[Federal Register Volume 64, Number 165 (Thursday, August 26, 1999)]
[Notices]
[Pages 46646-46651]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-22197]


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DEPARTMENT OF COMMERCE

International Trade Administration
[C-201-505]


Preliminary Results of Expedited Sunset Review: Porcelain-on-
Steel Cooking Ware From Mexico

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

ACTION: Notice of Preliminary Results of Expedited Sunset Review: 
Porcelain-on-Steel Cooking Ware from Mexico.

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SUMMARY: On February 1, 1999, the Department of Commerce (``the 
Department'') initiated a sunset review of the countervailing duty 
order on porcelain-on-steel cooking ware from Mexico pursuant to 
section 751(c) of the Tariff Act of 1930, as amended (``the Act''). On 
the basis of a notice of intent to participate filed on behalf of 
domestic interested parties and adequate substantive responses filed on 
behalf of domestic and respondent interested parties, the Department is 
conducting a full sunset review. As a result of this review, the 
Department preliminarily determines that revocation of the 
countervailing duty order would not be likely to lead to continuation 
or recurrence of a countervailing subsidy.

For Further Information Contact: Martha V. Douthit or Melissa G. 
Skinner, Office of Policy for Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th St. & 
Constitution Ave., NW., Washington, D.C. 20230; telephone (202) 482-
3207 or (202) 482-1560, respectively.

Effective Date: August 26, 1999.

Statute and Regulations

    This review is being conducted pursuant to sections 751(c) and 752 
of the Act. The Department's procedures for the conduct of sunset 
reviews are set forth in Procedures for Conducting Five-year 
(``Sunset'') Reviews of Antidumping and Countervailing Duty Orders, 63 
FR 13516 (March 20, 1998) (``Sunset Regulations''). Guidance on 
methodological or analytical issues relevant to the Department's 
conduct of sunset reviews is set forth in the Department's Policy 
Bulletin 98:3--Policies Regarding the Conduct of Five-year (``Sunset'') 
Reviews of Antidumping and Countervailing Duty Orders; Policy Bulletin, 
63 FR 18871 (April 16, 1998) (``Sunset Policy Bulletin'').

[[Page 46647]]

Scope

    Imports covered by this order are shipments of porcelain-on-steel 
(``POS'') cooking ware from Mexico, except teakettles, which do not 
have self-contained electric heating elements. All of the foregoing are 
constructed of steel, and are enameled or glazed with vitreous glasses. 
This merchandise is classifiable under item number 7323.94.0020 of the 
Harmonized Tariff Schedule (HTSUS). The HTS item number is provided for 
convenience and customs purposes. The written description remains 
dispositive.

History of the Order

    On October 10, 1986, the Department issued a final affirmative 
countervailing duty determination on POS cooking ware from 
Mexico.1 During the investigation, the Department reviewed 
two companies, Cinsa, S.A. (``Cinsa'') and Troqueles y Esmaltes, S.A. 
(``TRES'').2 The Department calculated a country-wide 
estimated net subsidy of 1.97 percent ad valorem based on two programs 
found to confer subsidies--the Fund for the Promotion of Exportation of 
Mexican Manufactured Products (FOMEX), 1.69 percent ad valorem, and the 
Fund for Industrial Development (FONEI), 0.28 percent ad valorem. As a 
result of a program-wide change in the FOMEX program, which occurred 
prior to the preliminary determination, the Department adjusted the 
duty deposit rate to 1.90 percent ad valorem.3 On December 
12, 1986, the countervailing duty order on POS cooking ware from Mexico 
was published in the Federal Register.4
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    \1\ See Final Affirmative Countervailing Duty Determination; 
Porcelain-on-Steel Cooking Ware from Mexico, Mexico, 51 FR 36447 
(October 10, 1986).
    \2\ TRES subsequently became Acero Porcelanizada, S.A. 
(``APSA'').
    \3\ The duty deposit rate attributable to FOMEX was reduced to 
1.62 percent ad valorem.
    \4\ See Porcelain-on-Steel Cooking Ware from Mexico 
Countervailing Duty Order; 51 FR 44827 (December 12, 1986).
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    Since the issuance of the countervailing duty order on POS cooking 
ware from Mexico, the Department has conducted several administrative 
reviews.5 In the administrative review covering January 1, 
1990 through December 31, 1990, the Department found that the FOMEX 
program was eliminated by decree published in the Diario Official on 
December 30, 1989. Additionally, the Department found that effective 
January 1, 1990, the Mexican Treasury Department transferred the FOMEX 
trust to the Banco Nacional de Comercio Exterior, S.N.A. 
(``Bancomext'') upon the elimination of the FOMEX loan program. The 
Department found that the Bancomext program operates much like its 
predecessor, FOMEX, and provided countervailable export subsidies. In 
the same review, the Department found that the PITEX program (the 
Program for Temporary Importation of Products used in the Production of 
Exports) provided a countervailable export subsidy. For the first time, 
the Department issued company-specific subsidy rates. (See 57 FR 562 
(January 7, 1992) and 56 FR 48163 (September 24, 1991).) In the 
administrative review covering the period January 1, 1993 through 
December 31, 1993, the Department stated that FONEI, which provided 
long-term loans at below-market rates, was a GOM trust administered by 
the Banco de Mexico until its dissolution on December 31, 1989. (See 60 
FR 39360 (August 2, 1995) and 60 FR 53165 (October 12, 1995).)
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    \5\ See Porcelain-on-Steel Cooking Ware from Mexico; Final 
Results of Countervailing Duty Administrative Review, 54 FR 13093 
(March 30, 1989), Porcelain-on-Steel Cooking Ware from Mexico; Final 
Results of Countervailing Duty Administrative Review, 55 FR 6666 
(February 26, 1990), Porcelain-on-Steel Cooking Ware from Mexico; 
Final Results of Countervailing Duty Administrative Review, 56 FR 
2064 (June 6, 1991), Porcelain-on-Steel Cooking Ware from Mexico; 
Final Results of Countervailing Duty Administrative Review, 57 FR 
562 (January 7, 1992), Porcelain-on-Steel Cooking Ware from Mexico; 
Final Results of Countervailing Duty Administrative Review, 60 FR 
53165 (October 12. 1995), Porcelain-on-Steel Cooking Ware from 
Mexico; Final Results of Countervailing Duty Administrative Review, 
60 FR 62391 (December 6, 1995), and Porcelain-on-Steel Cooking Ware 
from Mexico; Final Results of Countervailing Duty Administrative 
Review, 61 FR 10726 (March 15, 1996). Twenty-two programs were made 
available to manufacturers/producers/exporters of POS cooking ware 
from Mexico since the countervailing duty order was placed in 
effect. See the POS cooking ware from Mexico case information on the 
Department's web site, http://www.ita.doc.gov/import__admin/records/
sunset/feb99.
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Background

    On February 1, 1999, the Department initiated a sunset review of 
the countervailing duty order on porcelain-on-steel cooking ware from 
Mexico pursuant to section 751(c) of the Act. On February 16, 1999, the 
Department received a Notice of Intent to Participate from Columbian 
Home Products, LLC (``CHP''), within the deadline specified in section 
351.218(d)(1)(i) of the Sunset Regulations. On March 3, 1999, the 
Department received a complete substantive response from CHP, within 
the deadline specified in section 351.218(d)(3)(i). CHP claimed 
interested party status under section 19 U.S.C 1677(9)(C) as the sole 
domestic manufacturer of porcelain-on-steel cooking ware. CHP asserts 
that it participated in the original countervailing investigation.
    The Department received substantive responses from respondent 
interested parties, Cinsa, Esmaltaciones de Norte America, S.A. de C.V. 
(ENASA), and from the Government of Mexico (``GOM'') (collectively 
``Respondents''), within the 30-day deadline specified in the Sunset 
Regulations under section 351.218(d)(3)(i). Cinsa claimed interested 
party status as a foreign manufacturer and exporter of light-gauge POS 
cook ware from Mexico. ENASA claimed interested party status as a 
foreign manufacturer and exporter of heavy-gauge POS cooking ware from 
Mexico. The GOM claimed interested party status within the meaning of 
19 U.S.C. 1677(9)(B). Cinsa maintains that it was a respondent in the 
original investigation and has participated in all of the subsequent 
administrative reviews. ENASA maintains that it was incorporated in 
1993, and began its shipments of POS cooking ware to the United States 
in 1994. ENASA has been a participant in the two most recent 
administrative reviews.6
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    \6\ Cinsa and ENASA note that they are sister companies, each 
100 percent owned subsidiaries of ISLO, S.A. de C.V., which in turn 
is a wholly owned subsidiary of Grupo Industrial Saltillo, S.A. de 
C.V. (``GIS'').
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    The Department received rebuttal comments from CHP and Respondents 
on March 12, 1999.7 Because we received complete substantive 
responses from CHP, the GOM, and respondent foreign producers 
accounting for significantly more than 50 percent of the value of 
imports over the most recent five years, the Department is conducting a 
full sunset review of this order.
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    \7\ On March 5, 1999, the Department received a request from CHP 
for an extension of deadline for filing rebuttal comments in this 
sunset review. As a result, the Department granted a five day 
extension for all participants eligible to file rebuttal comments. 
The deadline for filing rebuttals to the substantive comments became 
March 12, 1999, instead of the original deadline date of March 8, 
1999.
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    The Department determined that the sunset review of the 
countervailing duty order on POS cooking ware from Mexico is 
extraordinarily complicated. In accordance with section 751(c)(5)(C)(v) 
of the Act, the Department may treat a review as extraordinarily 
complicated if it is a review of a transition order (i.e., an order in 
effect on January 1, 1995). (See section 751(c)(6)(C) of the Act.) 
Therefore, on May 28, 1999 the Department extended the time limit for 
completion of the final results of this review until not later than 
August 20, 1999, in accordance with section 751(c)(5)(B) of the Act 
(see 64 FR 28983).

[[Page 46648]]

Determination

    In accordance with section 751(c)(1) of the Act, the Department is 
conducting this review to determine whether revocation of the 
countervailing duty order would be likely to lead to continuation or 
recurrence of a countervailable subsidy. Section 752(b) of the Act 
provides that, in making this determination, the Department shall 
consider the net countervailable subsidy determined in the 
investigation and subsequent reviews, and whether any change in the 
program which gave rise to the net countervailable subsidy has occurred 
that is likely to affect that net countervailable subsidy. Pursuant to 
section 752(b)(3) of the Act, the Department shall provide to the 
International Trade Commission (``the Commission'') the net 
countervailable subsidy likely to prevail if the order is revoked. In 
addition, consistent with section 752(a)(6), the Department shall 
provide the Commission information concerning the nature of the subsidy 
and whether the subsidy is a subsidy described in Article 3 or Article 
6.1 of the 1994 WTO Agreement on Subsidies and Countervailing Measures 
(``Subsidies Agreement'').
    The Department's determination concerning continuation or 
recurrence of a countervailable subsidy, the net countervailable 
subsidy likely to prevail if the order is revoked, and nature of the 
subsidy are discussed below. In addition, parties' comments with 
respect to each of these issues are addressed within the respective 
sections.

Continuation or Recurrence of a Countervailable Subsidy

Parties' Comments

    In its substantive response, CHP argues that the history of this 
proceeding indicates that Mexican producers and exporters of the 
subject merchandise would likely continue to receive countervailable 
subsidies from the Mexican Government if the order were revoked. CHP 
argues that the FOMEX program, which was found to confer a 
countervailable subsidy and was found to have been terminated, was 
essentially replaced by the Bancomext program. Further, the Bancomext 
program was found to confer a countervailable subsidy. Accordingly, CHP 
argues that the Department should determine that the continued 
existence of the FOMEX program, which was essentially replaced by the 
Bancomext program, is a strong indication that Mexican producers would 
likely continue to receive countervailable subsidies were the order 
revoked.
    With respect to the FONEI program, which CHP admits was found 
terminated in December, 1989, CHP argues that the fact that the program 
provided countervailable subsidies from the original investigation 
through the seventh administrative review indicates that the program 
could be reinstated and lead to future subsidization. Additionally, CHP 
argues that the Department has never made a finding that the program 
was not likely to be reinstated.
    Finally, CHP argues that the PITEX program was found in the fourth 
administrative review to confer a countervailable subsidy. Because the 
program has not been discontinued, CHP asserts that the Department 
should determine that were the order revoked, this program would likely 
lead to continuation or recurrence of a countervailable subsidy.
    In their substantive responses, Respondents argue that revocation 
of the order will have no impact on the U.S. market or domestic 
interested parties because no net countervailable subsidy has been 
conferred on the subject merchandise since 1993 and because the 
countervailing duty deposit rate has been zero since October 1995. 
Respondents argue that the GOM terminated one of the two programs found 
in the original investigation to confer countervailable benefits (FOMEX 
export and pre-export loans) and that the GOM now provides loans to 
Mexican companies (Bancomext loans and FONEI loans) consistent with 
commercial considerations, thereby eliminating countervailable 
benefits. Therefore, Respondents argue there is no likelihood that 
Mexican producers of POS cooking ware could be able to obtain 
countervailable benefits were the order revoked.
    The GOM argues that because it no longer provides export loans or 
long-term loans that are inconsistent with commercial considerations--
in compliance with its obligations pursuant to the Mexico-United States 
Understanding Regarding Subsidies and Countervailing Duties (the 
``Understanding'')--a subsidy rate from a period before the agreement 
took effect does not provide a basis for a determination of likelihood 
of continuation or recurrence of a countervailable subsidy. Finally, 
the GOM argues that, had this investigation been conducted under the 
current statute, a final country-wide subsidy rate of 1.97 percent 
would be found de minimis and, as a result, the Department would issue 
a negative final countervailing duty determination.
    In its rebuttal comments CHP argues that although the FOMEX and 
FONEI programs have changed since the time of the original 
investigation, these changes do not provide a sufficient basis for 
finding that the programs will not be used in the future to provide 
subsidies to Mexican POS cooking ware manufacturers and exporters. 
Specifically, CHP argues that, as admitted by respondents, the FOMEX 
program has not been permanently terminated, but instead it continues 
to exist in a slightly altered form as the Bancomext program. CHP 
asserts, therefore, that it would be simple for the GOM to use this 
program to provide subsidies to Mexican exporters of POS cooking ware.
    CHP further argues that respondents provided no evidence to suggest 
that changes in the FONEI program are either binding or permanent. CHP 
argues that Mexico's elimination of the preferential element of FONEI 
loans represents an exercise of administrative discretion which could 
be reversed at any time. In conclusion, CHP argues, therefore, that the 
Department should find that FONEI is likely to be reinstated as a 
subsidy program in the event the order is revoked.
    Finally, CHP argues that contrary to respondent's assertions, the 
1985 Understanding does not reduce the likelihood of future 
countervailable subsidization of subject merchandise. Referring to the 
terms of the Understanding, CHP asserts that the terms of the 
Understanding do not prohibit the use of domestic subsidies. Further, 
CHP notes that Mexico continued to provide export subsidies (in the 
form of PITEX) after the Understanding came into effect. Additionally, 
CHP argues that the Understanding does not prohibit Mexico from 
providing export subsidies, rather, it entitles the United States to 
refuse to afford merchandise from Mexico an injury test in any pending 
or future countervailing duty determination. In this connection, CHP 
notes that as a WTO member country, Mexico is entitled to an injury 
test regardless of the Understanding.
    In conclusion, CHP argues that any recent decline in usage of the 
programs found countervailable over the life of the order is not 
indicative of what is likely to occur if the order is revoked. Rather, 
as is clear from the terms of the Understanding, the Mexican Government 
continues to be permitted to confer subsidies upon its manufacturers 
and exporters. CHP argues that, accordingly, the Department should 
determine that revocation of the order would likely lead to 
continuation

[[Page 46649]]

or recurrence of a countervailable subsidy.
    In its rebuttal comments the GOM asserts that the arguments 
presented by CHP do not provide sufficient evidence or reasoning to 
demonstrate that, given the producer-exporters commercial history and 
current situation, there is a ``need'' to continue imposition of the 
order. Referring to Article 21.1 of the Subsidies Agreement, the GOM 
asserts that Commerce is required to demonstrate that there is a 
``need'' to continue the order and that such a determination must be 
demonstrable on the basis of evidence. Further, the GOM asserts that 
the arguments presented by CHP do not provide sufficient evidence or 
reasoning to demonstrate that, if the order is revoked, it is 
``likely'' that exporters would continue to benefit from subsidization 
at significant margins.
    The GOM argues that contrary to CHP's assumption that FOMEX and 
Bancomext are the same, FOMEX was terminated over ten years ago. 
Additionally, although the FOMEX funds were taken in by Bancomext, 
Bancomext is an entirely separate entity from FOMEX. Furthermore, the 
GOM asserts that the only company in this case that benefitted from any 
Bancomext loan, no longer exists. The GOM argues, therefore, that CHP's 
assertion that Mexican producers would likely continue to benefit from 
subsidies is a presumption unsupported by evidence or reasons.
    Similarly, with respect to the FONEI domestic loan program which 
was terminated in 1989, the GOM argues that CHP's assertion that there 
is an indication that the program could be reinstated and provide 
future subsidization because the program continued to have a 
diminishing countervailable benefit (down to 0.01 percent in 1993) 
until the 7th review, does not provide any evidence or reason as to why 
the GOM would be interested in reinstating such a program. Further, the 
GOM argues that CHP does not provide any evidence as to how the program 
could be considered a prohibited or actionable subsidy as established 
in articles 3, 5, or 6.1 of the Subsidies Agreement.
    With respect to the PITEX program, the GOM first notes that the 
program was not considered in the context of the investigation and 
therefore has never been determined to cause injury to the U.S. 
industry, as required by articles 15.5, 15.9, and 21.1 of the Subsidies 
Agreement. Additionally, the GOM asserts that PITEX was only used by a 
single company that no longer exists. As such, the GOM argues that 
there is no reason to presume that exporters will continue to benefit 
from a program that they have never used and, if such a presumption is 
made, it must be demonstrated by the Department.
    The GOM also argues that the producers and exporters affected by 
this order have changed over the life of the order. Specifically, of 
the two companies investigated in the original investigation--Cinsa and 
TRES (later know as APSA)--APSA no longer exists. Therefore, the GOM 
argues that it would be inappropriate for the Department to consider 
the effect of the subsidy margins for APSA in the context of an order-
wide review. Rather, the Department should, analogous to its practice 
of calculating separate subsidy margins in an original investigation or 
review, determine likelihood specific to each producer.
    The GOM expresses its belief that CHP's assumptions relied on 
polices identified in the Sunset Policy Bulletin, policies which the 
GOM believes may be inconsistent with the WTO and the Subsidies 
Agreement. The GOM asserts that the policies, and general assumptions 
contained therein, appear to operate to effectively require the 
continued imposition of countervailing duties and place the burden on 
respondents to prove the assumptions wrong. The GOM argues that, 
contrary to the policies, the Department bears the burden of 
demonstrating, with evidence, the issues regarding ``necessity'' and 
``likelihood.''
    In their rebuttal comments, Cinsa and ENASA (``respondent 
companies'') argue that CHP's assertions are not correct and the 
information before the Department establishes that if the order were 
revoked, subsidization would not recur. Respondent companies argue that 
CHP's assertions ignore several facts relevant to the Department's 
determination. First, CHP, although acknowledging that the country-wide 
rate has been de minimis since 1993, fails to give effect to the 
Department's finding of zero subsidization. Further, CHP fails to give 
effect to the Department's determination that Cinsa (the respondent 
which presently accounts for the vast majority of Mexican exports of 
POS cooking ware to the United States) has had company-specific 
countervailing duty rates of de minimis since 1989, a period of ten 
years.
    Similar to the GOM, respondent companies argue that TRES, later 
known as APSA--the company that received most of the countervailable 
subsidies before becoming a zero rate company in 1993--no longer exists 
and, as such, cannot possibly obtain future countervailable subsidies. 
Further, respondent companies argue that it is inappropriate to assert 
that subsidization would recur if the order were revoked based largely 
upon the historical receipt of net countervailable subsidies by a 
respondent that no longer exists. Rather, the Department's 
determination of likelihood should be based upon the experience of the 
companies that presently exist and have the potential to produce and 
export subject merchandise to the United States.
    Respondent companies also argue that the Understanding (which has 
been fully implemented) and other multilateral agreements to which both 
Mexico and the United States are parties, have been responsible for the 
termination of export subsidies and the elimination of the preferential 
elements from loan programs. Therefore, the magnitude of subsidization 
that may have existed prior to Mexico's undertaking of its current 
international obligations to eliminate improper subsidization does not 
provide a rational basis for determining the magnitude of subsidization 
that would likely prevail at this point in time if the order were 
revoked.
    Respondent parties argue that CHP is incorrect in its attempt to 
have the Department assign the net subsidy rate from FOMEX to 
Bancomext. Rather, they argue that the Department should confirm its 
previous findings that the FOMEX program was terminated and then should 
separately determine whether any subsidization under the Bancomext 
program would recur if the order were revoked. With respect to 
Bancomext, Respondent parties argue that the only time the Department 
imposed countervailing duties attributable to Bancomext was in the 1990 
administrative review and, even there, the duties were with regard to 
TRES/APSA, a company that no longer exists. Further, Respondent parties 
argue that given that in the most recently completed administrative 
reviews the Department determined that the Bancomext program provided 
zero or de minimis benefits, the likely net countervailable subsidy 
rate that would prevail if the order were revoked would continue to be 
zero.
    With respect to the FONEI program, Respondent parties argue that 
CHP's position is untenable. First, Respondent parties note that, in 
the 1993 review, the Department determined that the net benefit 
attributable to this previously revoked, long-term loan program was a 
de minimis 0.01 percent. Further, even if the ten-year loan (the 
maximum term under the program) which provided the

[[Page 46650]]

benefit in the original investigation has been taken out in 1985, the 
benefit stream would have terminated in 1995. Even if a 10-year loan 
had been taken out in the final year of the program (1989), the benefit 
stream would terminate in 1999. Therefore, Respondent parties argue 
that no possible benefit stream from a FONEI loan that could exist 
beyond the date of revocation.
    Lastly, with respect to the PITEX program, Respondent companies 
argue that the information before the Department establishes that if 
the order were revoked there would be no likely net countervailable 
subsidy to existing POS cooking ware manufacturers and exporters. 
Again, Respondent parties argue that only TRES/APSA ever received a net 
countervailable subsidy from PITEX and that the Department has found 
PITEX not used by any other company examined by the Department. 
Further, Respondent companies argue that PITEX is countervailable only 
to the extent that import duties are refunded or not collected for 
imported machinery or spare parts used in the production of export 
merchandise and that, in the 1989 review, the Department found that 
PITEX benefits were not countervailable to the extent that they are 
attributable to products that were physically incorporated into re-
exported merchandise. Additionally, Respondent parties refer to the 
Department's Sunset Policy Bulletin and argue that the Department 
recognizes that it is not appropriate to attribute future usage of a 
program to companies that have never been found to have used that 
program. In conclusion, Respondent parties argue that because the 
Department has never found that Cinsa or ENASA have used 
countervailable elements of the PITEX program, it would be contrary to 
stated Departmental policy to attribute a net countervailable subsidy 
for PITEX to existing POS cooking ware companies.

Department's Preliminary Determination

    Drawing on the guidance provided in the legislative history 
accompanying the Uruguay Round Agreement Act (``URAA''), specifically 
the Statement of Administrative Act (``the SAA''), H.R. Doc. No. 103-
316, vol. 1 (1994), the House Report, H.R. Rep. No. 103-826, pt. 1 
(1994), and the Senate Report, S. Rep. No. 103-412 (1994), the 
Department issued its Sunset Policy Bulletin providing guidance on 
methodological and analytical issues, including the basis for 
likelihood determinations. The Department clarified that the 
determinations of likelihood will be made on an order-wide basis (see 
section III.A.2. of the Sunset Policy Bulletin). Additionally, the 
Department normally will determine that revocation of a countervailing 
duty order is likely to lead to continuation or recurrence of a 
countervailable subsidy where (a) a subsidy program continues, (b) a 
subsidy program has been only temporarily suspended, or (c) a subsidy 
program has been only partially terminated (see section III.A.3.a of 
the Sunset Policy Bulletin). Exceptions to this policy are provided 
where a company has a long record of not using a program (see section 
III.A.3.b of the Sunset Policy Bulletin).
    The Sunset Policy Bulletin, at section III.A.3.a, states that, 
consistent with the SAA at 888, continuation of a program will be 
highly probative of the likelihood of continuation or recurrence of 
countervailable subsidies. Temporary suspension or partial termination 
of a subsidy program also will be probative of continuation or 
recurrence of countervailable subsidies absent significant evidence to 
the contrary. However, the Sunset Policy Bulletin also provides that, 
where a program has been officially terminated by the foreign 
government, this will be probative of the fact that the program will 
not continue or recur if the order is revoked. (See Sunset Policy 
Bulletin at section III.A.5.)
    As noted above, in the final affirmative countervailing duty 
determination the Department determined that Mexican producers/
exporters of the subject merchandise were benefitting from 
countervailable subsidies under the FOMEX and FONEI programs. In 
subsequent administrative reviews, the Department found that the FOMEX 
and FONEI programs were terminated in 1989. CHP argues that the FOMEX 
program continues to exist by virtue of the fact that remaining funds 
were transferred to the still existent Bancomext program. However, as 
the Department determined in the 1990 administrative review, the FOMEX 
program was officially eliminated by decree in December, 1989. 
Additionally, the Department confirmed this determination in the final 
results of the 1993 administrative review when it explained that the 
FOMEX program was terminated on December 31, 1989 and effective January 
1, 1990, the FOMEX trust was transferred to Bancomext. The Department 
has, in numerous reviews, investigated Bancomext as a separate program. 
Therefore, given that the FOMEX program was terminated by official 
decree, we preliminarily determine that the FOMEX program has been 
eliminated.
    With respect to the FONEI program, we preliminarily determine that 
the program has been eliminated without residual benefit. In the 1993 
administrative review, the Department stated that FONEI was a GOM trust 
administered by the Banco de Mexico until its dissolution on December 
31, 1989. CHP does not argue that the program still exists. Rather, 
they argue that the program could be easily reinstated. We are not 
persuaded by mere assertions, however. Rather, based on the 
Department's prior findings with respect to FONEI and absent evidence 
to the contrary, we preliminarily determine that the FONEI program has 
been eliminated and is not likely to be reinstated. Further, we agree 
with respondents that any potential remaining countervailable benefit 
from 10-year, long-term loans granted prior to the 1989 termination of 
the FONEI program would not continue beyond 1999.
    With respect to the PITEX program, we note that none of the parties 
argued that the program has been terminated. Rather, CHP argues that we 
should find that countervailable subsidies are likely to continue or 
recur were the order revoked based on a finding in the 1990 
administrative review that one company, APSA, used the program for 
temporary imports of machinery and spare parts that were not physically 
incorporated into exported products. The Respondents argue that APSA is 
the only company in this proceeding ever found to have received a 
countervailable subsidy under this program, APSA no longer exists, and 
other companies have a long track record of not using this program. 
Therefore, PITEX should not be found likely to provide a 
countervailable subsidy.
    We preliminarily determine that there is a long track record of 
non-use of the PITEX program by companies that are currently, and are 
likely to be, producing and exporting POS cooking ware to the United 
States. In the administrative review of the antidumping duty order on 
POS cooking ware from Mexico covering the period December 1, 1996 
through November 31, 1997, the Department found that APSA had been sold 
in 1997 and that Cinsa had incorporated some of APSA's production 
equipment into its facility (see Porcelain-on-Steel Cookware from 
Mexico: Final Results of Antidumping Duty Administrative Review, 64 FR 
26934 (May 18, 1999)). Therefore, we agree that APSA no longer exists. 
As to whether companies other than APSA are likely to receive a 
countervailable subsidy from the PITEX program, we agree with 
respondents that, where a

[[Page 46651]]

company has a long track record of not using a program, the Department 
normally will determine that the mere availability of the program does 
not, by itself, indicate likelihood of continuation or recurrence of a 
countervailable subsidy. (See section III.A.3.b of the Sunset Policy 
Bulletin.) We preliminarily determine, therefore, that there is no 
likelihood of a countervailable subsidy from the PITEX program were the 
order revoked.
    With respect to the Bancomext program, CHP argues that Bancomext 
should be considered a replacement for FOMEX and, therefore, CHP does 
not independently address Bancomext. As noted above, the Department 
determined that the Bancomext program was separate from the FOMEX 
program. Further, Bancomext has been found to provide countervailable 
subsidies to the extent that loans are provided at preferential rates. 
None of the parties have argued that the Bancomext program has been 
terminated. Rather, respondents argue that, as a result of the 1985 
Understanding, the GOM altered its practice and no longer provides 
loans on terms inconsistent with commercial considerations. The 
Department has reviewed the Bancomext program during reviews covering 
1990, 1993, and 1994. In each of these reviews, the Department found 
countervailable subsidies were provided by the Bancomext program, 
albeit at de minimis rates. Therefore, we do not agree with respondents 
that the Bancomext no longer provides countervailable subsidies. 
However, we do agree, based on a history of de minimis findings, that 
there is no evidence to suggest that the Bancomext program is likely to 
provide above de minimis countervailable subsidies, if any, were the 
order revoked. Therefore, we preliminarily determine that the Bancomext 
program is not likely to confer a countervailable subsidy were the 
order revoked.
    On the basis of the above analysis regarding the termination, non-
use, and de minimis subsidies, we preliminarily determine that 
revocation of the countervailing duty order on POS cooking ware from 
Mexico is not likely to result in continuation or recurrence of a 
countervailable subsidy.

Net Countervailable Subsidy

Parties' Comments

    In its substantive and rebuttal comments, CHP argues that in 
accordance with the Department's policy, the Department should report 
to the Commission a net countervailable subsidy of 3.84 percent as the 
subsidy likely to prevail if the order were revoked. CHP argues that 
the Department should add to the 1.97 percent subsidy from the original 
investigation (attributable to FOMEX and FONEI) the 1.87 percent 
subsidy rate found in the 1990 administrative review attributable to 
PITEX.
    In their substantive and rebuttal comments, the respondents argue 
that the zero or de minimis rates from the most recent administrative 
reviews are the rates likely to prevail if the order were revoked.

Department's Preliminary Determination

    Because we preliminarily determine that a countervailable subsidy 
is not likely to continue or recur were the order revoked, there is no 
net countervailable subsidy to report to the Commission.

Nature of the Subsidy

Parties' Comments

    Neither party specifically addressed this issue. As noted above, 
however, the GOM did argue that the Department must be able to 
demonstrate, with evidence, that any subsidy found likely to continue 
or recur if the order were revoked is a subsidy inconsistent with 
articles 3, 5, or 6 or the Subsidies Agreement.

Department's Position

    Because we preliminarily determine that a countervailable subsidy 
is not likely to continue or recur were the order revoked, there is no 
nature of the subsidy to report to the Commission.

Preliminary Results of Review

    As a result of this review, the Department preliminarily finds that 
revocation of the countervailing duty order would not be likely lead to 
continuation or recurrence of a countervailable subsidy. As a result of 
this determination, the Department, pursuant to section 751(d)(2) of 
the Act, preliminarily intends to revoke the order on POS cooking ware 
from Mexico. Pursuant to section 751(c)(6)(A)(iv) of the Act, this 
revocation would be effective January 1, 2000.
    Any interested party may request a hearing within 30 days of 
publication of this notice in accordance with 19 CFR 351.310(c). Any 
hearing, if requested, will be held on October 20, 1999. Interested 
parties may submit case briefs no later than October 11, 1999, in 
accordance with 19 CFR 351.309(c)(1)(i). Rebuttal briefs, which must be 
limited to issues raised in the case briefs, may be filed not later 
than October 18, 1999. The Department will issue a notice of final 
results of this sunset review, which will include the results of its 
analysis of issues raised in any such comments, no later than December 
28, 1999.
    This five-year (``sunset'') review and notice are in accordance 
with sections 751(c), 752, and 777(i)(1) of the Act.

    Dated: August 20, 1999.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-22197 Filed 8-25-99; 8:45 am]
BILLING CODE 3510-DS-P