01-975. Grain-Oriented Electrical Steel From Italy; Final Results of Countervailing Duty Administrative Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of final results of countervailing duty administrative review.

SUMMARY:

On July 7, 2000, the Department of Commerce (the Department) published in the Federal Register its preliminary results of the administrative review of the countervailing duty order on grain-oriented electrical steel for the period January 1, 1998 through December 31, 1998.

Based on our analysis of the comments received, and the decision of the Court of Appeals for the Federal Circuit in Delverde S.r.L. v. United States, 202 F.3d 1360 (Fed. Cir. 2000) (Delverde III), the Department has reexamined its change in ownership analysis and methodology. As a result, we have made changes to the net subsidy rate. Therefore, the final results differ from the preliminary results. The final net subsidy rate for the reviewed company is listed below in the section entitled “Final Results of Review.”

EFFECTIVE DATE:

January 12, 2001.

FOR FURTHER INFORMATION CONTACT:

Stephanie Moore or Darla Brown, Office of AD/CVD Enforcement VI, Group II, Import Administration, U.S. Department of Commerce, Room 4012, 14th Street and Constitution Avenue, N.W., Washington, D.C. 20230. Telephone numbers [phone] or [phone], respectively.

SUPPLEMENTARY INFORMATION:

Applicable Statute

Unless otherwise indicated, all citations to the statute are references to the provisions of the Tariff Act of 1930 (the Act), as amended by the Uruguay Round Agreements Act (URAA) effective January 1, 1995. In addition, unless otherwise indicated, all citations to the Department's regulations are to the regulations codified at 19 CFR part 351 (1999).

Background

On July 7, 2000, the Department published the preliminary results of the administrative review of the countervailing duty order on grain-oriented electrical steel. See Grain-Oriented Electrical Steel from Italy; Preliminary Results of Countervailing Duty Administrative Review and Extension of Time Limit for Final Results of Countervailing Duty Administrative Review, 65 FR 41950 (July 7, 2000). This review covers one manufacturer/exporter, Acciai Speciali Terni S.p.A. (AST). The review covers the period January 1, 1998 through December 31, 1998, and 28 programs.

In the preliminary results, the Department invited interested parties to comment in their case briefs on the implications for this proceeding, if any, of the Delverde III decision. Both petitioners and AST provided comments in their case and rebuttal briefs. On September 28, 2000, we sent a questionnaire soliciting information from AST, the Government of Italy (GOI) and the European Commission (EC) regarding the change in ownership issue. On October 20, 2000, AST submitted its response. The Department issued supplemental questionnaires to the respondents on October 27, 2000, and received responses on November 14, 2000.

On November 21, 2000, the Department issued its interpretation of Delverde III and its revised change in ownership approach in the Draft Results of Redetermination Pursuant to Court Remand, Acciai Speciali Terni S.p.A. v. United States (Draft Redetermination), which pertains to the Final Affirmative Countervailing Duty Determination: Stainless Steel Plate in Coils from Italy, 64 FR 15508 (March 31, 1999). On November 22, 2000, we placed the public version of this Draft Redetermination on the record of this administrative review and provided interested parties an opportunity to comment on the change in ownership approach set forth in the Draft Redetermination. On December 6, 2000, petitioners and AST submitted comments. A public hearing was held on December 15, 2000, in which both parties participated. On December 19, 2000, the Department issued the Final Results of Redetermination Pursuant to Court Remand, Acciai Speciali Terni S.p.A. v. United States (Final Redetermination), which was placed on this record as well.

Scope of the Review

Imports covered by this review are shipments of grain-oriented electrical steel from Italy, which is a flat-rolled alloy steel product containing by weight at least 0.6 percent of silicon, not more than 0.08 percent of carbon, not more than 1.0 percent of aluminum, and no other element in an amount that would give the steel the characteristics of another alloy steel, of a thickness of no more than 0.56 millimeters, in coils of any width, or in straight lengths which are of a width measuring at least 10 times the thickness. The products covered by this review are provided for under the following item numbers of the Harmonized Tariff Schedule of the United States (HTSUS): 7225.10.0030, 7226.10.1030, 7226.10.5015, and 7226.10.5065. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of this proceeding is dispositive.

Analysis of Comment Received

All issues raised in the case and rebuttal briefs submitted by parties to this administrative review are addressed in the “Issues and Decision Memorandum” (Decision Memorandum) from Holly A. Kuga, Acting DAS, Group II, Import Administration, to Troy H. Cribb, Assistant Secretary for Import Administration, dated concurrent with this notice, which is hereby adopted into this notice. A list of issues which parties have raised and to which we have responded, all of which are in the Decision Memorandum, is attached to this notice as Appendix I. 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 room B-099 of the Main Commerce Building. In addition, a complete version of the Decision Memorandum can be accessed directly on the internet at http://ita.doc.gov/​import_​admin/​records/​frn,, under the heading “Italy.” The paper copy and electronic version of the Decision Memorandum are identical in content.

Changes Since the Preliminary Results

Based on our analysis of comments received, and the Department's revised change in ownership approach based on the Court's ruling in Delverde III, we have made certain changes to the net subsidy rate. These changes are discussed in the relevant sections of the Decision Memorandum.

Final Results of Review

In accordance with 19 CFR 351.212(b), we calculated an individual subsidy rate for the producer/exporter subject to this review. We will instruct the U.S. Customs (Customs) to assess countervailing duties as indicated below on all appropriate entries. For the period January 1, 1998, through December 31, 1998, we determine the net subsidy rate for the reviewed company to be as follows:

Margin
Manufacturer/Exporter	Percent
AST	14.25

We will instruct Customs to assess countervailing duties as indicated above. The Department will also instruct Customs to collect cash deposits of estimated countervailing duties in the percentages detailed above of the f.o.b. invoice price on all shipments of the subject merchandise from reviewed companies, entered, or withdrawn from warehouse, for consumption on or after the date of publication of the final results of this review.

Because the 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. The 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); Floral Trade Council v. United States, 822 F. Supp. 766 (CIT 1993). 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 Customs 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 will be the rate for that company established in the most recently completed administrative proceeding conducted under the Act, as amended by 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 Final Affirmative Countervailing Duty Determination: Grain-Oriented Electrical Steel from Italy, 59 FR 18357 (April 18, 1994). 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, 1998, through December 31, 1998, 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.

This notice serves as a reminder to parties subject to administrative protective order (APO) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305. Timely written notification of return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.

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: January 3, 2002.

Richard W. Moreland,

Acting Assistant Secretary for Import Administration.

Appendix I—Issues Discussed in Decision Memorandum

http://ita.doc.gov/​import_​ admin/records/frn, under the heading (“Italy”).

Methodology and Background Information

I. Change in Ownership

A. Background and Calculation Methodology

II. Subsidies Valuation Information

A. Allocation Period

B. Equityworthiness

C. Creditworthiness

D. Benchmark / Discount Rate

III. Facts Available

A. Adverse Facts Available

Analysis of Programs

I. Programs Conferring Subsidies

A. Equity Infusions

B. Debt Forgiveness: 1988-1990 Restructuring Plan

C. Debt Forgiveness: 1993-1994 Restructuring Plan

D. Interest Contributions on IRI Loans/Bond Issues under Law 675/77

E. Pre-Privatization Retirement Benefits under Law 451/94

F. Exchange Rate guarantees under Law 796/76

European Commission Programs

A. ECSC Loans under Article 54

B. European Social Fund (ESF)

II. Programs Not Used

A. Rotation Fund

B. Grants Under Law 10/81—Energy Conservation

C. Brite-EuRam Project Grants

D. Loan from IRI to KAI for the Purchase of AST

E. Lending from the Ministry of Industry under Law 675/77

F. Mortgage Loans from the Ministry of Industry Under Law 675/77

G. Personnel Retraining Grants under Law 675/77

H. Capital Grants under Law 675/77

I. Reductions of the VAT under Law 675/77

J. Worker Training under Law 181/89 (Early Retirement Provision)

K. Reindustrialization under Law 181/89

L. Law 488/92 Investment Grants

M. Subsidized Export Financing Under Law 227/77

N. Finsider Loans

O. Interest Subsidies under Law 617/81

P. Financing under Law 464/7

Q. Interest Contributions under the Sabatini Law (Law 1329/65)

R. Social Security Exemptions

S. ILOR and IRPEG Exemptions

T. Law 345/92: Benefits for Early Retirement Program Name

III. Analysis of Comments

Comment 1: Change In Ownership (Privatization)—Interpretation of Delverde III

Comment 2: The Department's New Change In Ownership Approach

Comment 3: Successor-in-Interest Test

Comment 4: WTO Implications on Change in Ownership

Comment 5: Application of the Department's New Approach to Change In Ownership

Comment 6: Facts Otherwise Available

Comment 7: Spin-Off Transactions

Comment 8: 1993 Debt Forgiveness Apportionment

Comment 9: 1993 Gross Debt vs. Net Debt

Comment 10: 1993 Creditworthiness

Comment 11: Countervailability of European Social Fund

Comment 12: Countervailability of European Coal and Steel Community Article 54 Loans

Comment 13: Countervailability of Pre-Privatization Retirement Benefits under Law 451/94

Comment 14: 1988 Equity Infusion