[Federal Register Volume 63, Number 73 (Thursday, April 16, 1998)]
[Notices]
[Pages 18871-18877]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-10039]
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DEPARTMENT OF COMMERCE
International Trade Administration
Policies Regarding the Conduct of Five-year (``Sunset'') Reviews
of Antidumping and Countervailing Duty Orders; Policy Bulletin
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Policy Bulletin; request for comments.
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SUMMARY: The Department of Commerce is proposing policies regarding the
conduct of five-year (``sunset'') reviews of antidumping and
countervailing duty orders and suspended investigations pursuant to the
provisions of sections 751(c) and 752 of the Tariff Act of 1930, as
amended, and the Department's regulations. The proposed policies are
intended to complement the applicable statutory and regulatory
provisions by providing guidance on methodological or analytical issues
not explicitly addressed by the statute and regulations.
DATES: To be assured of consideration, written comments must be
received not later than May 12, 1998. Rebuttal comments must be
received not later than June 2, 1998.
ADDRESSES: A signed original and six copies of each set of comments,
including reasons for any recommendation, along with a cover letter
identifying the commenter's name and address, should be submitted to
Robert S. LaRussa, Assistant Secretary for Import Administration,
Central Records Unit, Room 1870, U.S. Department of Commerce,
Pennsylvania Avenue and 14th Street, NW, Washington, DC 20230;
Attention: Sunset Policy Bulletin.
FOR FURTHER INFORMATION CONTACT: Melissa G. Skinner, Office of Policy,
Import Administration, International Trade Administration, U.S.
Department of Commerce, at (202) 482-1560, or Stacy J. Ettinger, Office
of the Chief Counsel for Import Administration, U.S. Department of
Commerce, at (202) 482-4618.
SUPPLEMENTARY INFORMATION: This policy bulletin proposes guidance
regarding the conduct of sunset reviews. As described below, the
proposed policies are intended to complement the applicable statutory
and regulatory provisions by providing guidance on methodological or
analytical issues not explicitly addressed by the statute and
regulations. We invite public comment on the policies.
Request for Comment
The Department solicits comments pertaining to its proposed
policies concerning sunset reviews. Initial comments should be received
by the Assistant Secretary not later than May 12, 1998. Any rebuttals
to the initial comments should be received by the Assistant Secretary
not later than June 2, 1998. Commenters should file a signed original
and six copies of each set of initial and rebuttal comments. All
comments will be available for public inspection and photocopying in
the Import Administration's Central Records Unit, Room B-099, between
the hours of 8:30 am and 5:00 pm on business days.
Each person submitting a comment should include the commenter's
name and address, and give reasons for any recommendations. To
facilitate their consideration by the Department, initial and rebuttal
comments regarding these proposed policies should be submitted in the
following format: (1) number each comment in accordance with the
paragraph numbering of the proposed policy being addressed; (2) begin
each comment on a separate page; (3) provide a brief summary of the
comment (a maximum of three sentences) and label this section ``Summary
of the Comment;'' and (4) concisely state the issue identified and
discussed in the comment and provide reasons for any recommendation.
To help simplify the processing and distribution of comments, the
Department requests the submission of initial and rebuttal comments in
electronic form to accompany the required paper copies. Comments filed
in electronic form should be on a DOS formatted 3.5'' diskette in
either WordPerfect format or a format that the WordPerfect program can
convert and import into WordPerfect. Please make each comment a
separate file on the diskette and name each separate file using the
paragraph numbering of the proposed policy being addressed in the
comment.
Comments received on diskette will be made available to the public
on the Internet at the following address: ``http://www.ita.doc.gov/
import__admin/records/''. In addition, upon request, the Department
will make comments filed in electronic form available to the public on
3.5'' diskettes (at cost), with specific instructions for accessing
compressed data (if necessary). Any questions concerning file
formatting, document conversion, access on the Internet, or other
electronic filing issues should be addressed to Andrew Lee Beller, IA
Webmaster, at (202) 482-0866.
Dated: April 10, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
Policy Bulletin 98:3
Policies Regarding the Conduct of Five-year (``Sunset'') Reviews of
Antidumping and Countervailing Duty Orders
Sunset Review Policies
I. Overview
II. Sunset Reviews in Antidumping Proceedings
A. Determination of Likelihood of Continuation or Recurrence of
Dumping
1. In general
2. Basis for likelihood determination
3. Likelihood of continuation or recurrence of dumping
4. No likelihood of continuation or recurrence of dumping
5. Treatment of zero or de minimis margins
B. Magnitude of the Margin of Dumping That is Likely to Prevail
1. In general
2. Use of a more recently calculated margin
3. Duty absorption
C. Consideration of Other Factors
1. In general
2. Example
3. Timing of determination of good cause
III. Sunset Reviews in Countervailing Duty Proceedings
A. Determination of Likelihood of Continuation or Recurrence of
a Countervailable Subsidy
1. In general
2. Basis for likelihood determination
3. Continuation, temporary suspension, or partial termination of
a subsidy program
4. Subsidies for which benefits are allocated over time
5. Elimination of a subsidy program or exclusion of subject
companies by the foreign government
6. Treatment of zero or de minimis rates
B. Net Countervailable Subsidy That is Likely to Prevail
1. In general
2. Determination of net countervailable subsidy; company-
specific rates
3. Adjustments to the net countervailable subsidy
4. Nature of the countervailable subsidy
C. Consideration of Other Factors
1. Programs determined to provide countervailable subsidies in
other investigations or reviews
2. Programs newly alleged to provide countervailable subsidies
[[Page 18872]]
Sunset Review Policies
I. Overview
The Uruguay Round Agreements Act (``URAA'') revised the Tariff Act
of 1930, as amended (``the Act''), by requiring that antidumping
(``AD'') and countervailing duty (``CVD'') orders be revoked, and
suspended investigations be terminated, after five years unless
revocation or termination would be likely to lead to a continuation or
recurrence of (1) dumping or a countervailable subsidy, and (2)
material injury to the domestic industry. The URAA assigns to the
Department of Commerce (``the Department'') the responsibility of
determining whether revocation of an antidumping or countervailing duty
order, or termination of a suspended investigation, would be likely to
lead to a continuation or recurrence of dumping or a countervailable
subsidy. The Department then must transmit to the International Trade
Commission (``the Commission'') its likelihood determination and its
determination regarding the magnitude of the margin of dumping or the
net countervailable subsidy that is likely to prevail if the order is
revoked or the suspended investigation is terminated. The URAA also
requires that the Department begin initiating sunset reviews in July
1998, that all sunset reviews of ``transition orders''--those
antidumping and countervailing duty orders and suspended investigations
in effect on January 1, 1995, the effective date of the URAA--be
initiated by December 31, 1999, and that all reviews of transition
orders be completed by June 30, 2001. The URAA further requires that
the Department initiate a sunset review of each order or suspended
investigation that is not a ``transition order'' not later than 30 days
before the fifth anniversary of publication of the order or suspension
agreement in the Federal Register. Pursuant to section 751(c)(1) of the
Act, initiation of sunset reviews is automatic.
Sunset reviews of antidumping and countervailing duty orders and
suspended investigations will be conducted pursuant to the provisions
of the Act, including sections 751(c) and 752 of the Act, and the
Department's regulations at 19 CFR Part 351, including Secs. 351.218,
351,221, 351.222(i), 351.307, 351.308(f), 351.309, and 351.310 (see
Procedures for Conducting Five-year (``Sunset'') Reviews of Antidumping
and Countervailing Duty Orders, 63 FR 13516 (March 20, 1998) (interim
final rules)). These policies are intended to complement the applicable
statutory and regulatory provisions by providing guidance on
methodological or analytical issues not explicitly addressed by the
statute and regulations. In developing these policies, the Department
has drawn on the guidance provided by the legislative history
accompanying the URAA, specifically the Statement of Administrative
Action (``the SAA''), H.R. Doc. No. 103-316, vol. 1 (1994), the House
Report, H.R. Rep. No. 103-826, pt. 1 (1994), and the Senate Report, S.
Rep. No. 103-412 (1994).
II. Sunset Reviews in Antidumping Proceedings
A. Determination of Likelihood of Continuation or Recurrence of Dumping
1. In General
In accordance with section 752(c)(1) of the Act, in determining
whether revocation of an antidumping order or termination of a
suspended dumping investigation would be likely to lead to continuation
or recurrence of dumping, the Department will consider--
(a) the weighted-average dumping margins determined in the
investigation and subsequent reviews, and
(b) the volume of imports of the subject merchandise for the period
before and the period after the issuance of the antidumping order or
acceptance of suspension agreement.
2. Basis for Likelihood Determination
Consistent with the SAA at 879, and the House Report at 56, the
Department will make its determination of likelihood on an order-wide
basis.
3. Likelihood of Continuation or Recurrence of Dumping
The SAA at 889, the House Report at 63, and the Senate Report at
52, state that,
[D]eclining import volumes accompanied by the continued
existence of dumping margins after the issuance of the order may
provide a strong indication that, absent an order, dumping would be
likely to continue, because the evidence would indicate that the
exporter needs to dump to sell at pre-order volumes.
In addition, the SAA at 890, and the House Report at 63-64, state
that,
[E]xistence of dumping margins after the order, or the cessation
of imports after the order, is highly probative of the likelihood of
continuation or recurrence of dumping. If companies continue to dump
with the discipline of an order in place, it is reasonable to assume
that dumping would continue if the discipline were removed. If
imports cease after the order is issued, it is reasonable to assume
that the exporters could not sell in the United States without
dumping and that, to reenter the U.S. market, they would have to
resume dumping.
Therefore, the Department normally will determine that revocation
of an antidumping order or termination of a suspended dumping
investigation is likely to lead to continuation or recurrence of
dumping where--
(a) dumping continued at any level above de minimis after the
issuance of the order or the suspension agreement, as applicable;
(b) imports of the subject merchandise ceased after issuance of the
order or the suspension agreement, as applicable; or
(c) dumping was eliminated after the issuance of the order or the
suspension agreement, as applicable, and import volumes for the subject
merchandise declined significantly.
The Department recognizes that, in the context of a sunset review
of a suspended investigation, the data relevant to the criteria under
paragraphs (a) through (c), above, may not be conclusive with respect
to likelihood. Therefore, the Department may be more likely to
entertain good cause arguments under paragraph II.C in a sunset review
of a suspended investigation.
4. No Likelihood of Continuation or Recurrence of Dumping
The SAA at 889-90, and the House Report at 63, state that,
[D]eclining (or no) dumping margins accompanied by steady or
increasing imports may indicate that foreign companies do not have
to dump to maintain market share in the United States and that
dumping is less likely to continue or recur if the order were
revoked.
See also, the Senate Report at 52.
Therefore, the Department normally will determine that revocation
of an antidumping order or termination of a suspended dumping
investigation is not likely to lead to continuation or recurrence of
dumping where dumping was eliminated after issuance of the order or the
suspension agreement, as applicable, and import volumes remained steady
or increased. Declining margins alone normally would not qualify
because the legislative history makes clear that continued margins at
any level would lead to a finding of likelihood. See section II.A.3,
above. In analyzing whether import volumes remained steady or
increased, the Department normally will consider companies' relative
market share. Such information should be provided to the Department by
the parties.
The Department recognizes that, in the context of a sunset review
of a suspended investigation, the elimination of dumping coupled with
[[Page 18873]]
steady or increasing import volumes may not be conclusive with respect
to no likelihood. Therefore, the Department may be more likely to
entertain good cause arguments under paragraph II.C in a sunset review
of a suspended investigation.
5. Treatment of Zero or De Minimis Margins
Section 752(c)(4)(A) of the Act provides that a weighted-average
dumping margin determined in the investigation or subsequent reviews
that is zero or de minimis shall not by itself require the Department
to determine that revocation of an antidumping duty order or
termination of a suspended investigation would not be likely to lead to
continuation or recurrence of sales at less than fair value.
Therefore, although the Department may consider the existence of a
zero or de minimis dumping margin in making its determination of
likelihood, a zero or de minimis dumping margin, in itself, will not
require that the Department determine that continuation or recurrence
of dumping is not likely. In accordance with section 752(c)(4)(B) of
the Act and 19 CFR 351.106(c)(1), the Department will treat as de
minimis any weighted-average dumping margin that is less than 0.5
percent ad valorem or the equivalent specific rate.
B. Magnitude of the Margin of Dumping That is Likely to Prevail
1. In General
Section 752(c)(3) of the Act provides that the Department will
provide to the Commission the magnitude of the margin of dumping that
is likely to prevail if the order is revoked or the suspended
investigation is terminated. The SAA at 890, and the House Report at
64, provide that the Department normally will select a margin ``from
the investigation, because that is the only calculated rate that
reflects the behavior of exporters * * * without the discipline of an
order or suspension agreement in place.''
Therefore, except as provided in paragraphs II.B.2 and II.B.3, the
Department normally will provide to the Commission the margin that was
determined in the final determination in the original investigation. In
certain situations, the Department may provide to the Commission the
margin that was determined in the preliminary determination in the
original investigation, e.g., where the Department did not issue a
final determination because the investigation was suspended and
continuation was not requested. Specifically, the Department normally
will provide the company-specific margin from the investigation for
each company regardless of whether the margin was calculated using a
company's own information or based on best information available or
facts available. Furthermore, in light of the legislative history
discussed above, for companies not specifically investigated or for
companies that did not begin shipping until after the order was issued,
the Department normally will provide a margin based on the all others
rate from the investigation. In addition, the Department normally will
provide to the Commission a list of companies excluded from the order
based on zero or de minimis margins, if any, or subsequently revoked
from the order, if any.
In a sunset review of an antidumping duty finding, i.e., where the
original investigation was conducted by the Department of the Treasury
(``Treasury''), the Department normally will provide to the Commission
the company-specific margin or the all others rate included in the
Treasury finding published in the Federal Register. If no company-
specific margin or all others rate is included in the Treasury finding,
the Department normally will provide to the Commission the company-
specific margin from the first final results of administrative review
published in the Federal Register by the Department. If the first final
results of administrative review of the finding do not contain a margin
for a particular company, the Department normally will provide to the
Commission, as the margin for that company, the first ``new shippers''
rate \1\ established by the Department for the finding.
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\1\ In 1993, the Department began using the all others rate from
the original investigation as the appropriate cash deposit rate for
companies not covered by a review or the original investigation.
Prior to that time, the Department's practice was to use a ``new
shippers'' rate resulting from a particular review as the cash
deposit rate for companies whose first shipment occurred after the
period covered by the review. The Department used as the ``new
shippers'' rate the highest of the rates of all responding firms
with shipments during the review period. This ``new shippers'' rate
is unrelated to new shipper reviews conducted pursuant to the URAA
under section 751(a)(2)(B) of the Act.
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2. Use of a More Recently Calculated Margin
The SAA at 890-91, and the House Report at 64, provide that in
certain instances, it may be more appropriate for the Department to
provide the Commission with a more recently calculated margin.
Specifically, the SAA and the House Report state that, ``if dumping
margins have declined over the life of an order and imports have
remained steady or increased, [the Department] may conclude that
exporters are likely to continue dumping at the lower rates found in a
more recent review.'' In addition, the SAA at 889-90, and the House
Report at 63, state that, ``declining (or no) dumping margins
accompanied by steady or increasing imports may indicate that foreign
companies do not have to dump to maintain market share in the United
States and that dumping is less likely to continue or recur if the
order were revoked.'' See also, the Senate Report at 52.
Therefore, unless the Department finds no likelihood of
continuation or recurrence of dumping, the Department may, in response
to argument from an interested party, provide to the Commission a more
recently calculated margin for a particular company where, for that
particular company, dumping margins declined or dumping was eliminated
after the issuance of the order or the suspension agreement, as
applicable, and import volumes remained steady or increased. In
analyzing whether import volumes remained steady or increased, the
Department normally will consider the company's relative market share.
Such information should be provided to the Department by the parties.
In addition, a company may choose to increase dumping in order to
maintain or increase market share. As a result, increasing margins may
be more representative of a company's behavior in the absence of an
order. Therefore, unless the Department finds no likelihood of
continuation or recurrence of dumping, the Department may, in response
to argument from an interested party, provide to the Commission a more
recently calculated margin for a particular company where, for that
particular company, dumping margins increased after the issuance of the
order, even if the increase was as a result of the application of best
information available or facts available.
3. Duty Absorption
a. In General
Section 751(a)(4) of the Act provides that, during the second or
fourth administrative review of an order (or, for transition orders,
during an administrative review initiated in 1996 or 1998 (see 19 CFR
351.213(j))), upon request, the Department will determine whether
antidumping duties have been absorbed by a foreign producer or exporter
subject to an order if the subject merchandise is sold in the
[[Page 18874]]
United States through an importer who is affiliated with such foreign
producer or exporter. The statute further provides that the Department
will notify the Commission of its findings regarding such duty
absorption for the Commission to consider in conducting a sunset
review.
Therefore, the Department will provide to the Commission, on a
company-specific basis, its findings regarding duty absorption, if any,
for all reviews in which the Department conducted a duty absorption
analysis.
b. Effect on Magnitude of the Margin
The SAA at 885, and the House report at 60, state that,
Duty absorption is a strong indicator that the current dumping
margins calculated by [the Department] in reviews may not be
indicative of the margins that would exist in the absence of an
order. Once an order is revoked, the importer could achieve the same
pre-revocation return on its sales by lowering its prices in the
U.S. in the amount of the duty that previously was being absorbed.
See also, the Senate Report at 50. The SAA at 886, and the House Report
at 61, also provide that if, in the fourth administrative review (or,
for transition orders, for an administrative review initiated in 1998),
the Department finds that absorption has taken place, the Department
will take that into account in its determination regarding the dumping
margins likely to prevail if an order were revoked. The Senate Report
at 50, suggests that the Department's notification to the Commission of
its findings on duty absorption should include, to the extent
practicable, some indication of the magnitude of the absorption.
Therefore, notwithstanding paragraphs II.B.1 and II.B.2, where the
Department has found duty absorption in the fourth administrative
review of the order (or, for transition orders, in an administrative
review initiated in 1998), the Department normally will--
(a) determine that a company's current dumping margin is not
indicative of the margin likely to prevail if the order is revoked; and
(b) provide to the Commission the higher of the margin that the
Department otherwise would have reported to the Commission or the most
recent margin for that company adjusted to account for the Department's
findings on duty absorption.
The Department normally will adjust a company's most recent margin
to take into account its findings on duty absorption by increasing the
margin by the amount of duty absorption on those sales for which the
Department found duty absorption.
C. Consideration of Other Factors
Section 752(c)(2) of the Act provides that, if the Department
determines that good cause is shown, the Department also will consider
other price, cost, market or economic factors in determining the
likelihood of continuation or recurrence of dumping. The SAA at 890,
states that such other factors might include,
the market share of foreign producers subject to the antidumping
proceeding; changes in exchange rates, inventory levels, production
capacity, and capacity utilization; any history of sales below cost
of production; changes in manufacturing technology in the industry;
and prevailing prices in relevant markets.
The SAA at 890, also notes that the list of factors is illustrative,
and that the Department should analyze such information on a case-by-
case basis.
Therefore, the Department will consider other factors in AD sunset
reviews if the Department determines that good cause to consider such
other factors exists. The burden is on an interested party to provide
information or evidence that would warrant consideration of the other
factors in question. With respect to a sunset review of a suspended
investigation, where the Department determines that good cause exists,
the Department normally will conduct the sunset review consistent with
its practice of examining likelihood under section 751(a) of the Act.
III. Sunset Reviews in Countervailing Duty Proceedings
A. Determination of Likelihood of Continuation or Recurrence of a
Countervailable Subsidy
1. In General
In accordance with section 752(b)(1) of the Act, in determining
whether revocation of a countervailing duty order or termination of a
suspended countervailing duty investigation would be likely to lead to
continuation or recurrence of a countervailable subsidy, the Department
will consider--
(a) the net countervailable subsidy determined in the investigation
and subsequent reviews, and
(b) whether any change in the program which gave rise to the net
countervailable subsidy determined in the investigation and subsequent
reviews has occurred that is likely to affect that net countervailable
subsidy.
2. Basis for Likelihood Determination
Consistent with the SAA at 879, and the House Report at 56, the
Department will make its determination of likelihood on an order-wide
basis.
3. Continuation, Temporary Suspension, or Partial Termination of a
Subsidy Program
a. In General
The SAA at 888, states that,
Continuation of a program will be highly probative of the
likelihood of continuation or recurrence of countervailable
subsidies. Temporary suspension or partial termination of a subsidy
program also will be probative of continuation or recurrence of
countervailable subsidies, absent significant evidence to the
contrary.
See also, the Senate Report at 52.
Therefore, the Department normally will determine that revocation
of a countervailing duty order or termination of a suspended
investigation is likely to lead to continuation or recurrence of a
countervailable subsidy where--
(a) a subsidy program continues;
(b) a subsidy program has been only temporarily suspended; or
(c) a subsidy program has been only partially terminated.
b. Exception
The SAA at 888-89, provides that, if companies have a long track
record of not using a program, the mere availability of the program
should not, by itself, indicate likelihood of continuation or
recurrence of a countervailable subsidy. However, the SAA at 888, also
provides that as long as a subsidy program continues to exist, the
Department should not consider company- or industry-specific
renunciations of countervailable subsidies, by themselves, as an
indication that continuation or recurrence of countervailable subsidies
is unlikely.
Therefore, where a company has a long track record of not using a
program, including during the investigation, the Department normally
will determine that the mere availability of the program does not, by
itself, indicate likelihood of continuation or recurrence of a
countervailable subsidy. In addition, where a subsidy program continues
to exist, the Department normally will not consider company-specific or
industry-specific renunciation of countervailable subsidies under that
program, by themselves, as an indication that continuation or
recurrence of a countervailable subsidy is unlikely.
4. Subsidies for Which Benefits Are Allocated Over Time
The SAA at 889, provides that, with respect to subsidies for which
the benefits are allocated over time, such as grants, long-term loans,
or equity infusions, the Department ``will consider whether the fully
allocated
[[Page 18875]]
benefit stream is likely to continue after the end of the review,
without regard to whether the program that gave rise to the long-term
benefit continues to exist.''
Therefore, where the Department is examining a subsidy for which
the benefits are allocated over time, the Department normally will
determine that a countervailable subsidy will continue to exist when
the benefit stream, as defined by the Department, will continue beyond
the end of the sunset review, without regard to whether the program
that gave rise to the long-term benefit continues to exist.
5. Elimination of a Subsidy Program or Exclusion of Subject Companies
by the Foreign Government
The SAA at 888, states that,
If the foreign government has eliminated a subsidy program, . .
. [the Department] will consider the legal method by which the
government eliminated the program and whether the government is
likely to reinstate the program. For example, programs eliminated
through administrative action may be more likely to be reinstated
than those eliminated through legislative action.
Therefore, where the foreign government has eliminated a subsidy
program or changes a program to exclude subject companies, the
Department will consider--
(a) the legal method by which the government eliminated the
program, and
(b) whether the government is likely to reinstate the program,
in determining whether revocation of a countervailing duty order or
termination of a suspended investigation is likely to lead to
continuation or recurrence of a countervailable subsidy. The Department
normally will determine that programs eliminated through administrative
action are more likely to be reinstated than those eliminated through
legislative action.
6. Treatment of Zero or De Minimis Rates
a. In General
Section 752(b)(4)(A) of the Act provides that a net countervailable
subsidy determined in the investigation or subsequent reviews that is
zero or de minimis shall not by itself require the Department to
determine that revocation of a countervailing duty order or termination
of a suspended investigation would not be likely to lead to
continuation or recurrence of a countervailable subsidy.
Therefore, although the Department may consider the existence of a
zero or de minimis countervailable subsidy rate in making its
determination of likelihood, a zero or de minimis countervailable
subsidy rate, in itself, will not require that the Department determine
that continuation or recurrence of a countervailable subsidy is not
likely. In accordance with section 752(b)(4)(B) of the Act and 19 CFR
351.106(c)(1), the Department will treat as de minimis any
countervailable subsidy rate that is less than 0.5 percent ad valorem
or the equivalent specific rate.
b. De Minimis Combined Benefits
The SAA at 889, and the House Report at 63, state that,
[I]f the combined benefits of all programs considered by [the
Department] for purposes of its likelihood determination have never
been above de minimis at any time the order was in effect, and if
there is no likelihood that the combined benefits of such programs
would be above de minimis in the event of revocation or termination,
[the Department] should determine that there is no likelihood of
continuation or recurrence of countervailable subsidies.
Therefore, if the combined benefits of all programs considered by
the Department for purposes of its likelihood determination have never
been above de minimis at any time the order was in effect, and if there
is no likelihood that the combined benefits of such programs would be
above de minimis in the event of revocation or termination, the
Department normally will determine that there is no likelihood of
continuation or recurrence of countervailable subsidies. In accordance
with section 752(b)(4)(B) of the Act and 19 CFR 351.106(c)(1), the
Department will treat as de minimis any overall countervailable subsidy
rate that is less than 0.5 percent ad valorem or the equivalent
specific rate.
B. Net Countervailable Subsidy That is Likely to Prevail
1. In General
Section 752(b)(3) of the Act provides that the Department will
provide to the Commission the net countervailable subsidy that is
likely to prevail if the order is revoked or the suspended
investigation is terminated. The SAA at 890, and the House Report at
64, provide that the Department normally will select a rate ``from the
investigation, because that is the only calculated rate that reflects
the behavior of exporters and foreign governments without the
discipline of an order or suspension agreement in place.''
Therefore, except as provided in paragraph III.B.3, the Department
normally will provide to the Commission the net countervailable subsidy
that was determined in the final determination in the original
investigation. In certain situations, the Department may provide to the
Commission the net countervailable subsidy that was determined in the
preliminary determination in the original investigation, e.g., where
the Department did not issue a final determination because the
investigation was suspended and continuation was not requested. In
addition, the Department normally will provide to the Commission a list
of companies excluded from the order based on zero or de minimis rates,
if any, or subsequently revoked from the order, if any.
In a sunset review of a countervailing duty order where the
original investigation was conducted by Treasury, the Department
normally will provide to the Commission the net countervailable subsidy
(sometimes previously called the net bounty, subsidy, or grant) from
the first final results of administrative review published in the
Federal Register by the Department, where the net countervailable
subsidy was first calculated on an ad valorem basis.
2. Determination of Net Countervailable Subsidy; Company-Specific Rates
Prior to enactment of the URAA, the Department calculated company-
specific countervailable subsidy rates in the original investigation
only where such rates were ``significantly different'' from the
country-wide rate. See 19 CFR 355.20(d) (1995). Since enactment of the
URAA, and in accordance with section 777A(e)(1) of the Act, the
Department, where possible, calculates individual countervailable
subsidy rates in an investigation for each known exporter or producer
of the subject merchandise (see section 777A(e)(2) of the Act
(providing for an exception to the calculation of individual rates
where it is not practicable to do so because of the large number of
exporters or producers involved in the investigation)).
Therefore, except as provided in paragraph III.B.3, where a
company-specific countervailing duty rate was determined for a
particular company in the original investigation, the Department
normally will provide that rate to the Commission as the net
countervailable subsidy that is likely to prevail for that company if
the order is revoked or the suspended investigation is terminated.
Specifically, the Department normally will provide the company-specific
countervailing duty rate from the investigation for each company, where
available, regardless of whether the rate was calculated using a
[[Page 18876]]
company's own information or was based on best information available or
facts available. If no company-specific countervailing duty rate was
determined for a particular company in the original investigation,
because the company's rate was not ``significantly different'' from the
country-wide rate, the company was not specifically investigated, or
the company did not begin shipping until after the order was issued,
except as provided in paragraph III.B.3, the Department normally will
provide to the Commission the country-wide rate or all others rate
determined in the original investigation as the net countervailable
subsidy that is likely to prevail for that particular company if the
order is revoked or the suspended investigation is terminated.
3. Adjustments to the Subsidy
As discussed in paragraph III.B.1, the Department normally will
provide to the Commission the net countervailable subsidy that was
determined in the original investigation. However, the purpose of the
net countervailable subsidy in the context of sunset reviews is to
provide the Commission with a rate which represents the countervailable
rate that is likely to prevail if the order is revoked or the suspended
investigation is terminated. Furthermore, section 752(b)(1)(B) of the
Act provides that the Department will consider whether any change in
the program which gave rise to the net countervailable subsidy
determination in the investigation or subsequent reviews has occurred
that is likely to affect the net countervailable subsidy. Consequently,
although the SAA at 890, and the House Report at 64, provide that the
Department normally will select a rate from the investigation, this
rate may not be the most appropriate if, for example, the rate was
derived (in whole or part) from subsidy programs which were found in
subsequent reviews to be terminated, there has been a program-wide
change, or the rate ignores a program found to be countervailable in a
subsequent administrative review.
Therefore, the Department may make adjustments to the net
countervailable subsidy determined pursuant to paragraphs III.B.1 and
III.B.2, including, but not limited to, the following:
(a) Where the Department has conducted an administrative review of
the order, or suspension agreement, as applicable, and found that a
program was terminated with no residual benefits and no likelihood of
reinstatement, the Department normally will adjust the net
countervailable subsidy rate determined in the original investigation
to reflect the change. If, in an investigation, the Department found
that a program had been terminated with no residual benefits subsequent
to the period of investigation, the Department normally will consider
this information in determining the net countervailable subsidy.
(b) The Department normally will not make adjustments to the net
countervailable subsidy rate for programs that still exist, but were
modified subsequent to the order, or suspension agreement, as
applicable, to eliminate exports to the United States (or subject
merchandise) from eligibility.
(c) Where the Department has conducted an administrative review of
the order, or suspension agreement, as applicable, and found a new
countervailable program, or found a program previously not used but
subsequently found countervailable, that was included in the new
subsidy rate for the administrative review, the Department normally
will adjust the net countervailable subsidy rate determined in the
original investigation to reflect the change.
(d) Where the Department has conducted an administrative review of
the order, or suspension agreement, as applicable, and determined to
increase the net countervailable subsidy rate for any reason, including
as a result of the application of best information available or facts
available, the Department may adjust the net countervailable subsidy
rate determined in the original investigation to reflect the increase
in the rate.
(e) Where the Department has conducted an administrative review of
the order, or suspension agreement, as applicable, and found that a
program is not countervailable based on sections 771(5B)(B), (C), or
(D) of the Act, the Department normally will adjust the net
countervailable subsidy rate determined in the original investigation
to reflect the change. Also, where a subsidy is provided pursuant to a
program that has been notified in accordance with Article 8.3 of the
Subsidies Agreement (see section 771(5B)(E)(i) of the Act), the
Department normally will adjust the net countervailable subsidy rate
determined in the original investigation to reflect the change, unless
the Department determines to treat the subsidy as countervailable based
upon notification from the Trade Representative under section
771(5B)(E)(ii) of the Act.
(f) Where the Department has conducted an administrative review of
the order, or suspension agreement, as applicable, and found that a
program is not countervailable based on section 771(5B)(F) of the Act,
the Department normally will adjust the net countervailable subsidy
rate determined in the original investigation to reflect the change.
(g) Where the Department has not conducted an administrative review
of the order, or suspension agreement, as applicable, subsequent to the
investigation, except as provided in paragraph III.C, the Department
normally will not make adjustments to the net countervailable subsidy
rate determined in the original investigation.
4. Nature of the Countervailable Subsidy
Consistent with section 752(a)(6) of the Act, the Department will
provide information to the Commission concerning the nature of a
countervailable subsidy and whether the subsidy is a subsidy described
in Article 3 or Article 6.1 of the Subsidies Agreement.
C. Consideration of Other Factors
1. Programs Determined To Provide Countervailable Subsidies in Other
Investigations or Reviews
Section 752(b)(2)(A) of the Act provides that if the Department
determines that good cause is shown, the Department also will consider
programs determined to provide countervailable subsidies in other
investigations or reviews, but only to the extent that such programs--
(a) can potentially be used by the exporters or producers subject
to the sunset review, and
(b) did not exist at the time that the countervailing duty order
was issued or the suspension agreement accepted.
Therefore, the Department will consider such other programs in CVD
sunset reviews if the Department determines that good cause to consider
such other programs exists. The burden is on interested parties to
provide information or evidence that would warrant consideration of the
subsidy program in question. In addition, with respect to a sunset
review of a suspended investigation, where the Department determines
that good cause exists, the Department normally will conduct the sunset
review consistent with its practice of examining likelihood under
section 751(a) of the Act.
2. Programs Newly Alleged To Provide Countervailable Subsidies
Section 752(b)(2)(B) of the Act provides that if the Department
determines that good cause is shown, the Department also will consider
programs newly alleged to provide countervailable subsidies, but only
to
[[Page 18877]]
the extent that the Department makes an affirmative countervailing duty
determination with respect to such programs and with respect to the
exporters or producers subject to the sunset review. The SAA at 889,
states that,
[S]ubsidy allegations normally should be made in the context of
[administrative] reviews * * *, and [the Department is not expected]
to entertain frivolous allegations in . . . [sunset] reviews.
However, where there have been no recent [administrative] reviews or
where the alleged countervailable subsidy program came into
existence after the most recently completed [administrative] review,
[the Department] may consider new subsidy allegations in the context
of a * * * [sunset] review.
Therefore, the Department will consider programs newly alleged to
provide countervailable subsidies if the Department determines that
good cause to consider such programs exists. Furthermore, the
Department normally will consider a new subsidy allegation in the
context of a sunset review only where information on such program was
not reasonably available to domestic interested parties during the most
recently completed administrative review or the alleged countervailable
subsidy program came into existence after that administrative review.
The burden is on interested parties to provide information or evidence
that would warrant consideration of the subsidy program in question. In
addition, with respect to a sunset review of a suspended investigation,
where the Department determines that good cause exists, the Department
normally will conduct the sunset review consistent with its practice of
examining likelihood under section 751(a) of the Act.
[FR Doc. 98-10039 Filed 4-15-98; 8:45 am]
BILLING CODE 3510-DS-P
