[Federal Register Volume 66, Number 177 (Wednesday, September 12, 2001)]
[Notices]
[Pages 47515-47516]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-22826]


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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

[Docket No. WTO/D-212]


WTO Dispute Settlement Proceedings Regarding Countervailing Duty 
Measures Concerning Certain Products From the European Communities

AGENCY: Office of the United States Trade Representative.

ACTION: Notice; request for comments.

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SUMMARY: The Office of the United States Trade Representative (USTR) is 
providing notice that on August 8, 2001, the European Communities (EC) 
requested the establishment of a dispute settlement panel under the 
Marrakesh Agreement Establishing the World Trade Organization (WTO 
Agreement). The request relates to the continued application by the 
United States of countervailing duties based upon the ``change-in-
ownership'' methodologies used by the U.S. Department of Commerce 
(Commerce). The EC alleges that the methodologies used by Commerce in 
certain identified countervailing duty proceedings is inconsistent with 
various provisions of the WTO Agreement on Subsidies and Countervailing 
Measures (SCM Agreement), and Article XVI:4 of the WTO Agreement. The 
EC also alleges that section 771(5)(F) of the Tariff Act of 1930, as 
amended, 19 U.S.C. 1677(5)(F), is also inconsistent with these 
provisions to the extent that it allows Commerce to apply the disputed 
methodologies. USTR invites written comments from the public concerning 
the issues raised in this dispute.

DATES: Although USTR will accept any comments received during the 
course of the dispute settlement proceedings, comments should be 
submitted on or before October 12, 2001, to be assured of timely 
consideration by USTR.

ADDRESSES: Submit comments to Sandy McKinzy, Monitoring and Enforcement 
Unit, Office of the General Counsel, Room 122, Office of the United 
States Trade Representative, 600 17th Street, NW., Washington, DC 
20508, Attn: Change in Ownership in Methodology Dispute. Telephone: 
(202) 395-3582.

FOR FURTHER INFORMATION CONTACT: William D. Hunter, Associate General 
Counsel, Office of the United States Trade Representative, 600 17th 
Street, NW., Washington, DC 20508. Telephone: (202) 395-3582.

SUPPLEMENTARY INFORMATION: Section 127(b) of the Uruguay Round 
Agreements Act (URAA) (19 U.S.C. 3537(b)(1)) requires that notice and 
opportunity for comment be provided after the United States receives a 
request for the establishment of a WTO dispute settlement panel. 
Consistent with this obligation, USTR is providing notice that the EC 
has requested the establishment of a dispute settlement panel pursuant 
to the WTO Dispute Settlement Understanding. Such panel, which would 
hold its meetings in Geneva, Switzerland, would be expected to issue a 
report on its findings and recommendations within six to nine months 
after it is established.

Major Issues Raised by the EC

    In its panel request, the EC alleges that in United States--
Imposition of Countervailing Duties on Certain Hot-Rolled Lead and 
Bismuth Carbon Steel Products Originating in the United Kingdom, WT/
DS138/AB/R (``U.K. Lead Bar''), the WTO Appellate Body found the 
change-in-ownership methodology applied by Commerce for purposes of the 
U.S. countervailing duty law to be inconsistent with the SCM Agreement. 
The EC also alleges that the Appellate Body found that a change of 
ownership at fair market value eliminated the benefit of any prior 
subsidies to the privatized company. Therefore, the EC alleges that the 
continued application by Commerce of the change-in-ownership 
methodology at issue in U.K. Lead Bar, and the continued imposition of 
countervailing duties based upon that methodology, is consistent with 
Articles 1.1, 10 (including footnote 36), 14(d), 19.1, 19.3, 19.4, 
21.1, 21.2, 21.3, and 32.5 of the SCM Agreement , and Article XVI:4 of 
the WTO Agreement. According to the EC in its panel request, this pre-
U.K. Lead Bar methodology ``fails to examine whether there is a subsidy 
to the producer concerned in circumstances where a financial 
contribution was grant to a previous owner of a company or its 
productive assets and there has been a change of ownership or 
privatization thereof at arm's-length for fair market value.''
    Following the Appellate Body report in U.K. Lead Bar and a related 
decision by the U.S. Court of Appeals for the Federal Circuit, Commerce 
revised its change-in-ownership methodology. Under its new methodology, 
Commerce

[[Page 47516]]

examines whether the entity existing after a change-in-ownership 
transaction is the same legal person that existed prior to the 
transaction and that received subsidies. The EC alleges that this new 
methodology also is inconsistent with the provisions of the SCM 
Agreement and the WTO Agreement cited above. According to the EC in its 
panel request, this methodology ``ignores the consideration paid by the 
current producer in the privatisation or change of ownership, instead 
purporting to undertake an analysis of whether the buyer is `for all 
intents and purposes' the `same person' as the company which had 
received a financial contribution before privatisation.''
    The measures identified by the EC (including the relevant Comerce 
case nuber) are as follows:

 Original Imposition of Countervailing Duties
     Stainless Steel Sheet and Strip in Coils from France (C-
427-815)
     Certain Cut-to-Length Carbon Quality Steel from France (C-
427-817)
     Stainless Steel Sheet and Strip in Coils from Italy (C-
475-825)
     Certain Stainless Steel Wire Rod from Italy (C-475-821)
     Stainless Steel Plate in Coils from Italy (C-475-823)
     Certain Cut-to-Length Carbon-Quality Steel Plate from 
Italy (C-475-827)
 Administrative Reviews
     Cold-rolled Carbon Steel Flat Products from Sweden (C-401-
401)
     Cut-to-Length Carbon Steel Plate from Sweden (C-401-804)
     Grain-Oriented Electrical Steel from Italy (C-475-812)

    (With respect to case C-475-812, the EC panel request refers to a 
``Definitive determination in administrative review 2nd request; final 
sunset results ... .'').

 Sunset Reviews
     Cut-to-Length Carbon Steel Plat from the United Kingdom 
(C-412-815)
     Certain Corrosion-Resistant Carbon Steel Flat Products 
from France (C-427-810)
     Cut-to-Length Carbon Steel Plate from Germany (C-428-817)
     Cut-to-Length Carbon Steel Plate from Spain (C-469-804)

    In addition, the EC also cites section 771(5)(F) of the Tariff Act 
of 1930, as amended, which is entitled ``Change in ownership''. 
According to the EC in its panel request, section 771(5)(F) is 
inconsistent with the provisions of the SCM Agreement and the WTO 
Agreement cited above ``to the extent that it allows [Commerce] to 
impose countervailing duties without assessing the existence of a 
countervailable subsidy after a privatisation or change of ownership 
... .''

Public Comment: Requirements for Submissions

    Interested persons are invited to submit written comments 
concerning the issues raised in the dispute. Comments must be in 
English and provided in fifteen copies. A person requesting that 
information contained in a comment submitted by that person be treated 
as confidential business information must certify that such information 
is business confidential and would not customarily be released to the 
public by the commenter. Confidential business information must be 
clearly marked BUSINESS CONFIDENTIAL in a contrasting color ink at the 
top of each page of each copy.
    Information or advice contained in a comment submitted, other than 
business confidential information, may be determined by USTR to be 
confidential in accordance with section 135(g)(2) of the Trade Act of 
1974 (19 U.S.C. 2155 (g)(2)). If the submitter believes that 
information or advice may qualify as such, the submitter--
    (1) Must so designate the information or advice;
    (2) Must clearly mark the material as SUBMITTED IN CONFIDENCE in a 
contrasting color ink at the top of each page of each copy; and
    (3) Is encouraged to provide a non-confidential summary of the 
information or advice.
    Pursuant to section 127(e) of the URAA (19 U.S.C. 3537 (e)), USTR 
will maintain a file on this dispute settlement proceeding, accessible 
to the public, in the USTR Reading Room: Room 101, Office of the United 
States Trade Representative, 600 17th Street, N.W., Washington, D.C. 
20508. The public file will include non-confidential comments received 
by USTR from the public with respect to the dispute; if a dispute 
settlement panel is convened, the U.S. submissions to that panel, the 
submissions, or non-confidential summaries of submissions to the panel 
received from other participants in the dispute, as well as the report 
of the panel; and, if applicable, the report of the Appellate Body. An 
appointment to review the public file (Docket WTO/D-212, Change in 
Ownership Methodology Dispute) may be made by calling Brenda Webb, 
(202) 395-6186. The USTR Reading Room is open to the public from 9:30 
a.m. to 12 noon and 1 p.m. to 4 p.m., Monday through Friday.

A. Jane Bradley,
Assistant United States Trade Representative for Monitoring and 
Enforcement.
[FR Doc. 01-22826 Filed 9-11-01; 8:45 am]
BILLING CODE 3190-01-M