[Federal Register Volume 64, Number 33 (Friday, February 19, 1999)]
[Notices]
[Pages 8313-8322]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-4198]
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DEPARTMENT OF COMMERCE
International Trade Administration
[C-351-829]
Preliminary Affirmative Countervailing Duty Determination and
Alignment of Final Countervailing Duty Determination With Final
Antidumping Duty Determination: Certain Hot-Rolled Flat-Rolled Carbon-
Quality Steel Products From Brazil
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: February 19, 1999.
FOR FURTHER INFORMATION CONTACT: Kathleen Lockard or Javier Barrientos,
Office of CVD/AD Enforcement VI, Import Administration, U.S. Department
of Commerce, Room 4012, 14th Street and Constitution Avenue, N.W.,
Washington, D.C. 20230; telephone (202) 482-2786.
Preliminary Determination
The Department of Commerce (the Department) preliminarily
determines that countervailable subsidies are being provided to
Companhia Siderugica Nacional (CSN), Usinas Siderugicas de Minas Gerais
(USIMINAS) and Companhia Siderurgica Paulista (COSIPA) producers and
exporters of certain hot-rolled flat-rolled carbon-quality steel
products from Brazil. For information on the estimated countervailing
duty rates, please see the ``Suspension of Liquidation'' section of
this notice.
Petitioners
The petition in this investigation was filed by Bethlehem Steel
Corporation, U.S. Steel Group, a unit of USX Corporation, Ispat Inland
Steel, LTV Steel Company, Inc., National Steel Corporation, California
Steel Industries, Gallatin Steel Company, Geneva Steel, Gulf States
Steel Inc., IPSCO Steel Inc., Steel Dynamics, Weirton Steel
Corporation, Independent Steelworkers Union, and United Steelworkers of
America (the petitioners).
Case History
Since the publication of the notice of initiation in the Federal
Register, the following events have occurred. See Notice of Initiation
of Countervailing Duty Investigation: Certain Hot-Rolled Flat-Rolled
Carbon-Quality Steel Products from Brazil, 63 FR 56623 (October 22,
1998) (Initiation Notice). On October 19, 1998 we issued countervailing
duty questionnaires to the Government of Brazil (GOB) and the
producers/exporters of the subject merchandise. We issued supplemental
countervailing duty questionnaires on November 10 and December 17,
1998, and January 26, 1999. We received responses to these
questionnaires on December 7, 1998, January 6, 1999, January 12, 1999,
and February 8, 1999.
On November 12, 1998, Petitioners alleged an additional subsidy
that was not included in the petition. On December 8, 1998 we initiated
on this program. See ``Memorandum to Holly Kuga, Acting Deputy
Assistant Secretary for AD/CVD Enforcement II, Regarding Petitioners'
Allegations,'' a public document on file in the Central Records Unit,
Room B-099 of the Main Commerce Building (CRU).
On December 1, 1998, we deemed this investigation extraordinarily
complicated and postponed the preliminary determination to no later
than January 25, 1998. See Hot-Rolled Flat-Rolled Carbon-Quality Steel
Products from Brazil: Postponement of Time Limit for Countervailing
Duty Investigation, 63 FR 67459 (December 7, 1998). On January 22,
1999, we determined that additional time was necessary to make the
preliminary determination and further postponed the preliminary
determination to no later than February 12, 1999. See Hot-Rolled Flat-
Rolled Carbon-Quality Steel Products from Brazil: Postponement of Time
Limit for Countervailing Duty Investigation, 64 FR 4638 (January 29,
1999).
The 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 by
the Uruguay Round Agreements Act effective January 1, 1995 (the Act).
In addition, unless otherwise indicated, all citations to the
Department's regulations are to the regulations as codified at 19 CFR
351 and published in the Federal Register on May 19, 1997 (62 FR
27295).
Scope of Investigation
For purposes of this investigation, the products covered are
certain hot-rolled flat-rolled carbon-quality steel products of a
rectangular shape, of a width of 0.5 inch or greater, neither clad,
plated, nor coated with metal and whether or not painted, varnished, or
coated with plastics or other non-metallic substances, in coils
(whether or not in successively superimposed layers) regardless of
thickness, and in straight lengths, of a thickness less than 4.75 mm
and of a width measuring at least 10 times the thickness. Universal
mill plate (i.e., flat-rolled products rolled on four faces or in a
closed box pass, of a width exceeding 150 mm but not exceeding 1250 mm
and of a thickness of not less than 4 mm, not in coils and without
patterns in relief) of a thickness not less than 4.0 mm is not included
within the scope of these investigations.
Specifically included in this scope are vacuum degassed, fully
stabilized (commonly referred to as interstitial-free (``IF'')) steels,
high strength low alloy (``HSLA'') steels, and the substrate for motor
lamination steels. IF steels are recognized as low carbon steels with
micro-alloying levels of elements such as titanium and/or niobium added
to stabilize carbon and nitrogen elements.
[[Page 8314]]
HSLA steels are recognized as steels with micro-alloying levels of
elements such as chromium, copper, niobium, titanium, vanadium, and
molybdenum. The substrate for motor lamination steels contains micro-
alloying levels of elements such as silicon and aluminum.
Steel products to be included in the scope of this investigation,
regardless of HTSUS definitions, are products in which: (1) iron
predominates, by weight, over each of the other contained elements; (2)
the carbon content is 2 percent or less, by weight; and (3) none of the
elements listed below exceeds the quantity, by weight, respectively
indicated:
1.80 percent of manganese, or
1.50 percent of silicon, or
1.00 percent of copper, or
0.50 percent of aluminum, or
1.25 percent of chromium, or
0.30 percent of cobalt, or
0.40 percent of lead, or
1.25 percent of nickel, or
0.30 percent of tungsten, or
0.012 percent of boron, or
0.10 percent of molybdenum, or
0.10 percent of niobium, or
0.41 percent of titanium, or
0.15 percent of vanadium, or
0.15 percent of zirconium.
All products that meet the physical and chemical description
provided above are within the scope of this investigation unless
otherwise excluded. The following products, by way of example, are
outside and/or specifically excluded from the scope of this
investigation:
Alloy hot-rolled steel products in which at least one of
the chemical elements exceeds those listed above (including e.g., ASTM
specifications A543, A387, A514, A517, and A506).
SAE/AISI grades of series 2300 and higher.
Ball bearing steels, as defined in the HTSUS.
Tool steels, as defined in the HTSUS.
Silico-manganese (as defined in the HTSUS) or silicon
electrical steel with a silicon level exceeding 1.50 percent.
ASTM specifications A710 and A736.
USS Abrasion-resistant steels (USS AR 400, USS AR 500).
Hot-rolled steel coil which meets the following chemical,
physical and mechanical specifications:
----------------------------------------------------------------------------------------------------------------
C percent Mn percent P percent S percent Si percent Cr percent Cu percent Ni percent
----------------------------------------------------------------------------------------------------------------
0.10-0.14.... 0.90* 0.025* 0.005* 0.30-0.50 0.50-0.70 0.20-0.40 0.20*
----------------------------------------------------------------------------------------------------------------
*Max
Width = 44.80 inches maximum; Thickness = 0.063-0.198 inches;
Yield Strength = 50,000 ksi minimum; Tensile Strength = 70,000-88,000 psi.
Hot-rolled steel coil which meets the following chemical,
physical and mechanical specifications:
--------------------------------------------------------------------------------------------------------------------------------------------------------
C percent Mn percent P percent S percent Si percent Cr percent Cu percent Ni percent
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.10-0.16 0.70-0.90* 0.025* 0.006* 0.30-0.50* 0.50-0.70* 0.25* 0.20
Mo ................. ................. ................. ................. ................. ................. ................
0.21* ................. ................. ................. ................. ................. ................. ................
--------------------------------------------------------------------------------------------------------------------------------------------------------
*Max
Width = 44.80 inches maximum; Thickness = 0.350 inches maximum;
Yield Strength = 80,000 ksi minimum; Tensile Strength = 105,000 psi Aim.
Hot-rolled steel coil which meets the following chemical,
physical and mechanical specifications:
--------------------------------------------------------------------------------------------------------------------------------------------------------
C percent Mn percent P percent S percent Si percent Cr percent Cu percent Ni percent
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.10-0.14 1.30-1.80 0.025* 0.005* 0.30-0.50 0.50-0.70 0.20-0.40 0.20*
V(wt.) Cb ................. ................. ................. ................. ................. ................
0.10* 0.08* ................. ................. ................. ................. .................
--------------------------------------------------------------------------------------------------------------------------------------------------------
*Max
Width = 44.80 inches maximum; Thickness = 0.350 inches maximum;
Yield Strength = 80,000 ksi minimum; Tensile Strength = 105,000 psi Aim.
Hot-rolled steel coil which meets the following chemical,
physical and mechanical specifications:
--------------------------------------------------------------------------------------------------------------------------------------------------------
C percent Mn percent P percent S percent Si percent Cr percent Cu percent Ni percent
--------------------------------------------------------------------------------------------------------------------------------------------------------
0.15* 1.40* 0.025* 0.010* 0.50* 1.00* 0.50* 0.20*
Nb Ca Al ................. ................. ................. ................. ................
[[Page 8315]]
0.005 Min Treated 0.01-0.07 ................. ................. ................. ................. ................
--------------------------------------------------------------------------------------------------------------------------------------------------------
*Max
Width = 39.37 inches; Thickness = 0.181 inches maximum;
Yield Strength = 70,000 psi minimum for thicknesses 0.148 inches and 65,000 psi minimum for thicknesses > 0.148 inches; Tensile Strength =
80,000 psi minimum.
Hot-rolled dual phase steel, phase-hardened, primarily
with a ferritic-martensitic microstructure, contains 0.9 percent up to
and including 1.5 percent silicon by weight, further characterized by
either (i) tensile strength between 540 N/mm\2\ and 640 N/mm\2\ and an
elongation percentage 26 percent for thicknesses of 2 mm
and above, or (ii) a tensile strength between 590 N/mm\2\ and 690 N/
mm\2\ and an elongation percentage 25 percent for
thicknesses of 2mm and above.
Hot-rolled bearing quality steel, SAE grade 1050, in
coils, with an inclusion rating of 1.0 maximum per ASTM E 45, Method A,
with excellent surface quality and chemistry restrictions as follows:
0.012 percent maximum phosphorus, 0.015 percent maximum sulfur, and
0.20 percent maximum residuals including 0.15 percent maximum chromium.
The merchandise subject to these investigations is classified in
the Harmonized Tariff Schedule of the United States (``HTSUS'') at
subheadings: 7208.10.15.00, 7208.10.30.00, 7208.10.60.00,
7208.25.30.00, 7208.25.60.00, 7208.26.00.30, 7208.26.00.60,
7208.27.00.30, 7208.27.00.60, 7208.36.00.30, 7208.36.00.60,
7208.37.00.30, 7208.37.00.60, 7208.38.00.15, 7208.38.00.30,
7208.38.00.90, 7208.39.00.15, 7208.39.00.30, 7208.39.00.90,
7208.40.60.30, 7208.40.60.60, 7208.53.00.00, 7208.54.00.00,
7208.90.00.00, 7210.70.30.00, 7210.90.90.00, 7211.14.00.30,
7211.14.00.90, 7211.19.15.00, 7211.19.20.00, 7211.19.30.00,
7211.19.45.00, 7211.19.60.00, 7211.19.75.30, 7211.19.75.60,
7211.19.75.90, 7212.40.10.00, 7212.40.50.00, 7212.50.00.00. Certain
hot-rolled flat-rolled carbon-quality steel covered by this
investigation, including: vacuum degassed, fully stabilized; high
strength low alloy; and the substrate for motor lamination steel may
also enter under the following tariff numbers: 7225.11.00.00,
7225.19.00.00, 7225.30.30.50, 7225.30.70.00, 7225.40.70.00,
7225.99.00.90, 7226.11.10.00, 7226.11.90.30, 7226.11.90.60,
7226.19.10.00, 7226.19.90.00, 7226.91.50.00, 7226.91.70.00,
7226.91.80.00, and 7226.99.00.00. Although the HTSUS subheadings are
provided for convenience and Customs purposes, the written description
of the merchandise under investigation is dispositive.
Injury Test
Because Brazil is a ``Subsidies Agreement country'' within the
meaning of section 701(b) of the Act, the International Trade
Commission (ITC) is required to determine whether imports of the
subject merchandise from Brazil materially injure, or threaten material
injury to, a U.S. industry. On November 25, 1998, the ITC published its
preliminary determination that there is a reasonable indication that an
industry in the United States is being materially injured, or
threatened with material injury, by reason of imports from Brazil of
the subject merchandise (63 FR 65221).
Alignment With Final Antidumping Duty Determination
On January 19, 1999, the petitioners submitted a letter requesting
alignment of the final determination in this investigation with the
final determination in the companion antidumping duty investigations.
See Initiation of Antidumping Duty Investigations: Certain Hot-Rolled
Flat-Rolled Carbon-Quality Steel Products from Brazil, Japan and the
Russian Federation, 63 FR 56607 (October 22, 1998). In accordance with
section 705(a)(1) of the Act, we are aligning the final determination
in this investigation with the final antidumping duty determinations in
the antidumping investigations of certain hot-rolled flat-rolled
carbon-quality steel products.
Period of Investigation
The period for which we are measuring subsidies (the POI) is
calendar year 1997.
Facts Available
Section 776(a)(1) of the Act requires the Department to use the
facts available if ``necessary information is not available on the
record.'' The Department asked the GOB and the respondent companies
twice to provide information about the market value of privatization
currencies, but so far they have been unable to do so. This information
is necessary to our analysis of the privatizations of the respondent
companies. Because this information is not available on the record, we
have resorted to the facts available as detailed in the ``Change in
Ownership'' section below.
Company Histories
USIMINAS was founded in 1956 as a venture between the Brazilian
Government, various stockholders and Nippon Usiminas. In 1974, the
majority interest in USIMINAS was transferred to SIDERBRAS, the
government holding company for steel interests. The company underwent
several expansions of capacity throughout the 1980s. In 1990, SIDERBRAS
was put into liquidation and the GOB decided to include its operating
companies, including USIMINAS, in its National Privatization Program
(NPP). In 1991, USIMINAS was partially privatized; as a result of the
initial auction, Companhia do Vale do Rio Doce (CVRD), a majority
government-owned iron ore producer, acquired 15 percent of USIMINAS's
common shares. In 1994, the Government disposed of additional holdings,
amounting to 16.2 percent of the company's equity. USIMINAS is now
owned by CVRD and a consortium of private investors, including Nippon
Usiminas, Caixa de Previdencia dos Funcionarios do Banco do Brasil
(Previ) and the USIMINAS Employee Investment Club. CVRD was partially
privatized in 1997.
COSIPA was established in 1953 as a government-owned steel
production company. In 1974, COSIPA was transferred to SIDERBRAS. In
the 1980s, the company underwent restructurings of its capacity. Like
USIMINAS, COSIPA was included in the NPP after SIDERBRAS was put into
liquidation. In 1993, COSIPA was partially privatized, with the GOB
retaining a minority of the preferred shares. Control of the company
was acquired by a consortium of investors led by USIMINAS. In 1994,
additional government-held shares were sold, but the GOB still
maintained approximately 25 percent of COSIPA's preferred shares.
During the POI, USIMINAS owned 49.8 percent of the voting capital stock
of the company.
[[Page 8316]]
Other principal owners include Bozano Simonsen Asset Management Ltd.,
the COSIPA Employee Investment Club and COSIPA's Pension Fund (FEMCO).
CSN was established in 1941 and commenced operations in 1946 as a
government-owned steel company. In 1974, CSN was transferred to
SIDERBRAS; only a very small amount of shares, a fraction of a percent,
were held by private investors. The company underwent several capacity
restructurings throughout the 1980s. In 1990, SIDERBRAS was put into
liquidation and the GOB decided to include its operating companies,
including CSN, in its NPP. In 1991, 12 percent of the equity of the
company was transferred to the CSN employee's pension fund. In 1993,
CSN was partially privatized; CVRD, through its subsidiary Vale do Rio
Doce Navegacao S.A. (Docenave), acquired 9.4 percent of the common
shares. The GOB's remaining share of the firm was sold in 1994. CSN is
now owned by Docenave/CVRD and a consortium of private investors,
including Uniao Comercio e Partipacoes Ltda., Textilia S.A., Previ, the
CSN Employee Investment Club, and the CSN employee pension fund. As
discussed above, CVRD was partially privatized in 1997; CSN was part of
the consortium that acquired control of CVRD through this partial
privatization.
Affiliated Parties
In the present investigation, there are affiliated parties (within
the meaning of section 771(33) of the Act) whose relationship is
sufficient to warrant treatment as a single company. In the
countervailing duty questionnaire, consistent with our past practice,
the Department defined companies as sufficiently affiliated to warrant
potential treatment as a single company where one company owns 20
percent or more of the other company, or where companies prepare
consolidated financial statements. The Department also has stated that
companies may be considered sufficiently affiliated where there are
common directors or one company performs services for the other
company. See Final Affirmative Countervailing Duty Determination:
Certain Pasta (``Pasta'') From Italy, 61 FR 30287 (June 14, 1996)
(Pasta). According to the questionnaire, companies that are
sufficiently affiliated to warrant potential treatment as a single
company and either (1) produce the subject merchandise or (2) have
engaged in certain financial transactions are required to respond. This
standard is designed to identify instances where two companies
interests have merged and either both produce subject merchandise or
there is ``evidence of the transmittal of subsidies between the
companies.'' See Pasta, 61 FR at 30308.
USIMINAS owns 49.79 percent of COSIPA, as such, the companies are
affiliated within the meaning of section 771(33)(E) of the Act.
Moreover, given the level of ownership and the fact that both companies
produce the subject merchandise, we preliminarily determine that it is
appropriate to treat these two producers as a single company for
purposes of this investigation. We calculated a single countervailing
duty rate for these companies by dividing their combined subsidy
benefits by their combined sales.
We also examined the relationship between USIMINAS and CSN in order
to determine whether these two companies were affiliated and, if so,
whether the level of affiliation between the two companies was
sufficient to warrant treatment as a single company.
Two entities, CVRD and Previ, the pension fund of the Bank of
Brasil, have meaningful holdings in both USIMINAS and CSN. CVRD holds
15.48 percent of USIMINAS and 10.3 percent of CSN (through Docenave)
and holds two of the eight seats on each company's board of directors.
Previ holds 15 percent of the common shares of USIMINAS and one seat on
its board of directors and 13 percent of CSN and two seats on its board
of directors. The record does not support a conclusion that either
CVRD's ownership interests or Previ's ownership interests, standing
alone, constitute common control of USIMINAS and CSN within the meaning
of section 771(33)(F). Therefore, we do not consider that the evidence
supports a finding that USIMINAS and CSN are affiliated through common
control. In addition, as discussed below, the record at this time does
not contain evidence to establish that the interests between CVRD and
Previ have merged or that the two companies operate together when
acting as owners of the respondent companies in order to warrant
aggregating their interests when analyzing potential affiliation
between USIMINAS and CSN.
CVRD, through its nearly wholly-owned subsidiary, Docenave, is a
member of the CSN Shareholders Agreement, as is Previ. In this
Agreement, which includes the major shareholders that participated in
the first privatization auction, the members agreed to pre-vote CSN
board issues and then vote the entire block of shares subject to the
Agreement in order to control the company. The CSN Shareholders
Agreement also confers certain additional rights on the members and
resulted in Docenave's right to one more seat on CSN's board of
directors than its percentage ownership of common shares would
otherwise entitle. We note that CSN is also a principal member of the
group of investors that gained control of CVRD in its 1997 partial
privatization, and the two companies have the same Chairman.
With respect to USIMINAS, CVRD and Previ do not have the same
position. Neither CVRD nor Previ is a party to the USIMINAS
Shareholders Agreement. We note that there is one additional overlap
between USIMINAS and CVRD; each company also holds 50 percent of VUP
S.A., a holding company that controls a ferro-alloys producer.
The record does not indicate at this time that USIMINAs and CSN are
under the common control of Previ and CVRD. Therefore, for purposes of
this preliminary determination, we determine that the relationship
between USIMINAS and CSN is not sufficient to justify a finding of
affiliation and, as a result, also not sufficient to warrant treating
the two companies as a single company. However, these relationships
warrant further analysis and we will continue to examine the
affiliation issue for the final determination.
Changes in Ownership
In the General Issues Appendix (GIA), attached to the Final
Affirmative Countervailing Duty Determination; Certain Steel Products
from Austria, 58 FR 37217, 37226 (July 9, 1993), we applied a new
methodology with respect to the treatment of subsidies received prior
to the sale of the company (privatization).
Under this methodology, we estimate the portion of the company's
purchase price which is attributable to prior subsidies. We compute
this by first dividing the face value of the company's subsidies by the
company's net worth for each of the years corresponding to the
company's allocation period, ending one year prior to the
privatization. We then take the simple average of these ratios, which
serves as a reasonable surrogate for the percentage that subsidies
constitute of the overall value, i.e., net worth, of the company. Next,
we multiply the purchase price of the company by this average ratio to
derive the portion of the purchase price that we estimate to be a
repayment of prior subsidies. Then, we reduce the benefit streams of
the prior subsidies by the ratio of the repayment amount to the net
present value of all remaining benefits at the time of the change in
ownership.
In the current investigation, we are analyzing the privatizations
of USIMINAS, COSIPA and CSN,
[[Page 8317]]
including the various partial privatizations. In conducting these
analyses, to the extent that partially government-owned companies
purchased shares, we have not considered the percentage acquired
corresponding to government-ownership to warrant any adjustment under
our methodology. Further, we have preliminarily determined that it is
appropriate to make an additional adjustment to USIMINAS and CSN's
calculations to account for CVRD's 1997 partial privatization.
There are several facts in this case that warrant additional
examination in the context of our privatization methodology. Because
the purchase price of the company is a critical factor in our
privatization methodology, the use of ``privatization currencies,''
i.e., certain existing government bonds, debt instruments,
privatization certificates and frozen currencies, as payment for the
shares of the companies, could have a significant impact on our
analysis. Privatization currencies were used to acquire the vast
majority of shares of producers of subject merchandise. The GOB
accepted most of these currencies their face value; foreign debt and
restructuring bonds (MYDFA's) were accepted at 75 percent of their face
value. Petitioners have provided some indication that the market value
of these currencies was not their face value; according to a press
report, the market price for MYDFA's was about 30 percent of the face
value. See Petitioner's October 22, 1998, submission, a public document
on file in the CRU. We have made an adjustment to the purchase prices
in order to take into account this information about the market value
of the MYDFA's. However, to date, respondents have been unable to
provide information on how the other privatization currencies were
valued in secondary markets. Information we were able to gather from
public sources, including the public record that was compiled in
reaching the final determination in the countervailing duty
investigation of certain steel products from Brazil, support
petitioner's allegation that the privatization currencies were accepted
by the GOB in the NPP for more than their market values. See
Attachments to Calculation Memo dated February 12, 1999, public version
on file in the CRU and Final Affirmative Countervailing Duty
Determinations: Certain Steel Products from Brazil, 68 FR 37295, (July
9, 1993) (Certain Steel from Brazil). Thus, some adjustment to the
purchase price is warranted. Because we were not able to gather
information on market values for each type of privatization currency in
time for the preliminary determination, as facts available we have
reduced the amount of the privatization currencies (with the exception
of MYDFAs, which are discussed above), by a ratio reflecting the
percentage difference between the value assigned to the MYDFAs and
accepted by the GOB and the actual market value of the MYDFAs. We will
continue to request information from the GOB and companies, about the
market value of the privatization currencies, and plan to examine this
issue in detail at verification.
Subsidies Valuation Information
Allocation Period
In the past, the Department has relied upon information from the
U.S. Internal Revenue Service on the industry-specific AUL in
determining the allocation period for non-recurring subsidies. See GIA,
58 FR at 37227. However, in British Steel plc v. United States, 879 F.
Supp. 1254 (CIT 1995) (British Steel I), the U.S. Court of
International Trade (the Court) ruled against this allocation
methodology. In accordance with the Court's remand order, the
Department calculated a company-specific allocation period for non-
recurring subsidies based on the AUL of non-renewable physical assets.
This remand determination was affirmed by the Court on June 4, 1996.
See British Steel plc v. United States, 929 F. Supp. 426, 439 (CIT
1996) (British Steel II). Thus, we intend to determine the allocation
period for non-recurring subsidies using company-specific AUL data
where reasonable and practicable. See, e.g., Certain Cut-to-Length
Carbon Steel Plate from Sweden; Final Results of Countervailing Duty
Administrative Review, 62 FR 16551 (April 7, 1997) (Steel Plate from
Sweden).
In recent countervailing duty investigations, it has been our
practice to follow the Court's decision in British Steel II, and to
calculate a company-specific allocation period for all countervailable
non-recurring subsidies where reasonable and practicable. In this
investigation the Department, in accordance with British Steel II,
requested that the respondents submit information relating to its
average useful life of assets. However, our analysis of the data
submitted by COSIPA, CSN, and USIMINAS regarding the AUL of their
assets has revealed several problems.
All three companies have undergone multi-staged privatizations
within the years relevant to this investigation. As a result of the
changes in ownership, the firms have changed investment patterns,
altered asset valuation methodologies and, in some cases, changed the
amortization periods for certain assets after privatization. When the
AUL amounts calculated on an annual basis for the years prior to the
changes in ownership are compared to the AUL amounts calculated after
the changes in ownership, dramatic differences become apparent. These
changes have significant impacts upon the cumulative AUL calculated by
the Department over a ten-year period (i.e., 1988 through 1997).
Based on the concerns outlined above and in accordance with the
Department's practice, we preliminarily determine that the calculations
of company-specific AULs for COSIPA, CSN and USIMINAS should not be
used to determine the appropriate allocation period for non-recurring
subsidies. See Final Affirmative Countervailing Duty Determination:
Steel Wire Rod from Germany, 62 FR 54990, 54999 (October 22, 1997) and
Preliminary Affirmative Countervailing Duty Determination and Alignment
of Final Countervailing Duty Determination with Final Antidumping Duty
Determination: Stainless Steel Sheet and Strip in Coils from the
Republic of Korea, 63 FR 63884, 63887 (November 17, 1998). Rather, for
purposes of this preliminary determination, we are using 15 years as
set out in the U.S. Internal Revenue Service (IRS) depreciation tables.
While we have not used company-specific AULs because of the
concerns outlined above, even if we were to use the company-specific
data submitted by respondents, the facts of this case pose additional
concerns and possible inconsistencies. In particular, this
investigation covers countervailable non-recurring subsidies
benefitting COSIPA, CSN and USIMINAS, i.e., GOB equity infusions. These
same non-recurring subsidies to the same companies were previously
found countervailable in Certain Steel from Brazil. See Certain Steel
from Brazil, 68 FR at 37298. In that investigation, the Department
allocated the benefits from these GOB investments over 15 years based
on information from the IRS for the industry-specific average useful
life of assets. Under current Department practice, previously allocated
subsidies within the same proceeding are not given a new allocation
period. Rather, it is our policy to retain the allocation period
originally established for the subsidies in subsequent administrative
reviews for the same proceeding. See, e.g., Steel Plate from Sweden, 62
FR 16551.
[[Page 8318]]
The issue we are presented with is whether the allocation period,
once established for a subsidy to a company should change in different
proceedings. If the allocation period did not change across
proceedings, the same GOB equity infusions described above would be
allocated over 15 years in both the current investigation, and any
future administrative reviews of the Certain Steel from Brazil
countervailing duty order. However, if we were to adopt different
allocation periods for different proceedings, the same subsidy to the
same company would be allocated over different periods.
We encourage parties to comment on this issue and whether an
alternative approach may be more appropriate. One option may be to
retain the allocation period of a subsidy previously investigated in a
prior investigation, rather than assign a new company-specific
allocation period based on company-specific AUL data. As described
above, that would conform with our practice in administrative reviews
of the same countervailing duty order. Another option would be to
determine an individual company-specific AUL for each year in which a
non-recurring subsidy is provided to a company, rather than to
determine a company-specific AUL for non-recurring subsidies that could
change with each investigation and result in different allocation
periods for the same subsidy, as detailed above. We also welcome any
additional comments on this issue not raised above.
Equityworthiness
In analyzing whether a company is equityworthy, the Department
considers whether that company could have attracted investment capital
from a reasonable private investor in the year of the government equity
infusion based on the information available at that time. In this
regard, the Department has consistently stated that a key factor for a
company in attracting investment capital is its ability to generate a
reasonable return on investment within a reasonable period of time. In
making an equityworthiness determination, the Department may examine
the following factors, among others:
1. Current and past indicators of a firm's financial condition
calculated from that firm's financial statements and accounts,
2. Future financial prospects of the firm including market studies,
economic forecasts, and project or loan appraisals,
3. Rates of return on equity in the three years prior to the
government equity infusion,
4. Equity investment in the firm by private investors, and
5. Prospects in the marketplace for the product under
consideration.
For a more detailed discussion of the Department's equityworthiness
criteria, see the GIA, 58 FR at 37244 and Final Affirmative
Countervailing Duty Determination: Steel Wire Rod from Venezuela, 62 FR
55104 (Oct. 21, 1997) (Steel Wire Rod from Venezuela).
The Department has examined the respondents' equityworthiness for
each equity infusion covered by the initiation: for COSIPA 1977 through
1989 and 1992 through 1993, USIMINAS 1980 through 1988, and CSN 1977
through 1992; we note that because the Department has preliminarily
determined that it is appropriate to use a 15 year allocation period
for non-recurring subsidies, equity infusions provided in the years
1977 through 1982 do not provide a benefit in the POI. In a prior
investigation we have found that COSIPA was unequityworthy in 1983-1989
and 1991, USIMINAS in 1983 through 1988, and CSN in 1983 through 1991.
See Certain Steel from Brazil, 58 FR at 37296. No new information has
been provided in this investigation that would cause us to reconsider
these determinations.
In considering whether COSIPA was equityworthy in 1992 and1993, we
examined information on the above-listed factors. To address factors
one and three, we examined COSIPA's financial ratios for the three
years prior to each of the infusions. We found that COSIPA incurred a
net loss for every year under consideration except for 1989. COSIPA
also had a negative return on equity, return on sales, and return on
assets for each of the years under consideration except for 1989. The
company's quick and current ratios fell steadily from 1989 through
1992, revealing increasing uncertainty in the company's financial
health and ability to cover even short-term obligations.
With respect to the second factor, we note that the GOB made the
equity investments into COSIPA on the recommendation of a private
consultant contracted to evaluate the company's financial health prior
to privatization. However, respondents have not demonstrated that this
recommendation was premised on independent market studies, economic
forecasts, or project appraisals that projected that COSIPA's future
performance would improve significantly. Indeed, the basic purpose of
the consultant's work was to inform the GOB of the requirements to make
COSIPA a reasonable privatization candidate; this work was not
undertaken to address the soundness of a contemplated additional
investment in the company by the GOB for the purpose of the GOB's
continued ownership and operation of the company. Thus, we do not find
the fact that the investments were made on this private consultant's
recommendation to be dispositive evidence of the company's
equityworthiness.
COSIPA had only nominal private investors before the company's
privatization. Therefore, there are no private investments that may be
used to evaluate COSIPA's equityworthiness.
In light of COSIPA's unfavorable financial position throughout this
period and its long-standing history of poor performance, it seems
unlikely that a reasonable private investor would have made equity
investments in the company. On this basis, we preliminarily determine
that COSIPA was unequityworthy in 1992 and 1993.
In considering whether CSN was equityworthy in 1992, we examined
information on the above-listed factors. To address factors one and
three, we examined CSN's financial ratios for the years 1989, 1990, and
1991. The company's returns on equity and return on sales were negative
in 1989 and 1990, including an extremely unfavorable return on sales in
1990. These ratios became positive in 1991, but both were quite low.
The company's current ratio has fallen steadily since 1989. CSN's quick
ratio vacillated during the period, but in each year remained well
below 1 percent. While these ratios, on the whole, show a gradual
improvement in 1991, we do not think this mild recovery would cause an
inflow of private investment, considering the firm's history of poor
results.
With respect to the second factor, we note that the GOB made the
equity investment into CSN on the recommendation of a private
consultant contracted to evaluate the company's financial health prior
to privatization. However, respondents have not demonstrated that this
recommendation was premised on independent market studies, economic
forecasts, or project appraisals that projected that CSN's future
performance would improve significantly. In addition, as with COSIPA
the basic purpose of the consultant's work was to inform the GOB of the
requirements to make CSN a reasonable privatization candidate, and did
not address whether the contemplated investment was sound with respect
to expected return and performance of the company. Thus, we do not find
the fact that the investments were made on this private consultant's
[[Page 8319]]
recommendation to be dispositive evidence of the company's
equityworthiness.
Through 1990, CSN had only nominal private investment, insufficient
for evaluation in the Department's analysis. In 1991, approximately 12
percent of CSN's equity was transferred to the company's pension fund
in exchange for eliminating CSN's debt with the pension fund. CSN's
1991 Annual Report reveals that this transaction was necessitated by
CSN's inability to make required contributions to the pension fund. See
Appendix A, section 12 to the Countervailing Duty Petition, public
version on file in the CRU. Thus, this transaction is not considered
evidence of the company's equityworthiness.
In light of CSN's unfavorable financial position throughout this
period and its long-standing history of poor performance, it seems
unlikely that a reasonable private investor would have made an equity
investment in the company. On this basis, we preliminarily determine
that CSN was unequityworthy in 1992.
Equity Methodology
In measuring the benefit from a government equity infusion to an
unequityworthy company, the Department compares the price paid by the
government for the equity to a market benchmark, if such a benchmark
exists. A market benchmark can be obtained, for example, where the
company's shares are publicly traded. See, e.g., Final Affirmative
Countervailing Duty Determinations: Certain Steel Products from Spain,
58 FR 37374, 37376 (July 9, 1993).
Where a market benchmark does not exist, the Department has
determined in this investigation to continue to follow the methodology
described in the GIA, 58 FR at 37239. Following this methodology,
equity infusions made to unequityworthy companies are treated as
grants. Use of the grant methodology for equity infusions into an
unequityworthy company is based on the premise that an
unequityworthiness finding by the Department is tantamount to saying
that the company could not have attracted investment capital from a
reasonable investor in the infusion year based on the available
information.
Creditworthiness
When the Department examines whether a company is creditworthy, it
is essentially attempting to determine if the company in question could
obtain commercial financing at commonly available interest rates. To do
so, the Department examines whether the company received long-term
commercial loans in the year in question, and, if necessary, the
overall financial health and future prospects of the company. If a
company receives long-term financing from commercial sources without
government guarantees, that company will normally be considered
creditworthy. In the absence of commercial borrowings, the Department
examines the following factors, among others, to determine whether or
not a firm is creditworthy:
1. Current and past indicators of a firm's financial health
calculated from the firm's financial statements and accounts,
2. The firm's recent past and present ability to meet its costs and
fixed financial obligations with its cash flow, and
3. Future financial prospects of the firm including market studies,
economic forecasts, and projects or loan appraisals.
For a more detailed discussion of the Department's creditworthiness
criteria, see, e.g., Final Affirmative Countervailing Duty
Determinations: Certain Steel Products from the United Kingdom, 58 FR
37393 (July 9, 1993).
The Department has previously determined that respondents were
uncreditworthy in the following years: USIMINAS, 1983-1988; COSIPA,
1983-1989 and 1991; and CSN 1983-1991. See Certain Steel from Brazil,
58 FR at 37297. No new information has been presented in this
investigation that would lead us to reconsider these findings.
COSIPA received no long-term financing from commercial sources in
the years in question. Therefore, to determine whether COSIPA was
creditworthy in 1992 and 1993, in accordance with the Department's past
practice, we analyzed financial ratios for each of the three years
prior to the year under examination. While COSIPA posted a profit in
1989, it quickly reverted to a pattern of increasing losses from 1990
through 1992. Further, the company's low and deteriorating current and
quick ratios from 1989 through 1992 reveal an increasing lack of
creditor protection that would likely cause doubts about COSIPA's
ability to meet its debt obligations. The declining interest coverage
ratio over this period also points to increasing vulnerability in the
company's financial position. For these reasons, it is doubtful that
the company could have obtained financing at commercial interest rates
during these years. Therefore, we preliminarily determine that COSIPA
was uncreditworthy in 1992 and 1993.
CSN received one small commercial loan in 1992, however, the terms
and insignificant principal amount of this loan render it inconclusive
in determining whether CSN was creditworthy in 1992. Therefore, to
determine whether CSN was creditworthy in 1992, we also analyzed
financial data for the prior three years. CSN incurred a loss in 1989
and a significant loss in 1990 but recovered to post a small profit in
1991. The company's current ratio decreased over this period, remaining
well below 1.0. CSN's quick ratio vacillated over these years, but
remained extremely low, ranging from 0.12 to 0.17. CSN's interest
coverage ratio also shows a downward trend over these years. In 1990
and 1991, this ratio is extremely low, and shows that the company had
difficulty managing its financial obligations. For these reasons, it is
doubtful that the company could have obtained long-term financing at
commercial interest rates. Therefore, we preliminarily determine that
CSN was uncreditworthy in 1992.
Discount Rates
In the years relevant to this investigation through 1994, Brazil
has experienced persistent and high inflation. There were no long-term
fixed-rate commercial loans made in domestic currencies during those
years that could be used as discount rates. As in the Certain Steel
from Brazil investigation, we have determined that the most reasonable
way to account for the high inflation in the Brazilian economy through
1994, and the lack of an appropriate Brazilian discount rate, is to
convert the non-recurring subsidies into U.S. dollars based on the
exchange rate applicable in the month the subsidies were granted, and
then to apply, as the discount rate, a long-term dollar lending rate.
Therefore, for our discount rate, we used data for U.S. dollar lending
in Brazil for long-term non-guaranteed loans from private lenders, as
published in the World Bank Debt Tables: External Finance for
Developing Countries. This conforms with our practice in Certain Steel
from Brazil (58 FR at 37298) and Steel Wire Rod from Venezuela (62 FR
at 55019 and 55023). Because we have preliminarily determined CSN,
COSIPA and USIMINAS to be uncreditworthy as described above, we added
to the discount rates a risk premium equal to 12 percent of the U.S.
prime rate for each of the years the companies were determined to be
uncreditworthy.
Based upon our analysis of the petition and the responses to our
questionnaires, we determine the following:
[[Page 8320]]
I. Programs Preliminarily Determined To Be Countervailable
A. Pre-1992 Equity Infusions
The GOB, through SIDERBRAS, provided equity infusions to USIMINAS
(1983 through 1988), COSIPA (1983 through 1989 and 1991) and CSN (1983
through 1991) that have previously been investigated by the Department.
See Certain Steel from Brazil, 58 FR at 37298.
We preliminarily determine that under section 771(5)(E)(i) of the
Act, the equity infusions into USIMINAS, COSIPA and CSN were not
consistent with the usual investment practices of private investors and
confer a benefit in the amount of each infusion (see
``Equityworthiness'' section above). These equity infusions are
specific within the meaning of section 771(5A)(D) of the Act because
they were limited to each of the companies. Accordingly, we find that
the pre-1992 equity infusions are countervailable subsidies within the
meaning of section 771(5) of the Act.
As explained in the ``Equity Methodology'' section above, we have
treated equity infusions into unequityworthy companies as grants given
in the year the infusion was received because no market benchmark
exists. We have further determined these infusions to be non-recurring
subsidies because each required separate authorization from SIDERBRAS,
the shareholder. Because USIMINAS, COSIPA and CSN were uncreditworthy
in the year of receipt, we applied a discount rate that included a risk
premium. Since USIMINAS, COSIPA and CSN have been privatized, we
followed the methodology outlined in the ``Change in Ownership''
section above to determine the amount of each equity infusion
attributable to the companies after privatization. For CSN, we summed
the benefits allocable to the POI from all equity infusions and divided
by CSN's total sales during the POI. For USIMINAS/COSIPA, we summed the
benefits allocable to the POI from all of the equity infusions and
divided this amount by the combined total sales of USIMINAS/COSIPA
during the POI. On this basis, we preliminarily determine the net
subsidy to be 5.63 percent ad valorem for CSN and 5.65 percent ad
valorem for USIMINAS/COSIPA.
B. GOB Debt-to-Equity Conversions Provided to COSIPA in 1992 and 1993
In 1990, the GOB decided to liquidate SIDERBRAS and to include the
SIDERBRAS operating companies, including respondents, in its National
Privatization Program. The NPP was a major initiative proposed by
President Collor that was part of the GOB's larger strategy to
liberalize the Brazilian economy. Under the NPP, approved in Law 8031
of April 12, 1990, a general framework was established to govern all
privatizations. Two entities were charged with oversight of the
process: the Privatization Committee and the Banco Nacionale de
Desenvolvimento Economico e Social (BNDES), which acted as the general
coordinator. The Privatization Committee, composed of government and
private sector representatives, was responsible for approving the
conditions of sale, guidelines and the minimum price for each
privatization. BNDES commissioned three consultants to make
recommendations with respect to each company undergoing privatization:
two consultants to make an economic assessment of the company including
its competitiveness and to recommend a minimum price and one consultant
to act as an independent auditor.
One of the consultants who examined COSIPA's financial health and
competitiveness recommended that financial adjustments be made to the
company before privatization including debt-to-equity conversions and
deferring certain tax liabilities (see ``Negotiated Deferrals of Tax
Liabilities'' in the section ``Programs Preliminarily Determined to be
Non-Countervailable'' below). In accordance with this consultant's
recommendation, the GOB made two debt-to-equity conversions in 1992 and
1993 in preparation for COSIPA's privatization.
We preliminarily determine that pursuant to section 771(5)(E)(i) of
the Act, these debt-to-equity conversions were not consistent with the
usual investment practices of private investors and confer a benefit in
the amount of each conversion (see ``Equityworthiness'' section above).
These debt-to-equity conversions are specific within the meaning of
section 771(5A)(D) of the Act because they were limited to COSIPA.
Accordingly, we find that the GOB debt-to-equity conversions provided
to COSIPA in 1992 and 1993 are countervailable subsidies within the
meaning of section 771(5) of the Act.
As explained in the ``Equity Methodology'' section above, we have
treated each debt-to-equity conversion as a grant given in the year the
conversion was made. We have further determined that these conversions
are non-recurring subsidies because they were specifically approved by
the GOB. Because COSIPA was uncreditworthy in the years of receipt, we
applied a discount rate that included a risk premium. Since COSIPA has
been privatized, we followed the methodology outlined in the ``Change
in Ownership'' section above to determine the amount of each debt-to-
equity conversion attributable to the company after privatization. We
divided the benefit allocable to the POI from these debt-to-equity
conversions by the combined total sales of USIMINAS/COSIPA. On this
basis, we preliminarily determine the net subsidy to be 3.80 percent ad
valorem for USIMINAS/COSIPA.
C. GOB Equity Infusion to CSN in 1992
As discussed above, under the GOB's National Privatization program,
companies were privatized under the supervision of BNDES and the
Privatization Committee. In accordance with the established
privatization procedures, BNDES commissioned three consultants with
respect to the privatization of CSN: two to analyze the firm's
financial performance, make recommendations, and formulate the minimum
price and one to act as an independent auditor. One of the consultants,
after analysis of CSN's financial data, recommended that additional
capital be provided to the firm in advance of its privatization. The
GOB followed this recommendation and made a pre-privatization equity
infusion in 1992.
We preliminarily determine that, pursuant to section 771(5)(E)(i)
of the Act, this equity infusion was not consistent with the usual
investment practices of private investors and confers a benefit in the
amount of the infusion (see ``Equityworthiness'' section above). This
infusion is specific within the meaning of section 771(5A)(D) of the
Act because it was limited to CSN. Accordingly, we find that the GOB
equity infusion provided to CSN in 1992 is a countervailable subsidy
within the meaning of section 771(5) of the Act.
As explained in the ``Equity Methodology'' section above, we have
treated this equity infusion as a grant given in the year the infusion
was received. We have further determined that this infusion is a non-
recurring subsidy because it required separate authorization from the
GOB. Because CSN was uncreditworthy in the year of receipt, we applied
a discount rate that included a risk premium. Since CSN was privatized,
we followed the methodology outlined in the ``Change in Ownership''
section above to determine the amount of each equity infusion
attributable to the company after privatization. We divided the benefit
[[Page 8321]]
allocable to the POI from the equity infusion by CSN's total sales
during the POI. On this basis, we preliminarily determine the net
subsidy to be 0.99 percent ad valorem for CSN.
II. Program Preliminarily Determined To Be Non-Countervailable
Negotiated Deferrals of Tax Liabilities
As discussed above, one of the privatization consultants
recommended that COSIPA negotiate with the various tax authorities in
order to arrange to pay its large tax arrears in deferred installments.
COSIPA petitioned four different tax authorities in order to arrange
for installment payments for ten different types of taxes owed. In
addition, CSN petitioned to arrange for installment payments for one
tax liability.
Each of the tax agencies, the Revenue Service, Social Security
Authority, State of Sao Paulo, and City authority has established legal
procedures for arranging installment payments for delinquent tax
payers. The authorities established these rules in order to collect tax
arrears without resorting to legal action. These procedures were
contained in Law 8383/91, Law 8620/93 and Decree 612/92, Decree 33.118/
91 and Law 1383/83, respectively, and specified penalties, interest
rates, and in some cases, the maximum repayment term. For example, law
8383/91 that governs the Revenue Service's operations and applies to
six of the ten types of taxes COSIPA deferred and the tax that CSN
deferred, specifies that fines of 20 percent and interest of one per
cent per month will be charged and that all amounts will be subject to
monetary correction, i.e., adjustments for inflation. To the extent
that terms, such as the maximum repayment period, were not covered in
the agency's laws and regulations, they were negotiated by COSIPA or
CSN and the relevant tax authority. Once the parties completed
negotiations, the authority would endorse the petition and, in some
cases, execute a separate agreement.
When determining whether a program is countervailable, we must
ascertain whether it provides benefits to a specific enterprise,
industry, or group thereof within the meaning of section 771(5A)(D) of
the Act. By comparing the terms included in the agencies' laws and
regulations and the terms provided to COSIPA and CSN, we were able to
conclude that the respondent companies received the same terms as those
specified in the laws. Therefore, as the GOB did not favor COSIPA or
CSN over other companies, we turned to an examination of the general
programs themselves in order to determine whether they are specific. We
examined whether the programs are de jure specific and found that the
laws do not limit eligibility to an enterprise, industry, or group
thereof. We then analyzed whether the program meets the criteria for de
facto specificity. The GOB indicated in its response that ``[d]eferred
payment terms are generally available for all companies that have
outstanding tax obligations to the underlying tax authority.'' See GOB
Supplemental Questionnaire Response dated January 12, 1999, public
version on file in the CRU. Further, the GOB stated that tax deferral
petitions are automatically approved by the authorities as long as they
conform with the establishing laws and regulations and as stated above
neither the laws nor regulations provide differential or special
treatment to any company or industry. Further, the GOB has provided
information on the number of companies that petitioned the Revenue
Service to renegotiate taxes; in 1993 and 1994, the years that COSIPA
and CSN petitioned the Revenue Service to defer payments on various
taxes, 91,440 and 139,596 taxpayers received deferred payment schedules
for tax arrears. See GOB Supplemental Questionnaire Response dated
February 8, 1999, public version on file in the CRU. While the number
of companies that receive benefits under a program is not dispositive
as to a program's non-specificity, the extremely large number of
companies receiving deferrals indicates that a broad range of companies
and industries received benefits under the program. Therefore, based on
the response, there is no reason to believe that these tax deferrals
are limited to a specific enterprise, industry or group thereof, and we
preliminarily determine that these tax deferrals are not
countervailable. We will continue to gather information about the de
facto distribution of benefits under this program and carefully examine
this issue at verification.
III. Program Preliminarily Determined Not To Exist
GOB Equity Infusions to COSIPA in 1992 and 1993
The Department included two programs in its initiation relating to
benefits provided to COSIPA in advance of the company's privatization:
debt assumptions and equity infusions. According to information
provided by respondents, there were no equity infusions, per se.
Instead, all benefits were in the form of debt assumptions that were
converted into equity and have been addressed in the ``GOB Debt-to-
Equity Conversions Provided to COSIPA in 1992 and 1993'' section above.
Accordingly, we preliminarily determine that the separate ``GOB Equity
Infusions to COSIPA in 1992 and 1993'' program does not exist.
Verification
In accordance with section 782(i) of the Act, we will verify the
information submitted by respondents prior to making our final
determination.
Suspension of Liquidation
In accordance with section 703(d)(1)(A)(i) of the Act, we have
calculated individual rates for each of the companies under
investigation. As discussed in the ``Affiliated Parties'' section of
this notice, we are treating USIMINAS/COSIPA as one company and have
calculated a single rate for USIMINAS/COSIPA. To calculate the ``all
others'' rate, we weight-averaged the company rates by each company's
exports of the subject merchandise to the United States.
In accordance with section 703(d) of the Act, we are directing the
U.S. Customs Service to suspend liquidation of all entries of the
subject merchandise from Brazil, which are entered or withdrawn from
warehouse, for consumption on or after the date of the publication of
this notice in the Federal Register, and to require a cash deposit or
bond for such entries of the merchandise in the amounts indicated
below. This suspension will remain in effect until further notice.
Ad Valorem Rates
------------------------------------------------------------------------
Net
Producer/exporter subsidy
rate %
------------------------------------------------------------------------
USIMINAS/COSIPA.............................................. 9.45
CSN.......................................................... 6.62
All Others................................................... 7.85
------------------------------------------------------------------------
ITC Notification
In accordance with section 703(f) of the Act, we will notify the
ITC of our determination. In addition, we are making available to the
ITC all nonprivileged and nonproprietary information relating 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, without the written consent
of the Assistant Secretary, Import Administration.
[[Page 8322]]
If our final determination is affirmative, the ITC will make its
final determination within 45 days after the Department makes its final
determination.
Public Comment
In accordance with 19 CFR 351.310, we will hold a public hearing,
if requested, to afford interested parties an opportunity to comment on
this preliminary determination. The hearing is tentatively scheduled to
be held 57 days from the date of publication of the preliminary
determination at the U.S. Department of Commerce, 14th Street and
Constitution Avenue, N.W., Washington, D.C. 20230. Individuals who wish
to request a hearing must submit a written request within 30 days of
the publication of this notice in the Federal Register to the Assistant
Secretary for Import Administration, U.S. Department of Commerce, Room
1870, 14th Street and Constitution Avenue, N.W., Washington, DC 20230.
Parties should confirm by telephone the time, date, and place of the
hearing 48 hours before the scheduled time.
Requests for a public hearing should contain: (1) the party's name,
address, and telephone number; (2) the number of participants; and, (3)
to the extent practicable, an identification of the arguments to be
raised at the hearing. In addition, six copies of the business
proprietary version and six copies of the nonproprietary version of the
case briefs must be submitted to the Assistant Secretary no later than
50 days from the date of publication of the preliminary determination.
As part of the case brief, parties are encouraged to provide a summary
of the arguments not to exceed five pages and a table of statutes,
regulations, and cases cited. Six copies of the business proprietary
version and six copies of the nonproprietary version of the rebuttal
briefs must be submitted to the Assistant Secretary no later than 55
days from the date of publication of the preliminary determination. An
interested party may make an affirmative presentation only on arguments
included in that party's case or rebuttal briefs. Written arguments
should be submitted in accordance with 19 CFR 351.309 and will be
considered if received within the time limits specified above.
This determination is published pursuant to sections 703(f) and
777(i) of the Act.
Dated: February 12, 1999.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-4198 Filed 2-18-99; 8:45 am]
BILLING CODE 3510-DS-P
