02-24797. Final Affirmative Countervailing Duty Determination: Certain Cold-Rolled Carbon Steel Flat Products From Brazil

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

The Department of Commerce (the Department) has made a final determination that countervailable subsidies are being provided to producers and exporters of certain cold-rolled carbon steel flat products from Brazil. The subsidy rates in this final determination differ from those in the preliminary determination. The revised final subsidy rates for the investigated producers/exporters are listed below in the “Suspension of Liquidation” section of this notice.

EFFECTIVE DATE:

October 3, 2002.

FOR FURTHER INFORMATION CONTACT:

Sean Carey at [phone] or Holly Hawkins at [phone], Office of AD/CVD Enforcement VII, Group III, Import Administration, International Trade Administration, U.S. Department of Commerce, Room 7866, 14th Street and Constitution Avenue, NW., Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Applicable Statute and Regulations

Unless otherwise indicated, all citations to the statute are references to the provisions of the Tariff Act of 1930, as amended. In addition, unless otherwise indicated, all citations to the Department's regulations are to 19 CFR part 351 (2001).

Petitioners

The petition in this investigation was filed on September 28, 2001, by Bethlehem Steel Corporation; United States Steel LLC; LTV Steel Company, Inc.; Steel Dynamics, Inc.; National Steel Corporation; Nucor Corporation; WCI Steel, Inc.; and Weirton Steel Corporation (collectively, “the petitioners”).

Case History

The following events have occurred since the publication of the preliminary determination in the Federal Register. See Notice of Preliminary Affirmative Countervailing Duty Determination and Alignment with Final Antidumping Duty Determinations: Certain Cold-Rolled Carbon Steel Flat Products from Brazil, March 4, 2002 (67 FR 9652).

On March 21, 2002, we issued a fourth supplemental questionnaire requesting more information on the National Bank for Economic and Social Development (BNDES) loan programs and on the Program to Induce Industrial Modernization of the State of Minas Gerais (PROIM). On April 9, 2002, respondents filed a response to this supplemental questionnaire. We issued a fifth supplemental questionnaire on May 22, 2002 requesting further clarification on the BNDES programs, and we received a response to this questionnaire on June 3, 2002.

From June 10, 2002 to June 28, 2002, we conducted verification of the questionnaire responses submitted by the Government of Brazil (GOB), Companhia Siderurgica Nacional (CSN), Usinas Siderurgicas de Minas Gerais (USIMINAS), and Companhia Siderurgica Paulista (COSIPA).

On August 23, 2002, we received a combined case brief from the GOB, USIMINAS, COSIPA, and CSN. On this date, we also received a case brief filed by petitioners. On August 29, 2002, we received a combined rebuttal brief from the GOB, and the three respondent companies, USIMINAS, COSIPA, and CSN, as well as a rebuttal brief from the petitioners.

With respect to scope, in the preliminary LTFV determinations in this and the companion cold-rolled steel investigations, the Department preliminarily excluded certain porcelain enameling steel from the scope of these investigations. See Scope Appendix to the Notice of Preliminary Determination of Sales at Less Than Fair Value: Certain Cold-Rolled Carbon Steel Flat Products from Argentina,

67 FR 31181 (May 9, 2002) (Scope Appendix—Argentina Preliminary LTFV Determination). On June 13, 2002, we issued a preliminary decision on the remaining 75 scope exclusion requests filed in a number of the on-going cold-rolled steel investigations (see the June 13, 2002, memorandum regarding “Preliminary Scope Rulings in the Antidumping Investigations on Certain Cold-Rolled Carbon Steel Flat Products from Argentina, Australia, Belgium, Brazil, France, Germany, India, Japan, Korea, the Netherlands, New Zealand, the People's Republic of China, the Russian Federation, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey, and Venezuela, and in the Countervailing Duty Investigations of Certain Cold-Rolled Carbon Steel Flat Products from Argentina, Brazil, France, and Korea” (Preliminary Scope Rulings), which is on file in the Department's Central Records Unit (CRU), room B-099 of the main Department building. We gave parties until June 20, 2002, to comment on the preliminary scope rulings, and until June 27, 2002, to submit rebuttal comments. We received comments and/or rebuttal comments from petitioners ^[1] and respondents from various countries subject to these investigations of cold-rolled steel. In addition, on June 13, 2002, North American Metals Company (an interested party in the Japanese proceeding) filed a request that the Department issue a “correction” for an already excluded product. On July 8, 2002, the petitioners objected to this request.

At the request of multiple respondents, the Department held a public hearing with respect to the Preliminary Scope Rulings on July 1, 2002. The Department's final decisions on the scope exclusion requests are addressed in the Scope of Investigation section below.

Period of Investigation

The period for which we are measuring subsidies, or period of investigation (POI) is calendar year 2000.

Scope of Investigation

For purposes of this investigation, the products covered are certain cold-rolled (cold-reduced) flat-rolled carbon-quality steel products. A full description of the scope of this investigation is contained in the Scope Appendix attached to the Notice of Correction to Final Determination of Sales at Less Than Fair Value: Certain Cold-Rolled Carbon Steel Flat Products from Australia, 67 FR 52934 (Aug. 14, 2002). For a complete discussion of the comments received on the Preliminary Scope Rulings, see the memorandum regarding “Issues and Decision Memorandum for the Final Scope Rulings in the Antidumping Duty Investigations on Certain Cold-Rolled Carbon Steel Flat Products from Argentina, Australia, Belgium, Brazil, France, Germany, India, Japan, Korea, the Netherlands, New Zealand, the People's Republic of China, the Russian Federation, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey, and Venezuela, and in the Countervailing Duty Investigations of Certain Cold-Rolled Carbon Steel Flat Products from Argentina, Brazil, France, and Korea,” dated July 10, 2002, which is on file in CRU.

Analysis of Subsidy Programs

The complete analysis of the programs under investigation is included in the Issues and Decision Memorandum for the Final Affirmative Countervailing Duty Determination in the Countervailing Duty Investigation of Certain Cold-Rolled Carbon Steel Flat Products from Brazil, from Joseph A. Spetrini, Deputy Assistant Secretary for AD/CVD Enforcement III to Faryar Shirzad, Assistant Secretary for Import Administration, dated September 23, 2002.

Programs Determined To Confer Subsidies

We have determined that the following programs confer subsidies:

A. Federal Programs

1. Equity Infusions

2. “Presumed” Tax Credit for the Program of Social Integration and the Social Contributions of Billings on Inputs Used in Exports (“PIS/COFINS”)

3. BNDES Loan Programs

a. FINAME

b. BNDES Export Import Financing

c. BNDESPAR

B. Provincial Government Program

PRO-INDUSTRIA

Program Determined Not To Confer a Subsidy

We have determined that the FINEM program does not confer a subsidy.

Programs Determined Not To Be Used

We have determined that the following programs have not been used.

A. Federal Program

PROEX

B. Provincial Government Program

PROIM

Analysis of Comments Received

All issues raised in the case and rebuttal briefs by parties to this investigation are addressed in the Issues and Decision Memorandum for the Final Affirmative Countervailing Duty Determination in the Countervailing Duty Investigation of Certain Cold-Rolled Carbon Steel Flat Products from Brazil, from Joseph A. Spetrini, Deputy Assistant Secretary for AD/CVD Enforcement III to Faryar Shirzad, Assistant Secretary for Import Administration, dated September 23, 2002 (Decision Memorandum), which is hereby adopted by this notice. Attached to this notice as Appendix I is a list of the programs investigated and a list of the issues which parties have raised and to which we have responded in the Decision Memorandum. Parties can find a complete discussion of all programs and all issues raised in this investigation and the corresponding recommendations in this public memorandum which is on file in the CRU. In addition, a complete version of the Decision Memorandum can be accessed directly on the Internet at http://ia.ita.doc.gov/​frn/​ under the heading “Brazil.” The paper copy and electronic version of the Decision Memorandum are identical in content.

Suspension of Liquidation

In accordance with section 777A(e)(1) of the Act, we have calculated an individual subsidy rate for each producer/exporter under investigation. We determine the total estimated net subsidy rate for each company to be the following:

Product/exporter	Net subsidy rate (percent)
USIMINAS/COSIPA	13.99
CSN	7.90
All Others	13.07

In accordance with our preliminary affirmative determination, we instructed Customs to suspend liquidation of all entries of cold-rolled steel from Brazil, which were entered or withdrawn from warehouse for consumption on or after March 4, 2002, the date of the publication of our preliminary determination in the Federal Register, and to require a cash deposit or bond for such entries of the merchandise in the amounts indicated in the Preliminary Determination. In accordance with section 703(d) of the Act, we instructed Customs to discontinue the suspension of liquidation for merchandise entered on or after July 3, 2002, but to continue the suspension of liquidation of entries made between March 4, 2002 and July 3, 2002.

We will reinstate suspension of liquidation under section 706(a) of the Act for all entries if the ITC issues a final affirmative injury determination, and we will require a cash deposit of estimated countervailing duties for such entries of merchandise in the amount indicated above. This suspension of liquidation, if reinstated, will be effective on the date of publication of the countervailing duty order. If the ITC determines that material injury, or threat of material injury, does not exist, this proceeding will be terminated and all estimated duties deposited or securities posted as a result of the suspension of liquidation will be refunded or canceled.

ITC Notification

In accordance with section 705(d) of the Act, we will notify the ITC of our determination. In addition, we are making available to the ITC all non-privileged and non-proprietary information related to this investigation. We will allow the ITC access to all privileged and business proprietary information in our files, provided the ITC confirms that it will not disclose such information, either publicly or under an Administrative Protective Order (“APO”), without the written consent of the Assistant Secretary for Import Administration.

Return or Destruction of Proprietary Information

In the event that the ITC issues a final negative injury determination, this notice will serve as the only reminder to parties subject to an APO of their responsibility concerning the destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Failure to comply is a violation of the APO.

This determination is published pursuant to sections 705(d) and 777(i) of the Act.

Dated: September 23, 2002.

Faryar Shirzad,

Assistant Secretary for Import Administration.

Appendix I—Issues and Decision Memorandum

I. Subsidies Valuation Information

A. Allocation Period

B. Cross Ownership and Attribution of Subsidies

C. Equityworthiness

D. Equity Methodology

E. Creditworthiness

F. Discount Rates

G. Benchmarks for Loans

H. Trading Companies

I. Changes in Ownership

II. Programs Determined to Confer Subsidies

A. Federal Programs

1. Equity Infusions

2. “Presumed” Tax Credit for the Program of Social Integration and the Social Contributions of Billings on Inputs Used in Exports (“PIS/COFINS”)

3. BNDES Loan Programs

a. FINAME

b. BNDES Export Import Financing

c. BNDESPAR

B. Provincial Government Program

PRO-INDUSTRIA

III. Program Determined Not to Confer A Subsidy

FINEM

IV. Programs Determined Not to be Used

A. Federal Program

Programa de Financiamento as Exportacoes (PROEX)

B. Provincial Government Program

Program to Induce Industrial Modernization of the State of Minas Gerais (PROIM)

V. Analysis of Comments

Comment 1: CSN, USIMINAS and COSIPA Privatization

Comment 2: PIS/COFINS—Direct Taxes v. Indirect Taxes

Comment 3: PIS/COFINS-Rebate of Prior-Stage Cumulative Indirect Taxes

Comment 4: PIS/COFINS Credit—Excessive Remission

Comment 5: FINEM Financing and Specificity

Comment 6: FINAME as an Import Substitution Program

Comment 7: FINAME Financing and Specificity

Comment 8: Integral Linkage of FINAME and FINEM

Comment 9: Financial Contribution and Benefit of BNDES Loan Programs

Comment 10: BNDES-ExIm Financing and Specificity

Comment 11: BNDESPAR Program

Comment 12: PRO-Industria-Specificity

Comment 13: Non-Use of PROEX

VI. Total Ad Valorem Subsidy Rate

VII. Recommendation

Footnotes

1.  The petitioners in this investigation are Bethlehem Steel Corporation, LTV Steel Company, Inc., National Steel Corporation, Nucor Corporation, Steel Dynamics, Inc., United States Steel Corporation, WCI Steel, Inc., and Weirton Steel Corporation (collectively, the petitioners).