E5-1386. Certain Stainless Steel Wire Rod from Italy: Notice of Court Decision and Suspension of Liquidation

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

On March 9, 2005, in AL Tech Specialty Steel Corp., Carpenter Technology Corp., Republic Engineered Steels, Talley Metals Technology, Inc. and United Steel Workers of America, AFL-CIO/CLC v. United States and Acciaierie Valbruna S.r.l. and Acciaierie Di Bolzano S.p.A. v. United States, Slip Op. 05-30 (AL Tech II), the Court of International Trade (CIT) affirmed the Department of Commerce's Final Results of Redetermination Pursuant to Remand (Remand Results), dated October 27, 2004. Consistent with the decision of the U.S. Court of Appeals for the Federal Circuit (CAFC) in Timken Co. v. United States, 893 F.2d 337 (Fed. Cir. 1990) (Timken), the Department will continue to order the suspension of liquidation of the subject merchandise, where appropriate, until there is a “conclusive” decision in this case. If the case is not appealed, or if it is affirmed on appeal, the Department will instruct U.S. Customs and Border Protection (CBP) to liquidate all relevant entries from Acciaierie Valbruna S.r.l. (Valbruna) and Acciaierie Di Bolzano S.p.A. (Bolzano) and revise the cash deposit rates as appropriate.

EFFECTIVE DATE:

March 29, 2005.

FOR FURTHER INFORMATION CONTACT:

Darla Brown, AD/CVD Operations, Office 3, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230; telephone: [phone].

SUPPLEMENTARY INFORMATION:

Background

Following publication of the Final Affirmative Countervailing Duty Determination: Certain Stainless Steel Wire Rod from Italy, 63 FR 40474 (July 29, 1998) (Final Determination) and Notice of Countervailing Duty Order: Stainless Steel Wire Rod from Italy, 63 FR 49334 (September 15, 1998), AL Tech Specialty Steel Corp., Carpenter Technology Corp., Republic Engineered Steels, Talley Metals Technology, Inc. and United Steel Workers of America, AFL-CIO/CLC (collectively, AL Tech), the petitioners in this case, and the respondents, Valbruna and Bolzano (collectively, Valbruna/Bolzano), challenged the Department's Final Determination before the CIT.

In AL Tech Specialty Steel Corp., et al. v. United States, Slip. Op. 04-114 (CIT, September 8, 2004), the CIT Court affirmed (1) the Department's finding that the Province of Bolzano's purchase of a particular industrial site did not confer a subsidy; (2) the Department's use of a nationwide, rather than a region-specific benchmark for measuring the adequacy of remuneration of Valbruna's lease of an industrial site from the Province of Bolzano; and (3) the Department's determination that its “tying” practice was inapplicable to plant closure assistance provided under Law 193/84.

However, the Court remanded the following issues to the Department for further consideration: (1) the Department's determination that a two-year rent abatement granted to Valbruna on its lease of an industrial site from the Province of Bolzano conferred a subsidy; (2) the Department's determination not to adjust the benchmark used to determine adequacy of remuneration under Valbruna's lease of the Bolzano site to account for Valbruna's assumption of future extraordinary maintenance expenses; (3) the Department's determination not to adjust the lease benchmark to account for depreciation of buildings on the Bolzano industrial site; (4) the Department's determination that aid under Law 25/81 continued to confer a subsidy despite evidence that the subsidy had been repaid; (5) the Department's determination to treat Articles 2 and 4 of Law 193/84 as a single program for purposes of the small grants test; thus, allocating the aid over time rather than expensing it in the year of receipt; (6) the Department's finding that EU/European Social Fund (“ESF”) Objective 4 funding was regionally specific to Italy, and (7) the Department's finding that Italian ESF Objective 4 funding was regionally specific to Bolzano.

The Draft Final Results Pursuant to Remand (Draft Results) were released to parties on October 18, 2004. On October 22, 2004, the Department received comments from respondents on the Draft Results. Petitioners did not submit comments on the Draft Results. There were no substantive changes made to the Remand Results as a result of comments received on the Draft Results. On October 27, 2004, the Department responded to the CIT's Order of Remand by filing the Remand Results. In its Remand Results, the Department determined on remand that the two-year lease abatement was a bargained-for exchange and, therefore, did not constitute a countervailable subsidy and that no countervailable benefit under Law 25/81 existed for Valbruna after January 1, 1986. As a result of the remand redetermination, the net subsidy rate for Valbruna/Bolzano was revised from 1.28 to 0.65 percent ad valorem, which is de minimis.

On December 1, 2004, the CIT received comments from petitioners and respondents. On December 21, 2004, the Department responded to these comments.

On March 9, 2005, the CIT affirmed the Department's findings in the Remand Results. Specifically, the CIT upheld the Department's finding on remand that the rent abatement did not constitute a countervailable subsidy and the Department's treatment of Law 25/81. AL Tech II, Slip Op. 05-30 (CIT March 9, 2005).

Suspension of Liquidation

The CAFC, in Timken, held that the Department must publish notice of a decision of the CIT or the CAFC which is not “in harmony” with the Department's final determination or results. Publication of this notice fulfills that obligation. The CAFC also held that the Department must suspend liquidation of the subject merchandise until there is a “conclusive” decision in the case. Therefore, pursuant to Timken, the Department must continue to suspend liquidation pending the expiration of the period to appeal the CIT's March 9, 2005, decision or, if that decision is appealed, pending a final decision by the CAFC. The Department will instruct CBP to revise cash deposit rates, as appropriate, and to liquidate relevant entries covering the subject merchandise effective March 29, 2005, in the event that the CIT's ruling is not appealed, or if appealed and upheld by the CAFC.

Dated: March 21, 2005.

Joseph A. Spetrini,

Acting Assistant Secretary for Import Administration.