[Federal Register Volume 68, Number 173 (Monday, September 8, 2003)]
[Notices]
[Pages 52895-52904]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-22787]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-201-810]


Certain Cut-to-Length Carbon Steel Plate From Mexico: Preliminary 
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 cut-
to-length carbon steel plate (CTL Plate) from Mexico for the period 
January 1, 2001, through December 31, 2001, the period of review (POR). 
For information on the net subsidy for the reviewed company as well as 
for 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 the administrative review, we will 
instruct the Bureau of Customs and Border Protection (BCBP) 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 the ``Public Comment'' 
section of this notice).

EFFECTIVE DATE: September 8, 2003.

FOR FURTHER INFORMATION CONTACT: Lyman Armstrong, AD/CVD Enforcement, 
Office VI, Group II, Import Administration, U.S. Department of 
Commerce, Room 4012, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230; telephone (202) 482-3601.

SUPPLEMENTARY INFORMATION:

Background

    On August 17, 1993, the Department published in the Federal 
Register (58 FR 43755) the countervailing duty order on certain cut-to-
length carbon steel plate from Mexico. On August 6, 2002, the 
Department published a notice of ``Opportunity to Request an 
Administrative Review'' (67 FR 50856) of this countervailing duty 
order. On

[[Page 52896]]

August 30, 2002, we received a timely request for review from Altos 
Hornos de Mexico, S.A. (AHMSA), the respondent company in this 
proceeding. On September 25, 2002, we initiated the review covering the 
period January 1, 2001, through December 31, 2001 (67 FR 60210). See 
Initiation of Antidumping and Countervailing Duty Administrative 
Reviews and Requests for Revocation in Part, 67 FR 60210 (September 25, 
2002).
    On September 27, 2002, we issued initial questionnaires to AHMSA 
and the Government of Mexico (GOM) covering the programs reviewed in 
the previous segment of the proceeding. On October 22, 2002, 
petitioners argued that two GOM programs, asset tax relief provided 
under the Immediate Deduction Program and the Program for Sectoral 
Promotion (PROSEC), were either subsumed by or successors to programs 
previously found to be countervailable in this proceeding and, thus, 
should be included in any questionnaires issued to AHMSA and the 
GOM.\1\ On December 16, 2002, petitioners submitted new subsidy 
allegations. These allegations included the Immediate Deduction Program 
and PROSEC as well as the following programs: Provision of Debt Relief 
from AHMSA's Creditors by Nacional Financiera (NAFIN) and the Coahuila 
State Government (CGS), Petroleos Mexicanos (Pemex) Guaranteed 
Provision of Natural Gas for less than Adequate Remuneration, and Debt 
Relief on Banco Nacional de Comercio Exterior S.N.C. (Bancomext) Loans. 
Petitioners also alleged that AHMSA was uncreditworthy during calendar 
year 2000. On January 21, 2003, petitioners submitted additional 
factual information regarding their new subsidy allegations.
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    \1\ Petitioners are Bethlehem Steel Corporation and United 
States Steel Corporation.
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    On March 26, 2003, we extended the period for completion of the 
preliminary results of review pursuant to section 751(a)(3) of the 
Tariff Act of 1930, as amended, (the Act). See Certain Cut-to-Length 
Carbon Steel Plate From Mexico: Extension of Time Limit for Preliminary 
Results of Countervailing Duty Administrative Review (68 FR 14580). On 
April 29, 2003, we issued our first supplemental questionnaires to 
AHMSA and the GOM.
    On June 3, 2003, we issued a memorandum concerning petitioners' new 
subsidy allegations. In the memorandum, we agreed with petitioners that 
asset tax relief provided under the Immediate Deduction Program was 
related to a program previously found countervailable by the Department 
and that the program merited an examination in the instant proceeding. 
Furthermore, we initiated investigations of the following programs: 
Provision of Debt Relief from AHMSA's Creditors by Nacional Financiera 
(NAFIN) and the Coahuila State Government (CGS), Petroleos Mexicanos 
(Pemex) Guaranteed Provision of Natural Gas for less than Adequate 
Remuneration, and Banco Nacional de Comercio Exterior S.N.C. 
(Bancomext) Debt Relief. In addition, we initiated an investigation of 
AHMSA's creditworthiness covering calendar year 2000. We declined to 
initiate an investigation of PROSEC because we found no record evidence 
to support petitioners allegation that the PROSEC program was 
countervailable. For more information, see the June 3, 2003, memorandum 
from the Team to Melissa G. Skinner, Director, Office of AD/CVD 
Enforcement VI, the public version of which is on file in Room B-099 of 
the Central Records Unit (CRU) in the Main Commerce Building (New 
Subsidies Memorandum). The programs for which we initiated 
investigations are discussed in further detail in the 
``Creditworthiness and Calculation of Discount Rate'' and ``Analysis of 
Programs'' sections of this preliminary results notice.
    On June 3, 2003, we issued second supplemental questionnaires to 
AHMSA and the GOM. On June 30, 2003, we issued a third supplemental 
questionnaire to AHMSA.
    From July 16 through July 24, 2003, we conducted a verification of 
the questionnaire responses submitted by AHMSA and the GOM. The results 
of our verification are contained in the September 2, 2003, memoranda 
from Lyman Armstrong to Eric Greynolds, Program Manager, Office of AD/
CVD Enforcement VI (AHMSA Verification Report and GOM Verification 
Report, respectively), the public versions of which are on file in the 
CRU.
    In accordance with 19 CFR 351.213(b), this review covers only those 
producers or exporters for which a review was specifically requested, 
i.e., AHMSA, and 17 programs.

Scope of Review

    The products covered by this administrative review are certain cut-
to-length carbon steel plates. These products include hot-rolled carbon 
steel universal mill plates (i.e., flat-rolled products rolled on four 
faces or in a closed box pass, of a width exceeding 150 millimeters but 
not exceeding 1,250 millimeters and of a thickness of not less than 4 
millimeters, not in coils and without patterns in relief), of 
rectangular shape, neither clad, plated nor coated with metal, whether 
or not painted, varnished, or coated with plastics or other nonmetallic 
substances; and certain hot-rolled carbon steel flat-rolled products in 
straight lengths, of rectangular shape, hot rolled, neither clad, 
plated, nor coated with metal, whether or not painted, varnished, or 
coated with plastics or other nonmetallic substances, 4.75 millimeters 
or more in thickness and of a width which exceeds 150 millimeters and 
measures at least twice the thickness, as currently classifiable in the 
Harmonized Tariff Schedules of the United States (HTSUS) under item 
numbers 7208.31.0000, 7208.32.0000, 7208.33.1000, 7208.33.5000, 
7208.41.0000, 7208.42.0000, 7208.43.0000, 7208.90.0000, 7210.70.3000, 
7210.90.9000, 7211.11.0000, 7211.12.0000, 7211.21.0000, 7211.22.0045, 
7211.90.0000, 7212.40.1000, 7212.40.5000, and 7212.50.0000. Included in 
this administrative review are flat-rolled products of nonrectangular 
cross-section where such cross-section is achieved subsequent to the 
rolling process (i.e., products which have been ``worked after 
rolling'')--for example, products which have been bevelled or rounded 
at the edges. Excluded from this administrative review is grade X-70 
plate. HTSUS subheadings are provided for convenience and customs 
purposes. The written description of the scope of this proceeding is 
dispositive.

Allocation Period

    Pursuant to 19 CFR 351.524(d)(2), we will presume the allocation 
period for non-recurring subsidies to be the average useful life (AUL) 
of renewable physical assets for the industry concerned, as listed in 
the Internal Revenue Service's (IRS) 1977 Class Life Asset Depreciation 
Range System, as updated by the Department of the Treasury. The 
presumption will apply unless a party claims and establishes that these 
tables do not reasonably reflect the AUL of the renewable physical 
assets for the company or industry under investigation or review, and 
that the difference between the company-specific AUL and the AUL for 
the industry under investigation is significant.
    In this administrative review, the Department is considering both 
non-recurring subsidies previously allocated in the initial 
investigation and non-recurring subsidies received since the period of 
investigation (POI). For non-recurring subsidies previously allocated 
in the initial investigation, the

[[Page 52897]]

Department is using the original allocation period of 15 years. For 
non-recurring subsidies received since the original investigation, no 
party to the proceeding has claimed that the AUL listed in the IRS 
tables did not reasonably reflect the AUL of the renewable physical 
assets for the firm or industry under review. Therefore, in accordance 
with 19 CFR 351.524(d)(2), we have allocated all of AHMSA's non-
recurring subsidies received since the original investigation over 15 
years, the AUL listed in the IRS tables for the steel industry.

Facts Available

    In the course of this proceeding, we have repeatedly sought 
information from AHMSA concerning its creditworthiness status during 
calendar year 2000, in connection with the renegotiation of a loan. See 
questions C.1 through C.7 of the Department's June 3, 2003, 
supplemental questionnaire. See also question B.1 of the Department's 
June 30, 2003, supplemental questionnaire. In both instances, AHMSA 
responded that it was ``unable to respond to the Department's questions 
on creditworthiness at this time.'' \2\
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    \2\ We note that, at AHMSA's request, we extended the due date 
of the June 3, 2003, questionnaire by 10 days. See the Department's 
June 10, 2003, letter to AHMSA on, ``Extension Request on Behalf of 
Altos Hornos de Mexico, S.A. de C.V.''
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    Section 776(a) of the Act requires the use of facts available when 
an interested party withholds information that has been requested by 
the Department, or when an interested party fails to provide the 
information requested in a timely manner and in the form required. As 
described above, AHMSA has failed to provide information regarding its 
creditworthiness during calendar year 2000 in the manner explicitly and 
repeatedly requested by the Department; therefore, we must resort to 
the facts otherwise available. Lacking a questionnaire response from 
AHMSA on the issue of its creditworthiness in 2000, we have relied on 
primary source information from AHMSA that was submitted onto the 
record of this proceeding prior to the initiation of our 
creditworthiness investigation. Namely, we have used, as facts 
available, AHMSA's financial statements for the years 1997 through 
2000, as well as information obtained during verification concerning 
AHMSA's financial standing in 2000. Using this primary source 
information, we have determined that, for purposes of these preliminary 
results, AHMSA was uncreditworthy during 2000. For a discussion of our 
creditworthiness analysis, see the September 2, 2003 memorandum from 
the team to Melissa G. Skinner, Director, Office of AD/CVD Enforcement 
VI, a public document which is on file in the CRU (Creditworthiness 
Memorandum) as well as the ``Creditworthiness and Calculation of 
Discount Rate'' section of this preliminary results notice.

Change in Ownership

    In November 1991, the GOM sold all of its ownership interest in 
AHMSA. Prior to privatization, AHMSA was almost entirely owned by the 
GOM. Since November 1991, the GOM has held no stock in AHMSA.
    In accordance with the decision of the U.S. Court of Appeals for 
the Federal Circuit (CAFC) in Delverde Srl v. United States, 202 F.3d 
1360, 1365 (Fed. Cir. 2000), reh'g en banc denied (June 20, 2000) 
(Delverde III), the Department addresses this fact pattern by first 
determining whether the person who received the subsidies is, in fact, 
distinct from the person that produced the subject merchandise exported 
to the United States during the POR. If the two are distinct, the 
original subsidies may not be attributed to the new producer/exporter. 
On the other hand, if the original subsidy recipient and the current 
producer/exporter are considered to be the same person, that person 
benefits from the original subsidies, and its exports are subject to 
countervailing duties to offset those subsidies. In other words, in the 
latter case, we will determine that a ``financial contribution'' has 
been made by a government and a ``benefit'' has been conferred upon the 
``person'' that is the firm under investigation. Assuming that the 
original subsidy had not been fully amortized under the Department's 
normal allocation methodology as of the POR, the Department would 
continue to countervail the remaining benefits of that subsidy. See 
e.g., the ``Change in Ownership'' section of the Decision Memorandum 
that accompanied the Final Results of the Administrative Review of the 
Countervailing Duty Order (CVD) on Certain Cut-to-Length Carbon Steel 
Plate from Mexico--Calendar Year 1998, 66 FR 14549 (March 12, 2001) 
(1998 Review of CTL Plate).
    In making the ``same person'' determination, where appropriate and 
applicable, we analyze factors such as (1) continuity of general 
business operations, including whether the successor holds itself out 
as the continuation of the previous enterprise, as may be indicated, 
for example, by use of the same name, (2) continuity of production 
facilities, (3) continuity of assets and liabilities, and (4) retention 
of personnel. No single factor will necessarily provide a dispositive 
indication of any change in the entity under analysis. Instead, the 
Department will generally consider the post-sale entity to be the same 
person as the pre-sale entity if, based on the totality of the factors 
considered, we determine that the entity sold in the change-in-
ownership transaction can be considered a continuous business entity 
because it was operated in substantially the same manner before and 
after the change-in-ownership. Id.
    In the previous segment of the proceeding, we found that the 
privatized AHMSA was essentially the same person as that which existed 
prior to the privatization as a separately-incorporated, GOM-owned 
steel producer of the same name. As a result of our analysis, we found 
the subsidies received by the pre-privatized AHMSA to be 
countervailable. See the ``Application of Methodology'' section of the 
Decision Memorandum that accompanied the 1998 Review of CTL Plate. No 
new information or evidence of changed circumstances has been submitted 
requiring us to reconsider our finding in this segment of the 
proceeding (i.e., calendar year 2001). Therefore, for purposes of these 
preliminary results, we continue to find that the privatized AHMSA is 
essentially the same person as that which existed prior to the 
privatization. We further preliminarily determine that allocable 
subsidies bestowed prior to AHMSA's privatization continue to benefit 
AHMSA, to the extent that the benefit stream extends into the POR of 
this segment of the proceeding.\3\
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    \3\ On June 23, 2003, the Department published a notice that our 
practice regarding the ``same person test'' would be modified. See 
Notice of Final Modification of Agency Practice Under Section 123 of 
the Uruguay Round Agreements Act, 68 FR 37125. In that notice, we 
announced the prospective application of a new privatization 
methodology that would supercede the ``same person test.'' We 
further stated that the new methodology would only apply to segments 
of proceedings initiated on or after June 30, 2003.
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Inflation Methodology

    In the underlying investigation, we determined, based on 
information from the GOM, that Mexico experienced significant inflation 
from 1983 through 1988. See Final Affirmative Countervailing Duty 
Determination: Certain Steel Products from Mexico, 58 FR 37352 at 37355 
(July 9, 1993) (CTL Plate Investigation). In accordance with past 
practice, because we found significant inflation in Mexico and because 
AHMSA adjusted for inflation in its financial statements, we made 
adjustments, where necessary, to

[[Page 52898]]

account for inflation in the benefit calculations.
    Because Mexico experienced significant inflation during only a 
portion of the 15-year allocation period, indexing for the entire 
period or converting the non-recurring benefits into U.S. dollars at 
the time of receipt (i.e., dollarization) for use in our calculations 
would have inflated certain allocable benefits by adjusting for 
inflationary as well as non-inflationary periods. Thus, in the 
underlying investigation, we used a loan-based methodology to reflect 
the effects of intermittent high inflation. See CTL Plate 
Investigation, 58 FR at 37355. The methodology we used in the 
underlying investigation assumed that, in the absence of a government 
equity infusion/grant, a company would have needed a 15-year loan that 
would be rolled over each year at the prevailing nominal interest 
rates, which for purposes of our calculations are the interest rates 
based on Costo Porcentual Promedio (CPP) discussed in the ``Calculation 
of Discount Rate and Creditworthiness'' section of this notice. The 
benefit in each year of the 15-year period would be equal to the 
principal plus the interest payments associated with the loan at the 
nominal interest rate prevailing in that year.
    Because we assumed that an infusion/grant given was equivalent to a 
15-year loan at the current rate in the first year, a 14-year loan at 
current rates in the second year and so on, the benefit after the 15-
year period would be zero, as it would be under the Department's grant 
amortization methodology. Because nominal interest rates were used, the 
effects of inflation were already incorporated into the benefit. This 
methodology was upheld in British Steel plc v. United States, 127 F.3d 
1471 (Fed. Cir. 1997) (British Steel III).
    In Certain Cut-to-Length Carbon Steel Plate from Mexico: Final 
Results of Countervailing Duty Administrative Review, 65 FR 13368 
(March 13, 2000) (1997 Review of CTL Plate), we analyzed information 
provided by the GOM and found that Mexico, again, experienced 
significant, intermittent inflation during the period 1991 through 
1997. See the ``Inflation Methodology'' section of the Decision 
Memorandum for the 1997 Review of CTL Plate. In addition, during the 
1997 review of CTL Plate, we learned at verification that AHMSA had 
continued its practice of accounting for inflation in its financial 
statements. Id. Thus, in the 1997 Review of CTL Plate, we used the 
benefit calculation methodology from the CTL Plate Investigation, 
described above, for all non-recurring, peso-denominated grants 
received since the POI. Id.
    No new information or evidence of changed circumstances has been 
presented thus far in this review to warrant reconsideration of these 
findings. Thus, for the purposes of these preliminary results, we have 
continued to use the benefit calculation methodology from the CTL Plate 
Investigation for all non-recurring, peso-denominated grants received 
through 1997.\4\
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    \4\ We note that AHMSA has received no non-recurring, peso-
denominated grants since 1997.
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Calculation of Discount Rate and Creditworthiness

    In these preliminary results, for those years in which AHMSA 
received non-recurring grants and equity infusions, we used as our 
long-term benchmark discount rate the CPP, which is the average cost of 
funds for banks in Mexico.\5\ We note that we converted the CPP rate 
into a discount rate using the formula that has been used in past 
Mexican cases.\6\ We further note that, for those years in which there 
were grants and equity infusions and for which the Department had 
calculated a benchmark interest rate in a prior case, we used the rates 
calculated in those cases.
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    \5\ This is the same discount rate that was used in the previous 
segment of this proceeding. See, e.g., the Calculation Memorandum 
for the Final Results of Administrative Review of the Countervailing 
Duty Order on Certain Cut-to-Length Carbon Steel Plate from Mexico, 
which was included as Exhibit 11 of AHMSA's November 25, 2002, 
questionnaire response.
    \6\ Id.
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    As discussed in the ``Background'' section of this preliminary 
results notice, we initiated an investigation to determine whether 
AHMSA was creditworthy during calendar year 2000. As discussed in the 
``Facts Available'' section of this notice, we have made our 
determination of AHMSA's uncreditworthiness using primary source 
information from AHMSA that was submitted onto the record of this 
review prior to our initiation of this inquiry. Upon review of the 
financial information for AHMSA that is available on the record of this 
review, we preliminarily find that AHMSA was uncreditworthy during 
calendar year 2000. For further discussion, see the Creditworthiness 
Memorandum. Thus, for year 2000, we constructed a discount rate for 
uncreditworthy companies using the methodology described in 19 CFR 
351.505(a)(3)(iii).

Analysis of Programs

I. Programs Preliminarily Determined To Confer Subsidies

A. GOM Equity Infusions
    In the underlying investigation, we determined that the GOM made 
equity infusions into AHMSA during the years 1987, 1990 and 1991.\7\ 
See CTL Plate Investigation, 58 FR at 37356. Shares of common stock 
were issued for all of these infusions. The GOM made these equity 
infusions annually as part of its budgetary process, in accordance with 
the Federal Law on State Companies. At the time of these infusions, 
AHMSA was almost entirely a government-owned company.
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    \7\ AHMSA received counteravailable equity infusions in previous 
years. However, these equity infusions were fully allocated prior to 
the 2001 POR.
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    In the underlying investigation, we found AHMSA to be 
unequityworthy during the years 1987, and in 1990 and 1991. See CTL 
Plate Investigation 58 FR at 37356. Accordingly, we determined that the 
equity infusions by the GOM into AHMSA in these years were 
countervailable. In the 1998 review of CTL Plate, we continued to find 
this program countervailable. See the ``Programs Conferring Subsidies'' 
section of the Decision Memorandum that accompanied the 1998 Review of 
CTL Plate. No new information or evidence of changed circumstances has 
been presented in this review to warrant reconsideration of these 
findings. As a result, for purposes of these preliminary results, we 
continue to find that these equity infusions conferred a benefit and 
constituted a government financial contribution under sections 
771(5)(E)(i) and 771(5)(D)(i) of the Act, respectively. In addition, we 
continue to find that the equity infusions were specific to a single 
enterprise within the meaning of section 771(5A)(D)(iii)(I) of the Act.
    To calculate the countervailable benefit in the POR, we used the 
grant allocation methodology for intermittent, significant inflation 
described above. We then divided the benefit attributable to the POR by 
the total consolidated sales of AHMSA during the POR. On this basis, we 
preliminarily determine the net subsidy for this program to be 0.96 
percent ad valorem for AHMSA.
B. IMIS Research and Development Grants
    The Instituto Mexicano de Investigaciones Siderurgicas (IMIS), or 
the Mexican Institute of Steel Research, was a government-owned 
research and development organization that performed independent and 
joint

[[Page 52899]]

venture research with the iron and steel industry.
    In the underlying investigation, the Department found that IMIS's 
activities with AHMSA fell into two categories: joint venture 
activities and non-joint venture activities. See CTL Plate 
Investigation, 58 FR at 37359. We determined that IMIS's non-joint 
venture activities with AHMSA were not countervailable. However, the 
Department determined that joint venture activities were 
countervailable, and we treated IMIS's contributions to joint venture 
activities as non-recurring grants. Id. We used the same approach in 
the 1998 review of CTL Plate. AHMSA received grants under this program 
during the years 1987 through 1991.\8\ No new information or evidence 
of changed circumstances has been presented thus far in this review to 
warrant reconsideration of these findings. As a result, for purposes of 
these preliminary results, we continue to find that the IMIS grants 
conferred a benefit and constituted a government financial contribution 
under sections 771(5)(E) and 771(5)(D)(i) of the Act, respectively. In 
addition, we continue to find that the IMIS grants were specific to the 
steel industry under section 771(5A)(D)(i) of the Act.
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    \8\ AHMSA also received a grant under this program 1986. 
However, this grant was fully expensed prior to the 2001 POR.
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    To calculate the countervailable benefit in the POR, we used the 
grant allocation methodology for intermittent, significant inflation 
described above. We then divided the benefit attributable to the POR by 
the total consolidated sales of AHMSA during the same period. On this 
basis, we preliminarily determine the net subsidy for this program to 
be 0.04 percent ad valorem for AHMSA.
C. Lay-Off Financing From the GOM
    During the verification of the underlying investigation, the 
Department discovered that the GOM had loaned AHMSA money to cover the 
cost of personnel lay-offs which the GOM felt were necessary to make 
AHMSA more attractive to potential purchasers. This loan was made prior 
to AHMSA's privatization in 1991. The Department also learned that this 
loan did not accrue interest after September 30, 1991. Further, the 
Department learned that the GOM was allowing the privatized AHMSA to 
repay this loan with the transfer of AHMSA assets back to the GOM. The 
assets AHMSA was using to repay the loan were assets which the Grupo 
Acero del Norte (GAN), the purchaser of AHMSA, had not wished to 
purchase but which the GOM included in the sale package. See CTL Plate 
Investigation, 58 FR at 37360. These assets were characterized as 
``unnecessary assets'' or assets not necessary to the production of 
steel.
    Because the information about this financing and its repayment came 
to light only at verification of the questionnaire responses submitted 
during the investigation, we were unable to determine whether this loan 
relieved AHMSA of an obligation it would otherwise have borne with 
respect to the laid-off workers. Thus, in the underlying investigation, 
we calculated the benefit by treating the financing as an interest-free 
loan. See CTL Plate Investigation, 58 FR at 37361.
    In the review covering calendar year 1997, AHMSA claimed that it 
had extinguished its lay-off financing debt with the transfer of the 
``unnecessary assets.'' See 1997 Review of CTL Plate. See also, Certain 
Cut-to-Length Carbon Steel Plate from Mexico: Preliminary Results of 
Countervailing Duty Administrative Review, 64 FR 48796, 48801 
(September 8, 1999) (Preliminary Results of 1997 Review of CTL Plate). 
In that review, we noted that the record of the investigation indicated 
that these assets were included by the GOM in the sale of AHMSA despite 
the fact that GAN, the purchaser of AHMSA, indicated that it did not 
wish to purchase those assets, and GAN's bid for AHMSA did not include 
any funds for those assets. See Preliminary Results of 1997 Review of 
CTL Plate, 64 FR at 48799. In the 1997 review of CTL Plate, we further 
noted that the record from the investigation indicated that the value 
of those assets was frozen in November 1991, and that, as of that date, 
the assets were neither depreciated nor revalued for inflation, both of 
which are standard accounting practices in Mexico. See id. 64 FR at 
48801.
    Although, in the 1997 review of CTL Plate, we noted that a loan 
that provides countervailable benefits normally ceases to do so once it 
has been fully repaid, we determined that the benefit to AHMSA with 
respect to the lay-off financing was essentially in the form of a 
grant. Specifically, in that review, we determined that AHMSA had 
repaid the loan with the transfer of assets which AHMSA's purchasers 
did not wish to purchase and for which they did not pay. See 
Preliminary Results of 1997 Review of CTL Plate, 64 FR 48801. Thus, in 
the review covering calendar year 1997, we determined that the GOM's 
acceptance of these ``unnecessary assets'' to repay this loan, assets 
which were effectively given to AHMSA free of charge, constituted debt 
forgiveness of this loan. Accordingly, we determined that the entire 
amount of the pre-privatization lay-off financing was a non-recurring 
grant within the meaning of section 771(5)(E) of the Act that was 
received in 1994, the time at which the pre-privatization loan was 
forgiven. We further found that this program constituted a government 
financial contribution and was specific to a single enterprise within 
the meaning of sections 771(5)(D)(ii) and 771(5A)((D)(iii)(I) of the 
Act, respectively. We continued to apply this approach in the 1998 
review of CTL Plate. No new information or evidence of changed 
circumstances was presented in this review to warrant any 
reconsideration of these findings. Thus, for the purposes of these 
preliminary results, we continue to find that the entire amount of the 
pre-privatization lay-off financing constituted a non-recurring grant 
received in 1994, the point at which the loan was forgiven.
    To calculate the countervailable benefit in this review, we used 
the grant allocation methodology for intermittent, significant 
inflation described above. We then divided the benefit from the pre-
privatization lay-off financing attributable to the POR by the total 
consolidated sales of AHMSA during the same period. On this basis, we 
preliminarily determine the net subsidy for this program to be 0.52 
percent ad valorem for AHMSA.
D. GAN's Committed Investment Into AHMSA
    As noted above in the ``Change-in-Ownership'' section, the GOM sold 
AHMSA to GAN in 1991. To sell the company, the GOM established a bid 
structure in which bids could be divided into two parts: A cash 
component and a committed investment component. Under these bidding 
rules, a potential purchaser of AHMSA could, in lieu of a cash payment 
to the GOM, agree to make future investments into AHMSA. GAN, the 
eventual purchaser of AHMSA, made a bid for the company which consisted 
of a cash payment to the GOM as well as a promise to invest a certain 
amount into AHMSA in the future. Another bid by a third party, which 
had a higher cash component, was rejected by the GOM in favor of GAN's 
bid.
    In the 1998 review of CTL Plate, we found that, because the 
transaction in question involved only the sale of AHMSA, the actions of 
the GOM were specific to a single enterprise within the meaning of 
section 771(5A)(D)(iii)(I) of the Act. See the ``Committed Investment'' 
section of the Decision Memorandum that accompanied the

[[Page 52900]]

1998 Review of CTL Plate. We further found that the record reflected 
that the GOM, in accepting GAN's bid, considered one-half of GAN's 
committed investment to be equivalent to the payment of cash. 
Therefore, we used this amount as a proxy for the amount of revenue 
foregone by the GOM in its sale of AHMSA, within the meaning of section 
771(5)(D)(ii) of the Act. Id. No new information or evidence of changed 
circumstances has been presented thus far in this review to warrant any 
reconsideration of these findings. Therefore, for purposes of these 
preliminary results, we continue to find that GAN's committed 
investment into AHMSA was specific and constituted a government 
financial contribution within the meaning of the Act. Furthermore, we 
continue to find that this program conferred a benefit under section 
771(5)(E) of the Act.
    Accordingly, we have treated this benefit as a non-recurring grant 
in the amount of the revenue foregone and allocated it over time using 
our standard grant formula.\9\ We then converted the benefit 
attributable to the POR into pesos using the average annual peso/U.S. 
dollar exchange rate for the POR. Finally, we divided the resulting 
peso-denominated benefit amount by AHMSA's total consolidated sales 
during the POR. On this basis, we determine the net countervailable 
subsidy to be 2.21 percent ad valorem.
---------------------------------------------------------------------------

    \9\ The benefit amount under this program was denominated in 
U.S. dollars. Therefore, it was not necessary to use the 
intermittent inflation methodology discussed above.
---------------------------------------------------------------------------

E. 1988 and 1990 Debt Restructuring of AHMSA Debt and the Resulting 
Discounted Prepayment in 1996 of AHMSA's Restructured Debt Owed to the 
GOM
    In 1987, the GOM negotiated agreements with foreign creditors to 
restructure the debt of AHMSA. The GOM again negotiated on behalf of 
AHMSA debt restructuring agreements in 1988 and 1990. Under these 
agreements, the GOM purchased AHMSA's debts, which were denominated in 
several foreign currencies, from AHMSA's foreign creditors in exchange 
for GOM debt. The GOM thereby became the creditor for loans included in 
these agreements.
    In the underlying investigation, the GOM claimed that AHMSA's 
principal repayment obligations remained the same after the debt 
restructuring. However, in that investigation, we could not confirm 
during verification that AHMSA's principal obligations on its debt had 
not been forgiven in the 1988 and 1990 debt restructuring agreements. 
Thus, based upon the facts available to the Department at the time of 
the investigation, we assumed that the principal had been forgiven and 
that this had been reflected in the amount of the discount the GOM had 
received when purchasing the debt from AHMSA's foreign creditors. 
Accordingly, we treated the forgiven principal as a non-recurring 
grant.
    In the 1997 review of CTL Plate, AHMSA claimed that, in June 1996, 
it had repaid its restructured debt in the form of a discounted 
prepayment to the GOM, thereby extinguishing its financial obligations 
to the GOM. During verification of the questionnaire response submitted 
during that administrative review, we learned that, in order to 
determine the amount of the discounted prepayment that AHMSA was to 
make in June of 1996, the company and the GOM had created amortization 
tables for each of the foreign currency loans. Next, they had converted 
these payment streams into U.S. dollars and calculated the net present 
value for each payment stream. They had then summed the U.S. dollar 
denominated net present values to derive the amount of the discounted 
prepayment to be made in U.S. dollars.
    In the 1997 review of CTL Plate, we determined that AHMSA's 
discounted prepayment of its 1988 and 1990 restructured debts 
constituted a countervailable benefit, in the form of debt forgiveness, 
because AHMSA's discounted prepayment had resulted in a reduction of 
the amount of principal owed by AHMSA on this debt. See Preliminary 
Results of 1997 Review of CTL Plate, 64 FR at 48799. On this basis, we 
determined in the 1997 review of CTL Plate that the difference between 
the principal outstanding on AHMSA's restructured debt and the amount 
of its discounted prepayment constituted debt forgiveness on the part 
of the GOM and, therefore, conferred a benefit and constituted a 
government financial contribution within the meaning of sections 
771(5)(E) and 771(5)(D)(ii) of the Act, respectively. In addition, we 
determined that the benefit was conferred in 1996, the year in which 
the debt forgiveness took place. See id. Because the debt forgiveness 
was made to a single enterprise, we determined in the 1997 review of 
CTL Plate that it was specific within the meaning of section 
771(5A)(D)(iii)(I) of the Act. We continued this approach in the 1998 
review of CTL Plate. No new information or evidence of changed 
circumstances has been presented thus far in this review to warrant any 
reconsideration of these findings. Thus, for purposes of these 
preliminary results, we continue to find that the debt forgiveness 
under this program is a countervailable, non-recurring grant.
    Because the principal forgiven was denominated in U.S. dollars and, 
thus, was unaffected by Mexico's intermittent significant inflation, we 
used the Department's standard non-recurring grant methodology to 
allocate the benefit to the POR. See 19 CFR 351.509. We used as our 
discount rate the weighted-average of AHMSA's fixed-rate, U.S. dollar 
loans that were received during the year of receipt when the debt 
forgiveness took place. We then converted the U.S. dollar denominated 
benefit into pesos using the average annual peso/U.S. dollar exchange 
rate for the POR. Finally, we divided the benefit attributable to the 
POR by AHMSA's total consolidated sales during the same period. On this 
basis, we preliminarily determine the net subsidy for this program to 
be 0.52 percent ad valorem for AHMSA.
F. Immediate Deduction Program
    Under Article 51 of Mexico's tax law, companies may opt to take an 
immediate deduction on fixed assets purchased during the tax year, as 
opposed to taking regular straight line depreciation. The rates of 
depreciation under the immediate deduction vary according to industry. 
The Immediate Deduction program was established in 1987 and was subject 
to ongoing reforms until it was repealed in 1998. The program was 
subsequently reinstated in 2002. See the ``Immediate Deduction'' 
section of the GOM Verification Report. Tax credits earned under the 
Immediate Deduction program can be carried-forward for a period of 10 
years. Id. Pursuant to this carry forward provision, AHMSA was able to 
apply tax credits, earned prior to and during 1998, to tax year 2000 
even though the program was not active during the POR.
    The immediate deduction mechanism was available only for certain 
fixed assets that had not been previously used in Mexico. The immediate 
deduction was not available for pre-operation expenses or for deferred 
expenses and costs. The GOM's stated purpose for the immediate 
deduction program was to promote investment by allowing companies to 
take an accelerated or immediate deduction set to an industry-specific 
rate, rather than using the standard straight-line depreciation method. 
GOM officials confirmed during verification that the immediate 
deduction option only applied to property used permanently within 
Mexico but outside the metropolitan areas of Mexico City, Guadalajara, 
and

[[Page 52901]]

Monterrey. See the ``Immediate Deduction'' section of the GOM 
Verification Report. With respect to small firms (i.e., firms with a 
gross income of 7 million pesos or less), the location restriction did 
not apply.\10\ An immediate deduction could be taken, at the election 
of the taxpayer, in the tax year in which the investments in qualifying 
fixed assets were made, in the year in which these assets were first 
used, or in the following year. No prior approval by the GOM was 
required to use the immediate deduction option.
---------------------------------------------------------------------------

    \10\ We note that the small firm classification does not apply 
to AHMSA.
---------------------------------------------------------------------------

    In past reviews, our examination of this program was limited to 
whether AHMSA used tax credits earned under the Immediate Deduction 
program to reduce its income tax liability. See, e.g., the ``Immediate 
Deduction'' section of the Decision Memorandum that accompanied the 
1998 Review of CTL Plate. However, based on record evidence collected 
during this segment of the proceeding, we are preliminary revising this 
approach. Under Article 23 of the Mexican tax law, the GOM imposes an 
alternative minimum tax. Pursuant to this provision, companies are 
required to pay the lesser of either the income tax or the asset tax. 
The asset tax is equal to 1.8 percent of the value of a company's 
assets. During the POR, AHMSA was in a tax loss position. Therefore, it 
did not have any taxable income. However, pursuant to Article 23 of the 
Mexican tax law, it was liable for an asset tax equal to 1.8 percent of 
the value of its assets. Therefore, we are investigating the extent to 
which AHMSA may have used this program to reduce its asset tax burden.
    In previous segments of this proceeding, we have found the 
Immediate Deduction program specific to a region, pursuant to section 
771(5A)(D)(iv) of the Act. We have further found that the program 
constituted a financial contribution, to the extent that the GOM is not 
collecting tax revenue that is otherwise due, and that it conferred a 
benefit under sections 771(5)(D)(ii) and 771(5)(E) of the Act, 
respectively. See, e.g., the ``Immediate Deduction'' section of the 
Decision Memorandum that accompanied the 1998 Review of CTL Plate. No 
new information or evidence of changed circumstances has been presented 
in this review to warrant reconsideration of these findings. Thus, for 
purposes of these preliminary results, we continue to find this program 
countervailable.
    In accordance with 19 CFR 351.509, we have calculated the benefit 
under this program by determining the amount of asset tax that AHMSA 
would have paid, absent the program, in the tax return it filed during 
the POR. We note that the amount of asset tax that AHMSA would have 
paid absent the program was clearly indicated on the tax return that 
AHMSA filed during the POR. See Exhibit 1 of AHMSA's July 8, 2003, 
supplemental questionnaire response. We then divided the benefit by 
AHMSA's total consolidated sales. On this basis, we preliminarily 
determine the net subsidy to be 2.57 percent ad valorem for AHMSA.
G. Bancomext Export Loans
    The Banco Nacional de Comercio Exterior, S.N.C. (Bancomext), also 
known as the National Bank of Foreign Trade, is a state-owned lending 
institution that offers financing to producers or trading companies 
engaged in export activities. Specifically, these U.S. dollar-
denominated loans provide financing for working capital (pre-export 
loans), and export sales (export loans).
    During the POR, AHMSA made interest payments on a Bancomext loan 
that it originally received from the Government bank in 1995. However, 
the terms of the loan were renegotiated in May of 2000 following 
AHMSA's entrance into an interest payment suspension. AHMSA had no 
other loans outstanding with Bancomext as of the end of 2001, the POR. 
As discussed in further detail below, this Bancomext loan was the only 
loan that was not covered by the interest payment suspension and, thus, 
was the only loan on which AHMSA paid interest during the POR.
    In the underlying investigation, we determined that, because the 
loans issued by Bancomext are available only to exporters, this program 
is specific within the meaning of section 771(5A)(B) of the Act. We 
further found that loans under this program conferred a benefit and 
constituted a government financial contribution under sections 
771(5)(E)(ii) and 771(5)(D)(i) of the Act, respectively, to the extent 
that they are provided at rates below those prevailing on comparable 
commercial loans. See CTL Plate Investigation, 58 FR at 37357. We used 
the same approach in the previous segment of this proceeding. See the 
``Bancomext Export Loans'' section of the Decision Memorandum that 
accompanied the 1998 Review of CTL Plate. No new information or 
evidence of changed circumstances has been presented in this review to 
warrant reconsideration of these findings. Therefore, for purposes of 
these preliminary results, we continue to find that lending under this 
program constitutes a countervailable export subsidy.
    As explained in the Creditworthiness Memorandum, on May 25, 1999, 
AHMSA entered into a court-sanctioned suspension of payments program. 
Under the suspension of payments program, all payments on AHMSA's 
commercial debt (i.e., non-government debt) were suspended from May 
1999 through 2001, a period which includes the POR. However, during the 
POR, AHMSA made payments on its outstanding Bancomext loan, pursuant to 
a May 2, 2000 agreement established between Bancomext and AHMSA. Under 
this agreement, the terms of AHMSA's Bancomext loan were renegotiated. 
In particular, the two parties changed the repayment schedule, interest 
rates, and penalty payment terms. See, e.g., Exhibit 13 of AHMSA's 
November 25, 2002 questionnaire response.\11\
---------------------------------------------------------------------------

    \11\ Bankcomext officials were able to secure payment from 
AHMSA, pursuant to the terms of the amended loan agreement. We note 
that the details of the amended loan agreement are business 
propertary, see the ``Bancomet'' section of the GOM Verification 
Report.
---------------------------------------------------------------------------

    As stated above, while the Bancomext loan was originally issued in 
1995, the terms of the loan were renegotiated in 2000. Thus, in keeping 
with the Department's practice, we find that, for purposes of these 
preliminary results, May 2000 was the effective issuance date of the 
Bancomext loan. See e.g., Final Affirmative Countervailing Duty 
Determination: Certain Stainless Steel Wire Rod From Italy, 63 FR 
40474, 40477 (July 29, 1998). As explained in the Creditworthiness 
Memorandum, we have preliminarily determined that AHMSA could not have 
obtained long-term loans from conventional commercial sources in 2000. 
Accordingly, in deriving the benchmark interest rate (e.g., a rate that 
would have been established in 2000 and remained applicable during the 
POR) we have used the benchmark methodology for uncreditworthy 
companies outlined in 19 CFR 351.505(a)(3)(iii).
    To determine the benefit conferred under the Bancomext export loan 
program, we compared the interest rate charged on these loans during 
the POR to the uncreditworthy benchmark interest rate discussed above. 
As the interest amounts AHMSA paid in the 2001 POR were less than what 
AHMSA would have paid on a comparable commercial loan, as indicated by 
our benchmark interest rate, we preliminarily determine that this 
program conferred a countervailable benefit upon AHMSA in accordance 
with section 771(5)(E)(ii) of the Act.

[[Page 52902]]

    We note that AHMSA was unable to make timely interest payments on 
several occasions during the 2001 POR, and, pursuant to the terms of 
its loan agreement, was forced to make penalty interest payments. 
During verification, we confirmed that the penalty interest rate 
established under the terms of the renegotiation was 25 percent lower 
than that established under the original terms of the Bancomext loans. 
During verification, we asked Bancomext officials why, in the midst of 
AHMSA's financial difficulties, they decided to lower the penalty 
interest rate that they charged AHMSA for late interest payments. 
Bancomext officials explained that the revised moratorium interest rate 
was the rate that was agreed to between the two parties during the 
renegotiation process.
    For purposes of these preliminary results, we find that, given that 
AHMSA defaulted on its commercial debt in 1999, its uncreditworthy 
status at the time of the 2000 renegotiation process, and its history 
of failing to adhere to its contractual obligations with Bancomext, the 
terms of the renegotiated Bancomext loans did not reflect the amount of 
penalty interest that AHMSA would have paid on a comparable commercial 
loan.\12\
---------------------------------------------------------------------------

    \12\ Regarding AHMSA's history of failing to adhere to its 
contractual obligations with bancomext, see the ``Bancomext Loan'' 
section of the AHMSA Verification Report.
---------------------------------------------------------------------------

    We attempted to obtain information from AHMSA and the GOM regarding 
penalty interest rates charged in Mexico during 2000. AHMSA explained 
that, while it was late on several loans prior to 2000, it did not make 
any penalty interest payments to commercial institutions immediately 
prior to or during the 2001 POR. See page 11 of AHMSA's May 22, 2003, 
supplemental questionnaire response. In its supplemental questionnaire 
response, the GOM stated that it was, ``* * * unable to provide such 
information * * *'' on the grounds that, ``* * * Mexican bank secrecy 
laws prohibit the disclosure of company-specific repayment 
information.'' See page 1 of the GOM's May 21, 2003, questionnaire 
response. During verification, we attempted to meet with a commercial 
lending institution in Mexico to discuss, among other things, the 
typical practices of Mexican banks, as they apply to the establishment 
of penalty interest payments. However, the officials at the commercial 
lending institution refused to answer our questions. See the September 
2, 2003, report entitled, ``Meeting with Banking Officials from 
Banamex,'' a public document on file in room B-099 of the CRU. Thus, in 
accordance with section 776(a) of the Act, we are using as facts 
available the penalty interest rate that was established between 
Bancomext and AHMSA pursuant to the original terms of the 1995 
Bancomext loan agreement. See Exhibit 4 of AHMSA's July 8, 2003, 
supplemental questionnaire response.
    To determine the benefit attributable to AHMSA's reduced penalty 
interest payments, we subtracted the amount of penalty interest AHMSA 
actually paid during the 2001 POR from the amount of penalty interest 
the company would have paid during the POR pursuant to its initial 1995 
loan agreement with Bancomext.
    In their December 16, 2003, submission, petitioners alleged that 
the GOM forgave principal due on the Bancomext loans when AHMSA and 
Bancomext renegotiated the terms of the Bancomext loans in 2000. In our 
New Subsidy Memorandum, we determined that an examination of 
petitioners' allegations was warranted. See page 8 of the New Subsidy 
Memorandum. During this review, we have issued multiple supplemental 
questionnaires to AHMSA and the GOM concerning petitioners' allegation 
that the government forgave a portion of AHMSA's Bancomext debt. In 
addition, we thoroughly examined this issue during verification. For 
example, we reviewed source documents that indicated the balance of 
principal that AHMSA owed on the Bancomext loans before and after the 
2000 loan renegotiation. See the ``Bancomext Loans'' section of the 
AHMSA Verification Report. Based on the questionnaire responses 
submitted by the GOM and AHMSA and on the source documents reviewed 
during verification, we preliminarily find that no debt was forgiven on 
AHMSA's Bancomext loans.
    Because eligibility under this program is contingent upon exports, 
we divided the benefit (i.e., the difference between the benchmark 
interest/penalty payments and AHMSA's actual interest/penalty payments) 
by AHMSA's total export sales. We note that we have used an 
unconsolidated export sales figure because the program was contingent 
on AHMSA's export sale. Because AHMSA's total export sales were 
denominated in pesos, we converted the benefit AHMSA received under 
this program to pesos using the peso/U.S. dollar exchange rate that was 
outstanding on the date of the interest payments. On this basis, we 
preliminarily determine the net subsidy for this program to be 6.55 
percent ad valorem for AHMSA.

II. Programs Preliminarily Determined Not to Confer Subsidies

A. Petroleos Mexicanos (PEMEX) Guaranteed Provision of Natural Gas for 
Less Than Adequate Remuneration
    Based on our New Subsidies Memorandum, we initiated an 
investigation into whether PEMEX sold natural gas to AHMSA for less 
than adequate remuneration during the POR. In particular, we examined a 
program under which the state-owned PEMEX agreed to provide a certain 
fixed quantity of natural gas for the price of US$4 per million British 
Thermal Units (MMBTU) to AHMSA for a period of three years beginning on 
February 8, 2001. This contract was applicable from January 1, 2001, to 
December 31, 2003.
    During verification, we met with officials from PEMEX and discussed 
the manner in which the program operated during the POR. In addition, 
we identified and examined the distribution of companies and industries 
that used the program during the POR. See the ``PEMEX'' section of the 
GOM Verification Report. During verification, we confirmed that, as the 
GOM had stated in its questionnaire responses, the program was provided 
to wide variety of industries and that neither AHMSA nor the Mexican 
steel industry was singled out or disproportionally represented in 
terms of usage. Thus, based on the questionnaire responses submitted by 
the GOM and on information collected during verification, we 
preliminarily determine that this program is not specific within the 
meaning of section 771(5A) of the Act and, therefore, is not 
countervailable.
B. PITEX Duty-Free Imports for Companies That Export
    In prior segments of this proceeding, we found that the Programa de 
Importacion Temporal Para Producir Productos Para Exportar (PITEX), 
also know as the Program for Temporary Importation to Produce Products 
for Export, provides countervailable export subsidies to the extent 
that the program offers duty exemptions on products not consumed in the 
production of the exported product. In its questionnaire responses, the 
GOM claimed that this aspect of the program was terminated pursuant to 
Article 303 of the North American Free Trade Agreement (NAFTA). In 
particular, the GOM asserted that, after 2001, PITEX no longer offered 
duty-free exemptions on capital goods and machinery. See, e.g., page 
II-44 of the GOM's November 25, 2002. During verification, we 
investigated the GOM's claims regarding

[[Page 52903]]

PITEX. We found no information that contradicted the GOM's claims. See 
the ``PITEX'' section of the GOM Verification Report.
    Because this change was implemented after the POR of this review, 
we reviewed the relevant source documentation of AHMSA and its 
affiliate Nacional de Acero, S.A (NASA) to confirm that these companies 
did not use PITEX during the 2001 POR. See the ``PITEX (Temporary 
Import Items)'' section of the AHMSA Verification Report. In 
particular, we reviewed annual reports that both companies submitted to 
the Ministry of Economy, the authority that administers PITEX. Id. 
These reports listed all temporary imports made by the AHMSA and NASA 
during the POR.\13\ We noted that AHMSA reported no temporary imports 
during the POR. Id. NASA reported temporary imports; however, a review 
of its source documents indicated that it did not receive any duty 
exemptions on items that were not consumed in the production of 
exported products. Id.
---------------------------------------------------------------------------

    \13\ We note that, in prior segments of this review, usage of 
PITEX has corresponded to those items that fall under the temporary 
imports category.
---------------------------------------------------------------------------

    Based on the questionnaire responses submitted by the GOM and 
AHMSA, as well as on information examined during verification, we find 
that PITEX did not confer a benefit on AHMSA or its affiliate, NASA, 
during the POR. Furthermore, we preliminarily determine that PITEX, as 
of 2002, is no longer countervailable because it no longer offers duty 
exemptions on products not consumed in the production of the exported 
product.
C. GOM Assumption of AHMSA Debt in 1986
    In the previous segment of this proceeding we found this program 
conferred countervailable subsidies. See the ``1986 Assumption of 
AHMSA's Debt'' section of the Decision Memorandum that accompanied the 
1998 Review of CTL Plate in which we treated the debt forgiveness 
provided under this program as a non-recurring, allocable grant 
received in 1986. However, because we have allocated the debt 
forgiveness under this program using a 15-year AUL, the benefit stream 
was fully extinguished prior to the POR and, thus, no longer confers 
countervailable subsidies. Therefore, we preliminarily determine that 
this program is no longer countervailable.

III. Program Preliminarily Determined Not To Exist

A. NAFIN/Coahuila State Government Supplier Relief
    In our New Subsidies Memorandum, we initiated an investigation into 
whether the state-run Nacional Financiera (NAFIN) and the Coahuila 
State Government (CGS) developed a rescue scheme in 1999 to address the 
lack of payment of AHMSA's debts to local suppliers. During 
verification, we thoroughly examined AHMSA's accounts payable, as well 
as other accounting documents related to its suppliers. During our 
review of these document, we found no evidence that AHMSA received any 
of the alleged benefits or that this alleged program exists. See the 
``NAFIN/Coahuila State Government Supplier Relief'' section of the 
AHMSA Verification Report. Further, the GOM claimed that this program 
does not exist. Therefore, for purposes of these preliminary results, 
we find that this program does not exist.

IV. Programs Preliminarily Determined To Be Not Used

    Based on information reviewed during verification, we preliminarily 
determine that the following programs were not used during the POR:
    1. FONEI Long-Term Financing.
    2. Export Financing Restructuring.
    3. Bancomext Trade Promotion Services and Technical Support.
    4. Empresas de Comercio Exterior or Foreign Trade Companies 
Program.
    5. Article 15 & 94 Loans.
    6. NAFIN Long-Term Loans.

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, 2001, through December 
31, 2001, we preliminarily determine the net subsidy for AHMSA to be 
13.37 percent ad valorem. If the final results of this review remain 
the same as these preliminary results, the Department intends to 
instruct the BCBP to assess countervailing duties for AHMSA at 13.37 
percent ad valorem of the f.o.b. invoice price on all shipments of the 
subject merchandise from AHMSA, entered, or withdrawn from warehouse, 
for consumption on or after the date of publication of the final 
results of this review.
    Because the Uruguay Round Agreements Act (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. A 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 pre-URAA antidumping regulation on automatic assessment, 
which was 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 the BCBP 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 are those 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 CTL Plate Investigation, 58 FR 37352. 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, 2001, through December 31, 2001, 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

[[Page 52904]]

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 this administrative review, including 
the results of its analysis of arguments made in any case or rebuttal 
briefs.
    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: September 2, 2003.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 03-22787 Filed 9-5-03; 8:45 am]
BILLING CODE 3510-DS-P