exceeding 150 millimeters but not 
exceeding 1,250 millimeters and of a thickness of not less than 4 
millimeters, not in coils and without patterns in relief), of 
rectangular shape, neither clad, plated nor coated with metal, whether 
or not painted, varnished, or coated with plastics or other nonmetallic 
substances; and certain hot-rolled carbon steel flat-rolled products in 
straight lengths, of rectangular shape, hot rolled, neither clad, 
plated, nor coated with metal, whether or not painted, varnished, or 
coated with plastics or other nonmetallic substances, 4.75 millimeters 
or more in thickness and of a width which exceeds 150 millimeters and 
measures at least twice the thickness, as currently classifiable in the 
Harmonized Tariff Schedule (HTS) under subheadings 7208.31.0000, 
7208.32.0000, 7208.33.1000, 7208.33.5000, 7208.41.0000, 7208.42.0000, 
7208.43.0000, 7208.90.0000, 7210.70.3000, 7210.90.9000, 7211.11.0000, 
7211.12.0000, 7211.21.0000, 7211.22.0045, 7211.90.0000, 7212.40.1000, 
7212.40.5000, and 7212.50.0000. Included in this review are flat-rolled 
products of non-rectangular cross-section where such cross-section is 
achieved subsequent to the rolling process (i.e., products which have 
been ``worked after rolling'')--for example, products which have been 
beveled or rounded at the edges. Excluded from these investigations is 
grade X-70 plate. The HTS subheadings are provided for convenience and 
U.S. Customs Service (Customs) purposes. The written description of the 
scope remains dispositive.

Allocation Methodology

    In British Steel plc. v. United States, 879 F.Supp. 1254 (February 
9, 1995) (British Steel), the U.S. Court of International Trade (the 
Court) ruled against the allocation period methodology for non-
recurring subsidies that the Department had employed for the past 
decade, a methodology that was articulated in the General Issues 
Appendix (58 FR 37227) appended to Final Affirmative Countervailing 
Duty Determination: Certain Steel Products from Austria; 58 FR 37217 
(July 9, 1993) (GIA). In accordance with the Court's decision on 
remand, the Department determined that the most reasonable method of 
deriving the allocation period for nonrecurring subsidies is a company-
specific average useful life (AUL) of non-renewable physical assets. 
This remand determination was affirmed by the Court on June 4, 1996. 
British Steel, 929 F.Supp 426,439 (CIT 1996). Accordingly, the 
Department has applied this methodology to those non-recurring 
subsidies that have not yet been countervailed.
    Fabfer submitted an AUL calculation based on depreciation and asset 
values of productive assets reported in its financial statements. 
Fabfer's AUL was derived by adding depreciation charges for ten years, 
and dividing these charges by the sum of average gross book value of 
depreciable fixed assets for the related periods. We found this 
calculation to be reasonable and consistent with our company-specific 
AUL objective. Fabfer's calculation resulted in an average useful life 
of 26 years. For non-recurring subsidies received prior to the POR and 
which have already been countervailed based on an allocation period 
established in an earlier segment of the proceeding, it is not 
reasonable or practicable to reallocate those subsidies over a 
different period of time. Since the countervailing duty rate in earlier 
segments of the proceeding was calculated based on a certain allocation 
period and resulting benefit stream, redefining the allocation period 
in later segments of the proceeding would entail taking the original 
grant amount and creating an entirely new benefit stream for that 
grant. Such a practice may lead to an increase or decrease in the total 
amount countervailed and, thus, would result in the possibility of 
over-countervailing or under-countervailing the actual benefit. 
Therefore, for purposes of these preliminary results, the Department is 
using the original allocation period assigned to each nonrecurring 
subsidy received prior to the POR, which has already been 
countervailed. See Certain Carbon Steel Products from Sweden; Final 
Results of Countervailing Duty Administrative Review, 62 FR 16549 
(April 7, 1997) (Carbon Steel Products from Sweden).

Analysis of Programs

I. Programs Conferring Subsidies

A. Programs Previously Determined To Confer Subsidies Cash Grants and 
Interest Subsidies Under the Economic Expansion Law of 1970
    The Economic Expansion Law of December 30, 1970 (1970 Law), offers 
incentives to promote the establishment of new enterprises or the 
expansion of existing ones which contribute directly to the creation of 
new activities and new employment within designated development zones. 
Although funding for programs under the 1970 Law is provided by the 
GOB, the provisions of the 1970 Law are implemented and administered by 
regional authorities. In the Final Affirmative Countervailing Duty 
Determinations: Certain Steel Products From Belgium (Final 
Determination) 58 FR 37273 (July 9, 1993), the Department found this 
program countervailable because it provided benefits to enterprises or 
industries or groups of enterprises or industries located in certain 
regions. In this proceeding, we have received no new information or 
evidence of changed circumstances to warrant reconsideration of this 
finding.
    Fabfer received grants between 1977 and 1985 under this program; 
none were provided since the investigation. To calculate the benefit in 
this review, we followed the methodology used in the Final 
Determination. In that proceeding, the Department determined that, 
absent the 1970 Law, most of the benefits provided under this law would 
have been available under the 1959 Economic Expansion Law (the 1959 
Law). The 1959 Law was found to be non-specific and, thus, not 
countervailable, in Final Affirmative Countervailing Duty 
Determinations: Certain Carbon Steel Products from Belgium; 47 FR 
39304, (September 7, 1982). Therefore, the Department countervailed 
benefits provided under the 1970 Law only to the extent that they 
exceeded the benefits available under the 1959 Law.
    To calculate the subsidy rate for this review, we employed the 
standard grant methodology outlined in the allocation section of the 
GIA and allocated the benefit from each grant over fifteen years, the 
average useful life of the renewable physical assets in the steel 
industry as determined under the U.S. Internal Revenue Service's Asset 
Depreciation Range System. As the discount rate, we used the long-term 
fixed rates of the Kredietbank for each year in which grants were 
provided. We summed the benefit amounts attributable to the POR and 
divided the result by Fabfer's total sales during the POR. On this 
basis, we calculated a subsidy rate of 0.28 percent ad valorem. 
B. Other Programs Preliminarily Determined To Confer Subsidies Research 
and Development Loan Provided Under the 1970 Economic Expansion Law
    Under Article 25 of the 1970 Economic Expansion Law and the October 
20, 1988 Decree of the

[[Page 48190]]

Executive of the Walloon Region, assistance is provided to promote 
research activities or the development of prototypes, new products or 
new production in the Walloon Region. Based on the questionnaire 
response, it appears that this program is funded by the GOB and 
administered by the Walloon regional authority. This understanding of 
the authority and funding of the 1970 Law relates only to the benefits 
examined in this review and is based upon record evidence of this case. 
We will seek more clarification on the administration and funding of 
these benefits prior to the final results of review. The program 
provides interest-free loans for up to 50 percent of the cost of the 
project for large enterprises and up to 80 percent for small and medium 
sized firms.
    We examined the 1970 Economic Expansion Law with respect to cash 
grants and interest subsidies in the Final Determination and found that 
it was regionally specific because it provides incentives to promote 
economic development in designated development zones (see Final 
Determination at 37275). In the verification report (Memorandum to 
Susan Kuhbach, ``Verification Report of the Government of Belgium, 
public version on file in the Centra Records Unit (Room B-099 of the 
Main Commerce Building) dated April 1, 1993 at 6, we identify research 
and development as one of the types of ``incentives'' provided under 
this law. We also confirm in the verification report that Fabfer is 
located in a development zone. We examined the documentation provided 
in this review and we did not find any indication of changed 
circumstances which would warrant reconsideration of this finding. 
Therefore, we preliminarily determine that this program is regionally 
specific and therefore countervailable.
    Under this program, Fabfer received an interest-free loan approved 
in 1989 and disbursed in four installments between 1990 and 1992, which 
was outstanding in the POR. To calculate the benefit on this loan we 
used our long-term loan methodology and measured the cost savings in 
each year the loan was outstanding using the long-term fixed rate of 
the Kredietbank as the benchmark. We then took the present value of 
each of these amounts as of the time the loan was disbursed and we 
reallocated the present value of the yearly benefits over the life of 
the loan, using our standard grant methodology and the 1989 long-term 
fixed rate of the Kredietbank as the discount rate. We then divided the 
amount allocated to the POR by Fabfer's total sales during the POR. On 
this basis, we determine the net subsidy for this program to be 0.15 
percent ad valorem. 

II. Programs Preliminarily Determined Not To Confer Subsidies

1. Societe Nationale de Credite a l'Industrie (SNCI) Loans
    The SNCI is a public credit institution which, through medium-and 
long-term financing, encourages the development and growth of 
industrial and commercial enterprises in Belgium, including the 
national industries. SNCI is organized as a limited liability company 
and is 50-percent owned by the Belgian government. In 1979, SNCI's 
board of directors agreed to provide the GOB with the funds needed to 
assist the steel industry under the 1978 restructuring plan (the Claes 
Plan) and to grant loans to steel companies within the framework of the 
plan and under the economic expansion laws of 1959 and 1970. In the 
Final Determination, the Department determined that the SNCI loan 
program was countervailable because it was limited to a specific 
enterprise or industry, or group of enterprises or industries. In this 
review, no new information or evidence of changed circumstances has 
been submitted to warrant reconsideration of this finding.
    Fabfer had two variable-interest long-term loans outstanding during 
the POR: one received in 1982, the other in 1983. The interest rates 
for the 1982 loan were renegotiated in 1987, 1992 and 1995. The 
interest rate for the 1983 loan was renegotiated in 1988. Consistent 
with Carbon Steel Products from Sweden, we calculated the benefit by 
comparing the amount of interest which was paid during the review 
period to the amount of interest which would have been paid at the 
benchmark rate. As in the Final Determination at 37291, we used as a 
benchmark the long-term fixed rates of the Kredietbank as of the last 
renegotiation date of the loan. (See Final Determination at page 
37291.) Because the benchmark rate was lower that the program rate, we 
preliminarily determine the benefit from this program to be zero.
2. Exhibition Stands
    Fabfer reported to have received grants from the GOW to pay for 
exhibition stands for participation in fairs hosted in foreign 
countries to promote the company's own products. The grants were 
received prior to the POR and did not exceed 0.5 percent of Fabfer's 
total exports in the year they were received. Therefore, in accordance 
with our practice, the entire amount was expensed in the year of 
receipt. On that basis, we preliminary determine the benefit from this 
program during the POR is zero.
3. Promotion Brochure
    Fabfer reported to have received a fixed-rate long-term loan during 
the POR from GOW for the publication of advertising brochures for 
international markets. We compared the interest rate paid on this loan 
to the benchmark rate, the Kredietbank fixed-rate long-term rate 
provided in the response. Because the loan interest rate was higher 
than the benchmark rate in year the loan was approved, we preliminarily 
determine that the benefit from this program during the POR is zero.

III. Programs Preliminarily Determined To Be Not Used

    We examined the following programs and preliminarily determine that 
the producers and/or exporters of the subject merchandise did not apply 
for or receive benefits under these programs during the period of 
review.

1. Resider Program

    Petitioners alleged that Fabfer received aid from the European 
Regional Development Fund under the Resider program to promote 
reconversion in regions which have undergone substantial employment 
losses in the steel industry. Based on the information on the record, 
we preliminarily determine that Fabfer did not receive benefits from 
this program during the POR.

2. European Commission-approved Grants
3. Early Retirement
4. The ``Invests''
5. SNSN
6. FSNW
7. Belgian Industrial Finance Company (Belfin) Loans
8. Government-Guaranteed Loans issued pursuant to the Economic 
Expansion Laws of 1959 and 1970
9. Programs under the 1970 Law
    a. Exemption of the Corporate Income Tax for Grants
    b. Accelerated Depreciation Under Article 15
    c. Exemption from Real Estate Taxes
    d. Exemption from the Capital Registration
10. ECSC Article 54 Loans and Loan Guarantees
11. ECSC Redeployment Aid
12. European Social Funds Grants
13. Interest Rate Subsidies Provided by Copromex
14. Employment Premiums
15. Short-term Export Credit
16. New Community Instrument Loans

[[Page 48191]]

17. European Regional Development Fund Aid
18. ECSC Interest Rebates under Article 54
19. ECSC Conversion Loans under Article 56
20. ECSC Interest Rebates under Article 56

Preliminary Results of Review

    In accordance with 19 CFR 351.221(b)(4)(i), we calculated an 
individual subsidy rate for each producer/exporter subject to this 
administrative review. For the period January 1, 1996 through December 
31, 1996, we preliminarily determine the net subsidy for Fabfer to be 
0.43 through December 31, 1996, we prelinarily determine the net 
subsidy for Fabfer to be 0.37 percent ad valorem. As provided for in 
the Act, any rate less than 0.5 percent ad valorem in an administrative 
review is de minimis. Accordingly, pursuant to 19 CFR 351.106(c)(2), if 
the final results of this review remain the same as these preliminary 
results, the Department intends to instruct Customs to liquidate, 
without regard to countervailing duties, shipments of the subject 
merchandise from Fabfer exported on or after January 1, 1996 and on or 
before December 31, 1996. Also, the cash deposits required for Fabfer 
will be zero.
    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 review 
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 this 
review will be unchanged by the results of this review.
    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. Accordingly, the cash deposit 
rates that will be applied to non-reviewed companies covered by this 
order will be the rate established for these companies in the most 
recently completed administrative proceeding conducted under the URAA. 
If such a review has not been conducted, the rate established in the 
most recently completed administrative proceeding pursuant to the 
statutory provisions that were in effect prior to the URAA amendments 
is applicable. See Final Determination. 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 this order are the cash deposit rates in effect at 
the time of entry.

Public Comment

    Pursuant to 19 CFR 351.224(b), the Department will disclose to 
parties to the proceeding any calculations performed in connection with 
these preliminary results within five days after the date of 
publication of this notice. Pursuant to 19 CFR 351.309, interested 
parties may submit written comments in response to these preliminary 
results. Case briefs must be submitted within 30 days after the date of 
publication of this notice, and rebuttal briefs, limited to arguments 
raised in case briefs, must be submitted no later than five days after 
the time limit for filing case briefs. Parties who submit argument in 
this proceeding are requested to submit with the argument: (1) A 
statement of the issues, and (2) a brief summary of the argument. Case 
and rebuttal briefs must be served on interested parties in accordance 
with 19 CFR 351.303(f). Also, pursuant to 19 CFR 351.310, within 30 
days of the date of publication of this notice, interested parties may 
request a public hearing on arguments to be raised in the case and 
rebuttal briefs. Unless the Secretary specifies otherwise, the hearing, 
if requested, will be held two days after the date for submission of 
rebuttal briefs, that is, thirty-seven days after the date of 
publication of these preliminary results.
    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 this administrative 
review, including the results of its analysis of issues raised in any 
case or rebuttal brief or at a hearing.
    This administrative review and notice are issued and published in 
accordance with section 751(a)(1) and 777(i)(1) of the Act (19 U.S.C. 
1675(a)(1) and 19 U.S.C. 1677f(i).

    Dated: August 31, 1998.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 98-24172 Filed 9-8-98; 8:45 am]
BILLING CODE 3510-DS-P