[Federal Register Volume 65, Number 239 (Tuesday, December 12, 2000)]
[Notices]
[Pages 77580-77584]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-31634]



[[Page 77580]]

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DEPARTMENT OF COMMERCE

International Trade Administration

[C-357-815, C-533-821, C-560-813, C-791-810, C-549-818]


Notice of Initiation of Countervailing Duty Investigations: 
Certain Hot-Rolled Carbon Steel Flat Products From Argentina, India, 
Indonesia, South Africa, and Thailand

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

ACTION: Initiation of Countervailing Duty Investigations.

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EFFECTIVE DATE: December 12, 2000.

FOR FURTHER INFORMATION CONTACT: Robert Copyak (Argentina), at (202) 
482-2209; Eric Greynolds (India), at (202) 482-6071; Stephanie Moore 
(Indonesia), at (202) 482-3692; Sally Gannon (South Africa), at 482-
0162; and Dana Mermelstein (Thailand), at (202) 482-1391, Import 
Administration, U.S. Department of Commerce, Room 1870, 14th Street and 
Constitution Avenue, N.W., Washington, D.C. 20230.

INITIATION OF INVESTIGATIONS:   

The Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (the Act) by the 
Uruguay Round Agreements Act (URAA). In addition, unless otherwise 
indicated, all citations to the Department's regulations are to the 
regulations codified at 19 CFR Part 351 (2000).

The Petitions

    On November 13, 2000, the Department of Commerce (the Department) 
received petitions filed in proper form on behalf of Bethlehem Steel 
Corporation; LTV Steel Company, Inc.; National Steel Corporation; and 
U.S. Steel Group, a Unit of USX Corporation; Gallatin Steel Company; 
IPSCO Steel Inc.; Nucor Corporation; Steel Dynamics, Inc.; Weirton 
Steel Corporation, and the Independent Steelworkers Union (the 
petitioners). The United Steelworkers of America notified the 
Department that it also is a petitioning party in these investigations 
on November 16, 2000. The Department received from the petitioners 
information supplementing the petitions throughout the 20-day 
initiation period.
    In accordance with section 702(b)(1) of the Act, the petitioners 
allege that manufacturers, producers, or exporters of certain hot-
rolled carbon steel flat products (hot-rolled steel or subject 
merchandise) in Argentina, India, Indonesia, South Africa, and Thailand 
receive countervailable subsidies within the meaning of section 701 of 
the Act.
    The Department finds that the petitioners filed the petitions on 
behalf of the domestic industry because they are interested parties as 
defined in sections 771(9)(C) and (D) of the Act. The petitioners have 
demonstrated sufficient industry support with respect to each of the 
countervailing duty investigations which they are requesting the 
Department to initiate (see Determination of Industry Support for the 
Petitions, below).

Scope of Investigations

    For purposes of these investigations, the products covered are 
certain hot-rolled carbon steel flat 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 of 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 4.0 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 within the scope of these investigations 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 or niobium (also commonly referred to as columbium), or both, 
added to stabilize carbon and nitrogen elements. HSLA steels are 
recognized as steels with micro-alloying levels of elements such as 
chromium, copper, niobium, 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 these investigations, 
regardless of definitions in the Harmonized Tariff Schedule of the 
United States (HTSUS), are products in which: (i) Iron predominates, by 
weight, over each of the other contained elements; (ii) the carbon 
content is 2 percent or less, by weight; and (iii) none of the elements 
listed below exceeds the quantity, by weight, respectively indicated:

1.80 percent of manganese, or
2.25 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
0.10 percent of molybdenum, or
0.10 percent of niobium, 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 these investigations unless 
otherwise excluded. The following products, by way of example, are 
outside or specifically excluded from the scope of these 
investigations:
     Alloy hot-rolled steel products in which at least one of 
the chemical elements exceeds those listed above (including, e.g., 
American Society for Testing and Materials (ASTM) specifications A543, 
A387, A514, A517, A506).
     Society of Automotive Engineers (SAE)/American Iron & 
Steel Institute (AISI) grades of series 2300 and higher.
     Ball bearings 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 2.25 percent.
     ASTM specifications A710 and A736.
     USS abrasion-resistant steels (USS AR 400, USS AR 500).
     All products (proprietary or otherwise) based on an alloy 
ASTM specification (sample specifications: ASTM A506, A507).
     Non-rectangular shapes, not in coils, which are the result 
of having been processed by cutting or stamping and which have assumed 
the character of articles or products classified outside chapter 72 of 
the HTSUS.
    The merchandise subject to these investigations is classified in 
the 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,

[[Page 77581]]

7208.90.00.00, 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, and 7211.19.75.90. Certain hot-rolled carbon steel flat 
products covered by these investigations, 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. Subject merchandise 
may also enter under 7210.70.30.00, 7210.90.90.00, 7211.14.00.30, 
7212.40.10.00, 7212.40.50.00, and 7212.50.00.00. Although the HTSUS 
subheadings are provided for convenience and U.S. Customs purposes, the 
written description of the merchandise under investigation is 
dispositive.
    During our review of the petitions, we discussed the scope with the 
petitioner to ensure that it accurately reflects the product for which 
the domestic industry is seeking relief. Moreover, as discussed in the 
preamble to the Department's regulations (62 FR 27323), we are setting 
aside a period for parties to raise issues regarding product coverage. 
The Department encourages all parties to submit such comments by 
December 26, 2000. Comments should be addressed to Import 
Administration's Central Records Unit at Room 1870, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 
20230. The period of scope consultations is intended to provide the 
Department with ample opportunity to consider all comments and consult 
with parties prior to the issuance of the preliminary determinations.

Consultations

    Pursuant to section 702(b)(4)(A)(ii) of the Act, the Department 
invited representatives of the relevant foreign governments for 
consultations with respect to the petitions filed. The Department held 
consultations with representatives of the governments of Thailand on 
November 28, Argentina on November 29, and South Africa on November 30, 
2000. See the memoranda to the file regarding these consultations 
(public documents on file in the Central Records Unit of the Department 
of Commerce, Room B-099). The Government of Indonesia did not accept 
our invitation to hold consultations before the initiation. However, it 
has requested a meeting after initiation. The Government of India also 
did not accept our invitation to hold consultations before the 
initiation. It did, however, submit written comments on December 4, 
2000. In addition, it has requested a meeting after initiation.

Determination of Industry Support for the Petitions

    Section 771(4)(A) of the Act defines the ``industry'' as the 
producers of a domestic like product. Thus, to determine whether the 
petition has the requisite industry support, the statute directs the 
Department to look to producers and workers who produce the domestic 
like product. The International Trade Commission (ITC), which is 
responsible for determining whether ``the domestic industry'' has been 
injured, must also determine what constitutes a domestic like product 
in order to define the industry. While both the Department and the ITC 
must apply the same statutory definition regarding the domestic like 
product (section 771(10) of the Act), they do so for different purposes 
and pursuant to separate and distinct authority. In addition, the 
Department's determination is subject to limitations of time and 
information. Although this may result in different definitions of the 
like product, such differences do not render the decision of either 
agency contrary to the law. \1\
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    \1\ See Algoma Steel Corp. Ltd., v. United States, 688 F. Supp. 
639, 642-44 (CIT 1988); High Information Content Flat Panel Displays 
and Display Glass Therefore from Japan: Final Determination; 
Rescission of Investigation and Partial Dismissal of Petition, 56 FR 
32376, 32380-81 (July 16, 1991).
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    Section 771(10) of the Act defines the domestic like product as ``a 
product which is like, or in the absence of like, most similar in 
characteristics and uses with, the article subject to an investigation 
under this title.'' Thus, the reference point from which the domestic 
like product analysis begins is ``the article subject to an 
investigation,'' i.e., the class or kind of merchandise to be 
investigated, which normally will be the scope as defined in the 
petition. Moreover, the petitioners do not offer a definition of 
domestic like product distinct from the scope of the investigation.
    In this case, ``the article subject to investigation'' is 
substantially similar to the scope of the Department's investigations 
involving hot-rolled carbon steel products initiated in 1998. See 
Initiation of Antidumping Duty Investigations: Certain Hot-Rolled Flat-
Rolled Carbon-Quality Steel Products From Brazil, Japan, and the 
Russian Federation, 63 FR 56607 (October 22, 1998). The only 
differences are as follows: (1) A 2.25 percent silicon maximum content 
level (as opposed to 1.50 percent in the 1998 case); (2) the omission 
of maximum content levels for boron and titanium; and (3) the 
itemization of two additional examples of products specifically 
excluded from the scope, i.e., all products (proprietary or otherwise) 
based on an alloy ASTM specification (sample specifications: ASTM A506, 
A507), and non-rectangular shapes, not in coils, which are the result 
of having been processed by cutting or stamping and which have assumed 
the character of articles or products classified outside chapter 72 of 
the HTSUS. The Department has reviewed reasonably available information 
to determine whether the products within the scope of the 
investigations constitute one or more than one domestic like product.
    Some steel products classified as alloy steels based on the HTSUS 
are recognized as carbon steels by the industry and/or the marketplace. 
For example, The Book of Steel, a 1996 publication by Sollac, a flat-
rolled steel division of Usinor, one of the largest steel companies in 
the world, identifies HSLA, IF, and motor lamination steels as falling 
within categories of plain carbon sheet steels (see chapters 44, 45 and 
52). Also, Carbon and Alloy Steels, published in 1996 by ASM 
International, a major materials society, indicates that HSLA steels 
are not considered to be alloy steels, but are in fact similar to as-
rolled mild-carbon steel and are generally priced by reference to the 
base price for carbon steels (see page 29). Carbon and Alloy Steels 
also distinguishes between carbon-boron and alloy-boron steels; the 
former may contain boron at levels which would classify it as alloy 
under the HTSUS, but would not classify it as an alloy steel 
commercially because, unlike the alloy-boron steels, higher levels of 
other alloying elements are not specified (see, e.g., pages 159 and 
161).
    We noted that, in the1998 hot-rolled steel investigations, we 
discussed these issues with representatives of the ITC and the 
International Trade Administration's (ITA's) Office of Trade 
Development. Other than the fact that the AISI technically defines 
alloy steels based on alloy levels comparable to those in the HTSUS, 
none of the agency representatives cited reasons why the products in 
question might be treated as distinct from hot-rolled carbon steels. In 
addition to the research discussed above, the Department determined in

[[Page 77582]]

the 1998 hot-rolled steel investigations that, with respect to certain 
steel products, such as high-strength low-alloy steel, industry sources 
indicated that these steel products are manufactured by similar 
processes, are priced from similar bases, are marketed in comparable 
ways, and are used for similar applications. See Certain Hot-Rolled 
Flat-Rolled Carbon-Quality Steel Products From Brazil, Japan, and the 
Russian Federation: Attachment to the Initiation Checklist, Re: 
Industry Support, October 15, 1998 (which is on file and publicly 
available in the Central Records Unit (CRU) of the Main Commerce 
Department building). We are unaware of any factual differences between 
the present case and the initiation of the 1998 hot-rolled steel 
investigations. Thus, based on our analysis of the information 
presented to the Department above and the information obtained and 
reviewed independently by the Department, we have determined that there 
is a single domestic like product which is defined in the Scope of 
Investigations section above, and have analyzed industry support in 
terms of this domestic like product.
    Section 702(b)(1) of the Act requires that a petition be filed on 
behalf of the domestic industry. Section 702(c)(4)(A) of the Act 
provides that a petition meets this requirement if the domestic 
producers or workers who support the petition account for: (1) At least 
25 percent of the total production of the domestic like product; and 
(2) more than 50 percent of the production of the domestic like product 
produced by that portion of the industry expressing support for, or 
opposition to, the petition. Finally, Section 702(c)(4)(D) of the Act 
provides that if the petition does not establish support of domestic 
producers or workers accounting for more than 50 percent of the total 
production of the domestic like product, the administering agency 
shall: (i) Poll the industry or rely on other information in order to 
determine if there is support for the petition as required by 
subparagraph (A), or (ii) determine industry support using a 
statistically valid sampling method.
    In order to estimate production for the domestic industry as 
defined for purposes of this case, the Department has relied upon not 
only the petition and amendments thereto, but also upon ``other 
information'' it obtained through research and which is attached to the 
Initiation Checklist for each country (See Import Administration CVD 
Investigation Initiation Checklist (Initiation Checklist), Attachment 
Re: Industry Support, December 4, 2000). Based on information from 
these sources, the Department determined, pursuant to Section 
702(c)(4)(D), that there is support for the petition as required by 
subparagraph (A). Specifically, the Department made the following 
determinations. For Argentina, India, Indonesia, South Africa, and 
Thailand, the petitioners established industry support representing 
over 50 percent of total production of the domestic like product. 
Therefore, the domestic producers or workers who support the petition 
account for at least 25 percent of the total production of the domestic 
like product, and the requirements of Section 702(c)(4)(A)(i) are met. 
Furthermore, because the Department received no opposition to the 
petition, the domestic producers or workers who support the petition 
account for more than 50 percent of the production of the domestic like 
product produced by that portion of the industry expressing support for 
or opposition to the petition. Thus, the requirements of Section 
702(c)(4)(A)(ii) are also met.
    Accordingly, the Department determines that the petitions were 
filed on behalf of the domestic industry within the meaning of section 
702(b)(1) of the Act. See the December 4, 2000, memoranda to the file 
(for each country) regarding the initiation of each investigation 
(public documents on file in the Central Records Unit of the Department 
of Commerce, Room B-099).

Injury Test

    Because Argentina, India, Indonesia, South Africa, and Thailand are 
``Subsidies Agreement Countries'' within the meaning of section 701(b) 
of the Act, section 701(a)(2) applies to these investigations. 
Accordingly, the ITC must determine whether imports of the subject 
merchandise from these countries materially injure, or threaten 
material injury to, a U.S. industry.

Allegations and Evidence of Material Injury and Causation

    The petitions allege that the U.S. industry producing the domestic 
like product is being materially injured, or is threatened with 
material injury, by reason of the individual and cumulated subsidized 
imports of the subject merchandise. Petitioners contend that the 
industry's injured condition is evident in the declining trends in net 
operating profits, net sales volumes, profit-to-sales ratios, and 
capacity utilization. The allegations of injury and causation are 
supported by relevant evidence including business proprietary data from 
the petitioning firms and U.S. Customs import data. The Department 
assessed the allegations and supporting evidence regarding material 
injury and causation, and determined that these allegations are 
supported by accurate and adequate evidence and meet the statutory 
requirements for initiation. See the December 4, 2000, memoranda to the 
file (for each country) regarding the initiation of each investigation 
(public documents on file in the Central Records Unit of the Department 
of Commerce, Room B-099).

Allegations of Subsidies

    Section 702(b) of the Act requires the Department to initiate a 
countervailing duty proceeding whenever an interested party files a 
petition, on behalf of an industry, that (1) alleges the elements 
necessary for an imposition of a duty under section 701(a), and (2) is 
accompanied by information reasonably available to petitioners 
supporting the allegations.

Initiation of Countervailing Duty Investigations

    The Department has examined the countervailing duty petitions on 
hot-rolled steel from Argentina, India, Indonesia, South Africa, and 
Thailand, and found that they comply with the requirements of section 
702(b) of the Act. Therefore, in accordance with section 702(b) of the 
Act, we are initiating countervailing duty investigations to determine 
whether manufacturers, producers, or exporters of hot-rolled steel from 
these countries receive subsidies. See the December 4, 2000, memoranda 
to the file (for each country) regarding the initiation of each 
investigation (public versions on file in the Central Records Unit of 
the Department of Commerce, Room B-099).

A. Argentina

    We are including in our investigation the following programs 
alleged in the petition to have provided countervailable subsidies to 
producers and exporters of the subject merchandise in Argentina:

1. Equity Infusions Bestowed from 1984 through 1990
2. Government of Argentina Assumption of Debt
3. Relief from Liquidation Costs
4. Additional Subsidies from Reorganization/Privatization under Decree 
1144/92
5. Investment Commitment
6. Tax Abatement Program
7. Rebate of Indirect Taxes (Reembolso)
8. Pre-and Post-shipment Export Financing
9. Zero-Tariff Turnkey Bill

[[Page 77583]]

Creditworthiness
    Petitioners have also alleged that Sociedad Mixta Siderurgica 
Argentina (SOMISA) was uncreditworthy in 1991 and 1992. To support this 
allegation, petitioners stated that the company had negative operating 
margins and negative return on sales in each of these two years. 
However, petitioners further stated that to fund these losses the 
company took on more long-term debt. Under the Department's policy, the 
presence of long-term borrowing generally constitutes dispositive 
evidence that a firm is creditworthy if such loans are provided without 
a government guarantee. See Section 351.505(a)(4)(ii) of the 
Department's CVD Regulations. Absent information that this debt was 
guaranteed by the Government of Argentina or other similar information, 
we do not plan to investigate SOMISA's alleged creditworthiness in 1991 
and 1992.

B. India

    We are including in our investigation the following programs 
alleged in the petition to have provided countervailable subsidies to 
producers and exporters of the subject merchandise in India:

1. The Passbook Scheme (PBS)
2. The Duty Entitlement Passbook Scheme--Pre- and Post-Export Credits 
(DEPBS)
3. Advanced, Advanced Intermediate and Special Imprest Import Licenses 
Under the Duty Exemption Scheme
4. Special Import Licenses (SIL)
5. Export Promotion Capital Goods Scheme (EPCGS)
6. Concessional Export Financing (Pre-and Post-shipment Export 
Financing)
7. Exemption of Export Credit from Interest Taxes
8. Income Tax Deductions Under Section 80 HHC
9. Loan Guarantees from the Government of India (GOI)
10. The GOI's Forgiveness of Steel Development Fund Loans Issued to 
Steel Authority of India Limited (SAIL)
11. GOI Forgiveness of Other Loans Issued to SAIL
12. Steel Development Fund (SDF) Loans

    In the Final Affirmative Countervailing Duty Determination: Certain 
Cut-to-Length Carbon-Quality Steel Plate from India (CTL Plate), 64 FR 
73131, 73138 (December 29, 1999), we determined that because the SDF 
was funded by producer levies and other non-GOI monies, there was no 
evidence of direct or indirect funding by the GOI. In addition, in CTL 
Plate, 64 FR at 73143, we determined that there was no evidence 
indicating that the GOI controlled the SDF. Therefore, we determined 
that the program was not countervailable.
    However, new information provided in the petition has led us to 
reconsider our finding in CTL Plate regarding the GOI's level of 
control of the SDF. Section 771(5)(B)(iii) of the Act states that a 
subsidy is bestowed when an authority ``entrusts or directs a private 
entity to make a financial contribution.'' Given that the GOI 
apparently has the authority to waive SAIL's SDF loans, we determine 
that, for the purposes of this initiation, there is sufficient evidence 
to initiate an investigation of the GOI's ability to control the terms 
at which participating companies can borrow from the fund.
Creditworthiness
    In their November 13, 2000 filing and their November 22, 2000 
amended filing, petitioners allege that SAIL was uncreditworthy in each 
year during the period 1989 through March 31, 2000.\2\
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    \2\ SAIL's most recently completed fiscal year was March 31, 
2000.
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    Based on an analysis of the information provided by petitioners, 
including detailed data regarding SAIL's financial health between the 
years 1989 through 2000, we recommend initiating an investigation on 
whether SAIL was uncreditworthy only during the fiscal years 1999 and 
2000. An examination of key financial ratios reveals general 
consistency during the fiscal years 1989 through 1998. Only in the 
fiscal years covering April 1, 1998, through March 31, 1999, and April 
1, 1999, through March 31, 2000, do the ratios take a substantial 
negative turn, especially with regard to profit ratios. Additionally, 
petitioners have provided information indicating that SAIL neared being 
declared a ``sick'' company based on its 1998-99 financial information, 
but they have not provided evidence indicating that SAIL was on the 
verge of such a declaration before that time.
    We note that it appears from SAIL's annual reports that the company 
received long-term loans from commercial sources that were outstanding 
as of the time of its 1999 annual report. The presence of such loans 
generally constitutes dispositive evidence that a firm is creditworthy 
if such loans are provided without a government guarantee (see Section 
351.505(a)(4)(ii) of the Department's CVD Regulations). However, given 
certain specific allegations made by petitioners regarding loan 
guarantees by the GOI, it is possible that the loans highlighted in 
SAIL's annual reports do indeed contain guarantees by the GOI. On this 
basis, we are investigating whether SAIL was uncreditworthy during the 
fiscal years 1999 and 2000.

C. Indonesia

    We are including in our investigation the following programs 
alleged in the petition to have provided countervailable subsidies to 
producers and exporters of the subject merchandise in Indonesia:

1. 1995 Equity Infusion into P.T. Krakatau Steel
2. Pre-1993 Equity Infusion
3. 1989 Equity Infusion to Cold Rolling Mill of Indonesia (CRMI)
4. Three-Step Equity Infusion to CRMI
5. Two-Step Loan Program
6. Bank of Indonesia Rediscount Loan Program
Creditworthiness
    Petitioners have submitted information sufficient to warrant an 
examination of the creditworthiness of Krakatau and CRMI in the years 
in which these companies were approved for equity and other non-
recurring benefits.

D. South Africa

    We are including in our investigation the following programs 
alleged in the petition to have provided countervailable subsidies to 
producers and exporters of the subject merchandise in South Africa:

1. 1996 and 1999 Equity Infusions into Saldanha Steel (Proprietary) 
Limited (Saldanha)
2. Industrial Development Corporation (IDC ) Loans
3. Impofin Loan Guarantees
4. Section 37E Tax Allowances
Creditworthiness
    Petitioners have submitted information sufficient to warrant an 
examination of the creditworthiness of Saldanha in the years in which 
the company was approved for equity and other non-recurring benefits.

E. Thailand

    We are including in our investigation the following programs 
alleged in the petition to have provided countervailable subsidies to 
producers and exporters of the subject merchandise in Thailand:

1. Duty Exemptions on Imports of Raw and Essential Materials Under 
Section 30 of the Investment Promotion Act (IPA)

[[Page 77584]]

2. Duty Exemptions on Imports of Machinery Under IPA Section 28
3. Exemptions from VAT Under Section 21(4) of the VAT Act
4. Corporate Income Tax Exemptions Under IPA Section 31
5. Additional Tax Deductions Under IPA Section 35
6. IPA Subsidies for Construction of SSI's On-Site Power Plant
7. IPA Subsidies for Building and Operating the Prachuab Port
8. SSI Debt Restructuring
9. LPN Debt Restructuring
10. Loans from the Industrial Finance Corporation of Thailand (IFCT) 
and the Thai Export-Import Bank
11. Other Loans and Loan Guarantees from Banks Owned, Controlled, or 
Influenced by the RTG
12. Export Packing Credits
13. Pre-shipment Finance Facilities
14. Export Insurance Program
15. Trust Receipt Financing for Raw Materials
16. Tax Certificates for Export
17. Import Duty Exemptions for Industrial Estates
18. Export Processing Zone Incentives
19. Provision of Water Infrastructure for Less Than Adequate 
Remuneration
20. Provision of Electricity for Less Than Adequate Remuneration
Creditworthiness
    Petitioners allege that both Sahaviriya Steel Industries Pcl (SSI) 
and LPN Plate Mill Pcl. (LPN) have been uncreditworthy since 1996. Our 
review of the information provided by the petitioners indicates that 
SSI was able to issue debentures to the public in 1995, and it was not 
until 1996 that these debentures lost their value. While SSI's 
financial ratios were very weak in 1995, it was not until the end of 
1996 that the company's ratios indicated that they were in serious 
financial difficulty and would have trouble meeting their debt 
obligations; in fact, SSI defaulted on its convertible bond issue in 
July 1998. The company continued to experience serious financial 
difficulties through at least the third quarter of 1999. As such, we 
will examine whether SSI was uncrediworthy from 1997 through 1999. With 
respect to LPN, we have examined the ratios based on information 
submitted by petitioners and we consider that the company's financial 
position, while deteriorating, was not critical until 1996. While 
petitioners were unable to obtain financial statements for the years 
after 1997, other evidence provided by the petitioners indicates that 
LPN continued to experience financial difficulties through the third 
quarter of 1999. Thus, we will examine whether LPN was uncreditworthy 
from 1997 through 1999.
    We are not including in our investigation the following programs 
alleged to be benefitting producers and exporters of the subject 
merchandise in Thailand:
    1. Fuel subsidies for SSI. Petitioners allege that the preliminary 
plans for the Steel Based Industrial Estate, where SSI is located, 
called for it to build a power plant on site to supply its steel mills. 
This plan called for SSI to start a ``special purpose joint venture'' 
to build the plant and receive Board of Investment (BoI) incentives 
similar to its other companies. Petitioners further allege that SSI was 
going to obtain fuel from PTT, Thailand's national oil company. 
Petitioners contend that PTT was going to provide SSI with fuel at 
international prices well below those available to other Thai 
producers. The Sahaviriya Power Plant Report that petitioners reference 
states ``that it will be critical to insure that they (PTT) provide 
competitive pricing in the same fashion that they do to EGAT.'' 
Although petitioners have alleged that ``competitive'' pricing 
constitutes a benefit, they have provided no information to support 
their allegation that the fuel is provided for less than adequate 
remuneration in accordance with section 771(5)(E)(iv) of the Act. Steel 
Scrap Export restrictions. Petitioners allege that Thailand imposes an 
export duty on scrap iron and steel. Petitioners claim that a financial 
contribution and benefit would be conferred under such export 
restrictions because, by the RTG's prevention of scrap exports, Thai 
steelmakers would gain a supply of low-priced steel scrap, an input in 
the steelmaking process. Petitioners contend that such a program would 
satisfy specificity requirements because steel producers are the 
primary users of steel scrap. We note that although economic theory 
would indicate that steel scrap export restrictions in Thailand might 
artificially lower domestic steel scrap prices, the Department requires 
information demonstrating that the restrictions had a downward pressure 
on steel scrap prices in order to meet the threshold of initiation. The 
petitioners did not provide sufficient information to support their 
allegation that the export restraints have ``led directly to a 
discernible lowering of input costs.'' See Statement of Administrative 
Action (``SAA'') accompanying the URAA, H.R. Doc. No. 103-316, at 257.

Distribution of Copies of the Petitions

    In accordance with section 702(b)(4)(A)(i) of the Act, copies of 
the public version of the petition have been provided to the 
representatives of Argentina, India, Indonesia, South Africa, and 
Thailand. We will attempt to provide copies of the public version of 
the petition to all the exporters named in the petition, as provided 
for under section 351.203(c)(2) of the Department's regulations.

ITC Notification

    Pursuant to section 702(d) of the Act, we have notified the ITC of 
these initiations.

Preliminary Determination by the ITC

    The ITC will determine by December 28, 2000, whether there is a 
reasonable indication that an industry in the United States is 
materially injured, or is threatened with material injury, by reason of 
imports of certain hot-rolled carbon steel flat products from 
Argentina, India, Indonesia, South Africa, and Thailand. A negative ITC 
determination for any country will result in the investigation being 
terminated with respect to that country; otherwise, the investigations 
will proceed according to statutory and regulatory time limits.
    This notice is published pursuant to section 777(i) of the Act.

    Dated: December 4, 2000.
Troy H. Cribb,
Assistant Secretary for Import Administration.
[FR Doc. 00-31634 Filed 12-11-00; 8:45 am]
BILLING CODE 3510-DS-P