[Federal Register Volume 64, Number 137 (Monday, July 19, 1999)]
[Notices]
[Pages 38797-38803]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-18227]


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DEPARTMENT OF COMMERCE

International Trade Administration
[C-351-829]


Suspension of Countervailing Duty Investigation: Certain Hot-
Rolled Flat-Rolled Carbon-Quality Steel Products From Brazil

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

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SUMMARY: The Department of Commerce (the Department) has suspended the 
countervailing duty investigation involving certain hot-rolled flat-
rolled carbon-quality steel products from Brazil. The basis for the 
suspension is an agreement between the Department and the Government of 
Brazil wherein the GOB has agreed not to provide any new or additional 
export or import substitution subsidies on the subject merchandise and 
has agreed to restrict the volume of direct or indirect exports to the 
United States of hot-rolled flat-rolled carbon-quality steel products 
from all Brazilian producers/exporters in order to eliminate completely 
the injurious effects of exports of this merchandise to the United 
States.

EFFECTIVE DATE: July 6, 1999.

FOR FURTHER INFORMATION CONTACT: Linda Ludwig at (202) 482-3833, 
Antidumping and Countervailing Duty Enforcement Group III, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 
20230.

SUPPLEMENTARY INFORMATION:

Background

    On October 15, 1998, the Department initiated a countervailing duty 
investigation under section 702 of the Tariff Act of 1930 (the Act), as 
amended, to determine whether manufacturers, producers, or exporters of 
certain hot-rolled flat-rolled carbon-quality steel products from 
Brazil receive subsidies (63 FR 56623). On November 25, 1998, the 
International Trade Commission (ITC) published its affirmative 
preliminary injury determination. On December 1, 1998 and January 22, 
1999, we postponed the preliminary determination until no later than 
February 12, 1999. See Hot-Rolled Flat-Rolled Carbon-Quality Steel 
Products from Brazil: Postponement of Time Limit for Countervailing 
Duty Investigation, 63 FR 67459 (December 7, 1998) and Hot-Rolled Flat-
Rolled Carbon-Quality Steel Products from Brazil: Postponement of Time 
Limit for Countervailing Duty Investigation, 64 FR 4638 (January 29, 
1999).
    On February 12, 1999, the Department preliminary determined that 
countervailable subsidies are being provided to Companhia Siderugica 
Nacional (CSN), Usinas Siderugicas de Minas Gerais (USIMINAS) and 
Companhia Siderurgica Paulista (COSIPA). See Preliminary Affirmative 
Countervailing Duty Determination and Alignment of Final Countervailing 
Duty Determination With Final Antidumping Duty Determination: Certain 
Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Brazil, 64 FR 
8313 (February 19, 1999). We conducted verification of the 
questionnaire responses of the Government of Brazil (GOB), CSN, 
USIMINAS and COSIPA from April 5 through April 16, 1999.
    The Department and the GOB initialed a proposed agreement 
suspending the investigation on June 6, 1999. Interested parties were 
informed that the Department intended to finalize the Agreement on July 
6, 1999, and were invited to provide written comments on the agreement. 
We received comments from petitioners (Bethlehem Steel Corp., Ispat 
Inland Inc., LTV Steel Company, Inc., National Steel Corp., U.S. Steel 
Group (a Unit of USX Corp.), California Steel Industries, Gallatin 
Steel Company, Geneva Steel, Gulf States Steel Inc., Ipsco Steel Inc., 
Steel Dynamics, Weirton Steel Corporation, and Independent Steelworkers 
Union).
    The Department and the GOB signed the final suspension agreement on 
July 6, 1999.

Scope of Suspension Agreement

    See Final Affirmative Countervailing Duty Determination: Certain 
Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Brazil, 
signed on July 6, 1999.

Suspension of Investigation

    The Department consulted with the parties to the proceeding and has 
considered their positions with respect to the proposed suspension 
agreement. In accordance with section 704(c) of the Act, we have 
determined that extraordinary circumstances are present in this case as 
defined by section 704(c)(4) of the Act. (See July 6, 1999, 
Extraordinary Circumstances Memorandum to Robert S. LaRussa.)
    The suspension agreement provides that: (1) The GOB will not 
provide any new or additional export or import substitution subsidies 
on the subject merchandise; and (2) the GOB will restrict the volume of 
direct or indirect exports to the United States of subject merchandise 
from all Brazilian producers/exporters.
    We have also determined that the suspension agreement can be 
monitored effectively and is in the public interest, pursuant to 
section 704(d) of the Act. (See July 6, 1999, Public Interest 
Memorandum to Robert S. LaRussa.) We find, therefore, that the criteria 
for suspension of the investigation pursuant to section 704(c) of the 
Act have been met. The terms and conditions of the suspension 
agreement, signed July 6, 1999, are set forth in Appendix I to this 
notice.
    The suspension of liquidation ordered in the final affirmative 
determination in this case shall continue in effect, subject to section 
704(h)(3) of the Act. Section 704(f)(2)(B) of the Act provides that the 
Department may adjust the security required to reflect the effect of 
the Agreement. Pursuant to this provision, the Department has found 
that the Agreement eliminates completely the injurious effects of the 
imports and, thus, the Department is adjusting the security required 
from producers and/or exporters to zero. The security rates in effect 
for imports from non-signatory producers/exporters remain as published 
in our final determination.
    On July 6, 1999, we received a request from petitioners requesting 
that we continue the investigation. Pursuant to this request, we are 
continuing the investigation in accordance with section 704(g) of the 
Act and have notified the ITC of our determination. If the ITC's injury 
determination is negative, the agreement will have no force or effect, 
and the investigation will be terminated

[[Page 38798]]

(see section 704(f)(3)(A) of the Act). If the ITC's determination is 
affirmative, the Department will not issue a countervailing duty order 
as long as the suspension agreement remains in force (see section 
704(f)(3)(B) of the Act).
    This notice is published pursuant to section 704(f)(1)(A) of the 
Act.

    Dated: July 6, 1999.
Bernard T. Carreau,
Acting Assistant Secretary for Import Administration.

Appendix I: Agreement Suspending the Countervailing Duty 
Investigation on Hot-Rolled Flat-Rolled Carbon-Quality Steel From 
Brazil

    The U.S. Department of Commerce (the ``DOC'') enters into this 
countervailing duty suspension agreement (``the Agreement'') 
1 with the Government of Brazil (the ``GOB'') through the 
Ministry of Foreign Relations. Pursuant to this suspension agreement, 
the GOB will restrict exports to the United Sates of certain hot-rolled 
flat-rolled carbon-quality steel products (hereinafter called Hot-
Rolled Steel) from all Brazilian producers/exporters, subject to the 
terms and conditions set forth below.
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    \1\ Pursuant to Section 704(b) and (c) of the Tariff Act of 
1930, as amended (19 U.S.C. 1671c(b) & (c)) (the ``Act''), and 
Section 208 of part 351 of Title 19 of the Code of Federal 
Regulations (the ``Regulations'').
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I. Definitions

    For purposes of this Agreement, the following definitions apply:
    A. Date of Export--of Hot-Rolled Steel into the United States shall 
be the date on which the GOB's export license issuing authority issued 
the Export License.
    B. Effective Date--means date on which this Agreement and the 
notice of suspension of investigation are published in the Federal 
Register.
    C. Export License--is the document issued by the GOB's export 
license issuing authority that serves as both an export limit 
certificate and a certificate of origin.
    D. Export and Import Substitution Subsidies--include those 
subsidies that have been determined to be export or import substitution 
subsidies in the preliminary determination in the countervailing duty 
investigation underlying this agreement (unless the investigation is 
continued and a contrary decision is reached in the final 
determination), in any final U.S. countervailing duty investigation of 
a Brazil product, or in any final review of a Brazil product under 
section 751 of the Act, and include subsidies which may apply to other 
products or exports to other destinations to the extent that such 
subsidies cannot be segregated as applying solely to such other 
products or exports.
    D. Hot-Rolled Steel means the certain hot-rolled, flat-rolled, 
carbon quality steel products from Brazil described in Appendix II and 
sometimes referred to as the ``subject merchandise'' of the suspended 
investigation.
    E. Indirect Exports means exports of Hot-Rolled Steel from Brazil 
to the United States through one or more third countries, whether or 
not such exports are further processed, provided that the further 
processing does not result in a substantial transformation or a change 
in the country of origin.
    F. Party to the Proceeding means any producer, exporter, or 
importer of Hot-Rolled Steel, union of workers engaged in the 
production of Hot-Rolled Steel, associations of such parties, or the 
government of any country from which such merchandise is exported, that 
actively participated in the countervailing duty investigation, through 
written submission of factual information or written argument, as 
provided for in section 771(9) of the Act.
    G. Export Limit Period means one of the following periods:
    H. Initial Export Limit Period--The Initial Export Limit Period 
shall begin on October 1, 1999, and end on September 30, 2000. The 
Subsequent Export Limit Periods shall consist of each subsequent year 
period from October 1 through the following September 30.
    I. United States means the customs territory of the United States 
of America (the 50 States, the District of Columbia and Puerto Rico) 
and foreign trade zones located within the territory of the United 
States.
    J. Violation means noncompliance with the terms of this Agreement, 
whether through an act or omission, except for noncompliance that is 
inconsequential, inadvertent, or does not substantially frustrate the 
purposes of this Agreement.

II. Suspension of Investigation

    On the Effective Date, the DOC will suspend its countervailing duty 
investigation of Hot-Rolled Steel from Brazil initiated on October 15, 
1998 (63FR56607, published October 22, 1998), in accordance with 
Section 704 of the Act and Section 208 of the Regulations.

III. Non-provision of Export Subsidies

    A. The GOB will not bestow any Export Subsidies or Import 
Substitution Subsidies upon the subject merchandise.
    B. The GOB recognizes that the provision of export or import 
substitution subsidies on the production or shipment of Hot-Rolled 
Steel exported directly or indirectly from Brazil to the United States 
may result in termination of this Agreement and resumption of the 
investigation pursuant to the provisions of section 704(i) of the Act.
    C. The GOB shall notify the DOC in writing of any new benefit which 
is, or which the GOB has reason to know would be, an export or import 
substitution subsidy on shipments of Hot-Rolled Steel exported, 
directly or indirectly, from Brazil to the United States, including 
subsidies which may apply to both the subject merchandise and other 
products or exports to other destinations, to the extent such benefits 
cannot be segregated as applying solely to such other products or 
exports.

IV. Export Limits

    A. The quota level in metric tons (MT) for each of the periods 
shall be as follows:

Effective Date through September 30, 1999: 0 MT
October 1, 1999 through September 30, 2000: 295,000 MT
October 1, 2000 through September 30, 2001: 295,000 MT
October 1, 2001 through September 30, 2002: 295,000 MT
October 1, 2002 through September 30, 2003: 295,000 MT
October 1, 2003 through September 30, 2004: 295,000 MT

    B. No Hot-Rolled Steel covered by this Agreement, whether exported 
directly or indirectly from Brazil, shall be entered into the United 
States unless, when cumulated with all prior entries of Hot-Rolled 
Steel exported from Brazil during each yearly Export Limit Period in 
which that Hot-Rolled Steel was exported, it does not exceed the export 
limits set forth in the previous paragraph.
    C. When Hot-Rolled Steel is imported into the United States and is 
subsequently re-exported, or re-packaged and re-exported, or further 
processed (but still covered by this Agreement) and re-exported, the 
amount re-exported shall be deducted from the amount of exports that 
have been counted against the export limit for the Export Limit Period 
in which the re-export takes place. The deduction will be applied only 
after the DOC has received, and has had the opportunity to verify, 
evidence demonstrating the original importation, any repackaging or

[[Page 38799]]

further processing, and subsequent exportation.
    D. The GOB's export license issuing authority will not issue export 
licenses authorizing the exportation to the United States of Hot-Rolled 
Steel covered by this Agreement in any half of any Export Limit Period 
that exceeds 60 percent of the export limit for that Export Limit 
Period.
    E. Notwithstanding any other provision of this Agreement, up to 15 
percent of the export limit for any Export Limit Period may be carried 
over to the Subsequent Export Limit Period and up to 15 percent of the 
export limit for any Export Limit Period may be carried back to the 
last 90 days of the previous Export Limit Period. Any carried over or 
carried back allowance shall be counted against the export limit for 
the subsequent or previous Export Limit Period, respectively.

V. Implementation

    A. The United States shall require presentation of an original 
stamped Export License as a condition for entry into the United States 
of Hot-Rolled Steel covered by this Agreement, except where there are 
multiple shipments under a single license. For multiple shipments at 
multiple ports, the original license shall be presented at each port 
and deductions made upon that original license for individual entries 
at each Port. For multiple entries at one port, the original license 
will be presented and deductions made for the first entry drawn from 
that license. Subsequent entries at that port can be made from 
certified copies of the original which reflect all of the deductions 
made from the original license. The United States will prohibit the 
entry of any Hot-Rolled Steel from Brazil not accompanied by an 
original stamped Export License, except as provided herein.1
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    \1\ The validity of an Export License will not be affected by a 
subsequent change of an HTS number.
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    B. Export Licenses must contain, for each Hot-Rolled Steel product 
covered by the license, the exact product description, applicable 
reference price, the quantity in metric tons, and dimensions (gauge, 
width, and, in the case of coils, length, if appropriate). If 
necessary, additional information may be included on the Export License 
or, if necessary, a separate page attached to the Export License. DOC 
will deduct the quantity listed on each Export License from the export 
limit for the Export Limit Period in which the Date of Export falls. 
However, if the bills of lading for all of the shipments under an 
Export License establish that the actual imports into the United States 
under that license were less than the total volume listed on the 
license, DOC will reflect the actual amount as having been deducted 
from the volume listed on the export license, but, notwithstanding the 
carry-over and carry-back limitations in section IV.D., will authorize 
the export license issue a new Export License in the same or Subsequent 
Export Licensing Period authorizing additional exports equal in volume 
to the volume of the undershipment. Exports under such additional 
licenses will be counted against the export limit for the Export Limit 
Period containing the Date of Export of the undershipment.
    C. The GOB will ensure compliance with all of the provisions of 
this Agreement. In order to ensure such compliance, the GOB will take 
at least the following measures:
    1. Ensure that no steel subject to this Agreement is exported from 
Brazil for entry into the United States during any Export Limit Period 
that exceeds the export limit for that Export Limit Period.
    2. Establish an export limit licensing and enforcement program for 
all direct and indirect exports of Hot-Rolled Steel to the United 
States no later than 120 days after the Effective Date.
    3. Require that applications for Export Licenses be accompanied by 
a report containing all of the information listed in Appendix III 
(Exports of Hot-Rolled Steel).
    4. Refuse to issue an Export License to any applicant that does not 
permit full verification and reporting under this Agreement of all of 
the information in the application.
    5. Issue Export Licenses sequentially, endorsed against the export 
limit for the relevant Export Limit Period, and reference any notice of 
export limit allocation results for the relevant Export Limit Period. 
Export Licenses shall remain valid for entry into the United States for 
six months. DOC and GOB may agree to an extension of the validity of 
the Export License in extraordinary circumstances.
    6. Issue Export Licenses in the English language and, at the 
discretion of the export license issuing authority, also in the 
Portugese language.
    7. Issue Export Licenses no earlier than 90 days before the day on 
which the Hot-Rolled Steel is accepted by a transportation company, as 
indicated in the bill of lading or a comparable transportation 
document, for export.
    8. Permit full verification of all information related to the 
administration of this Agreement on an annual basis or more frequently, 
as deemed necessary, to ensure that the GOB is in full compliance with 
this Agreement.
    9. Ensure compliance with all procedures established in order to 
effectuate this Agreement by any official Brazilian institution, 
chamber, or other authorized Brazilian company, and any Brazilian 
producer, exporter, broker, and trader of Hot-Rolled Steel.
    10. Impose strict measures, such as prohibition from participation 
in the export limits allowed by the Agreement, in the event that any 
Brazilian company does not comply in full with the requirements 
established by GOB pursuant to this Agreement.
    D. If any Hot-Rolled steel from Brazil is entered into the United 
States in excess of the Export Limit or without a valid Export Licence, 
DOC shall notify GOB of the entry(ies) and provide to GOB all of the 
information concerning the entry(ies) that DOC is able to disclose 
consistent with U.S. law. GOB shall respond within 21 days. If DOC 
determines that entry of Hot-Rolled Steel from Brazil in excess of the 
Export Limit or without a valid Export License has occurred, DOC shall 
provide GOB with an opportunity for prompt consultations, which shall 
be completed within 60 days after DOC notified GOB of the excessive or 
unlicensed entry. Once the consultations have been completed, unless 
DOC has concluded that the excessive or unlicensed entry did not occur, 
DOC shall count against the Export Limit for the period in which the 
excessive or licenced entry occurred twice the volume of the entry. If 
the Export Limit for the period in which the excessive or unlicensed 
entry occurred has been reached, any remaining portion of the excessive 
or unlicensed entry will be subtracted from the next period's Export 
Limit.

VI. Anticircumvention

    A. The GOB will take all necessary measures to prevent 
circumvention of this Agreement. These measures shall include requiring 
that all Brazilian exporters of Hot-Rolled Steel agree, as a condition 
of receiving any Export License under this Agreement, not to export 
directly or indirectly to the United States Hot-Rolled Steel that is 
not accompanied by an Export License issued pursuant to this Agreement.
    1. When GOB has received an allegation that circumvention has 
occurred, including an allegation from DOC, GOB shall promptly initiate 
an inquiry, normally complete the inquiry within 45 days and notify DOC 
of the results of the inquiry within 15 days after the conclusion of 
the inquiry.
    2. If GOB determines that a Brazilian company has participated in a

[[Page 38800]]

transaction circumventing this agreement, GOB shall impose penalties 
upon such company including, but not limited to, denial of access to 
export certificates for hot-rolled steel under this agreement.
    3. If GOB determines that a Brazilian company has participated in 
the circumvention of this agreement, GOB shall count against the export 
limit for the Export Limit Period in which the circumvention took place 
and amount of hot-rolled steel equivalent to the amount involved in 
such circumvention and shall immediately notify DOC of the amount 
deducted. If sufficient tonnage is not available in the current Export 
Limit Period, then the remaining amount shall be deducted from the 
subsequent Export Limit Period or Periods.
    4. If GOB determines that a company from a third country has 
circumvented the Agreement and DOC and GOB agree that no Brazilian 
company participated in or had knowledge of such activities, then the 
parties shall hold consultations for the purpose of sharing information 
regarding such circumvention and reaching mutual agreement on the 
appropriate measures to be taken to eliminate such circumvention. If 
the parties are unable to reach mutual agreement within 45 days, then 
DOC may take appropriate measures, such as deducting the amount of hot-
rolled steel involved in such circumvention from the export limit for 
the then-current Export Limit Period or a subsequent Period. Before 
taking such measures, DOC will notify GOB of the facts and reasons 
constituting the basis for DOC's intended action and will afford GOB 15 
days in which to comment.
    B. DOC will investigate any allegations of circumvention which are 
brought to its attention both by asking GOB to investigate such 
allegations and by itself gathering relevant information. GOB will 
respond to requests from DOC for information relating to such 
allegations. In distinguishing normal arrangements from those which 
would result in the circumvention of the export limits established by 
this Agreement, DOC will take the following factors into account:
    1. Existence of any verbal or written agreement leading to 
circumvention of this agreement;
    2. Existence and function of any subsidiaries or affiliates of the 
parties involved;
    3. Existence and function of any historical and traditional 
patterns of production and trade among the parties involved, and any 
deviation from such patterns;
    4. Existence of any payments unaccounted for by previous or 
subsequent deliveries, or any payments to one party for Hot-rolled 
steel delivered or swapped by another party;
    5. Sequence and timing of the arrangements; and
    6. Any other information relevant to the transaction or 
circumstances.
    C. In the event that DOC determines that a Brazilian company has 
participated in a transaction circumventing this Agreement, DOC and GOB 
shall hold consultations for the purpose of sharing evidence regarding 
such circumvention and reaching mutual agreement on an appropriate 
resolution of the problem. If DOC and GOB are unable to reach mutual 
agreement within 60 days, DOC may take appropriate measures, such as 
deducting the amount of hot-rolled steel involved in such circumvention 
from the export limit for the current Export Limit Period (or, if 
necessary, the Subsequent Export Limit Period) or instructing U.S. 
Customs to deny entry to any Brazilian hot-rolled steel sold by the 
company found to be circumventing the Agreement. Before taking such 
measures, DOC will notify GOB of the basis for DOC's intended action 
and GOB will comment within 30 days. DOC will enter its determinations 
regarding circumvention into the record of the Agreement. GOB may 
request an extension of up to 15 days for any of the deadlines 
mentioned in this Section.

VII. Monitoring and Notifications

    A. GOB will collect and provide to DOC such information as is 
necessary and appropriate to monitor the implementation of, and 
compliance with, this Agreement, including the following:
    1. Thirty days following the allocation of export rights for any 
Export Limit Period, GOB shall notify DOC of each allocation recipient 
and the volume granted to each recipient. GOB also shall inform DOC of 
any changes in the volume allocated to individual quota recipients 
within 60 days of the date on which such changes become effective.
    2. GOB shall collect and provide to DOC information on exports to 
the United States in the format in Appendix III to this Agreement, and 
on the aggregate quantity and value of exports of Hot-Rolled Steel to 
all other countries. This information will be based on semi-annual 
periods (October 1 through March 31 and April 1 through September 30), 
and will be provided no later than 90 days following the end of each 
half year period, beginning on June 30, 2000 (for the period from the 
Effective Date through March 31, 2000).
    3. The GOB shall certify to DOC, in accordance with the reporting 
schedule in section VII.A.2., whether it continues to be in compliance 
with the Agreement by providing that all exports of Hot-Rolled Steel to 
the United States are not and will not be eligible for any export 
subsidies, as provided in Section III. The GOB shall notify the DOC if 
any producer/exporter of Hot-Rolled Steel to the United States applies 
for or receives, directly or indirectly, any export or import 
substitution subsidy.
    4. The GOB shall immediately notify and provide copies to the DOC 
of any resolution, decree, legislation or equivalent Government action 
governing any export or import substitution subsidy which is issued, 
altered or amended in any way as to be applicable or available to 
producers/exporters of Hot-Rolled Steel to the United States.
    5. The GOB will inform the DOC of any violations of any provisions 
of this Agreement that come to its attention and of the measures taken 
with respect thereto.
    6. The GOB and the DOC recognize that the effective monitoring of 
this Agreement may require that the GOB provide information additional 
to that identified above. Accordingly, after consulting with the GOB, 
the DOC may request additional reporting requirements consistent with 
U.S. law and regulations during the course of this Agreement. The GOB 
shall also collect and provide to DOC, within 45 days of the request, 
any such additional information requested by DOC.
    B. The DOC will verify all information related to the 
administration of this Agreement, including all information relating to 
potential circumvention of this Agreement, annually or more frequently 
as deemed necessary.
    C. The DOC may disregard any information submitted after the 
deadlines set forth in this Section or any information which it is 
unable to verify to its satisfaction.

VIII. Disclosure and Comment

    A. The DOC shall make available to representatives of each Party to 
the Proceeding, under appropriately-drawn administrative protective 
orders consistent with U.S. laws and regulations, business proprietary 
information submitted to the DOC semi-annually or upon request pursuant 
to this Agreement, and in any administrative review of this Agreement.
    B. Not later than 45 days after the date of disclosure of 
information pursuant to section VII.A., the Parties to the Proceeding 
may submit written

[[Page 38801]]

comments to DOC, not to exceed 30 pages.
    C. At the end of each Export Limit Period, each Party to the 
Proceeding may request a hearing on issues raised during the preceding 
Export Limit Period. If such a hearing is requested, it will be 
conducted in accordance with U.S. laws and regulations.

IX. Consultations

    A. The DOC and the GOB may request consultations with the other 
concerning this agreement at any time.
    B. If the DOC requests consultations with the GOB concerning 
potential noncompliance with, or Violation of, this Agreement, it may 
simultaneously request the GOB to provide the DOC with all information 
relating to the allegation. The GOB will provide the requested 
information to the DOC within 21 days of the DOC's request. Any Party 
to the Proceeding may submit comments on the information submitted by 
the Signatory within 10 days after the DOC receives the information. 
The consultations shall be held within 45 days after the DOC's request 
for consultations or for relevant information, unless the DOC and the 
GOB agree on a later date.

X. Violations

    A. If the DOC determines that this Agreement is being or has been 
violated, DOC will take such action as it determines appropriate under 
U.S. laws and regulations.
    B. If the DOC determines that this Agreement no longer meets the 
requirements of the Act, the DOC shall take whatever action it deems 
appropriate under Section 704(i) of the Act and the Regulations.
    C. In the event that the DOC resumes the original investigation, it 
will conduct the resumed investigation on the basis of the original 
administrative record and the statutes, regulations, policies, and 
practices in effect on the Effective Date.

XI. Duration

    A. This Agreement will remain in force until the underlying 
countervailing duty proceeding is terminated in accordance with U.S. 
law.
    B. The GOB may terminate this Agreement at any time upon written 
notice to the DOC. Termination shall be effective 60 days after such 
notice is given to the DOC. Upon termination at the request of the GOB, 
the provisions of U.S. countervailing duty law and regulations shall 
apply.

XII. Other Provisions

    A. The DOC determines that extraordinary circumstances are present 
in this case, that this Agreement is in the public interest, that 
effective monitoring of this Agreement by the United States is 
practicable, and that this Agreement will completely eliminate injury 
to the domestic industry producing the like product by imports of Hot-
Rolled Steel from Brazil.
    B. For all purposes hereunder, the signatory Parties shall be 
represented by, and all communications and notices shall be given and 
addressed to:

DOC:
U.S. DOC of Commerce, Assistant Secretary for Import Administration, 
International Trade Administration, Washington, D.C. 20230

GOB:
Ministrio das Relaco6es Exteriores, Divisao de Politica Comercial, 
70.170-900--Brasilia--DF--Brazil
Embassy of Brazil, 3006 Massachusetts Ave. NW, Washington, D.C. 20008

    Signed on this 6th of July 1999. 3
Robert Larussa,
Assistant Secretary for Import Administration, U.S. Department of 
Commerce.
Regis Arslanian,
Minister-Counselor, Embassy of Brazil.

Appendix I--Definition of Hot-Rolled Steel

    For purposes of this investigation, the products covered are 
certain hot-rolled flat-rolled carbon-quality steel products of a 
rectangular shape, of a width of 0.5 inch or greater, neither clad, 
plated, nor coated with metal and whether or not painted, varnished, 
or coated with plastics or other non-metallic substances, in coils 
(whether or not in successively superimposed layers) regardless of 
thickness, and in straight lengths, of a thickness less than 4.75 mm 
and of a width measuring at least 10 times the thickness. Universal 
mill plate (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 thickness of not less than 4 mm, not in coils and 
without patterns in relief) of a thickness not less than 4.0 mm is 
not included within the scope of these investigations.
    Specifically included in this scope are vacuum degassed, fully 
stabilized (commonly referred to as interstitial-free (``IF'')) 
steels, high strength low alloy (``HSLA'') steels, and the substrate 
for motor lamination steels. IF steels are recognized as low carbon 
steels with micro-alloying levels of elements such as titanium and/
or niobium added to stabilize carbon and nitrogen elements. HSLA 
steels are recognized as steels with micro-alloying levels of 
elements such as chromium, copper, niobium, titanium, vanadium, and 
molybdenum. The substrate for motor lamination steels contains 
micro-alloying levels of elements such as silicon and aluminum.
    Steel products to be included in the scope of this 
investigation, regardless of HTSUS definitions, are products in 
which: (1) Iron predominates, by weight, over each of the other 
contained elements; (2) the carbon content is 2 percent or less, by 
weight; and (3) none of the elements listed below 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
0.012 percent of boron, 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 of zirconium.

    All products that meet the physical and chemical description 
provided above are within the scope of this investigation unless 
otherwise excluded. The following products, by way of example, are 
outside and/or specifically excluded from the scope of this 
investigation:
     Alloy hot-rolled steel products in which at least one 
of the chemical elements exceeds those listed above (including e.g., 
ASTM specifications A543, A387, A514, A517, and A506).
     SAE/AISI grades of series 2300 and higher.
     Ball bearing steels, as defined in the HTSUS.
     Tool steels, as defined in the HTSUS.
     Silico-manganese (as defined in the HTSUS) or silicon 
electrical steel with a silicon level exceeding 1.50 percent.
     ASTM specifications A710 and A736.
     USS Abrasion-resistant steels (USS AR 400, USS AR 500).
     Hot-rolled steel coil which meets the following 
chemical, physical and mechanical specifications:

--------------------------------------------------------------------------------------------------------------------------------------------------------
              C                       Mn                 P                 S                Si                Cr               Cu               Ni
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.10-0.14%...................  0.90% Max.......  0.025% Max......  0.005% Max......  0.30-0.50%......  0.50-0.70%.....  0.20-0.40%.....  0.20% Max.
--------------------------------------------------------------------------------------------------------------------------------------------------------

Width = 44.80 inches maximum; Thickness = 0.063--0.198 inches;
Yield Strength = 50,000 ksi minimum; Tensile Strength = 70,000--
88,000 psi.

     Hot-rolled steel coil which meets the following 
chemical, physical and mechanical specifications:

[[Page 38802]]



------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                C                         Mn                   P                   S                  Si                  Cr                  Cu                  Ni                  Mo
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
0.10-0.16%......................  0.70-0.90%........  0.025% Max........  0.006% Max........  0.30-0.50%........  0.50-0.70%........  0.25% Max.........  0.20% Max.........  0.21% Max.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Width = 44.80 inches maximum; Thickness = 0.350 inches maximum;
Yield Strength = 80,000 ksi minimum; Tensile Strength = 105,000 psi 
Aim.

     Hot-rolled steel coil which meets the following 
chemical, physical and mechanical specifications:

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
               C                       Mn                 P                 S                Si                Cr                Cu                Ni              V(wt.)              Cb
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
0.10-0.14%....................  1.30-1.80%......  0.025% Max......  0.005% Max......  0.30-0.50%......  0.50-0.70%......  0.20-0.40%......  0.20% Max.......  0.10 Max........  0.08% Max
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Width = 44.80 inches maximum; Thickness = 0.350 inches maximum;
Yield Strength = 80,000 ksi minimum; Tensile Strength = 105,000 psi 
Aim.
     Hot-rolled steel coil which meets the following 
chemical, physical and mechanical specifications:

----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                C                         Mn                   P                   S                  Si                  Cr                  Cu                  Ni                  Nb                  Ca                  Al
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
0.15% Max.......................  1.40% Max.........  0.025% Max........  0.010% Max........  0.50% Max.........  1.00% Max.........  0.50% Max.........  0.20% Max.........  0.005% Min........  Treated...........  0.01-0.07%
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Width = 39.37 inches; Thickness = 0.181 inches maximum;
Yield Strength = 70,000 psi minimum for thicknesses  
0.148 inches and 65,000 psi minimum for thicknesses >0.148 inches;
Tensile Strength = 80,000 psi minimum.

     Hot-rolled dual phase steel, phase-hardened, primarily 
with a ferritic-martensitic microstructure, contains 0.9 percent up 
to and including 1.5 percent silicon by weight, further 
characterized by either (i) tensile strength between 540 N/mm\2\ and 
640 N/mm\2\ and an elongation percentage  26 percent for 
thicknesses of 2 mm and above, or (ii) a tensile strength between 
590 N/mm\2\ and 690 N/mm\2\ and an elongation percentage  
25 percent for thicknesses of 2mm and above.
     Hot-rolled bearing quality steel, SAE grade 1050, in 
coils, with an inclusion rating of 1.0 maximum per ASTM E 45, Method 
A, with excellent surface quality and chemistry restrictions as 
follows: 0.012 percent maximum phosphorus, 0.015 percent maximum 
sulfur, and 0.20 percent maximum residuals including 0.15 percent 
maximum chromium.
     Grade ASTM A570-50 hot-rolled steel sheet in coils or 
cut lengths, width of 74 inches (nominal, within ASTM tolerances), 
thickness of 11 gauge (0.119 inch nominal), mill edge and skin 
passed, with a minimum copper content of 0.20%.
    The merchandise subject to these investigations is classified in 
the Harmonized Tariff Schedule of the United States (``HTSUS'') at 
subheadings: 7208.10.15.00, 7208.10.30.00, 7208.10.60.00, 
7208.25.30.00, 7208.25.60.00, 7208.26.00.30, 7208.26.00.60, 
7208.27.00.30, 7208.27.00.60, 7208.36.00.30, 7208.36.00.60, 
7208.37.00.30, 7208.37.00.60, 7208.38.00.15, 7208.38.00.30, 
7208.38.00.90, 7208.39.00.15, 7208.39.00.30, 7208.39.00.90, 
7208.40.60.30, 7208.40.60.60, 7208.53.00.00, 7208.54.00.00, 
7208.90.00.00, 7210.70.30.00, 7210.90.90.00, 7211.14.00.30, 
7211.14.00.90, 7211.19.15.00, 7211.19.20.00, 7211.19.30.00, 
7211.19.45.00, 7211.19.60.00, 7211.19.75.30, 7211.19.75.60, 
7211.19.75.90, 7212.40.10.00, 7212.40.50.00, 7212.50.00.00. Certain 
hot-rolled flat-rolled carbon-quality steel covered by this 
investigation, including: Vacuum degassed, fully stabilized; high 
strength low alloy; and the substrate for motor lamination steel may 
also enter under the following tariff numbers: 7225.11.00.00, 
7225.19.00.00, 7225.30.30.50, 7225.30.70.00, 7225.40.70.00, 
7225.99.00.90, 7226.11.10.00, 7226.11.90.30, 7226.11.90.60, 
7226.19.10.00, 7226.19.90.00, 7226.91.50.00, 7226.91.70.00, 
7226.91.80.00, and 7226.99.00.00. Although the HTSUS subheadings are 
provided for convenience and Customs purposes, the written 
description of the merchandise under investigation is dispositive.

Appendix II--Information To Be Contained in Export Licenses

1. Export License: Indicate the number(s) relating to each sale and 
or entry.
2. Complete Description of Merchandise: Include the 10 digit HTS 
category, the ASTM or equivalent grade, and the width and thickness 
of merchandise.
3. Quantity: Indicate in metric tons.
4 F.O.B. Sales Value: Indicate value and currency used.
5. Unit Price: Indicate unit price per metric ton and currency used, 
and reference price.
6. Date of Sale: The date all essential terms of the order (i.e, 
price and quantity) become fixed.
7. Sales Order Number(s): Indicate the number(s) relating to each 
sale and/or entry.
8. Date of Export: Date the Export License is issued.
9. Date of Entry: Date the merchandise entered the United States or 
the date book transfer took place.
10. Importer of Record: Name and address.
11. Trading Company: Name and address of trading company involved in 
sale.
12. Customer: Name and address of the first unaffiliated party 
purchasing from the Brazilian exporter.
13. Customer Relationship: Indicate whether the customer is 
affiliated or unaffiliated to the Brazilian exporter.
14. Allocation to Exporter: Indicate the total amount of quota 
allocated to the individual exporter during the Relevant Period.
15. Allocation Remaining: Indicate the remaining export limit 
allocation available to the individual exporter during the export 
limit period.
16. Destination: The complete name and address of the first 
unaffiliated purchaser.
17. Other: The identity of any party(ies) in the transaction chain 
between the producer and the first unaffiliated purchaser.

List of Heat Numbers

    GOB shall ensure that all shipments of Hot-Rolled Steel exported to 
the United States pursuant to this Agreement, shall be accompanied by a 
list of heat numbers under the shipment. GOB understands that DOC 
intends to fully verify this data during verifications.

Appendix III--Information on Exports of Hot-Rolled Steel

    In accordance with the established format, the GOB's license 
issuing authority shall collect and provide to DOC all information 
necessary to ensure compliance with this Agreement. This information 
will be provided to DOC on a semi-annual basis.
    The GOB's license issuing authority will collect and maintain 
data on exports to the United States on a continuous basis. Data for 
exports to countries other than the United States, will be reported 
upon request.
    The GOB's license issuing authority will provide a narrative 
explanation to substantiate all data collected in accordance with 
the following formats.
    The GOB's license issuing authority will provide all Export 
Licenses issued to Brazilian entities, which shall contain the 
following information with the exception that information requested 
in item #9, date of entry, item #10, importer of record, item #16, 
final destination, and item #17, other, may be omitted if unknown to 
the licensing authority and the licensee.


[[Page 38803]]


1. Export License: Indicate the number(s) relating to each sale and 
or entry.
2. Complete Description of Merchandise: Include the 10 digit HTS 
category, the ASTM or equivalent grade, and the width and thickness 
of merchandise.
3. Quantity: Indicate in metric tons.
4 F.O.B. Sales Value: Indicate value and currency used.
5. Unit Price: Indicate unit price per metric ton, currency used, 
and reference price
6. Date of Sale: The date all essential terms of the order (i.e, 
price and quantity) become fixed.
7. Sales Order Number(s): Indicate the number(s) relating to each 
sale and/or entry.
8. Date of Export: Date the Export License is issued.
9. Date of Entry: Date the merchandise entered the United States or 
the date book transfer took place.
10. Importer of Record: Name and address.
11. Trading Company: Name and address of trading company involved in 
sale.
12. Customer: Name and address of the first unaffiliated party 
purchasing from the Brazilian exporter.
13. Customer Relationship: Indicate whether the customer is 
affiliated or unaffiliated to the Brazilian exporter.
14. Allocation to Exporter: Indicate the total amount of quota 
allocated to the individual exporter during the Relevant Period.
15. Allocation Remaining: Indicate the remaining export limit 
allocation available to the individual exporter during the export 
limit period.
16. Destination: The complete name and address of the first 
unaffiliated purchaser.
17. Other: The identity of any party(ies) in the transaction chain 
between the producer and the first unaffiliated purchaser.

List of Heat Numbers

    The GOB's license issuing authority shall ensure that all 
shipments of Hot-Rolled Steel exported to the United States pursuant 
to this Agreement, shall be accompanied by a list of heat numbers 
under the shipment. The GOB's license issuing authority understands 
that DOC intends to fully verify this data during verifications.

[FR Doc. 99-18227 Filed 7-16-99; 8:45 am]
BILLING CODE 3510-DS-P