[Federal Register Volume 66, Number 17 (Thursday, January 25, 2001)]
[Notices]
[Pages 7739-7741]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-2203]



[[Page 7739]]

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DEPARTMENT OF COMMERCE

International Trade Administration

[C-475-830]


Notice of Initiation of Countervailing Duty Investigation: 
Stainless Steel Bar from Italy

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

ACTION: Initiation of countervailing duty investigation.

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EFFECTIVE DATE: January 25, 2001.

FOR FURTHER INFORMATION CONTACT: Suresh Maniam or Greg Campbell at 
(202) 482-0176 and (202) 482-2239, respectively; Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW., Washington, DC 20230.

Initiation of Investigation

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. In addition, unless otherwise indicated, 
all citations to the Department of Commerce's (the Department's) 
regulations are references to the provisions codified at 19 CFR part 
351 (April 2000).

The Petition

    On December 28, 2000, the Department received a petition filed in 
proper form by Carpenter Technology Corp., Crucible Specialty Metals, 
Electralloy Corp., Empire Specialty Steel Inc., Slater Steels Corp., 
and the United Steelworkers of America, AFL-CIO/CLC (collectively, the 
petitioners). The Department received supplemental information to the 
petition on January 8, 2001.
    In accordance with section 702(b)(1) of the Act, the petitioners 
allege that manufacturers, producers, or exporters of the subject 
merchandise from Italy receive countervailable subsidies within the 
meaning of section 701 of the Act, and that such imports are materially 
injuring, or threatening material injury to, an industry in the United 
States.
    The Department finds that the petitioners filed this petition on 
behalf of the domestic industry because they are interested parties as 
defined in sections 771(9)(C) and (D) of the Act and they have 
demonstrated sufficient industry support. See infra, ``Determination of 
Industry Support for the Petition.''

Scope of Investigation

    For purposes of this investigation, the term ``stainless steel 
bar'' includes articles of stainless steel in straight lengths that 
have been either hot-rolled, forged, turned, cold-drawn, cold-rolled or 
otherwise cold-finished, or ground, having a uniform solid cross 
section along their whole length in the shape of circles, segments of 
circles, ovals, rectangles (including squares), triangles, hexagons, 
octagons, or other convex polygons. Stainless steel bar includes cold-
finished stainless steel bars that are turned or ground in straight 
lengths, whether produced from hot-rolled bar or from straightened and 
cut rod or wire, and reinforcing bars that have indentations, ribs, 
grooves, or other deformations produced during the rolling process.
    Except as specified above, the term does not include stainless 
steel semi-finished products, cut length flat-rolled products (i.e., 
cut length rolled products which if less than 4.75 mm in thickness have 
a width measuring at least 10 times in thickness, or if 4.75 mm or more 
in thickness having a width which exceeds 150 mm and measures at least 
twice the thickness), products that have been cut from stainless steel 
sheet, strip or plate, wire (i.e., cold-formed products in coils, of 
any uniform solid cross section along their whole length, which do not 
conform to the definition of flat-rolled product), and angles, shapes 
and sections.
    The stainless steel bar subject to this investigation is currently 
classifiable under subheadings 7222.11.00.05, 7222.11.00.50, 
7222.19.00.05, 7222.19.00.50, 7222.20.00.05, 7222.20.00.45, 
7222.20.00.75, and 7222.30.00.00 of the Harmonized Tariff Schedules of 
the United States (HTSUS). Although the HTSUS subheadings are provided 
for convenience and Customs purposes, the written description of the 
scope of these investigations is dispositive.
    During our review of the petition, we discussed the scope with the 
petitioners and the Customs Service (see Memorandum to Paula Ilardi, 
``Scope Language for Stainless Steel Bar Petitions,'' dated January 9, 
2001) to ensure that the scope in the petition accurately reflects the 
products for which the domestic industry is seeking relief. Moreover, 
as discussed in the preamble to the Department's regulations 
(Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296, 
27323 (May 19, 1997)), we are setting aside a period for parties to 
raise issues regarding product coverage. The Department encourages all 
parties to submit such comments within 20 calendar days of publication 
of this notice. Comments should be addressed to Import Administration's 
Central Records Unit, 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 determination.

Consultations

    Pursuant to section 702(b)(4)(A)(ii) of the Act, the Department 
invited representatives of the Government of Italy (GOI) and the 
European Commission (EC) for consultations with respect to the petition 
filed. The Department held consultations with the GOI and EC on January 
10, 2001. The points raised in the consultations are described in the 
Memorandum to File, ``CVD Consultations with Officials from the 
Government of Italy and the European Commission,'' dated January 10, 
2001 and in the subsequent submission by the EC, dated January 10, 
2001. These points are addressed in the Import Administration 
Countervailing Duty Investigation Initiation Checklist, dated January 
17, 2001 (hereafter the Initiation Checklist), on file in the Central 
Records Unit, Room B-099 of the main Department of Commerce building.

Determination of Industry Support for the Petition

    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 the Department's industry support determination, which is 
to be made before the initiation of the investigation, be based on 
whether a minimum percentage of the relevant industry supports the 
petition. 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. Moreover, section 702(c)(4)(D) 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 Department

[[Page 7740]]

shall either poll the industry or rely on other information in order to 
determine if there is support for the petition.
    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 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 subtitle.'' 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.
    We reviewed the description of the domestic like product presented 
in the petition with Customs and the ITC. Based upon our review of the 
petitioners' claims, we concur that there is a single domestic like 
product, which is defined, supra, in the ``Scope of Investigation'' 
section. Moreover, the Department has determined that the petition 
contains adequate evidence of industry support and, therefore, polling 
is unnecessary (see Initiation Checklist). The Department received no 
opposition to the petition. The petitioners established industry 
support representing over 50 percent of total production of the 
domestic like product. Accordingly, we determine that this petition is 
filed on behalf of the domestic industry within the meaning of section 
702(c)(4)(A) of the Act.

Injury Test

    Because Italy is a ``Subsidies Agreement Country'' within the 
meaning of section 701(b) of the Act, section 701(a)(2) applies to this 
investigation. Accordingly, the ITC must determine whether imports of 
the subject merchandise from Italy materially injure, or threaten 
material injury to, a U.S. industry.

Allegations and Evidence of Material Injury and Causation

    The petition alleges 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 imports of 
the subject merchandise. The petitioners contend that the industry's 
injured condition is evident in the declining trends in net operating 
income, net sales volume and value, profit to sales ratios, and 
capacity utilization. The allegations of injury and causation are 
supported by relevant evidence including U.S. Customs import data, lost 
sales, and pricing information. We have assessed the allegations and 
supporting evidence regarding material injury and causation, and have 
determined that these allegations are properly supported by accurate 
and adequate evidence, and meet the statutory requirements for 
initiation (see Initiation Checklist).

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 sections 701(a), and (2) is 
accompanied by information reasonably available to the petitioners 
supporting the allegations.

Initiation of Countervailing Duty Investigation

    The Department has examined the countervailing duty petition on 
stainless steel bar from Italy and found that it complies with the 
requirements of section 702(b) of the Act. Therefore, in accordance 
with section 702(b) of the Act, we are initiating a countervailing duty 
investigation to determine whether manufacturers, producers, or 
exporters of stainless steel bar from Italy receive countervailable 
subsidies (see Initiation Checklist).
A. Equityworthiness
    The petitioners allege that, consistent with Wire Rod,\2\ the 
Department should find Cogne Acciai Speciali S.r.l. (CAS) and its 
predecessors unequityworthy from 1985 through 1988 and from 1991 
through 1992.
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    \2\ See Final Affirmative Countervailing Duty Determination: 
Certain Stainless Steel Wire Rod from Italy, 63 FR 40474 (July 29, 
1998) (Wire Rod).
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B. Creditworthiness
    The petitioners allege that, consistent with Wire Rod, the 
Department should find CAS and its predecessors uncreditworthy from 
1985 through 1993. The petitioners also request that the Department 
investigate the creditworthiness of Gruppo Falck S.p.A. (Falck) and 
Acciaierie di Bolzonao S.p.A. (Bolzano) from 1993 through 1994 and from 
1995 through 1996, respectively. The petitioners note that in Wire Rod, 
the Department initiated an uncreditworthy investigation on Falck and 
Bolzano for the years in question, but did not make a final 
determination because these companies were found to have not received 
any long-term loans or loan guarantees in those years (see Petitioners 
Supplement, dated January 8, 2001, at Attachment 1.) If, in the course 
of this investigation, we discover that Falck or Bolzano received 
equity infusions, loans or loan guarantees were provided in these 
years, we will investigate whether they were uncreditworthy.
C. Change in Ownership
    The petitioners allege that Finsider S.p.A. (Finsider)/ILVA and 
Falck, received non-recurring grants prior to their changes in 
ownership and that, after the changes in ownership, CAS and Acciaierie 
Balbruna S.r.l. (Valbruna)/Bolzano are, for all intents and purposes, 
the same ``person'' as Finsider/ILVA and Falck, respectively. 
Consequently, according to the petitioners, consistent with the 
Department's recent AST Remand Redetermination,\3\ the past 
countervailable subsidies received by these business entities continue 
to be countervailable after the changes in ownership. In support of the 
their allegation for CAS, the petitioners note that CAS, like the 
respondent in the AST Remand Redetermination, was created as a 
separately incorporated subsidiary of ILVA pursuant to the 
restructuring of the Italian steel industry. All assets and certain

[[Page 7741]]

liabilities associated with the production facilities of these 
companies were contributed to the newly formed companies in preparation 
for privatization.
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    \3\ See Final Results of Redetermination Pursuant to Court 
Remand in Acciai Speciali Terni S.p.A. v. United States., et al., 
(Ct. No. 99-06-00364) (December 19, 2000) (AST Remand 
Redetermination).
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    With regard to Bolzano, the petitioners argue that the company's 
financial statements demonstrate the continuity in the company's 
business activities before and after its sale. In particular, the 
company's production of merchandise continued unimpeded during the 
period of ownership change. Therefore, the petitioners request, 
consistent with the methodology in the AST Remand Redetermination, that 
all non-recurring subsidies provided to Finsider/ILVA and Falck be 
attributed in full to CAS and Valbruna/Bolzano, respectively.
D. Programs
    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 Italy:
Government of Italy Subsidies
    1. Capacity Reduction Payments under Law 193/1984
    2. Law 796/76 Exchange Rate Guarantees
    3. Article 33 of Law 227/77, Export Credit Financing Under Law 227/
77, and Decree Law 143/98
    4. Law 451/94 Early Retirement Benefits
    5. Grants under Laws 46/82 and 706/85
    6. Law 181/89 and Law 120/89
    7. Law 488/92, Legislative Decree 96/93 and Circolare 38522
    8. Law 341/95 and Circolare 50175/95
    9. Law 675/77
    10. Export Marketing Grants under Law 394/81
    11. Law 10/91
    12. Law 481/94 ``Law on Dismantling of the Private-Sector Steel 
Industry''
    13. Law 549/95
Government of Bolzano Subsidies
    14. Bolzano Law 25/81 Articles 13 through 15
Government of Valle d' Aosta Subsidies
    15. Valle d' Aosta Law 64/92
    16. Valle d' Aosta Law 12/87
European Union Subsidies
    17. ECSC Article 54 Loans
    18. European Social Fund
    19. ECSC Article 56 Conversion Loans, Interest Rebates and 
Restructuring Grants
    20. European Regional Development Fund
    21. Commission Decision 88/588 and Resider II
Company Specific Subsidies Conferred by the Government of Italy
    22. Restructuring Subsidies Provided to CAS
    A. Equity Infusions to Finsider and ILVA
    B. Pre-Privatization Assistance and Debt Forgiveness
Company Specific Subsidies Conferred by the Government of Bolzano
    23. Purchase and Leaseback of Bolzano Industrial Site
    A. Lease of Bolzano Industrial Site to Valbruna
    B. Lease Exemption under Valbruna/Bolzano Lease
    C. Environmental and Research and Development Assistance to Bolzano
Company Specific Subsidies Conferred by the Government of Valle d'' 
Aosta
    24. Assistance Associated with Sale of CAS
    A. Lease of Cogne Industrial Site
    B. Provision of Electricity
    C. Waste Plant
    D. Loans to CAS to Transfer its Property

Distribution of Copies of the Petition

    In accordance with section 702(b)(4)(A)(i) of the Act, a copy of 
the public version of the petition have been provided to the GOI and 
the EC. We will attempt to provide a copy of the public version of the 
petition to each exporter named in the petition, as provided for under 
Sec. 351.203(c)(2) of the Department's regulations.

ITC Notification

    We have notified the ITC of our initiation, as required by section 
702(d) of the Act.

Preliminary Determination by the ITC

    The ITC will determine no later than February 12, 2001, whether 
there is a reasonable indication that import of stainless steel bar 
from Italy is causing material injury, or threatening to cause material 
injury to, a U.S. industry. A negative ITC determination will result in 
the investigation being terminated; otherwise, the investigation will 
proceed according to statutory and regulatory time limits.
    This notice is issued and published pursuant to section 777(i) of 
the Act.

    Dated: January 17, 2001.
Troy H. Cribb,
Assistant Secretary for Import Administration.
[FR Doc. 01-2203 Filed 1-24-01; 8:45 am]
BILLING CODE 3510-DS-P