[Federal Register Volume 64, Number 122 (Friday, June 25, 1999)]
[Notices]
[Pages 34204-34209]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-16249]
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DEPARTMENT OF COMMERCE
International Trade Administration
[C-351-831, C-560-808, C-549-815, C-307-816]
Notice of Initiation of Countervailing Duty Investigations:
Certain Cold-Rolled Flat-Rolled Carbon-Quality Steel Products From
Brazil, Indonesia, Thailand, and Venezuela
AGENCY: Import Administration, International Trade Administration,
Department of Commerce
EFFECTIVE DATE: June 25, 1999.
FOR FURTHER INFORMATION CONTACT: Dana Mermelstein or Javier Barrientos
(Brazil), at (202) 482-2786; Rosa Jeong (Indonesia), at (202) 482-3853;
Eva Temkin (Thailand), at (202) 482-1167; and Dana Mermelstein or Sean
Carey (Venezuela), at (202) 482-2786, Import Administration, U.S.
Department of Commerce, Room 1870, 14th Street and Constitution Avenue,
N.W., Washington, D.C. 20230.
INITIATION OF INVESTIGATIONS:
The Applicable Statute and Regulations
Unless otherwise indicated, all citations to the statute are
references to the provisions effective January 1, 1995, the effective
date of the amendments made to the Tariff Act of 1930 (the Act) by the
Uruguay Round Agreements Act (URAA). In addition, unless otherwise
indicated, all citations to the Department's regulations are to the
regulations codified at 19 C.F.R. Part 351 (1998) and to the
substantive countervailing duty regulations published in the Federal
Register on November 25, 1998 (63 FR 65348).
The Petitions
On June 2, 1999, the Department of Commerce (the Department)
received petitions filed in proper form on behalf of Bethlehem Steel
Corporation, Gulf States Steel, Inc., Ispat Inland, Inc., LTV Steel
Co., Inc., National Steel Corporation, Steel Dynamics, Inc., U.S. Steel
Group, a Unit of USX Corporation, Weirton Steel Corporation, and United
Steelworkers of America, (collectively, ``the petitioners''). On June
8, 1999, the Independent Steelworkers Union joined as a co-petitioner.
Supplements to the petitions were filed on June 8, 10, 11, 14, and 15,
1999.
In accordance with section 702(b)(1) of the Act, petitioners allege
that manufacturers, producers, or exporters of certain cold-rolled
flat-rolled carbon-quality steel products (cold-rolled or subject
merchandise) in Brazil, Indonesia, Thailand, and Venezuela receive
countervailable subsidies within the meaning of section 701 of the Act.
Petitioners also allege that ``critical circumstances'' exist within
the meaning of section 703(e) of the Act, with respect to imports of
subject merchandise from Thailand and Venezuela.
The Department finds that petitioners are interested parties as
defined under sections 771(9)(C) and (D) of the Act, and have filed the
petitions on behalf of the domestic industry. The petitioners have
demonstrated sufficient industry support with respect to each of the
countervailing duty investigations, which they are requesting the
Department to initiate (see Determination of Industry Support for the
Petitions below).
Scope of the Investigations
For purposes of these investigations, the products covered are
certain cold-rolled (cold-reduced) flat-rolled carbon-quality steel
products, neither clad, plated, nor coated with metal, but whether or
not annealed, painted, varnished, or coated with plastics or other non-
metallic substances, both in coils, 0.5 inch wide or wider, (whether or
not in successively superimposed layers and/or otherwise coiled, such
as spirally oscillated coils), and also in straight lengths, which, if
less than 4.75 mm in thickness having a width that is 0.5 inch or
greater and that measures at least 10 times the thickness; or, if of a
thickness of 4.75 mm or more, having a width exceeding 150 mm and
measuring at least twice the thickness. The products described above
may be rectangular, square, circular or other shape and include
products of either rectangular or non-rectangular cross-section where
such cross-section is achieved subsequent to the rolling process (i.e.,
products which have been ``worked after rolling'')--for example,
products which have been beveled or rounded at the edges.
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 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. HSLA steels are recognized as steels with
micro-alloying
[[Page 34205]]
levels of elements such as chromium, copper, niobium, titanium,
vanadium, and molybdenum. Motor lamination steels contain micro-
alloying levels of elements such as silicon and aluminum.
Steel products included in the scope of these investigations,
regardless of definitions in the Harmonized Tariff Schedules of the
United States (``HTSUS''), 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
2.25 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
0.10 percent of molybdenum, or
0.10 percent of niobium (also called columbium), or
0.15 percent of vanadium, or
0.15 percent of zirconium
All products that meet the written physical description, and in
which the chemistry quantities do not exceed any one of the noted
element levels listed above, are within the scope of these
investigations unless specifically excluded. The following products, by
way of example, are outside and/or specifically excluded from the scope
of these investigations:
SAE grades (formerly also called AISI grades) above 2300;
Ball bearing steels, as defined in the HTSUS;
Tool steels, as defined in the HTSUS;
Silico-manganese steel, as defined in the HTSUS;
Silicon-electrical steels, as defined in the HTSUS, that
are grain-oriented;
Silicon-electrical steels, as defined in the HTSUS, that
are not grain-oriented and that have a silicon level exceeding 2.25
percent;
All products (proprietary or otherwise) based on an alloy
ASTM specification (sample specifications: ASTM A506, A507).
The merchandise subject to these investigations is typically
classified in the HTSUS at subheadings: 7209.15.0000, 7209.16.0030,
7209.16.0060, 7209.16.0090, 7209.17.0030, 7209.17.0060, 7209.17.0090,
7209.18.1530, 7209.18.1560, 7209.18.2510, 7209.18.2550, 7209.18.6000.
7209.25.0000, 7209.26.0000, 7209.27.0000, 7209.28.0000, 7209.90.0000,
7210.70.3000, 7210.90.9000, 7211.23.1500, 7211.23.2000, 7211.23.3000,
7211.23.4500, 7211.23.6030, 7211.23.6060, 7211.23.6075, 7211.23.6085,
7211.29.2030, 7211.29.2090, 7211.29.4500, 7211.29.6030, 7211.29.6080,
7211.90.0000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 7225.19.0000,
7225.50.6000, 7225.50.7000, 7225.50.8010, 7225.50.8015, 7225.50.8085,
7225.99.0090, 7226.19.1000, 7226.19.9000, 7226.92.5000, 7226.92.7050,
7226.92.8050, and 7226.99.0000.
Although the HTSUS subheadings are provided for convenience and
U.S. Customs Service (``U.S. Customs'') purposes, the written
description of the merchandise under investigation is dispositive.
During our review of the petition, we discussed the scope with the
petitioners to ensure that the scope in the petition accurately
reflects the product for which the domestic industry is seeking relief.
Moreover, as discussed in the preamble to the Department's regulations
(62 FR 27323), we are setting aside a period for parties to raise
issues regarding product coverage. In particular, we seek comments on
the specific levels of alloying elements set out in the description
above, the clarity of grades and specifications excluded by example
from the scope, and the physical and chemical description of the
product coverage. The Department encourages all parties to submit such
comments by July 7, 1999. Comments should be addressed to Import
Administration's Central Records Unit at Room 1870, U.S. Department of
Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C.
20230. The period of scope consultations is intended to provide the
Department with ample opportunity to consider all comments and consult
with parties prior to the issuance of the preliminary determination.
Consultations
Pursuant to section 702(b)(4)(A)(ii) of the Act, the Department
invited representatives of the relevant foreign governments for
consultations with respect to the petitions filed. On June 16, 1999,
the Department held consultations with representatives of the Royal
Thai Government (RTG). Also on June 16, 1999, the Department held
consultations with representatives of the Government of Brazil (GOB).
On June 18, 1999, the Department held consultations with
representatives of the Government of Venezuela (GOV). See the June 21,
1999, memoranda to the file regarding these consultations (public
documents on file in the Central Records Unit of the Department of
Commerce, Room B-099).
Determination of Industry Support for the Petition
Section 732(b)(1) of the Act requires that a petition be filed on
behalf of the domestic industry. Section 732(c)(4)(A) of the Act
provides that a petition meets this requirement if the domestic
producers or workers who support the petition account for: (1) At least
25 percent of the total production of the domestic like product; and
(2) more than 50 percent of the production of the domestic like product
produced by that portion of the industry expressing support for, or
opposition to, the petition.
Section 771(4)(A) of the Act defines the ``industry'' as the
producers of a domestic like product. Thus, to determine whether the
petition has the requisite industry support, the statute directs the
Department to look to producers and workers who produce the domestic
like product. The International Trade Commission (``ITC''), which is
responsible for determining whether ``the domestic industry'' has been
injured, must also determine what constitutes a domestic like product
in order to define the industry. While both the Department and the ITC
must apply the same statutory definition regarding the domestic like
product (section 771(10) of the Act), they do so for different purposes
and pursuant to separate and distinct authority. In addition, the
Department's determination is subject to limitations of time and
information. Although this may result in different definitions of the
like product, such differences do not render the decision of either
agency contrary to the law.1
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\1\ See Algoma Steel Corp. Ltd., v. United States, 688 F. Supp.
639, 642-44 (CIT 1988); High Information Content Flat Panel Displays
and Display Glass from Japan: Final Determination; Rescission of
Investigation and Partial Dismissal of Petition, 56 FR 32376, 32380-
81 (July 16, 1991).
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Section 771(10) of the Act defines the domestic like product as ``a
product that is like, or in the absence of like, most similar in
characteristics and uses with, the article subject to an investigation
under this title.'' Thus, the reference point from which the domestic
like product analysis begins is ``the article subject to an
investigation,'' i.e., the class or kind of merchandise to be
investigated, which normally will be the scope as defined in the
petition.
[[Page 34206]]
The domestic like product referred to in the petitions is the
single domestic like product defined in the ``Scope of Investigation''
section, above. The Department has no basis on the record to find the
petitioners' definition of the domestic like product to be inaccurate.
The Department, therefore, has adopted the domestic like product
definition set forth in the petitions.
Moreover, the Department has determined that the petitions (and
subsequent amendments) and supplemental information obtained through
the Department's research, contain adequate evidence of industry
support; therefore, polling is unnecessary (see Attachment to the
Initiation Checklist, Re: Industry Support, June 21, 1999). For all
countries, petitioners established industry support representing over
50 percent of total production of the domestic like product.
Accordingly, the Department determines that these petitions are filed
on behalf of the domestic industry within the meaning of section
732(b)(1) of the Act.
Injury Test
Because Brazil, Indonesia, Thailand, and Venezuela are ``Subsidies
Agreement Countries'' within the meaning of section 701(b) of the Act,
section 701(a)(2) applies to these investigations. Accordingly, the ITC
must determine whether imports of the subject merchandise from these
countries materially injure, or threaten material injury to, a U.S.
industry.
In our consultations with the Government of Venezuela , the GOV
stated that Article 27.10(b) of the SCM Agreement requires that the
Department decline to initiate a countervailing duty investigation of
certain cold-rolled carbon steel flat products from Venezuela or to
terminate any countervailing duty investigation, if initiated. The GOV
noted that the volume of imports as described in the petition does not
reach the thresholds required by Article 27(10)(b): the volume of
imports of the subject merchandise from Venezuela is less than four
percent of total U.S. imports of the like product, and, when aggregated
with imports from the other developing countries named in the petition
whose individual exports constitute less than four percent of total
imports (Thailand and Indonesia), less than nine percent of total U.S.
imports (by volume) of the like product. Article 27.10(b) is given
effect by Section 771(24)(B) of the Act, which directs the
International Trade Commission to apply a particular standard to
developing countries' imports when considering whether those imports
are ``negligible.'' Thus, the applicability of Article 27(10)(b) will
be properly considered by the International Trade Commission during its
investigation pursuant to section 703(a) of the Act. The ITC is
scheduled to make its preliminary determination by July 16, 1999.
Allegations and Evidence of Material Injury and Causation
The petitioners allege that the U.S. industry producing the
domestic like product is being materially injured, and is threatened
with material injury, by reason of the individual and cumulated
subsidized imports of the subject merchandise. The petitioners
explained that the industry's injured condition is evident in the
declining trends in net operating profits, net sales volumes, profit-
to-sales ratios, and industry employment level. The allegations of
injury and causation are supported by relevant evidence including
business proprietary data from the petitioning firms and U.S. Customs
import data. The Department assessed the allegations and supporting
evidence regarding material injury and causation, and determined that
these allegations are supported by accurate and adequate evidence and
meet the statutory requirements for initiation. See the June 21, 1999,
memoranda to the file (for each country) regarding the initiation of
each investigation (public versions on file in the Central Records Unit
of the Department of Commerce, Room B-099).
Section 702(b) of the Act requires the Department to initiate a
countervailing duty proceeding whenever an interested party files a
petition, on behalf of an industry, that (1) alleges the elements
necessary for an imposition of a duty under section 701(a), and (2) is
accompanied by information reasonably available to petitioners
supporting the allegations.
Initiation of Countervailing Duty Investigations
The Department has examined the petitions on certain cold-rolled
flat-rolled carbon-quality steel products from Brazil, Indonesia,
Thailand, and Venezuela, and found that they comply with the
requirements of section 702(b) of the Act. Therefore, in accordance
with section 702(b) of the Act, we are initiating countervailing duty
investigations to determine whether manufacturers, producers, or
exporters of cold-rolled from these countries receive subsidies. See
the June 21, 1999, memoranda to the file (for each country) regarding
the initiation of each investigation (public documents on file in the
Central Records Unit of the Department of Commerce, Room B-099). We
will also make a determination as to whether critical circumstances
exist with respect to the subject merchandise from Thailand and
Venezuela no later than the date of our preliminary determination.
A. Brazil
We are including in our investigation the following programs
alleged in the petition to have provided countervailable subsidies to
producers and exporters of the subject merchandise in Brazil:
1. GOB Equity Infusions
a. Pre-1992 Equity Infusions
b. GOB Equity Infusions to Companhia Siderurgica Paulista (COSIPA)
in 1992 and 1993
c. GOB Equity Infusion to Companhia Siderugica Nacional (CSN) in
1992
2. GOB Tax Deferrals
a. COFINS, IPI, Social Contribution, Finsocial, PIS and IRPJ
Arrears to the National Tax Authority;
b. INSS and FNDE Arrears to the Federal Social Security
Administration;
c. ICMS Arrears to the State of Sao Paulo;
d. IPTU Arrears to the City of Cubatao.
Based of the information contained in the petition, we are also
investigating whether COSIPA was uncreditworthy in the years from 1984
to 1989 and from 1991 to 1993, whether CSN was uncreditworthy in the
years from 1984 to 1992, and whether Usinas Siderugicas de Minas Gerais
(USIMINAS) was uncreditworthy in the years from 1984 to 1988. Further,
we will investigate whether the producers of subject merchandise were
unequityworthy to the extent that they received government equity
infusions.
B. Indonesia
We are including in our investigation the following programs
alleged in the petition to have provided countervailable subsidies to
producers and exporters of the subject merchandise in Indonesia:
1. 1995 Equity Infusion to PT Krakatau Steel (Krakatau).
2. Pre-1993 Equity Infusions to Krakatau.
3. Equity Infusions to PT Cold-Rolled Mill Indonesia (CRMI).
4. Two-Step Loan.
5. Bank of Indonesia Rediscount Loans.
6. Reduction in Electricity Tariffs.
Based in the information in the petition, we are also investigating
whether
[[Page 34207]]
Krakatau was uncreditworthy in 1995, whether Krakatau was
unequityworthy during the years from 1988 to 1992, and in 1995, and
whether CRMI was unequityworthy in 1989 and 1990.
C. Thailand
We are including in our investigation the following programs
alleged in the petition to have provided countervailable subsidies to
producers and exporters of the subject merchandise in Thailand:
1. Duty Exemptions on Imports of Raw and Essential Materials Under
Section 30 of the Investment Promotion Act (IPA).
2. Duty Exemption on Imports of Machinery Under IPA Section 28.
3. Exemptions from VAT Under Section 21(4) of the VAT Act.
4. Corporate Income Tax Exemptions Under IPA Section 31.
5. Tax Benefits from Revaluation.
6. Additional Tax Deductions Under IPA Section 35.
7. Loan Guarantees on 1996 Loan to Thai Cold-rolled Steel Sheet Plc
(TCRSS).
8. Subsidy on the 1996 Loan from RTG-Banks and Commercial Thai
Banks.
9. Loans from the IFCT and the Thai Export-Import Bank.
10. Investment Inducements.
11. Loans from Banks Owned, Controlled, or Influenced by the RTG.
12. Packing Credits.
13. Pre-Shipment Finance Facilities.
14. Export Insurance Program.
15. Trust Receipt Financing for Raw Materials.
16. Tax Certificates for Export.
17. Import Duty Exemptions for Industrial Estates.
18. Export Processing Zone Incentives.
19. IPA Subsidies for Building and Operating the Prachuap Port.
20. Subsidized Waterworks from Eastern Water.
21. Plant Construction Subsidies for Sahaviriya's Power Plant.
Based on the information in the petition, we are also investigating
whether TCRSS was uncreditworthy during the period from 1996 to the
POI. Petitioners also alleged that SUS was uncreditworthy and
unequityworthy during this period. However, no evidence was provided to
substantiate this allegation. Thus, we are not initiating an
investigation of these allegations.
We are not including in our investigation the following programs
alleged to be benefitting producers and exporters of the subject
merchandise in Thailand:
1. Subsidized Transport, Electricity, and Water Charges From the BoI
Petitioners allege that, since 1995, the Board of Investment (BoI)
has awarded projects of certain industries customized incentives for
investments of particular strategic importance. In particular,
petitioners allege that since the BoI has bestowed benefits upon the
Thai auto industry, and in light of the BoI's history of promoting the
steel industry, the Department should investigate whether the BOI is
also offering exclusive transport, electricity, and water discounts to
the steel industry. However, petitioners have not provided information
showing that the Thai steel industry is eligible for any benefits in
this capacity. Therefore, we are not initiating an investigation of
this subsidy allegation.
2. Regional Electricity Subsidies From EGAT
The Petitioners assert that the RTG is providing a countervailable
subsidy to producers of subject merchandise through the pricing policy
of the state-owned electric company. Petitioners argue that because the
Thai electric company (EGAT) charges all customers of the same type the
same rate for electricity, regardless of where they live or operate,
EGAT is subsidizing electricity users (including TCRSS) in regions with
much higher operating costs.
We are not initiating an investigation into this subsidy
allegation. Petitioners have not provided information to support their
allegation that RTG charged TCRSS electricity rates for less than
adequate remuneration.
3. Fuel Subsidies for SSI's On-Site Power Plant
Petitioners allege that PTT, Thailand's national oil company, which
has a monopoly on petroleum based fuels, normally charges monopoly
premiums but charged international market level prices to SSI.
Petitioners allege that TCRSS would receive a benefit if it pays for
fuel at less than adequate remuneration. Thus, petitioners argue that
the Department should investigate whether SSI's Bangsaphan steel
complex has its own generation facility, what price that facility pays
for fuel, and what amounts TCRSS pays for use of electricity generated
from the plant. However, the information in the petition does not
support the claim that PTT charges monopoly premiums to all users of
petroleum based fuels in Thailand. Because petitioners have failed to
substantiate their allegation of discriminatory pricing in favor of
TCRSS, we are not initiating an investigation of this subsidy
allegation.
D. Venezuela
We are including in our investigation the following programs
alleged in the petition to have provided countervailable subsidies to
producers and exporters of the subject merchandise in Venezuela:
1. Government Equity Infusions into Siderurgica del Orinoco C.A.
(SIDOR), Conversion of SIDOR'S Debt to Equity.
2. Dividend Advances from Hacienda.
3. Debt Assistance as Part of the Privatization of SIDOR.
4. GOV Provision of Iron Ore for Less than Adequate Remuneration.
5. Export Bond Program.
6. FINEXPO.
7. Government of Venezuela Port Concession.
8. Preferential Tax Incentives under Decree 1477.
9. 1988 Grant from the National Executive of the Government of
Venezuela.
10. Discounted Prepayment of SIDOR Debt.
Based on the information in the petition, we are also investigating
whether SIDOR was uncreditworthy during the period from 1979 to 1991,
with the exception of 1988, and during the period from 1995 to 1998.
Further, we will investigate whether SIDOR was unequityworthy to the
extent that it received government equity infusions.
We are not including in our investigation at this time the
following program alleged to be benefitting producers and exporters of
the subject merchandise in Venezuela:
1. Provision of Electricity, Water, Gas and Other Fuels for Less Than
Adequate Remuneration
Petitioners allege that the GOV provides to SIDOR electricity,
water, gas, and other fuels, for less than adequate remuneration.
Petitioners cite to an August 1997, press report which states ``the
contract guarantees the winning consortium the necessary supply of
electricity, water, and gas to operate the company.'' Petitioners also
cite to the Final Affirmative Countervailing Duty Determination;
Ferrosilicon from Venezuela; and Countervailing Duty Order for Certain
Ferrosilicon from Venezuela, 58 FR 27539 (May 10, 1993) (Ferrosilicon
from Venezuela), in which the Department found countervailable benefits
from the preferential government provision of electricity. Petitioners
contest the Department's finding in Final Affirmative Countervailing
Duty Determination; Steel Wire Rod From
[[Page 34208]]
Venezuela, 62 FR 55014 (October 22, 1997) (Steel Wire Rod) that
electricity was not provided for less than adequate remuneration.
Further, in petitioners' view, SIDOR's privatization provides new
information which warrants the reexamination of the GOV provision of
electricity, and the examination of the GOV provision of water and gas.
Notwithstanding the Department's negative determination with
respect to the provision of electricity for less than adequate
remuneration in Steel Wire Rod (62 FR at 55022), petitioners have
failed to provide adequate information that electricity, water and gas
are being provided to SIDOR for less than adequate remuneration. We
disagree with petitioners that a press report of the GOV's intent to
continue providing these utilities to SIDOR after privatization
suggests that those utilities are being provided for less than adequate
remuneration. Petitioners have not provided any information about
pricing policies or cost data that would indicate that the rates that
SIDOR pays are not based upon market principles. Neither have
petitioners provided any new information which would warrant
reexamining our finding in Steel Wire Rod. Thus, we are not including
this program in our initiation.
2. GOV-Induced Contribution
Petitioners alleged that, as part of the privatization, the
Amazonia Consortium was required to invest $300 million in plant
modernization, and $74 million in environmental control and clean-up.
SIDOR's financial statement indicates that the Consortium committed to
make a minimum investment of $300 million within three years.
Petitioners alleged that this committed investment constitutes revenue
foregone by the GOV in its privatization of SIDOR. Petitioners also
contended that in the absence of a GOV-induced equity infusion, the
benefit may have taken the form of a direct reimbursement to, or credit
against the purchase price.
While petitioners have documented the committed investment element
of SIDOR's privatization, a simple assertion that the investment was a
condition of SIDOR's sale is insufficient to demonstrate the existence
of a direct or indirect financial contribution by the GOV to SIDOR.
Thus, we are not investigating the investment commitments which were
made as part of the privatization of SIDOR.
3. Grant Given Through the Reduction of Sale Price
Petitioners alleged that SIDOR's purchasers received a discount on
the purchase price of SIDOR in return for agreeing to a one-year worker
layoff prohibition and a two-year retraining program. Petitioners
alleged that this discount constitutes revenue foregone by the GOV in
its sale of SIDOR and it confers a benefit which is specific to SIDOR.
While petitioners have documented their allegation that the terms
of SIDOR's sale may have included a payment of cash and commitments
with respect to employee retention and worker retraining, they have not
provided evidence that demonstrates that the terms give rise to a
direct or indirect financial contribution by the GOV to SIDOR. Thus, we
are not investigating whether the purchase price was discounted in
exchange for other commitments by SIDOR's purchasers.
Petitioners have also alleged that SIDOR was uncreditworthy from
1993 to 1998 and unequityworthy from 1996 to 1998. However, petitioners
did not provide information to indicate that the company was
uncreditworthy or unequityworthy during these years. Thus, we are not
investigating these allegations.
Critical Circumstances
The petitioners have alleged that critical circumstances exist with
regard to imports of cold-rolled steel from Thailand and Venezuela, and
have supported their allegations with the following information.
As discussed above, petitioners have provided documentation
supporting allegations of countervailable subsidies which are
inconsistent with the Subsidies Agreement, including export subsidies
that are similar to those contained in Annex I of the Subsidies
Agreement.
The petitioners also have alleged that imports from Thailand and
Venezuela have been massive over a relatively short period. Alleging
that there was sufficient pre-filing notice of these countervailing
duty petitions, the petitioners contend that the Department should
compare imports during October-December 1998 to imports during July-
September 1998 for purposes of this determination. Specifically,
petitioners supported this allegation with copies of news articles
discussing the likelihood of filing unfair trade complaints against
producers of cold-rolled steel. For example, petitioners cite to an
international trade publication in September 1998 that carried an
article discussing the likelihood that U.S. steel producers would file
unfair trade cases related to cold-rolled steel. In addition,
petitioners cite to comments made in September 1998 by the Chairman of
Bethlehem Steel Corporation, who discussed the rise of cold-rolled
steel imports and the possibility that trade remedy cases would be
filed. The Department concludes that this level of press coverage
provided foreign producers of cold-rolled steel with prior knowledge of
pending unfair trade investigations. Therefore, the Department
considered import statistics contained in the petition for the periods
October-December 1998 and July-September 1998. Based on this
comparison, imports of cold-rolled steel from Thailand increased by 114
percent, and imports of cold-rolled steel from Venezuela increased by
44 percent.
Although the ITC has not yet made a preliminary decision with
respect to injury, petitioners note that in the past the Department has
also considered the extent of the increase in the volume of imports of
the subject merchandise as one indicator of whether a reasonable basis
exists to impute knowledge that material injury was likely. In the
cases involving Thailand, and Venezuela, the increases in imports were
more than double the amount considered ``massive.'' Taking into
consideration the foregoing, we find that the petitioners have alleged
the elements of critical circumstances and supported them with
information reasonably available for purposes of initiating a critical
circumstances inquiry. For these reasons, we will investigate this
matter further and will make a preliminary determination at the
appropriate time, in accordance with section 735(e)(1) of the Act and
Department practice (see Policy Bulletin 98/4 (63 FR 55364, October 15,
1998)).
Distribution of Copies of the Petitions
In accordance with section 702(b)(4)(A)(i) of the Act, copies of
the public version of the petition have been provided to the
governmental representatives of Brazil, Indonesia, Thailand, and
Venezuela. We will attempt to provide copies of the public version of
the petition to all the exporters named in the petition, as provided
for under section 351.203(c)(2) of the Department's regulations.
ITC Notification
Pursuant to section 702(d) of the Act, we have notified the ITC of
these initiations.
Preliminary Determination by the ITC
The ITC will determine by July 16, 1999, whether there is a
reasonable indication that an industry in the United States is
materially injured, or is threatened with material injury, by
[[Page 34209]]
reason of imports of certain cold-rolled flat-rolled carbon-quality
steel products from Brazil, Indonesia, Thailand, and Venezuela. A
negative ITC determination for any country will result in the
investigation being terminated with respect to that country; otherwise,
the investigations will proceed according to statutory and regulatory
time limits.
This notice is published pursuant to section 777(i) of the Act.
Date: June 21, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-16249 Filed 6-24-99; 8:45 am]
BILLING CODE 3510-DS-P
