[Federal Register Volume 64, Number 171 (Friday, September 3, 1999)]
[Notices]
[Pages 48367-48369]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-23045]
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DEPARTMENT OF COMMERCE
International Trade Administration
[C-351-604]
Final Results of Expedited Sunset Review: Brass Sheet and Strip
From Brazil
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of final results of expedited sunset review: brass sheet
and strip from Brazil.
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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 brass sheet and strip from Brazil (64 FR 4840) 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 and adequate substantive
comments filed on behalf of the domestic interested parties, as well as
inadequate response (in this case, no response) from respondent
interested parties, the Department determined to conduct an expedited
(120 day) review. As a result of this review, the Department finds that
termination of the countervailing duty order would be likely to lead to
continuation or recurrence of a countervailable subsidy.
FOR FURTHER INFORMATION CONTACT: Kathryn B. McCormick or Melissa G.
Skinner, Office of Policy for Import Administration, International
Trade Administration, U.S. Department of Commerce, 14th Street &
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
1698 or (202) 482-1560, respectively.
EFFECTIVE DATE: September 3, 1999.
Statute and Regulations
This review was 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'').
Scope
This order covers shipments of coiled, wound-on-reels (traverse
wound), and cut-to-length brass sheet and strip (not leaded or tinned)
from Brazil. The subject merchandise has, regardless of width, a solid
rectangular cross section over 0.0006 inches (0.15 millimeters) through
0.1888 inches (4.8 millimeters) in finished thickness or gauge. The
chemical composition of the covered products is defined in the Copper
Development Association (``C.D.A.'') 200 Series or the Unified
Numbering System (``U.N.S.'') C2000; this review does not cover
products with chemical compositions that are defined by anything other
than C.D.A. or U.N.S. series. The merchandise is currently classified
under Harmonized Tariff Schedule (``HTS'') item numbers 7409.21.00 and
7409.29.00. The HTS item numbers are provided for convenience and U.S.
Customs purposes. The written description remains dispositive.
History of the Order
In the original investigation, the Department received information
on two Brazilian producers and exporters that accounted for
substantially all exports of brass sheet and strip to the United States
during the period of investigation. In its final affirmative
countervailing duty determination (52 FR 1218, January 12, 1987), the
Department concluded that the Government of Brazil was providing
countervailable subsidies to exporters of the subject merchandise
through four programs: (1) Preferential Working Capital Financing for
Exports (CACEX); (2) Income Tax Exemption for Export Earnings; (3)
Export Financing Under the CIC-CREGE 14-11 Circular; and (4) Import
Duty Exemption Under Decree-Law 1189 of 1979.1 We estimated
the net subsidy to be 6.13 percent ad valorem, and, on the basis of a
program-wide change in the Preferential Working Capital Financing for
exports program which occurred prior to the preliminary determination,
we established a cash deposit rate of 3.47 percent ad valorem for all
manufacturers, producers, or exporters of brass sheet and strip from
Brazil.
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\1\ See Final Affirmative Countervailing Duty Determination:
Brass Sheet and Strip From Brazil, November 10, 1986 (51 FR 40837).
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The Department has since conducted one administrative review (56 FR
56631 (November 6, 1991)) of this countervailing duty order, covering
the period January 1, 1990, through December 31, 1990. In the
Department's preliminary results of the administrative review, and
supported by the Department's final results of the administrative
review, the Department determined that each of the four programs found
to provide countervailable benefits in the investigation had been
terminated. Preferential Working Capital Financing for Exports was
terminated, effective August 30, 1990, by Central Bank Resolution 1744.
Loans under this program were officially suspended on February 22,
1989, until the program was terminated. The program of Income Tax
Exemption for Export Earnings, which eliminated the tax exemption and
established a prevailing tax rate of 30 percent for domestic and export
earnings for 1991, was effectively terminated by Decree Law 8034, April
12, 1990. Export Financing Under the CIC-CREGE 14-11 Circular (which
became CIC-OPCRE 6-2-6) was deemed to be terminated as it had set
interest rates equal to those of market rate loans as of September 20,
1988, and there is no evidence of current or future changes. Finally,
the Import Duty Exemption Under Decree Law 1189 was officially
terminated by the Government of Brazil by Decree Law 7988, Article 7,
on December 28, 1989. In its final results of review, the Department
noted that substantial documentation, including verification reports,
confirmed the termination without replacement of these four
[[Page 48368]]
countervailable subsidy programs.2 As a result of the
review, the Department set the duty deposit at zero. No additional
reviews have been conducted.
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\2\ See Brass Sheet and Strip From Brazil; Final Results of
Countervailing Duty Administrative Review, 56 FR 56631 (November 6,
1991).
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Background
On February 1, 1999, the Department initiated a sunset review of
the countervailing duty order on brass sheet and strip from Brazil (64
FR 4840), pursuant to section 751(c) of the Act. On February 16, 1999,
the Department received a Notice of Intent to Participate on behalf of
Heyco Metals, Inc. (``Heyco''), Hussey Copper Ltd. (``Hussey''), Olin
Corporation-Brass Group (``Olin''), Outokumpu American Brass
(``Outokumpu'') (formerly American Brass Company), PMX Industries, Inc.
(``PMX''), Revere Copper Products, Inc. (``Revere''), the International
Association of Machinists and Aerospace Workers, the United Auto
Workers (Local 2367), and the United Steelworkers of America (AFL/CIO-
CLC) (hereinafter, collectively ``domestic interested parties''),
within the deadline specified in section 351.218(d)(1)(i) of the Sunset
Regulations. The domestic interested parties claimed interested party
status under sections 771(9)(C) and (D) of the Act as domestic brass
mills, rerollers, and unions engaged in the production of brass sheet
and strip. With the exception of Heyco, all of the aforementioned
parties were original petitioners in this case.
We received a complete substantive response from the domestic
interested parties on March 3, 1999, within the 30-day deadline
specified in the Sunset Regulations under section 351.218(d)(3)(i); we
did not receive a substantive response from any government or
respondent interested party to this proceeding. As a result, pursuant
to 19 CFR 351.218(e)(1)(ii)(C), the Department determined to conduct an
expedited, 120-day, review of this order.
The Department determined that the sunset review of the
countervailing duty order on brass sheet and strip from Brazil 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 June 7, 1999, the Department extended the time limit for
completion of the final results of this review until not later than
August 30, 1999, in accordance with section 751(c)(5)(B) of the
Act.3
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\3\ See Porcelain-on-Steel Cooking Ware From the People's
Republic of China, Porcelain-on-Steel Cooking Ware From Taiwan, Top-
of-the-Stove Stainless Steel Cooking Ware From Korea (South) (AD &
CVD), Top-of-the-Stove Stainless Steel Cooking Ware From Taiwan (AD
& CVD), Standard Carnations From Chile (AD & CVD), Fresh Cut Flowers
From Mexico, Fresh Cut Flowers From Ecuador, Brass Sheet and Strip
From Brazil (AD & CVD), Brass Sheet and Strip From Korea (South),
Brass Sheet and Strip From France (AD & CVD), Brass Sheet and Strip
From Germany, Brass Sheet and Strip From Italy, Brass Sheet and
Strip From Sweden, Brass Sheet and Strip From Japan, Pompon
Chrysanthemums From Peru: Extension of Time Limit for Final Results
of Five-Year Reviews, 64 FR 30305 (June 7, 1999).
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Determination
In accordance with section 751(c)(1) of the Act, the Department is
conducting this review to determine whether termination 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 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 to the Commission
information concerning the nature of the subsidy and whether it 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 determinations concerning continuation or
recurrence of a countervailable subsidy are discussed below. In
addition, the domestic interested parties' comments with respect to
these issues are addressed within the respective sections.
Continuation or Recurrence of a Countervailable Subsidy
Drawing on the guidance provided in the legislative history
accompanying the Uruguay Round Agreements Act (``URAA''), specifically,
the Statement of Administrative Action (``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 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).
In addition to considering the guidance cited above, section
751(c)(4)(B) of the Act provides that the Department shall determine
that revocation of an order is likely to lead to continuation or
recurrence of dumping where a respondent interested party waives its
participation in the sunset review. Moreover, pursuant to the SAA, at
881, in a review of a countervailing duty order, when the foreign
government has waived participation, the Department shall conclude that
revocation of the order would be likely to lead to a continuation or
recurrence of a countervailable subsidy for all respondent interested
parties.4 In the instant review, the Department did not
receive a response from the foreign government or from any other
respondent interested party. Pursuant to section 351.218(d)(2)(iii) of
the Sunset Regulations, this constitutes a waiver of participation.
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\4\ See 19 CFR 351.218(d)(2)(iv).
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In their substantive response, the domestic interested parties
assert that, consistent with the Act and SAA, and absent significant
evidence to the contrary, continuation, temporary suspension or partial
termination of a subsidy program will be highly probative of the
likelihood of continuation or recurrence of countervailable subsidies
(see March 3, 1999 Substantive Response of domestic interested parties
at 33).
In their March 12, 1999 comments, the domestic interested parties
assert that the Department should find that revocation of the
countervailing duty order on brass sheet and strip from Brazil will
result in the continuation or recurrence of a countervailable subsidy
on the basis of the failure of respondent interested parties to file a
complete
[[Page 48369]]
substantive response to the Department's notice of initiation.
The domestic interested parties argue that this is consistent with
19 U.S.C. 1675(c)(4)(B) and the SAA, which provide that, where the
government waives participation, the Department will conclude that
revocation or termination would be likely to lead to continuation of
countervailable subsidies (see March 12, 1999 comments of domestic
interested parties at 3).
In this sunset review, as argued by the domestic interested
parties, the Department is required by section 751(c)(4)(B) of the Act
to find likelihood on the basis that the government of Brazil and the
respondents waived their right to participate in this review. The
participation of the government that has provided subsidies is
necessary to determine that the producers/exporters of subject
merchandise no longer receive subsidies and, without such
participation, we must conclude that the producers/exporters continue
to be subsidized. Therefore, consistent with the statute and SAA, the
Department determines that revocation of the order is likely to result
in continuation or recurrence of a countervailable subsidy.
Net Countervailable Subsidy
In the Sunset Policy Bulletin, the Department states that,
consistent with the SAA and House Report, the Department normally will
select a rate from the investigation because that is the only
calculated rate that reflects the behavior of exporters and foreign
governments without the discipline of an order or suspension agreement
in place. However, the Sunset Policy Bulletin also allows for
adjustments to be made to the net subsidy rate likely to prevail where
programs have either been terminated, with no residual benefits, and
where the Department has found new countervailable programs to
exist.5 Additionally, where the Department determined
company-specific countervailable subsidy rates in the original
investigation, the Sunset Policy Bulletin states that the Department
will report to the Commission company-specific rates for those
companies from the original investigation as well as an ``all others''
rate (see Sunset Policy Bulletin at section III.A.4).
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\5\ See sections III.B.1, III.B.3.A, and III.B.3.C of the Sunset
Policy Bulletin.
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The domestic interested parties cite the SAA statement that the
Administration intends that Commerce normally will select the rate from
the investigation because that is the only calculated rate that
reflects the behavior of exporters and foreign governments without the
discipline of an order in place (see March 3, 1999 Substantive Response
of domestic interested parties at 45). Therefore, the domestic
interested parties argue that the Department should determine that the
net countervailable subsidy likely to prevail should be the country-
wide rate of 3.47 percent, the rate set forth in the original
investigation.
The Department disagrees with the domestic interested parties'
position with respect to the appropriate subsidy rate to be reported to
the Commission. As acknowledged by the domestic interested parties, in
this case, the Department found that all of the countervailable subsidy
programs have been terminated, without likelihood of reinstatement.
Absent information on usage of other countervailable subsidy programs,
the Department has no basis on which to determine the net
countervailable subsidy likely to prevail.
Nature of the Subsidy
In the Sunset Policy Bulletin, the Department states that,
consistent with section 752(a)(6) of the Act, the Department will
provide information to the Commission concerning the nature of the
subsidy and whether the subsidy is a subsidy described in Article 3 or
Article 6.1 of the Subsidies Agreement. In their March 3, 1999
substantive response, the domestic interested parties, did not address
this issue. However, since all of the known countervailable programs
have been terminated, there is no nature of the subsidy to report to
the Commission.
Final Results of Review
As a result of this review, the Department finds that revocation of
the countervailing duty order would be likely to lead to continuation
or recurrence of a countervailable subsidy. However, as a result of
termination of all known countervailable programs, the Department is
unable to determine the net countervailable subsidy likely to prevail.
This notice serves as the only reminder to parties subject to
administrative protective order (APO) of their responsibility
concerning the disposition of proprietary information disclosed under
APO in accordance with 19 CFR 351.305 of the Department's regulations.
Timely notification of return/destruction of APO materials or
conversion to judicial protective order is hereby requested. Failure to
comply with the regulations and the terms of an APO is a sanctionable
violation.
This five-year (``sunset'') review and notice are in accordance
with sections 751(c), 752, and 777(i)(1) of the Act.
Dated: August 30, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-23045 Filed 9-2-99; 8:45 am]
BILLING CODE 3510-DS-P