[Federal Register Volume 69, Number 249 (Wednesday, December 29, 2004)]
[Notices]
[Pages 78091-78093]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E4-3863]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-475-825]


Stainless Steel Sheet & Strip in Coils from Italy; Preliminary 
Results of the Full Sunset Review of the Countervailing Duty Order

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: On June 1, 2004, the Department initiated a sunset review of 
the countervailing duty (``CVD'') order on stainless steel sheet & 
strip in coils (``SSSS'') from Italy pursuant to section 751(c) of the 
Tariff Act of 1930, as amended (``the Act''). See Initiation of Five-
Year (Sunset) Reviews, 69 FR 30874 (June 1, 2004). On the basis of 
substantive responses filed by domestic and respondent interested 
parties, the Department is conducting a full sunset review. As a result 
of this review, the Department preliminarily finds that revocation of 
the countervailing duty order would likely lead to continuation or 
recurrence of countervailable subsidies at the levels indicated in the 
Preliminary Results of Review section of this notice.

EFFECTIVE DATE: December 29, 2004.

FOR FURTHER INFORMATION CONTACT: Hilary Sadler, Esq., Office of Policy 
for Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW, 
Washington, D.C. 20230; telephone: (202) 482-4340.

SUPPLEMENTARY INFORMATION:

Background

    On June 1, 2004, the Department initiated a sunset review of the 
countervailing duty (``CVD'') order on SSSS from Italy pursuant to 
section 751(c) of the Tariff Act of 1930, as amended (``the Act''). See 
Initiation of Five-Year (Sunset) Reviews, 69 FR 30874 (June 1, 2004). 
The Department received a notice of intent to participate from 
Allegheny Ludlum Corp. (``Allegheny Ludlum''), North America Stainless 
(``NAS''), Nucor Corporation, Local 3303 United Auto Workers, 
Zanesville Armco Independent Organization, and the United Steelworkers 
of America, AFL-CIO/CLC (``USWA''), the domestic interested parties 
(collectively ``domestic interested parties''), within the applicable 
deadline (June 16, 2004) specified in section 351.218(d)(1)(i) of the 
Sunset Regulations. However, NAS does not support continuation of this 
countervailing duty order. See Notice of Intent to Participate from the 
Domestic Interested Parties at footnote 1 (June 16, 2004). All domestic 
interested parties claimed interested-party status under section 
771(9)(C) and (D) of the Act, as a U.S. producer of the domestic like 
product or a certified union whose workers are engaged in the 
production of the subject merchandise in the United States.
    On July 1, 2004, we received a complete substantive response from 
the domestic interested parties within the 30-day deadline specified in 
section 351.218(d)(3)(i) of the Department's Regulations. See 
Substantive Response of the Domestic Interested Parties (July 1, 2004).
    The Department received a complete substantive response to the 
notice of initiation on behalf of three respondent interested parties: 
the Government of Italy (``GOI''), the Delegation of the European 
Commission (``EC''), and TKAST. We received substantive responses from 
all respondent interested parties expressing their willingness to 
participate in this review. See Responses of the GOI (unpaginated), 
June 30, 2004, (``GOI Response''); EC (unpaginated), June 30, 2004, 
(``EC Response''). TKAST, a foreign producer and exporter of the 
subject merchandise claimed interested party status under section 
771(9)(A) of the Act. See Substantive Response of TKAST at 2 (July 1, 
2004) (``TKAST Response''). All respondent interested parties note that 
they have participated in this proceeding.
    We received rebuttal comments from the domestic interested parties 
on July 9, 2004; however, we did not receive rebuttal comments from the 
respondent interested parties.
    In a sunset review, the Department normally will find that there is 
adequate response to conduct a full sunset review where respondent 
interested parties account for more than 50 percent, by volume, of 
total exports of subject merchandise to the United States. See 19 CFR 
351.218(e)(1)(ii)(A). TKAST accounted for more than the 50 percent 
threshold that the Department normally considers to be an adequate 
response under 19 CFR section 351.218(e)(1)(ii)(A). On July 13, 2004, 
the Department determined that the responses by TKAST, the only 
respondent company in this review, the GOI, and the EC provided an 
adequate basis for a full review. See Memorandum for James J. Jochum, 
Assistant Secretary, Import Administration, from Ronald K. Lorentzen, 
Acting Director, Office of Policy, Re: Sunset Review of Stainless Steel 
Sheet & Strip in Coils from Italy; Adequacy of Respondent Interested 
Party Response to the Notice of Initiation, July 21, 2004. Therefore, 
the Department is conducting a full sunset review in accordance with 19 
CFR 351.218(e)(2)(i).

Scope of Review

    For purposes of this review, the product covered by this order is 
certain stainless steel sheet and strip in coils. Stainless steel is an 
alloy steel containing, by weight, 1.2 percent or less of carbon and 
10.5 percent or more of chromium, with or without other elements. The 
subject sheet and strip is a flat-rolled product in coils that is 
greater than 9.5 mm in width and less

[[Page 78092]]

than 4.75 mm in thickness, and that is annealed or otherwise heat 
treated and pickled or otherwise descaled. The subject sheet and strip 
may also be further processed (e.g., cold-rolled, polished, aluminized, 
coated, etc.) provided that it maintains the specific dimensions of 
sheet and strip following such processing.
    The merchandise subject to these orders is classified in the 
Harmonized Tariff Schedule of the United States (``HTSUS'') at the 
following subheadings: 7219.13.00.30, 7219.13.00.50, 7219.13.00.70, 
7219.13.00.80, 7219.14.00.30, 7219.14.00.65, 7219.14.00.90, 
7219.32.00.05, 7219.32.00.20, 7219.32.00.25, 7219.32.00.35, 
7219.32.00.36, 7219.32.00.38, 7219.32.00.42, 7219.32.00.44, 
7219.33.00.05, 7219.33.00.20, 7219.33.00.25, 7219.33.00.35, 
7219.33.00.36, 7219.33.00.38, 7219.33.00.42, 7219.33.00.44, 
7219.34.00.05, 7219.34.00.20, 7219.34.00.25, 7219.34.00.30, 
7219.34.00.35, 7219.35.00.05, 7219.35.00.15, 7219.35.00.30, 
7219.35.00.35, 7219.90.00.10, 7219.90.00.20, 7219.90.00.25, 
7219.90.00.60, 7219.90.00.80, 7220.12.10.00, 7220.12.50.00, 
7220.20.10.10, 7220.20.10.15, 7220.20.10.60, 7220.20.10.80, 
7220.20.60.05, 7220.20.60.10, 7220.20.60.15, 7220.20.60.60, 
7220.20.60.80, 7220.20.70.05, 7220.20.70.10, 7220.20.70.15, 
7220.20.70.60, 7220.20.70.80, 7220.20.80.00, 7220.20.90.30, 
7220.20.90.60, 7220.90.00.10, 7220.90.00.15, 7220.90.00.60, and 
7220.90.00.80. Although the HTSUS subheadings are provided for 
convenience and customs purposes, the Department's written description 
of the merchandise covered by these orders is dispositive.
    Excluded from the scope of these orders are the following: (1) 
sheet and strip that is not annealed or otherwise heat treated and 
pickled or otherwise descaled; (2) sheet and strip that is cut to 
length; (3) plate (i.e., flat-rolled stainless steel products of a 
thickness of 4.75 mm or more); (4) flat wire (i.e., cold-rolled 
sections, with a prepared edge, rectangular in shape, of a width of not 
more than 9.5 mm); and (5) razor blade steel. Razor blade steel is a 
flat-rolled product of stainless steel, not further worked than cold-
rolled (cold-reduced), in coils, of a width of not more than 23 mm and 
a thickness of 0.266 mm or less, containing, by weight, 12.5 to 14.5 
percent chromium, and certified at the time of entry to be used in the 
manufacture of razor blades. See Chapter 72 of the HTSUS, ``Additional 
U.S. Note'' 1(d).
    In response to comments by interested parties the Department has 
determined that certain specialty stainless steel products are also 
excluded from the scope of these orders. These excluded products are 
described below:
    Flapper valve steel is defined as stainless steel strip in coils 
containing, by weight, between 0.37 and 0.43 percent carbon, between 
1.15 and 1.35 percent molybdenum, and between 0.20 and 0.80 percent 
manganese. This steel also contains, by weight, phosphorus of 0.025 
percent or less, silicon of between 0.20 and 0.50 percent, and sulfur 
of 0.020 percent or less. The product is manufactured by means of 
vacuum arc remelting, with inclusion controls for sulphide of no more 
than 0.04 percent and for oxide of no more than 0.05 percent. Flapper 
valve steel has a tensile strength of between 210 and 300 ksi, yield 
strength of between 170 and 270 ksi, plus or minus 8 ksi, and a 
hardness (Hv) of between 460 and 590. Flapper valve steel is most 
commonly used to produce specialty flapper valves in compressors.
    Also excluded is a product referred to as suspension foil, a 
specialty steel product used in the manufacture of suspension 
assemblies for computer disk drives. Suspension foil is described as 
302/304 grade or 202 grade stainless steel of a thickness between 14 
and 127 microns, with a thickness tolerance of plus-or-minus 2.01 
microns, and surface glossiness of 200 to 700 percent Gs. Suspension 
foil must be supplied in coil widths of not more than 407 mm and with a 
mass of 225 kg or less. Roll marks may only be visible on one side, 
with no scratches of measurable depth. The material must exhibit 
residual stresses of 2 mm maximum deflection and flatness of 1.6 mm 
over 685 mm length.
    Certain stainless steel foil for automotive catalytic converters is 
also excluded from the scope of these orders. This stainless steel 
strip in coils is a specialty foil with a thickness of between 20 and 
110 microns used to produce a metallic substrate with a honeycomb 
structure for use in automotive catalytic converters. The steel 
contains, by weight, carbon of no more than 0.030 percent, silicon of 
no more than 1.0 percent, manganese of no more than 1.0 percent, 
chromium of between 19 and 22 percent, aluminum of no less than 5.0 
percent, phosphorus of no more than 0.045 percent, sulfur of no more 
than 0.03 percent, lanthanum of less than 0.002 or greater than 0.05 
percent, and total rare earth elements of more than 0.06 percent, with 
the balance iron.
    Permanent magnet iron-chromium-cobalt alloy stainless strip is also 
excluded from the scope of these orders. This ductile stainless steel 
strip contains, by weight, 26 to 30 percent chromium and 7 to 10 
percent cobalt, with the remainder of iron, in widths 228.6 mm or less, 
and a thickness between 0.127 and 1.270 mm. It exhibits magnetic 
remanence between 9,000 and 12,000 gauss, and a coercivity of between 
50 and 300 oersteds. This product is most commonly used in electronic 
sensors and is currently available under proprietary trade names such 
as ``Arnokrome III.''\1\
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    \1\ ``Arnokrome III'' is a trademark of the Arnold Engineering.
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    Certain electrical resistance alloy steel is also excluded from the 
scope of these orders. This product is defined as a non-magnetic 
stainless steel manufactured to American Society of Testing and 
Materials (ASTM) specification B344 and containing, by weight, 36 
percent nickel, 18 percent chromium, and 46 percent iron, and is most 
notable for its resistance to high-temperature corrosion. It has a 
melting point of 1390 degrees Celsius and displays a creep rupture 
limit of 4 kilograms per square millimeter at 1000 degrees Celsius. 
This steel is most commonly used in the production of heating ribbons 
for circuit breakers and industrial furnaces, and in rheostats for 
railway locomotives. The product is currently available under 
proprietary trade names, such as ``Gilphy 36.''\2\
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    \2\ ``Gilphy 36'' is a trademark of Imphy, S.A.
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    Certain martensitic precipitation-hardenable stainless steel is 
also excluded from the scope of these orders. This high-strength, 
ductile stainless steel product is designated under the Unified 
Numbering System (UNS) as S45500-grade steel, and contains, by weight, 
11 to 13 percent chromium and 7 to 10 percent nickel. Carbon, 
manganese, silicon and molybdenum each comprise, by weight, 0.05 
percent or less, with phosphorus and sulfur each comprising, by weight, 
0.03 percent or less. This steel has copper, niobium, and titanium 
added to achieve aging and will exhibit yield strengths as high as 1700 
Mpa and ultimate tensile strengths as high as 1750 Mpa after aging, 
with elongation percentages of 3 percent or less in 50 mm. It is 
generally provided in thicknesses between 0.635 and 0.787 mm, and in 
widths of 25.4 mm. This product is most commonly used in the 
manufacture of television tubes and is currently available under

[[Page 78093]]

proprietary trade names, such as ``Durphynox 17.''\3\
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    \3\ ``Durphynox 17'' is a trademark of Imphy, S.A.
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    Finally, three specialty stainless steels typically used in certain 
industrial blades and surgical and medical instruments are also 
excluded from the scope of these orders. These include stainless steel 
strip in coils used in the production of textile cutting tools (e.g., 
carpet knives).\4\ This steel is similar to AISI grade 420 but 
containing, by weight, 0.5 to 0.7 percent of molybdenum. The steel also 
contains, by weight, carbon of between 1.0 and 1.1 percent, sulfur of 
0.020 percent or less, and includes between 0.20 and 0.30 percent 
copper and between 0.20 and 0.50 percent cobalt. This steel is sold 
under proprietary names, such as ``GIN4 Mo.'' The second excluded 
stainless steel strip in coils is similar to AISI 420-J2 and contains, 
by weight, carbon of between 0.62 and 0.70 percent, silicon of between 
0.20 and 0.50 percent, manganese of between 0.45 and 0.80 percent, 
phosphorus of no more than 0.025 percent, and sulfur of no more than 
0.020 percent. This steel has a carbide density on average of 100 
carbide particles per 100 square microns. An example of this product is 
``GIN5'' steel. The third specialty steel has a chemical composition 
similar to AISI 420 F, with carbon of between 0.37 and 0.43 percent, 
molybdenum of between 1.15 and 1.35 percent, but lower manganese of 
between 0.20 and 0.80 percent, phosphorus of no more than 0.025 
percent, silicon of between 0.20 and 0.50 percent, and sulfur of no 
more than 0.020 percent. This product is supplied with a hardness of 
more than Hv 500 guaranteed after customer processing, and is supplied 
as, for example, ``GIN6''. ``GIN4 Mo,'' ``GIN5'' and ``GIN6'' are the 
proprietary grades of Hitachi Metals America, Ltd.
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    \4\ This list of uses is illustrative and provided for 
descriptive purposes only.
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Analysis of Comments Received:

    All issues raised in the substantive responses and rebuttals by 
parties to this sunset review are addressed in the ``Issues and 
Decision Memorandum'' (``Decision Memo'') from Ronald K. Lorentzen, 
Acting Director, Office of Policy, Import Administration, to James J. 
Jochum, Assistant Secretary for Import Administration, dated December 
17, 2004, which is hereby adopted by this notice. The issues discussed 
in the accompanying Decision Memo include the likelihood of 
continuation or recurrence of countervailable subsidies, the net 
subsidy likely to prevail were the order revoked, and the nature of the 
subsidy. Parties can find a complete discussion of all issues raised in 
this review and the corresponding recommendations in this public 
memorandum which is on file in the Central Records Unit, room B-099, of 
the main Commerce building.
    In addition, a complete version of the Decision Memo can be 
accessed directly on the Web at www.ia.ita.doc.gov/frn, under the 
heading ``Italy.'' The paper copy and electronic version of the 
Decision Memo are identical in content.

Preliminary Results of Review:

    The Department notes that on November 7, 2003, the U.S. Trade 
Representative requested the Department, pursuant to section 129(b)(4) 
of the Uruguay Round Agreements Act, to implement the determination in 
the Section 129 Memo. See Notice of Implementation Under Section 129 of 
the Uruguay Round Agreements Act: Countervailing Measures Concerning 
Certain Steel Products From the European Communities, 68 FR 64858, 
(November 17, 2003). Accordingly, the Department revised the cash 
deposit rates for TKAST and ``all others'' to reflect the impact that 
privatization had on non-recurring, allocable subsidies for the 
countervailing duty order on SSSS from Italy. Id. We have preliminarily 
determined to report these revised rates to the ITC.
    We preliminarily determine that revocation of the countervailing 
duty order on SSSS from Italy would be likely to lead to continuation 
or recurrence of countervailable subsidies at the rates listed below:

------------------------------------------------------------------------
                                                              Net
                 Producers/Exporters                    Countervailable
                                                       Subsidy (percent)
------------------------------------------------------------------------
TKAST...............................................                0.80
Arinox..............................................                0.34
All Others..........................................                1.61
------------------------------------------------------------------------

Nature of the Subsidy

    Consistent with section 752(a)(6) of the Act, the Department will 
provide to the ITC information concerning the nature of the subsidy, 
and whether the subsidy is a subsidy described in Article 3 or Article 
6.1 of the Subsidies Agreement. No receipt of benefits under these 
countervailable programs are contingent upon exports or the 
substitution of domestic over imported goods; therefore, these programs 
do not fall within the definition of a subsidy under Article 3 of the 
Subsidies Agreement. Furthermore, our review of the determinations on 
the record does not lead us to conclude that these programs fall within 
the definition of a subsidy under Article 6.1. We note that as of 
January 1, 2000, Article 6.1 has ceased to apply (see Article 31 of the 
Subsidies Agreement).
    Any interested party may request a hearing within 30 days of 
publication of this notice in accordance with 19 CFR 351.310(d)(i). Any 
hearing, if requested, will be held on February 16, 2004. Interested 
parties may submit case briefs no later than February 8, 2005, in 
accordance with 19 CFR 351.309(c)(1)(i). Rebuttal briefs, which must be 
limited to issues raised in the case briefs, may be filed not later 
than February 14, 2004, in accordance with 19 CFR 351.309(d)(i). The 
Department will issue a notice of final results of this sunset review, 
which will include the results of its analysis of issues raised in any 
such briefs, not later than April 27, 2005.
    This five-year (``sunset'') review and notice are in accordance 
with sections 751(c), 752, and 777(i)(1) of the Act.

    Dated: December 17, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. E4-3863 Filed 12-28-04; 8:45 am]
Billing Code: 3510-DS-S