[Federal Register Volume 64, Number 88 (Friday, May 7, 1999)]
[Notices]
[Pages 24585-24587]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-11576]


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DEPARTMENT OF COMMERCE

International Trade Administration
[C-122-815]


Pure Magnesium and Alloy Magnesium From Canada: Preliminary 
Results of the Sixth Countervailing Duty Administrative Reviews

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 the period January 1, 1997 through December 
31, 1997. We have preliminarily determined that certain producers/
exporters have received countervailable subsidies during the period of 
review. If the final results remain the same as these preliminary 
results, we will instruct the 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: May 7, 1999.

FOR FURTHER INFORMATION CONTACT: Annika O'Hara or Blanche Ziv, AD/CVD 
Enforcement, Group 1, Office 1, Import Administration, U.S. Department 
of Commerce, Room 3099, 14th Street and Constitution Avenue, N.W., 
Washington, D.C. 20230; telephone: (202) 482-3798 or (202) 482-4207, 
respectively.

SUPPLEMENTARY INFORMATION:

Applicable Statute and Regulations

    The Department of Commerce (the Department) is conducting these 
administrative reviews in accordance with section 751(a) of the Tariff 
Act of 1930, as amended by the Uruguay Round Agreements Act (URAA), 
effective January 1, 1995 (the Act). Unless otherwise indicated, all 
citations to the statute are references to the provisions of the Act. 
In addition, unless otherwise indicated, all citations to the 
Department's regulations are to the regulations codified at 19 CFR Part 
351 (1998).

Background

    On August 31, 1992, the Department published in the Federal 
Register the countervailing duty orders on pure magnesium and alloy 
magnesium from Canada (57 FR 39392). On August 11, 1998, the Department 
published a notice of ``Opportunity to Request Administrative Review'' 
of these orders (63 FR 42821). We received a timely request for review 
from Norsk Hydro Canada Inc. (NHCI) on August 25, 1998, and we 
initiated these reviews, covering the period January 1, 1997, through 
December 31, 1997, on September 29, 1998 (63 FR 51893).
    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. These reviews cover 17 subsidy programs.

[[Page 24586]]

    On October 6, 1998, the Department issued countervailing duty 
questionnaires to NHCI, the Government of Canada (GOC), and the 
Government of Quebec (GOQ). We received questionnaire responses from 
NHCI on November 20, 1998, the GOQ on November 23, 1998, and the GOC on 
November 27, 1998.

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.
    The pure and alloy magnesium subject to review is currently 
classifiable under items 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, the written descriptions of the merchandise subject to the 
orders are dispositive.
    Secondary and granular magnesium are not included in the scope of 
these orders. Our reasons for excluding granular magnesium are 
summarized in Preliminary Determination of Sales at Less Than Fair 
Value: Pure and Alloy Magnesium From Canada, 57 FR 6094 (February 20, 
1992).

Period of Review

    The period of review (POR) for which we are measuring subsidies is 
from January 1, 1997 through December 31, 1997.

Analysis of Programs

I. Programs Preliminarily 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 was exempt from paying its water bills. In accordance with this 
agreement, NHCI did not pay the invoiced amounts of its water bills, 
except for the taxes associated with these bills, until June 1997. By 
June 1997, NHCI had used the entire credit granted by the Industrial 
Park and began paying its water bills in full.
    In Final Affirmative Countervailing Duty Determinations: Pure 
Magnesium and Alloy Magnesium from Canada, 57 FR 30946, 30948 (July 13, 
1992) (Magnesium from Canada), 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 received 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 for water absent the exemption. To 
calculate the benefit under this program, we divided the amount NHCI 
would have paid during the POR by the company's total sales of 
Canadian-manufactured products during the same period. Thus, we 
preliminarily determine the countervailable subsidy provided by this 
program to be 0.18 percent ad valorem.
    The water bill credit program was terminated in June 1997. As of 
June 30, 1997, the credit given for water consumption had been reached 
and NHCI began to make water bill payments. Since NHCI has continued to 
make water bill payments thereafter, we preliminarily determine this 
program terminated with no residual benefits. Moreover, there is no 
evidence on the record which would indicate that residual benefits are 
being provided or received or that a substitute program has been 
implemented. Therefore, we will not examine this program in the future, 
and the cash deposit rate will be zero for this program.
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 at 30949.)
    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, neither the GOQ nor NHCI provided new information which would 
warrant reconsideration of this determination.
    For the reasons set forth in Preliminary Results of First 
Countervailing Duty Administrative Reviews: Pure Magnesium and Alloy 
Magnesium from Canada, 61 FR 11186, 11187 (March 19, 1996), we 
preliminarily determine that the Article 7 assistance received by NHCI 
was a non-recurring grant because it represented a one-time provision 
of funds.
    We calculated the benefit received by NHCI using our standard grant 
methodology. As the discount rate, we used the company's cost of long-
term, fixed-rate debt in the year in which the grant was awarded. We 
divided the portion of the benefit allocated to the POR by NHCI's total 
sales of Canadian-manufactured products during the same period. We 
preliminarily determine the net subsidy provided by this program to be 
1.84 percent ad valorem.

II. Programs Preliminarily Determined To Be Not Used

    We examined the following programs and preliminarily determine that 
NHCI did not apply for or receive benefits under these 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.

[[Page 24587]]

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, 1997, through 
December 31, 1997, we preliminarily determine the net subsidy rate for 
NHCI to be 2.02 percent ad valorem. If the final results of these 
reviews remain the same as these preliminary results, the Department 
intends to instruct the Customs Service to assess countervailing duties 
at the net subsidy rate.
    The Department also intends to instruct the Customs Service to 
collect cash deposits of estimated countervailing duties (exclusive of 
the net subsidy rate calculated for the water program, see section I. 
A. above), at the rate of 1.84 percent of the f.o.b. value of 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), the predecessor to 
19 CFR 351.212(c)). 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 the the Customs Service 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 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, 1997, through 
December 31, 1997, 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

    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 
these proceedings 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 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 reviews and notice are in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: May 3, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-11576 Filed 5-6-99; 8:45 am]
BILLING CODE 3510-DS-P