[Federal Register Volume 67, Number 210 (Wednesday, October 30, 2002)]
[Notices]
[Pages 66112-66114]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-27630]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-427-817]


Certain Cut-to-Length Carbon-Quality Steel Plate from France: 
Notice of Court Decision and Suspension of Liquidation

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: On September 24, 2002, in GTS Industries S.A. v. United 
States, Consol. Court No. 00-03-00118, Slip Op. 02-115 (CIT 2002), a 
lawsuit challenging the Department of Commerce's (``the Department's'') 
Final Affirmative Countervailing Duty Determination: Certain Cut-to-
Length Carbon-Quality Steel Plate from France, 64 FR 73277 (December 
29, 1999) (``French Plate''), the Court of International Trade 
(``CIT'') affirmed the Department's second remand redetermination and 
entered a judgment order. In this redetermination, the Department 
reviewed the record evidence regarding the facts and circumstances, 
including the terms of the sale, of the privatization of Usinor (which 
owned a majority interest in GTS Industries S.A. (``GTS'') prior to 
1996 and a minority interest during the period of investigation 
(``POI'')), and concluded that no countervailable subsidies were 
attributable to GTS following the privatization transaction.
    As a result of the redetermination, the countervailable subsidy 
rate for the subject merchandise produced and sold by GTS during the 
POI was reduced

[[Page 66113]]

from 6.86 percent to 0.00 percent ad valorem.
    This redetermination was not in harmony with the Department's 
original final determination in French Plate. Consistent with the 
decision of the U.S. Court of Appeals for the Federal Circuit 
(``CAFC'') in Timken Co. v. United States, 893 F.2d 337 (Fed. Cir. 
1990) (``Timken''), the Department will continue to order the 
suspension of liquidation of the subject merchandise until there is a 
``conclusive'' decision in this case. If the case is not appealed, or 
if it is affirmed on appeal, the Department will instruct the U.S. 
Customs Service to terminate the suspension of liquidation for all 
entries of certain cut-to-length carbon-quality steel plate from 
France.

EFFECTIVE DATE: October 30, 2002.

FOR FURTHER INFORMATION CONTACT: Jesse Cortes, AD/CVD Enforcement Group 
I, Office 1, Import Administration, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W., 
Washington, DC 20230; telephone: (202) 482-3986.

SUPPLEMENTARY INFORMATION:

Background

    In French Plate, using the change-in-ownership methodology in place 
at that time, the Department determined that countervailable subsidies 
were being provided to producers and exporters of certain cut-to-length 
carbon-quality steel plate from France. GTS challenged this 
determination before the CIT.
    On February 2, 2000, the CAFC ruled in Delverde SRL v. United 
States, 202 F.3d 1360 (Fed. Cir. 2000), reh'g granted in part, (June 
20, 2000) (``Delverde III''), that:
    the Tariff Act as amended does not allow Commerce to presume 
conclusively, pursuant to a per se rule, that the subsidies granted to 
the former owner of Delverde's corporate assets automatically 'passed 
through' to Delverde following the sale. Rather, the Tariff Act 
requires that Commerce make such a determination by examining the 
particular facts and circumstances of the sale and determining whether 
Delverde directly or indirectly received both a financial contribution 
and benefit from the government.
    202 F.3d at 1364. The methodology analyzing Delverde's change in 
ownership and struck down by the CAFC in Delverde III was similar to 
that employed in French Plate. Accordingly, the Department asked the 
CIT to remand the French Plate proceeding for reconsideration in light 
of Delverde III. The parties consented to this remand.
    On August 9, 2000, the CIT remanded the French Plate proceeding to 
the Department with instructions to: (1) ``determine the applicability, 
if any, of [Delverde III] to this proceeding, and (2) embark upon 
further fact finding, if appropriate.'' GTS Industries S.A. v. United 
States, Court No. 00-03-00118, Remand Order August 9, 2000, modified by 
Order August 24, 2000.
    On December 22, 2000, following a comment period, the Department 
issued the Final Results of Redetermination Pursuant to Court Remand. 
In that redetermination, in light of Delverde III, the Department 
analyzed the facts and circumstances of the privatization transaction 
to determine whether the person to whom countervailable subsides had 
been given in the past was essentially the same person after 
privatization. Among the facts and circumstances considered, the 
Department examined the continuity of general business operations, the 
continuity of production facilities, continuity of assets and 
liabilities, and retention of personnel before and after the 
privatization. Based on these factors, the Department determined that 
post-privatization Usinor was essentially the same person as pre-
privatization Usinor. Consequently, because the Department had 
attributed a portion of Usinor's pre-privatization subsidies to GTS, 
these subsidies remained attributable to GTS following Usinor's 
privatization.
    After briefing and a hearing, the CIT, on January 4, 2002\1\, again 
remanded the French Plate proceeding to the Department. GTS Industries 
S.A. v. United States, 182 F. Supp. 2d 1369 (CIT 2002). The court 
explained that the central question was whether the Department's remand 
decision was consistent with the statute, as interpreted by the CAFC in 
Delverde III. The court found that Delverde III's requirements were as 
follows:
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    \1\ The Court[quot]s Memorandum Opinion and Order is dated 
January 4, 2002, however, the order establishing the time frame for 
the remand is dated January 7, 2002.
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1.Section 1677(5) prohibits the Department from adopting any per se 
rule that a subsidy passes through, or is eliminated, as a result of a 
change in ownership. Id. at 1377.
2.The statute requires that the Department must look at the facts and 
circumstances of the entire transaction, including the terms of the 
sale, to determine if the purchaser/new owner received, directly or 
indirectly, a subsidy for which it did not pay adequate compensation. 
In other words, the Department must find that the purchaser/new owner 
indirectly received a subsidy from the government. Id. at 1377-1380.
    The Court specifically rejected, as contrary to Delverde III, the 
Department's argument that, if the pre and post-privatization companies 
are, in substance, the same legal person, the Department is not 
required to determine anew whether that same person has received a 
subsidy.
    On June 3, 2002, following a comment period, the Department issued 
its Results of Redetermination Pursuant to Court Remand. In this second 
redetermination, the Department re-analyzed certain facts and 
circumstances of the privatization of Usinor, including the terms of 
the sale. The Department determined that: 1) some purchasers of 
Usinor's shares paid full, fair-market value for those shares and, 
thus, received no subsidy from the privatization transaction; and 2) 
other purchasers that did not pay full, fair-market value did receive a 
subsidy from the privatization transaction. However, regarding the 
purchasers that did not pay full, fair-market value, while they did 
receive a subsidy, the Department determined that this subsidy was not 
countervailable because it was conferred on the owners of the company, 
and not on the company itself. Consequently, the Department concluded 
that Usinor (and, thus, GTS) received no countervailable subsidies as a 
result of the privatization transaction. Accordingly, the Department 
recalculated a subsidy rate of 0.00 percent ad valorem for GTS for the 
POI.
    The CIT affirmed the Results of Redetermination Pursuant to Court 
Remand on September 24, 2002. See GTS Industries S.A. v. United States, 
Consol. Court No. 00-03-00118, Slip Op. 02-115 (CIT 2002).

Suspension of Liquidation

    The CAFC, in Timken, held that the Department must publish notice 
of a decision of the CIT or the CAFC which is not ``in harmony'' with 
the Department's final determination. Publication of this notice 
fulfills that obligation. The CAFC also held that the Department must 
suspend liquidation of the subject merchandise until there is a 
``conclusive'' decision in the case. Therefore, pursuant to Timken, the 
Department must continue to suspend liquidation pending the expiration 
of the period to appeal the CIT's September 24, 2002, decision or, if 
that decision is appealed, pending a final decision by the CAFC. The 
Department will instruct the Customs Service to liquidate relevant 
entries covering the subject merchandise effective October 30, 2002, in 
the event that the CIT's

[[Page 66114]]

ruling is not appealed, or if appealed and upheld by the CAFC.

    Dated: October 23, 2002.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 02-27630 Filed 10-29-02; 8:45 am]
BILLING CODE 3510-DS-S