[Federal Register Volume 64, Number 50 (Tuesday, March 16, 1999)]
[Notices]
[Pages 12996-13002]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-6295]


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DEPARTMENT OF COMMERCE

International Trade Administration
[C-427-817, C-533-818, C-560-806, C-475-827, C-580-837]


Notice of Initiation of Countervailing Duty Investigations: 
Certain Cut-To-Length Carbon-Quality Steel Plate From France, India, 
Indonesia, Italy, and the Republic of Korea

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

EFFECTIVE DATE: March 16, 1999.

FOR FURTHER INFORMATION CONTACT: Eric Greynolds (France), at (202) 482-
6071; Robert Copyak (India), at (202) 482-2209; Kathleen Lockard 
(Indonesia), at (202) 482-1168; Kristen Johnson (Italy), at (202) 482-
4406; and Stephanie Moore (Republic of Korea), at (202) 482-3692, 
Import Administration, U.S. Department of Commerce, Room 1870, 14th 
Street and Constitution Avenue, NW, Washington, DC 20230.

Initiation of Investigations

The Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (the Act) by the 
Uruguay Round Agreements Act (URAA). In addition, unless otherwise 
indicated, all citations to the Department's regulations are to the 
regulations codified at 19 CFR part 351 (1998) and to the substantive 
countervailing duty regulations published in the Federal Register on 
November 25, 1998 (63 FR 65348).

The Petitions

    On February 16, 1999, the Department of Commerce (the Department) 
received petitions filed in proper form on behalf of U.S. Steel Group, 
a Unit of USX Corporation, Bethlehem Steel Corporation, Gulf States, 
Inc., IPSCO Steel Inc., Tuscaloosa Steel Corporation, and the United 
Steelworkers of America (the petitioners). Tuscaloosa Steel Corporation 
is not a petitioner to the countervailing duty investigations involving 
France and Italy. Supplements to the petitions were filed

[[Page 12997]]

on February 22, 24, 25, 26, March 2, and 4, 1999.
    In accordance with section 702(b)(1) of the Act, petitioners allege 
that manufacturers, producers, or exporters of certain cut-to-length 
carbon-quality steel plate (CTL plate or subject merchandise) in 
France, India, Indonesia, Italy, and Republic of Korea (Korea) receive 
countervailable subsidies within the meaning of section 701 of the Act.
    The Department finds that petitioners filed the petitions on behalf 
of the domestic industry because they are interested parties as defined 
under sections 771(9)(C) and (D) of the Act. The petitioners have 
demonstrated sufficient industry support with respect to each of the 
countervailing duty investigations, which they are requesting the 
Department to initiate (see Determination of Industry Support for the 
Petitions below).

Scope of the Investigations

    The products covered by this scope are certain hot-rolled carbon-
quality steel: (1) Universal mill plates (i.e., flat-rolled products 
rolled on four faces or in a closed box pass, of a width exceeding 150 
mm but not exceeding 1250 mm, and of a nominal or actual thickness of 
not less than 4 mm, which are cut-to-length (not in coils) and without 
patterns in relief), of iron or non-alloy-quality steel; and (2) flat-
rolled products, hot-rolled, of a nominal or actual thickness of 4.75 
mm or more and of a width which exceeds 150 mm and measures at least 
twice the thickness, and which are cut-to-length (not in coils).
    Steel products to be included in this scope are of rectangular, 
square, circular or other shape and of rectangular or non-rectangular 
cross-section where such non-rectangular 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. Steel products that meet the noted 
physical characteristics that are painted, varnished or coated with 
plastic or other non-metallic substances are included within this 
scope. Also, specifically included in this scope are high strength, low 
alloy (HSLA) steels. HSLA steels are recognized as steels with micro-
alloying levels of elements such as chromium, copper, niobium, 
titanium, vanadium, and molybdenum.
    Steel products to be included in this scope, regardless of 
Harmonized Tariff Schedule of the United States (HTSUS) definitions, 
are products in which: (1) Iron predominates, by weight, over each of 
the other contained elements, (2) the carbon content is two percent or 
less, by weight, and (3) none of the elements listed below is equal to 
or exceeds the quantity, by weight, respectively indicated:

1.80 percent of manganese, or
1.50 percent of silicon, or
1.00 percent of copper, or
0.50 percent of aluminum, or
1.25 percent of chromium, or
0.30 percent of cobalt, or
0.40 percent of lead, or
1.25 percent of nickel, or
0.30 percent of tungsten, or
0.10 percent of molybdenum, or
0.10 percent of niobium, or
0.41 percent of titanium, or
0.15 percent of vanadium, or
0.15 percent zirconium.

    All products that meet the written physical description, and in 
which the chemistry quantities do not equal or exceed any one of the 
levels listed above, are within the scope of these investigations 
unless otherwise specifically excluded. The following products are 
specifically excluded from these investigations: (1) Products clad, 
plated, or coated with metal, whether or not painted, varnished or 
coated with plastic or other non-metallic substances; (2) SAE grades 
(formerly AISI grades) of series 2300 and above; (3) products made to 
ASTM A710 and A736 or their proprietary equivalents; (4) abrasion-
resistant steels (i.e., USS AR 400, USS AR 500); (5) products made to 
ASTM A202, A225, A514 grade S, A517 grade S, or their proprietary 
equivalents; (6) ball bearing steels; (7) tool steels; and (8) silicon 
manganese steel or silicon electric steel.
    The merchandise subject to these investigations is classified in 
the HTSUS under subheadings: 7208.40.3030, 7208.40.3060, 7208.51.0030, 
7208.51.0045, 7208.51.0060, 7208.52.0000, 7208.53.0000, 7208.90.0000, 
7210.70.3000, 7210.90.9000, 7211.13.0000, 7211.14.0030, 7211.14.0045, 
7211.90.0000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 7225.40.3050, 
7225.40.7000, 7225.50.6000, 7225.99.0090, 7226.91.5000, 7226.91.7000, 
7226.91.8000, 7226.99.0000.
    Although the HTSUS subheadings are provided for convenience and 
Customs purposes, the written description of the merchandise under 
investigation is dispositive.
    During our review of the petitions, we discussed the scope with the 
petitioners to ensure that the scope in the petitions accurately 
reflects the merchandise for which the domestic industry is seeking 
relief. Moreover, as we discussed in the preamble to the Department's 
regulations (62 FR at 27323), we are setting aside a period for parties 
to raise issues regarding product coverage. In particular, we seek 
comments on the specific levels of alloying elements set out in the 
description above, the clarity of grades and specifications excluded 
from the scope, and the physical and chemical description of the 
product coverage. The Department encourages all parties to submit such 
comments by March 29, 1999. Comments should be addressed to Import 
Administration's Central Records Unit at Room 1870, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW., Washington, DC. 
20230. The period of scope consultations is intended to provide the 
Department with ample opportunity to consider all comments and consult 
with parties prior to the issuance of the preliminary determinations.

Consultations

    Pursuant to section 702(b)(4)(A)(ii) of the Act, the Department 
invited representatives of the relevant foreign governments for 
consultations with respect to the petitions filed. On February 26, 
1999, the Department held consultations with representatives of the 
governments of France, Italy, and the Delegation of the European 
Commission (EC). On March 2, 1999, consultations were held with 
representatives of the government of India. On March 8, 1999, 
consultations were held with representatives of the government of 
Indonesia. See the March 8, 1999, memoranda to the file regarding these 
consultations (public documents on file in the Central Records Unit of 
the Department of Commerce, Room B-099).

Determination of Industry Support for the Petitions

    Section 702(b)(1) of the Act requires that a petition be filed on 
behalf of the domestic industry. Section 702(c)(4)(A) of the Act 
provides that a petition meets this requirement if the domestic 
producers or workers who support the petition account for: (1) At least 
25 percent of the total production of the domestic like product; and 
(2) more than 50 percent of the production of the domestic like product 
produced by that portion of the industry expressing support for, or 
opposition to, the petition.
    Section 771(4)(A) of the Act defines the ``industry'' as the 
producers of a domestic like product. Thus, to determine whether the 
petition has the

[[Page 12998]]

requisite industry support, the statute directs the Department to look 
to producers and workers who produce the domestic like product. The 
International Trade Commission (ITC), which is responsible for 
determining whether ``the domestic industry'' has been injured, must 
also determine what constitutes a domestic like product in order to 
define the industry. While both the Department and the ITC must apply 
the same statutory definition regarding the domestic like product 
(section 771(10) of the Act), they do so for different purposes and 
pursuant to separate and distinct authority. In addition, the 
Department's determination is subject to limitations of time and 
information. Although this may result in different definitions of the 
like product, such differences do not render the decision of either 
agency contrary to the law.1
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    \1\ See Algoma Steel Corp., Ltd. v. United States, 688 F. Supp. 
639, 642-44 (CIT 1988); High Information Content Flat Panel Displays 
and Display Glass Therefor from Japan: Final Determination; 
Rescission of Investigation and Partial Dismissal of Petition, 56 FR 
32376, 32380-81 (July 16, 1991).
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    Section 771(10) of the Act defines domestic like product as ``a 
product that is like, or in the absence of like, most similar in 
characteristics and uses with, the article subject to an investigation 
under this title.'' Thus, the reference point from which the domestic 
like product analysis begins is ``the article subject to an 
investigation,'' i.e., the class or kind of merchandise to be 
investigated, which normally will be the scope as defined in the 
petition. Moreover, the petitioners do not offer a definition of 
domestic like product distinct from the scope of the investigations.
    In this case, ``the article subject to investigation'' includes 
certain products which have not previously been included within the 
scope of investigations involving cut-to-length carbon steel products. 
To this end, the Department has reviewed reasonably available 
information to determine whether the products within the scope of the 
investigations constitute one or more than one domestic like 
product(s).
    Some steel products classified as alloy steels based on the HTSUS 
are recognized as carbon steels by the industry and/or the marketplace. 
For example, The Book of Steel, a 1996 publication by Sollac, a flat-
rolled steel division of Usinor, one of the largest steel companies in 
the world, identifies HSLA as falling within categories of plain carbon 
sheet steels (see chapter 44). Also, Carbon and Alloy Steels, published 
in 1996 by ASM International, a major materials society, indicates that 
HSLA steels are not considered to be alloy steels, but are in fact 
similar to as-rolled mild-carbon steel and are generally priced by 
reference to the base price for carbon steels (see page 29). Carbon and 
Alloy Steels also distinguishes between carbon-boron and alloy-boron 
steels; the former may contain boron at levels which would classify it 
as alloy under the HTSUS, but would not classify it as an alloy steel 
commercially because, unlike the alloy-boron steels, higher levels of 
other alloying elements are not specified (see, e.g., pages 159 and 
161).
    The Department has considered that, with respect to certain steel 
products, such as HSLA, the petitioners indicate that these steel 
products are manufactured by similar processes, are priced from similar 
bases, are marketed in comparable ways, and are used for similar 
applications as carbon steels.
    Further, we confirmed this description with product experts at the 
Department and the ITC. Other than the fact that the AISI technically 
defines alloy steels based on alloy levels comparable to those in the 
HTSUS, none of the individuals cited reasons why the products in 
question might be treated as distinct from cut-to-length carbon steels. 
For these reasons, the Department determines that for purposes of these 
investigations, the domestic like product definition is the single 
domestic like product defined in the ``Scope of the Investigations'' 
section above.
    Based on our analysis of the information and arguments presented to 
the Department and the information independently obtained and reviewed 
by the Department, we have determined that there is a single domestic 
like product which is defined in the ``Scope of Investigations'' 
section above. Moreover, the Department has determined that the 
petitions (and subsequent amendments to the petitions) and supplemental 
information obtained through Department research contain adequate 
evidence of industry support and, therefore, polling is unnecessary. 
The Department received no opposition to the petitions. For all 
countries, the petitioners established industry support representing 
over 50 percent of total production of the domestic like product.
    Therefore, for these investigations, petitioners have established a 
level of support for the petitions commensurate with the statutory 
requirements. Accordingly, the Department determines that the petitions 
were filed on behalf of the domestic industry within the meaning of 
section 702(b)(1) of the Act. See the March 8, 1999, memoranda to the 
file (for each country) regarding the initiation of each investigation 
(public documents on file in the Central Records Unit of the Department 
of Commerce, Room B-099).

Injury Test

    Because France, India, Indonesia, Italy, and Korea are ``Subsidies 
Agreement Countries'' within the meaning of section 701(b) of the Act, 
section 701(a)(2) applies to these investigations. Accordingly, the ITC 
must determine whether imports of the subject merchandise from these 
countries materially injure, or threaten material injury to, a U.S. 
industry.

Allegations and Evidence of Material Injury and Causation

    The petitions allege that the U.S. industry producing the domestic 
like product is being materially injured, and is threatened with 
material injury, by reason of the individual and cumulated subsidized 
imports of the subject merchandise. Petitioners explained that the 
industry's injured condition is evident in the declining trends in net 
operating profits, net sales volumes, profit-to-sales ratios, and 
capacity utilization. The allegations of injury and causation are 
supported by relevant evidence including business proprietary data from 
the petitioning firms and U.S. Customs import data. The Department 
assessed the allegations and supporting evidence regarding material 
injury and causation, and determined that these allegations are 
supported by accurate and adequate evidence and meet the statutory 
requirements for initiation. See the March 8, 1999, memoranda to the 
file (for each country) regarding the initiation of each investigation 
(public documents on file in the Central Records Unit of the Department 
of Commerce, Room B-099).

Allegations of Subsidies

    Section 702(b) of the Act requires the Department to initiate a 
countervailing duty proceeding whenever an interested party files a 
petition, on behalf of an industry, that (1) alleges the elements 
necessary for an imposition of a duty under section 701(a), and (2) is 
accompanied by information reasonably available to petitioners 
supporting the allegations.

Initiation of Countervailing Duty Investigations

    The Department has examined the petitions on CTL plate from France, 
India, Indonesia, Italy, and Korea and found that they comply with the

[[Page 12999]]

requirements of section 702(b) of the Act. Therefore, in accordance 
with section 702(b) of the Act, we are initiating countervailing duty 
investigations to determine whether manufacturers, producers, or 
exporters of CTL plate from these countries receive subsidies. See the 
March 8, 1999, memoranda to the file (for each country) regarding the 
initiation of each investigation (public documents on file in the 
Central Records Unit of the Department of Commerce, Room B-099).

A. France

    We are including in our investigation the following programs 
alleged in the petition to have provided countervailable subsidies to 
producers and exporters of the subject merchandise in France:

Government of France Programs

1. 1986 Write-off of Steel Amortization Fund Debts (PACs)
2. 1986 Write-off of Steel Intervention Fund (FIS) Bonds
3. 1988 Write-off of Steel Intervention Fund (FIS) Bonds
4. 1986 Write-off of Shareholder's Advances
5. 1994 Purchase of Power Plant for Excessive Remuneration
6. Investment Operating Subsidies
7. Soft Loans from Credit Lyonnais
8. Grants for Funding of Myosotis Project
9. Advances for Electric Arc Furnace Technology
10. Caisse Francaise de Developpement Industriel (CFDI) Loans
11. Shareholder Guarantees
12. Subsidies Provided Directly to GTS Industries

European Commission Programs

1. ECSC Loans under Article 54
2. ECSC Article 56 Funding
3. European Regional Development Fund
4. Resider and Resider II
5. European Social Fund
    Petitioners allege that Usinor was uncreditworthy in each year 1980 
through 1995. In the Final Affirmative Countervailing Duty 
Determination: Certain Steel Products from France, 58 FR 37304 (July 9, 
1993) (Certain Steel 1993), Usinor was found uncreditworthy in years 
1982 through 1988, and creditworthy 1989 through 1991. Petitioners 
provided sufficient information to believe or suspect that Usinor was 
uncreditworthy in years 1992 through 1995. Thus for the years 1982 
through 1988, and 1992 through 1995, we will investigate whether Usinor 
was uncreditworthy in the years in which petitioners have alleged non-
recurring countervailable subsidies.
    We are not including in our investigation the following programs 
alleged to be benefitting producers and exporters of the subject 
merchandise in France:
1. 1991 Infusion Via Credit Lyonnais
    In 1991, the state-owned Credit Lyonnais (CL) purchased a 20 
percent share of Usinor for FF 2.5 billion. In (Certain Steel 1993) and 
the Final Affirmative Countervailing Duty Determination: Certain Hot 
Rolled Lead and Bismuth Carbon Steel Products from France, 58 FR 6221 
(January 27, 1993) (Lead and Bismuth), the Department determined that 
Usinor was equityworthy and found the investment not countervailable. 
The Department determined not to initiate in the Notice of Initiation 
of Countervailing Duty Investigations: Stainless Steel Sheet and Strip 
in Coils From France, Italy, and the Republic of Korea, 63 FR 37539 
(July 13, 1998) (Stainless Steel). Although petitioners claim to submit 
new information on this program, the information is the same as 
submitted in Stainless Steel. Petitioners also argue that the holding 
in Aimcor Alabama v. United States, 871 F. Supp. 447 (CIT 1994), which 
is incorporated into the new CVD regulations, compels us to initiate on 
this program. Though Stainless Steel preceded the new regulations, 
Aimcor was considered when we declined to initiate. Therefore, we are 
not including this program in our investigation.
2. 1991 PACs Write-Off
    In 1991, Usinor converted FF 2.8 billion of PAC liabilities into 
common stock held by the Government of France (GOF). Petitioners allege 
that this constituted a countervailable benefit in the form of debt 
forgiveness. In Certain Steel 1993 and Lead and Bismuth, we determined 
that this transaction was a debt-to-equity swap, and because we found 
Usinor equityworthy in 1991, this program was not countervailable. 
Thus, we declined to initiate in Stainless Steel. Again, petitioners 
contest the 1991 equityworthy finding but, aside from citing press 
reports of the poor financial state of Usinor at the time, they do not 
supply sufficient new information or evidence of changed circumstances 
to warrant reinvestigating this program. Therefore, we are not 
including this program in our investigation.
3. 1995 Capital Infusion
    Petitioners allege that the GOF forewent revenue otherwise due when 
it allowed Usinor to keep FF 5 billion resulting from the issuance of 
additional Usinor shares to private investors prior to its partial 
privatization. Petitioners argue that, at the time of the sale, Usinor 
was 100 percent government-owned and, therefore, all of the revenue 
resulting from the sale should have remained with the GOF. Petitioners 
argue that this sale constituted a financial contribution in the form 
of a direct cash grant or failure to collect revenue otherwise due in 
which the purchase by Stable Shareholders (i.e. the GOF) of shares at 
about the same time played a meaningful, but ancillary, role in the 
private investors' decision to purchase Usinor shares. Petitioners 
further argue that, in the event that the Department does not deem this 
program to be a grant, it can be viewed as an infusion by private 
parties acting at the behest of the GOF at a time when Usinor was 
unequityworthy. In Stainless Steel, we declined to initiate on these 
purchases of Usinor shares by the Stable Shareholders. No new 
information has been provided in this petition to warrant a 
reexamination of our decision not to initiate in Stainless Steel. 
Therefore, we are not including this program in our investigation.
4. GOF Advances for SODIs
    Regional development subsidiaries (SODIs) were established by 
Usinor and Sacilor in 1983, to assist in the retraining of laid-off 
personnel. Petitioners allege that the SODI advances to Usinor from 
1991 through 1994 are countervailable. In Certain Steel 1993, we 
determined that the program was not tied to steel production and that 
it did not relieve Usinor of any obligations that it would otherwise 
incur with respect to the retraining of laid-off personnel and thus, it 
was not countervailable. As new evidence, petitioners cite to the 1997 
European Union (EU) notification to the WTO of the SODI program for 
1995, claiming that it represents the EU's confirmation that SODI 
constitutes a subsidy program under the SCM agreement. However, we note 
that the EU's report to the WTO states that none of the GOF's SODI 
advances went to Usinor. Therefore, we are not including this program 
in our investigation.
5. 1987 through 1990 Write-off of Shareholder's Advances
    Petitioners allege that Usinor received additional shareholder 
advances during the years 1987 through 1990. They further allege that 
these advances were written off in 1991, and thus constitute 
countervailable debt forgiveness. We note that this allegation is the 
same as

[[Page 13000]]

the allegation under the GOF Advances for SODIs program (discussed 
above) and that these two allegations concern the same program; 
petitioners own source documentation indicates that these two programs 
are, in fact, one program. Furthermore, in the Preliminary Affirmative 
Countervailing Duty Determination: Certain Steel Products from France 
and Alignment of Final Countervailing Duty Determination With Final 
Antidumping Duty Determinations: Certain Steel Products from France, 
(57 FR 57785) (December 7, 1992), the Department referred to this 
program as Shareholder Advances After 1986 and classified it as a 
program for which more information was needed. In Certain Steel 1993, 
this program was determined to be not countervailable under the name 
Regional Development Subsidiaries (SODIs). Therefore, we are not 
including this program in our investigation.
6. Credit National Loans
    Petitioners allege that the GOF's Credit National (CN) selectively 
funnels subsidized loans to the steel industry, and that any CN loans 
outstanding during the POI are countervailable. In Certain Steel 1993, 
we found that the loans were not provided on either a de jure or de 
facto specific basis. Petitioners claim that new evidence indicates 
that CN loan terms vary depending on the recipient and thus, we should 
investigate whether Usinor or the French steel industry received 
subsidized loans on a specific basis. The information that petitioners 
have submitted is not sufficient to revisit the Department's previous 
determination on this program because it does not indicate that CN 
offered subsidized loans to the steel industry on a specific basis. 
Therefore, we are not including this program in our investigation.
7. Fonds de Developpement Economique et Social (FDES) Loans
    Petitioners allege that in 1991, Usinor received subsidized loans 
from the GOF under the FDES program. In Certain Steel 1993, the 
Department found that, although the loans were specifically provided to 
the steel industry, after comparing interest actually paid to interest 
that would have been paid at the benchmark interest rate, the 1991 
loans conferred no benefit. Thus, we declined to initiate in Stainless 
Steel. Petitioners provide no new information or evidence of changed 
circumstances indicating that Usinor has obtained any new loans or to 
prompt a reexamination of the loans and benchmark from the previous 
investigation.

B. India

    We are including in our investigation the following programs 
alleged in the petition to have provided countervailable subsidies to 
producers and exporters of the subject merchandise in India:

1. Passbook Scheme
2. Duty Entitlement Passbook Scheme
3. Import Licenses
    a. Advance Licenses
    b. Advanced Intermediate Licenses
    c. Special Imprest Licenses
4. Special Import Licenses
    a. Special Import License for Quality
    b. Special Import License for Star Trading Houses
5. Export Promotion Capital Goods Scheme
6. Pre-shipment and Post-shipment Export Financing
7. Government of India (GOI) Loans through the Steel Development Fund
8. Loan Guarantees from the GOI
9. Tax Exemption for Export Profits

    We are not including in our investigation the following program 
alleged to be benefitting producers and exporters of the subject 
merchandise in India:

Possible Conversion of Steel Development Fund Loans into Equity in the 
Steel Authority of India Limited (SAIL)

    The petition contains a news article dated December 1998, which 
indicates that India's steel ministry favors a proposal by SAIL to 
convert SAIL's Steel Development Fund loans into equity. The petition 
does not contain information as to whether such an agreement has been 
finalized. Absent information that any agreement occurred during the 
period of investigation (1998), this is not an issue for purposes of 
this investigation.

C. Indonesia

    We are including in our investigation the following programs 
alleged in the petition to have provided countervailable subsidies to 
producers and exporters of the subject merchandise in Indonesia:

1. Bank of Indonesia Rediscount Loans
2. Corporate Income Tax Holidays
3. Reduction in Electricity Tariffs
4. 1995 Equity Infusion into Krakatau

    We are also investigating whether Krakatau was uncreditworthy in 
1995, the year in which the company received the alleged equity 
infusion.

D. Italy

    We are including in our investigation the following programs 
alleged in the petition to have provided countervailable subsidies to 
producers and exporters of the subject merchandise in Italy:

Government of Italy Programs

1. Equity Infusions into Italsider/Nuova Italsider
2. Equity Infusions into ILVA
3. Debt Forgiveness in Connection with the 1981 Restructuring Plan
4. Debt Forgiveness in Connection with the 1988 Restructuring Plan
5. Debt Forgiveness Given in the Course of Privatization in Connection 
with the 1993-1994 Restructuring Plan
6. Additional Debt Forgiveness in Course of Privatization
7. Unpaid Portion of Payment Price for ILP
8. Grants to ILVA
9. Working Capital Grants to ILVA in 1993
10. Grants to ILVA to Cover Closure and Liquidation Expenses as Part of 
the 1993-1994 Privatization Plan
11. Grants to Riva/ILP
12. Interest Grants for ``Indirect Debts'' under Law 750/81
13. Lending from the Ministry of Industry under Law 675/77
14. Loans with Interest Contributions under Law 675/77
15. Capital Grants to Nuova Italsider under Law 675/77
16. Personnel Retraining under Law 675/77
17. VAT Reductions under Law 675/77
18. Closure Payments under Law 481/94 and its Predecessor Law
19. Closure Grants under Laws 46 and 706
20. Early Retirement Benefits
21. Decree Law 120/89

Regional Programs

22. Capital Grants
23. Law 488/92
24. Law 341/95 Tax Concessions
25. Exemptions from Taxes
26. Interest Rate Reductions under Law 902
27. Interest Contributions under the Sabatini Law
28. Urban Redevelopment Packages under Law 181/89
29. Exchange Rate Guarantees under Law 796/76
30. Export Marketing Grants under Law 394/81

European Commission Programs

1. ECSC Loans under Article 54
2. Interest Rebates on ECSC Article 54 Loans
3. ECSC Conversion Loans, Interest Rebates, Restructuring Grants, and 
Traditional and Social Aid under Article 56

[[Page 13001]]

4. ERDF Aid
5. Resider and Resider II
6. European Social Fund

    We are also investigating whether ILVA/ILP and their predecessor 
companies were uncreditworthy in the years 1977 through 1994. In the 
Final Affirmative Countervailing Duty Determinations: Certain Steel 
Products from Italy, 58 FR 37327 (July 9, 1993), (Certain Steel from 
Italy), we found that ILVA and its corporate predecessors were 
uncreditworthy in each year 1977 through 1991. In the Final Affirmative 
Countervailing Duty Determination: Grain-Oriented Electrical Steel From 
Italy, 59 FR 18357 (April 18, 1994), (Electrical Steel), we found that 
ILVA and its corporate predecessors were uncreditworthy in each year 
1978 through 1992. In the Final Affirmative Countervailing Duty 
Determination: Certain Stainless Steel Wire Rod from Italy, 63 FR 
40,474 (July 29, 1998), (Wire Rod), we found that ILVA and its 
corporate predecessors were uncreditworthy in each year 1985 through 
1993. Thus, for the years 1977 through 1994, we will investigate 
whether the companies were uncreditworthy in the years in which 
petitioners have alleged non-recurring countervailable subsidies.
    We are not including in our investigation the following program 
alleged to be benefitting producers and exporters of the subject 
merchandise in Italy:

Social Security Exemptions

    Petitioners allege that employers in the southern Mezzogiorno 
region were entitled to a full or partial exemption from social 
security contributions for workers that represented an addition to the 
company's labor force. Petitioners provide documentation that producers 
of the subject merchandise had their eligibility for the program 
suspended in 1986. Petitioners also point out that social security 
benefits were to be phased out by December 1997. In Certain Steel 
Italy, we treated social security exemptions as non-recurring benefits. 
However, in the Final Affirmative Countervailing Duty Determination: 
Certain Pasta from Italy, 61 FR 30288, 30293 (June 14, 1996) (Pasta), a 
subsequent determination to Certain Steel Italy, we determined that 
social security exemptions are recurring benefits. Because our 
methodology treats these benefits as recurring, along with the fact 
that producers of the subject merchandise had their eligibility for the 
program suspended in 1986, and these benefits were to be phased out 
before the period of investigation (1998) began, no benefit to 
producers of the subject merchandise would have been conferred during 
the period of investigation. Therefore, we are not including this 
program in our investigation.

E. Korea

    We are including in our investigation the following programs 
alleged in the petition to have provided countervailable subsidies to 
producers and exporters of the subject merchandise in Korea:

1. POSCO's Two-Tiered Pricing Structure to Domestic Customers
2. GOK Directed Credit Programs
    a. Pre-1992 Directed Credit
    b. Post-1991 Directed Credit
3. Private Capital Investment Act (PCIA)
4. Kwangyang Bay
    a. GOK Infrastructure Investments at Kwangyang Bay Pre-1992
    b. GOK Infrastructure Investments at Kwangyang Bay Post-1991
5. Tax Programs Under the Tax Reduction and Exemption Control Act 
(TERCL)
    a. Technical Development Reserve Funds (Article 8)
    b. Tax Credit for Technology and Manpower Development Expenses 
(Article 9)
    c. Tax Credit for Investment in Equipment to Develop Technology and 
Manpower/Investment Tax Credit (Article 10)
    d. Tax Credits for Vocational Training (Article 18)
    e. Tax Credit for Investment in Productivity Improvement Facilities 
(Article 25)
    f. Tax Credits for Investment in Specific Facilities (Article 26)
    g. Tax Credits for Temporary Investments (Article 27)
    h. Tax Credits for Specific Investments (Article 71)
    i. Reserve for Export Loss (Article 16)
    j. Reserve for Overseas Market Development (Article 17)
    k. Exemption of Corporation Tax on Dividend Income from Overseas 
Resources Development Investment (Article 24)
    l. Social Indirect Capital Investment Reserve Funds (Article 28)
    m. Energy-Saving Facilities Investment Reserve Funds (Article 29)
    n. Mining Investment Reserve Funds (Article 95)
6. Asset Revaluation Pursuant to TERCL Article 56(2)
7. Special Cases of Tax for Balanced Development among Areas (TERCL 
Articles 41, 42, 43, 44, and 45)
8. Industry Promotion and Research and Development Subsidies
    a. Promotion Fund for Science and Technology
    b. Highly Advanced National Project Fund
    c. Steel Campaign for the 21st Century
9. Overseas Resource Development (Loans and Grants) Programs
10. Free Trade Zones (FTZs) at Pusan and Kwangyang
11. Excessive Duty Drawback
12. Dockyard Fees (Port Facility Fees)
13. Preferential Utility Rates
14. Scrap Reserve Fund
15. Export Insurance Rates By The Korean Export Insurance Corporation
16. Short-Term Export Financing
17. Korean Export-Import Bank Loans
18. Export Industry Facility Loans (EIFL) and Specialty Facility Loans
19. Loans from the Energy Savings Fund

    We are not including in our investigation the following programs 
alleged to be benefitting producers and exporters of the subject 
merchandise in Korea:
1. Infrastructure at Asan Bay and Regional Tax Subsidies for Industries 
Located at Asan Bay
    Petitioners allege that the GOK is providing various infrastructure 
benefits to steel companies that relocate to Asan Bay, and that Dongkuk 
Steel Mill Co., Ltd. (Dongkuk Steel), a producer/exporter of the 
subject merchandise, is reportedly relocating to Asan Bay. In addition, 
petitioners allege that companies located in the Posung Industrial 
Complex located in Asan Bay are eligible for numerous tax subsidies. 
Petitioners cite a July 1998 report which states that Asan Bay ``is now 
emerging as Korea's steel mecca'' attracting companies such as Dongkuk 
Steel. However, press reports submitted in the petition, state that 
Dongkuk Steel shut down its plant in Pusan in December 1998, and plans 
to shift production to its Pohang and Inchon plants. Thus, the 
information provided in the petition does not indicate that Dongkuk 
Steel has moved, built or shifted production facilities to Asan Bay. 
Therefore, we are not initiating an investigation on programs 
specifically related to Asan Bay.
2. Overseas Investment Loss Reserve Funds (Article 23)
    Petitioners note that Article 23 permits a company to include the 
reserve for overseas business losses in the general losses in the 
current taxable year. Petitioners allege that this program is an export 
incentive, as the amount of the allowable loss is limited to a set 
percentage of foreign exchange receipts from overseas business. In the 
Final Affirmative Countervailing Duty

[[Page 13002]]

Determinations and Final Negative Critical Circumstances 
Determinations: Certain Steel Products from Korea, 58 FR 37338 (July 9, 
1993), the Department determined that this program was not 
countervailable. Petitioners have not provided any new information or 
evidence of changed circumstances that warrants reconsideration of that 
final determination. Therefore, we are not initiating an investigation 
on this program.
3. Industry Promotion and Research and Development Subsidies
    a. Environmental Engineering and Technology Development.
    b. Industrial Development Fund.
    Petitioners allege that POSCO and Dongkuk Steel are benefitting 
from industrial promotion funds and research and development subsidies. 
Petitioners' allegations regarding these two programs are based on the 
importance of the steel industry to the Korean economy, rather than on 
information regarding the eligibility criteria or usage of these two 
programs. The information provided in the petition does not indicate 
that the programs are de jure or de facto specific to the steel sector. 
Therefore, we are not initiating an investigation on these programs.
4. Special Depreciation for Energy Saving and Productivity Promotion
    Petitioners state that this program allows Korean exporters to 
claim a special depreciation charge for energy-savings facilities. 
Petitioners state that POSCO's 1994 SEC Prospectus recorded ``special 
depreciation charges'' for energy-saving and productivity promotion 
facilities and equipment. Note (4) of POSCO's 1994 SEC Prospectus 
specifically states that pursuant to a change in Korean GAAP (General 
Accounting Principles), ``special depreciation will no longer be 
allowed for financial reporting purposes, commencing in 1994.'' 
Moreover, petitioners have not provided any evidence indicating POSCO 
took special depreciation after 1993. Therefore, we are not 
investigating this program.
5. Tax Credit for Equipment Investment to Promote Workers' Welfare--
Article 88 (Article 72-2 and 90, prior to 1995)
    Petitioners allege that Korean steel producers are benefitting from 
several tax programs, including Articles 72-2 and 90. In support of 
their allegation, petitioners note that in the 1997 Stainless Steel 
Plate verification report for POSCO dated January 27, 1999, the 
Department reported that POSCO used tax credits under Articles 72-2 and 
90.
    However, the Department has not previously found these articles to 
be countervailable. Furthermore, petitioners did not make any 
allegations regarding the specificity of these articles, nor did they 
provide any supporting information. Therefore, we are not initiating an 
investigation on this program.

Distribution of Copies of the Petitions

    In accordance with section 702(b)(4)(A)(i) of the Act, copies of 
the public version of the petition have been provided to the 
representatives of France, India, Indonesia, Italy, and Korea. We will 
attempt to provide copies of the public version of the petition to all 
the exporters named in the petition, as provided for under 
Sec. 351.203(c)(2) of the Department's regulations.

ITC Notification

    Pursuant to section 702(d) of the Act, we have notified the ITC of 
these initiations.

Preliminary Determination by the ITC

    The ITC will determine by April 2, 1999, whether there is a 
reasonable indication that an industry in the United States is 
materially injured, or is threatened with material injury, by reason of 
imports of certain cut-to-length carbon-quality steel plate from 
France, India, Indonesia, Italy, and Korea. A negative ITC 
determination for any country will result in the investigation being 
terminated with respect to that country; otherwise, the investigations 
will proceed according to statutory and regulatory time limits.
    This notice is published pursuant to section 777(i) of the Act.

    Dated: March 8, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-6295 Filed 3-15-99; 8:45 am]
BILLING CODE 3510-DS-P