[Federal Register Volume 65, Number 174 (Thursday, September 7, 2000)]
[Notices]
[Pages 54229-54232]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-22999]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-401-401]


Certain Carbon Steel Products from Sweden: Preliminary Results of 
Countervailing Duty Administrative Review and Extension of Time Limit 
for Final Results of Countervailing Duty Administrative Review

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

ACTION: Notice of preliminary results of countervailing duty 
administrative review.

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SUMMARY: The Department of Commerce (the Department) is conducting an 
administrative review of the countervailing duty order on certain 
carbon steel products from Sweden. The period covered by this 
administrative review is January 1, 1998 through December 31, 1998. For 
information on the net subsidy for each reviewed company, as well as 
for all non-reviewed companies, please see the ``Preliminary Results of 
Review'' section of this notice. If the final results remain the same 
as these preliminary results of administrative review, we will instruct 
the U.S. Customs Service (Customs) to assess countervailing duties as 
detailed in the ``Preliminary Results of Review'' section of this 
notice. Interested parties are invited to comment on these preliminary 
results. (See ``Public Comment'' section of this notice.)

EFFECTIVE DATE: September 7, 2000.

FOR FURTHER INFORMATION CONTACT: Tipten Troidl or Gayle Longest, AD/CVD 
Enforcement, Office VI, Group II, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone (202) 482-
1767 and (202) 482-3338, respectively.

SUPPLEMENTARY INFORMATION:

[[Page 54230]]

Background

    On October 4, 1985, the Department published in the Federal 
Register (50 FR 48517) the countervailing duty order on certain carbon 
steel products from Sweden. On October 22, 1999, the Department 
published a notice of ``Opportunity to Request Administrative Review'' 
(64 FR 56485) of this countervailing duty order. We received a timely 
request for review from SSAB Svenskt Stal AB (SSAB), the respondent 
company to this proceeding. On December 3, 1999, we initiated a review 
covering the period January 1, 1998, through December 31, 1998 (64 FR 
67846).
    In accordance with 19 CFR 351.213(b), this review covers only those 
producers or exporters of the subject merchandise for which a review 
was specifically requested. The producer/exporter of the subject 
merchandise for which the review was requested is SSAB. This review 
covers six programs.

Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the statute are 
references to the provisions of the Tariff Act of 1930 (the Act), as 
amended by the Uruguay Round Agreements Act (URAA) effective January 1, 
1995. In addition, unless indicated, all citations to the Department's 
regulations are to the current regulations as codified at 19 CFR Part 
351 (1999) and to the substantive countervailing duty regulations 
published in the Federal Register on November 25, 1998 (63 FR 65348) 
(CVD Regulations).

Scope of the Review

    Imports covered by this review are shipments of certain carbon 
steel products from Sweden. These products include cold-rolled carbon 
steel, flat-rolled products, whether or not corrugated, or crimped: 
whether or not pickled, not cut, not pressed and not stamped to non-
rectangular shape; not coated or pleated with metal and not clad; over 
12 inches in width and of any thickness; whether or not in coils. 
During the review period, such merchandise was classifiable under the 
Harmonized Tariff Schedule (HTS) item numbers 7209.11.0000, 
7209.12.0000, 7209.13.0000, 7209.21.0000, 7209.22.0000, 7209.23.0000, 
7209.24.5000, 7209.31.0000, 7209.32.0000, 7209.33.0000, 7209.34.0000, 
7209.41.0000, 7209.43.0000, 7209.44.0000, 7209.90.0000, 7211.30.5000, 
7211.41.7000 and 7211.49.5000. The written description remains 
dispositive.

Extension of Final Results

    Section 751(a)(3)(A) of the Act requires the Department to make a 
final determination within 120 days after the date on which the 
preliminary results are published. However, if it is not practicable to 
complete the review within this time period, section 751(a)(3)(A) of 
the Act allows the Department to extend the time period for the final 
results to 180 days. Due to the complex nature of the issues in this 
case, we have determined that it is not practicable to complete the 
final results for this review within the original time limit. 
Therefore, the Department is extending the time limit for the final 
results to 180 days from the date of publication of these preliminary 
results.

Subsidies Valuation Information

Allocation Methodology

    In the current review, there are no new non-recurring subsidies. 
All of the non-recurring grants under review were provided prior to the 
period of review (POR) and allocation periods for these grants were 
established during prior segments of this proceeding. Therefore, for 
the purposes of these results, the Department is using the original 
allocation period assigned to each grant. See Certain Carbon Steel 
Products from Sweden; Finals Results of Administrative Review, 62 FR 
16549-50 (April 7, 1997) (1994 Final Results).

Change in Ownership

A. Background

    SSAB is the only Swedish company that produces and exports the 
subject merchandise. SSAB has sold several productive units and the 
company was partially privatized in 1987 and in 1989. In 1994, SSAB was 
completely privatized.
    The Department is aware that on June 20, 2000, the Court of Appeals 
for the Federal Circuit (CAFC) denied the Department's petition for 
rehearing and suggestion for rehearing en banc in Delverde, SRL v. 
United States, 202 F.3d 1360 (Fed. Cir. 2000) (Delverde). Although this 
decision addressed a purely private change in ownership, it appears 
that it may impact the Department's privatization methodology. However, 
due to the complexity of the issue, the Department has not yet 
completed its analysis of how Delverde may affect this proceeding. 
Accordingly, for purposes of these preliminary results, we will 
continue to determine that a portion of subsidies bestowed on a 
government-owned company prior to privatization continues to benefit 
the production of the privatized company, as set forth below.
    The Department invites interested parties to comment in their case 
briefs on the implications of the Delverde decision on this proceeding.

B. Change in Ownership Calculation Methodology

    We followed the Change in Ownership methodology described in the 
General Issues Appendix (GIA) that is attached to the Final Affirmative 
Countervailing Duty Determination: Certain Steel Products From Austria, 
58 FR 37217, 37226 (July 9, 1993) and which was used in the last 
administrative review of this order. See Certain Steel Products From 
Sweden: Final Results of Countervailing Duty Administrative Review, 64 
FR 57038 (October 22, 1999) (1999 Final Results).

Analysis of Programs

I. Programs Preliminarily Determined To Confer Subsidies

A. Structural Loans

    Under three separate pieces of legislation, SSAB received 
structural loans from the Government of Sweden (GOS) for investment in 
plant and equipment. The loans were disbursed in installments between 
1978 and 1983. Two loans were outstanding during the POR.
    According to the terms of the loans, both structural loans were 
interest-free for three years from the date of disbursement. After that 
time, the loans incurred interest at a fixed rate of five percent per 
annum. See SSAB's February 18, 2000 Questionnaire Response at page 11-
13 (Public Version on file in Room B-099 of the main Commerce 
Building). After a five-year grace period, the principal is repaid in 
20 equal installments at the end of each calendar year.
    In the final determinations of the two original investigations of 
the subject merchandise, Final Affirmative Countervailing Duty 
Determination; Certain Carbon Steel Products from Sweden, 50 FR 33377 
(August 19, 1985) (1985 Final Determination) and Final Affirmative 
Countervailing Duty Determination: Certain Steel Products from Sweden, 
58 FR 37385 (July 9, 1993) (1993 Certain Steel Products), we determined 
that these types of loans were provided only to SSAB and were received 
at an interest rate lower than what the recipient would have paid on a 
comparable commercial loan. We therefore, determined that the loans are 
countervailable. There has been no new information or evidence of 
changed

[[Page 54231]]

circumstances in this review to warrant reconsideration of this 
determination.
    To calculate the benefit from the fixed-rate structural loans, we 
employed the long-term loan methodology described in the 1994 
administrative review of this order. See 1994 Final Results. To 
calculate the benefits of the variable-rate loan, we used the variable-
rate long-term loan methodology described in the 1994 Final Results. As 
the benchmark, we used SSAB's company-specific long-term interest 
rates, previously established in 1993 Certain Steel Products.
    We reduced the benefit attributable to the POR from the fixed-rate 
structural loans according to the methodology outlined in the ``Change 
in Ownership'' section above. We then aggregated the benefits for the 
fixed interest rate loans and divided the results by SSAB's total sales 
for 1998. On this basis, we preliminarily determine the net subsidy 
from the two structural loans to be 0.11 percent ad valorem.

B. Forgiven Reconstruction Loans

    The GOS provided reconstruction loans to SSAB between 1979 and 1985 
to cover operating losses, investment in certain plant and equipment, 
and for employment promotion purposes. The loans were interest-free for 
three years, after which a fixed interest rate was charged. According 
to the terms of the loans, up to half of the outstanding amount of the 
loan could be written-off after the second calendar year following the 
disbursement. The remainder of the loan could be written off entirely 
at the end of the ninth calendar year after disbursement. Pursuant to 
the terms of the reconstruction loans, the GOS wrote off large portions 
of principal and accrued interest on these loans between 1980 and 1990.
    In the 1985 Final Determination and in 1993 Certain Steel Products, 
we determined that forgiveness of these loans is countervailable. There 
has been no new information or evidence of changed circumstances in 
this review to warrant reconsideration of this determination.
    To calculate the benefit, we treated the written-off portions of 
the reconstruction loans as countervailable grants received in the 
years the loans were forgiven and attributed the benefit for the POR 
from this program using the methodology described in the ``Allocation 
Methodology'' section above. We then reduced the benefits from these 
grants attributable to the POR according to the methodology outlined in 
the ``Change in Ownership'' section above. We then divided the results 
by SSAB's total sales for 1998. On this basis, we preliminarily 
determine the net subsidy from the three allocable forgiven 
reconstruction loans to be 0.51 percent ad valorem.

II. Other Programs

Research and Development Loans and Grants

    The Swedish National Board for Industrial and Technical Development 
(NUTEK) provides research and development loans and grants to Swedish 
industries for R&D purposes. One type of R&D loan (industrial 
development loans) is mostly aimed at ``new'' industries such as the 
biotechnical, electronic, and medical industries. Another type of R&D 
loan (energy efficiency loans) is directed towards big energy 
consumers.
    Under this program, SSAB had several R&D loans outstanding during 
the POR on which it did not make either principal or interest payments. 
In the last administrative review of this order, we found that the 
benefit provided from these loans was less than 0.005 percent ad 
valorem, and would have no impact on the countervailing duty rate 
calculated for this POR; therefore, it was not necessary to determine 
whether the loans provided under NUTEK were specific. See, e.g., 1999 
Final Results.
    In this administrative review, SSAB reported that it also received 
a NUTEK R&D grant for the application and further development of 
Information Technology concerning improved energy utilization and 
control of industrial processes. Under section 351.524(b)(2) of the CVD 
Regulations, this grant would be expensed in the year of receipt, which 
is the POR. The benefit from this grant is 0.01 percent ad valorem. 
Because we have not had to make a specificity determination with 
respect to this program in the last few administrative reviews of this 
order, we are attempting to gather more information from the GOS before 
making a final determination on the specificity of this program.

III. Programs Preliminarily Determined To Be Not Used

A. Transportation Grants
B. Location-of-Industry Loans
C. Regional Development Grants

Preliminary Results of Review

    In accordance with 19 CFR 351.221(b)(4)(i), we calculated an 
individual subsidy rate for the producer/exporter subject to this 
administrative review. For the period January 1, 1998, through December 
31, 1998, we preliminarily determine the net subsidy for SSAB to be 
0.62 percent ad valorem.
    If the final results of this review remain the same as these 
preliminary results, the Department intends to instruct Customs to 
assess countervailing duties as indicated above. The Department also 
intends to instruct Customs to collect cash deposits of estimated 
countervailing duties as indicated above of the f.o.b. invoice price on 
all shipments of the subject merchandise from reviewed companies, 
entered, or withdrawn from warehouse, for consumption on or after the 
date of publication of the final results of this review.
    Because the URAA replaced the general rule in favor of a country-
wide rate with a general rule in favor of individual rates for 
investigated and reviewed companies, the procedures for establishing 
countervailing duty rates, including those for non-reviewed companies, 
are now essentially the same as those in antidumping cases, except as 
provided for in section 777A(e)(2)(B) of the Act. The requested review 
will normally cover only those companies specifically named. See 19 CFR 
351.213(b). Pursuant to 19 CFR 351.212(c), for all companies for which 
a review was not requested, duties must be assessed at the cash deposit 
rate, and cash deposits must continue to be collected, at the rate 
previously ordered. As such, the countervailing duty cash deposit rate 
applicable to a company can no longer change, except pursuant to a 
request for a review of that company. See Federal-Mogul Corporation and 
The Torrington Company v. United States, 822 F. Supp. 782 (CIT 1993) 
and Floral Trade Council v. United States, 822 F. Supp. 766 (CIT 1993) 
(interpreting 19 CFR 353.22(e), the antidumping regulation on automatic 
assessment, which is identical to 19 CFR 355.22(g)). Therefore, the 
cash deposit rates for all companies except those covered by this 
review will be unchanged by the results of this review.
    We will instruct Customs to continue to collect cash deposits for 
non-reviewed companies at the most recent company-specific or country-
wide rate applicable to the company. Accordingly, the cash deposit 
rates that will be applied to non-reviewed companies covered by this 
order will be the rate for that company established in the most 
recently completed administrative proceeding conducted under the URAA. 
If such a review has not been conducted, the rate established in the 
most recently completed administrative proceeding pursuant to the 
statutory provisions that were in effect prior to the URAA amendments 
is applicable. See Certain Carbon Steel Products from

[[Page 54232]]

Sweden; Final Results of Countervailing Duty Administrative Review, 64 
FR 57038 (October 22, 1999). These rates shall apply to all non-
reviewed companies until a review of a company assigned these rates is 
requested. In addition, for the period January 1, 1998 through December 
31, 1998, the assessment rates applicable to all non-reviewed companies 
covered by this order are the cash deposit rates in effect at the time 
of entry.

Public Comment

    Pursuant to 19 CFR 351.224(b), the Department will disclose to 
parties to the proceeding any calculations performed in connection with 
these preliminary results within five days after the date of the public 
announcement of this notice. Pursuant to 19 CFR 351.309, interested 
parties may submit written comments in response to these preliminary 
results. Unless otherwise indicated by the Department, case briefs must 
be submitted within 30 days after the date of publication of this 
notice, and rebuttal briefs, limited to arguments raised in case 
briefs, must be submitted no later than five days after the time limit 
for filing case briefs, unless otherwise specified by the Department. 
Parties who submit argument in this proceeding are requested to submit 
with the argument: (1) A statement of the issue, and (2) a brief 
summary of the argument. Parties submitting case and/or rebuttal briefs 
are requested to provide the Department copies of the public version on 
disk. Case and rebuttal briefs must be served on interested parties in 
accordance with 19 CFR 351.303(f). Also, pursuant to 19 CFR 351.310, 
within 30 days of the date of publication of this notice, interested 
parties may request a public hearing on arguments to be raised in the 
case and rebuttal briefs. Unless the Secretary specifies otherwise, the 
hearing, if requested, will be held two days after the date for 
submission of rebuttal briefs, that is, thirty-seven days after the 
date of publication of these preliminary results.
    Representatives of parties to the proceeding may request disclosure 
of proprietary information under administrative protective order no 
later than 10 days after the representative's client or employer 
becomes a party to the proceeding, but in no event later than the date 
the case briefs, under 19 CFR 351.309(c)(ii), are due. The Department 
will publish the final results of these administrative reviews, 
including the results of its analysis of issues raised in any case or 
rebuttal brief or at a hearing.
    This administrative review is issued and published in accordance 
with sections 751(a)(1) and 777(i)(1) of the Act (19 U.S.C. 1675(a)(1) 
and 19 U.S.C. 1677f(i)(1)).

    Dated: August 31, 2000.
Troy H. Cribb,
Acting Assistant Secretary for Import Administration.
[FR Doc. 00-22999 Filed 9-6-00; 8:45 am]
BILLING CODE 3510-DS-P