[Federal Register Volume 63, Number 163 (Monday, August 24, 1998)]
[Notices]
[Pages 45045-45048]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-22664]
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DEPARTMENT OF COMMERCE
International Trade Administration
[C-122-815]
Pure and Alloy Magnesium From Canada; Final Results of the Fifth
(1996) Countervailing Duty Administrative Reviews
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of final results of countervailing duty administrative
reviews.
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SUMMARY: On April 30, 1998, the Department of Commerce (the Department)
published in the Federal Register its preliminary results of the fifth
administrative reviews of the countervailing duty orders on pure and
alloy magnesium from Canada covering the period January 1, 1996 through
December 31, 1996 (see Pure Magnesium and Alloy Magnesium From Canada;
Preliminary Results of the Fifth Countervailing Duty Administrative
Reviews (Preliminary Results), 63 FR 23728). We have completed these
reviews and determine the net subsidy in each to be 2.78 percent ad
valorem for Norsk Hydro Canada, Inc. (NHCI). We will instruct the U.S.
Customs Service (Customs) to assess countervailing duties in this
amount.
EFFECTIVE DATE: August 24, 1998.
FOR FURTHER INFORMATION CONTACT: Marian Wells or Rosa Jeong, AD/CVD
Enforcement, Group 1, Office 1, Import Administration, International
Trade Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW, Washington, DC. 20230; telephone: (202) 482-
6309 or (202) 482-3853, respectively.
SUPPLEMENTARY INFORMATION:
Background
In accordance with 19 CFR 355.22(a), these reviews cover only those
producers or exporters of the subject merchandise for which reviews
were specifically requested. Accordingly, these reviews cover only
NHCI, a producer of the subject merchandise which exported pure and
alloy magnesium to the United States during the review period.
On April 30, 1998, the Department published in the Federal Register
the Preliminary Results of its fifth administrative reviews of the
countervailing duty orders on pure and alloy magnesium from Canada (63
FR 23728). We invited interested parties to comment on the Preliminary
Results. On June 1, 1998, case briefs were submitted by the Government
of Quebec (GOQ), and the petitioner, Magnesium Corporation of America
(MAGCORP). The GOQ subsequently filed a rebuttal brief on June 8, 1998.
The Department did not conduct a hearing for these reviews because none
of the interested parties requested one.
These reviews cover the period January 1, 1996 through December 31,
1996 (the period of review or POR). The reviews involve one company
(NHCI) and the following programs: Exemption from Payment of Water
Bills, Article 7 Grants from the Quebec Industrial Development
Corporation (SDI), St. Lawrence River Environment Technology
Development Program, Program for Export Market Development, the Export
Development Corporation, Canada-Quebec Subsidiary Agreement on the
Economic Development of the Regions of Quebec, Opportunities to
Stimulate Technology Programs, Development Assistance Program,
Industrial Feasibility Study Assistance Program, Export Promotion
Assistance Program, Creation of Scientific Jobs in Industries, Business
Investment Assistance Program, Business Financing Program, Research and
Innovation Activities Program, Export Assistance Program, Energy
Technologies Development Program, and Transportation Research and
Development Assistance Program.
Applicable Statute
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 (URAA), effective January 1, 1995 (the
Act). The Department is conducting this administrative review in
accordance with section 751(a) of the Act. References to
``Countervailing Duties: Notice of Proposed Rulemaking and Request for
Public Comments,'' (54 FR 23366, May 31, 1989) (``1989 Proposed
Regulations''), which have been withdrawn, are provided solely for
further explanation of the Department's countervailing duty practice.
Scope of the Reviews
The products covered by these reviews are shipments of pure and
alloy magnesium from Canada. Pure magnesium contains at least 99.8
percent magnesium by weight and is sold in various slab and ingot forms
and sizes. Magnesium alloys contain less than 99.8 percent magnesium by
weight with magnesium being the largest metallic element in the alloy
by weight, and are sold in various ingot and billet forms and sizes.
Pure and alloy magnesium are currently classifiable under subheadings
8104.11.0000 and 8104.19.0000, respectively, of the Harmonized Tariff
Schedule of the United States (HTSUS). Although the HTSUS subheadings
are provided for convenience and customs purposes, our written
description of the scope of this proceeding is dispositive.
Secondary and granular magnesium are not included in the scopes of
these orders. Our reasons for excluding granular magnesium are
summarized in the Preliminary Determination of Sales at Less Than Fair
Value: Pure and Alloy Magnesium From Canada (57 FR 6094, February 20,
1992).
[[Page 45046]]
Analysis of Programs
Based upon our analysis of the questionnaire responses and written
comments from the interested parties, we determine the following:
I. Programs Conferring Subsidies
A. Exemption from Payment of Water Bills
In the Preliminary Results, we found that this program conferred
countervailable benefits on the subject merchandise. Our analysis of
the comments submitted by the interested parties, summarized below, has
not led us to change our findings from the Preliminary Results. On this
basis, the net subsidy rate for this program is as follows:
------------------------------------------------------------------------
Rate
Manufacturer/exporter (percent)
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NHCI......................................................... 0.46
------------------------------------------------------------------------
B. Article 7 Grants from the Quebec Industrial Development Corporation
In the Preliminary Results, we found that this program conferred
countervailable benefits on the subject merchandise. Our analysis of
the comments submitted by the interested parties, summarized below, has
not led us to change our findings from the Preliminary Results. On this
basis, the net subsidy rate for this program is as follows:
------------------------------------------------------------------------
Rate
Manufacturer/exporter (percent)
------------------------------------------------------------------------
NHCI......................................................... 2.32
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II. Programs Found Not to be Used
In the Preliminary Results, we found that NHCI did not apply for or
receive benefits under the following programs:
St. Lawrence River Environment Technology Development
Program
Program for Export Market Development
Export Development Corporation
Canada-Quebec Subsidiary Agreement on the Economic
Development of the Regions of Quebec
Opportunities to Stimulate Technology Programs
Development Assistance Program
Industrial Feasibility Study Assistance Program
Export Promotion Assistance Program
Creation of Scientific Jobs in Industries
Business Investment Assistance Program
Business Financing Program
Research and Innovation Activities Program
Export Assistance Program
Energy Technologies Development Program
Transportation Research and Development Assistance
Program.
We received no comments on these programs from the interested
parties; therefore, we have not changed our findings from the
Preliminary Results.
Analysis of Comments
In its June 1, 1998 case brief, Magcorp affirmed all of the
Department's positions in the preliminary results of review.
Comment 1: Obligation of Department to Re-examine Specificity of
Article 7 Assistance
In the event the Department continues to treat the Article 7
assistance as a nonrecurring grant, the GOQ argues that the Department
must re-examine whether the assistance was specific. In particular, the
Department is obliged to evaluate, according to the GOQ, in each
administrative review the countervailability of a program previously
determined to be de facto specific, regardless of whether the parties
have provided new information. The Department may not rely, as it did
in the Preliminary Results, on a de facto specificity determination
made in the original investigations.
DOC Position
Just as it does not revisit prior determinations that a program is
not specific, it is the Department's policy not to revisit prior
determinations that a program is specific, absent the presentation of
new facts or evidence (see e.g., Carbon Steel Wire Rod From Saudi
Arabia; Final Results of Countervailing Duty Administrative Review and
Revocation of Countervailing Duty Order (Carbon Steel Wire Rod from
Saudi Arabia), 59 FR 58814 (November 15, 1994); Final Results of the
First Countervailing Duty Administrative Reviews: Pure Magnesium and
Alloy Magnesium From Canada (First Magnesium Reviews), 62 FR 13857
(March 24, 1997); Final Results of the Second Countervailing Duty
Administrative Reviews: Pure Magnesium and Alloy Magnesium From Canada
(Second Magnesium Reviews), 62 FR 48607 (September 16, 1997); and Final
Results of the Third Countervailing Duty Administrative Reviews: Pure
Magnesium and Alloy Magnesium From Canada (Third Magnesium Reviews), 62
FR 18749 (April 17, 1997)). In the present reviews, no new facts or
evidence have been presented which would lead us to question our
original specificity determination for the POI.
Comment 2: Alternative Methodology for Determining Specificity of
Article 7 Assistance
The GOQ continues to argue, as it has in previous reviews, that the
Department should take an entirely different approach to the question
of how to determine if a nonrecurring grant is disproportionately
large, and therefore, specific. Rather than base its analysis on the
entire amount of the grant at the time of bestowal, the GOQ maintains
that the Department must instead examine only the portion of the
benefit allocated--in accordance with the Department's standard
allocation methodology--to the POR. It is this amount, in relationship
to the portions of benefits allocated to the POR for all assistance
bestowed under the program to all other enterprises, that must be
determined to be disproportionate. Because the benefit attributable to
the POR is the subsidy at issue, it is that amount, according to the
GOQ, that must be found specific before it may be countervailed.
The GOQ also counters the Department's assertion in Final Results
of the Fourth Countervailing Duty Administrative Reviews: Pure
Magnesium and Alloy Magnesium From Canada (Fourth Magnesium Reviews),
62 FR 48812, 48814 (September 17, 1997) that the GOQ has not cited a
single determination by the Department or any other legal authority to
support its position. The GOQ asserts that it has cited to the sixth
administrative review of Live Swine from Canada: Final Results of
Countervailing Duty Administrative Review (Live Swine from Canada), 59
FR 12243, 12249 (March 16, 1994) as an example where the Department
reexamined the countervailability of benefits found to be de facto
specific in prior reviews.
DOC Position
As we have explained in previous final results (see First Magnesium
Reviews, Second Magnesium Reviews, and Third Magnesium Reviews), the
GOQ is confusing the determination of specificity with the measurement
of the subsidy.
The specificity determination and the measurement of the subsidy
are two separate and distinct processes. The question of whether a
nonrecurring grant is disproportionately large is based on an
examination of the entire amount of the grant at the time of bestowal.
If such a grant is found to be
[[Page 45047]]
disproportionately large, it is determined to be specific. (As a grant
specifically provided, it is also at this point that the statutory
requirements for countervailing the grant are met. See section 771(5)
of the Act.) The separate and distinct second step is the measurement
of the benefit. This step involves allocating portions of the grant
over time. It is these portions of the grant which then provide the
basis for the calculation of the ad valorem rate of subsidization. The
portions of subsidies allocated to periods of time using the
Department's standard allocation methodology are irrelevant to an
examination of the actual distribution of benefits by the granting
government at the time of bestowal.
The GOQ refers to the sixth review of the countervailing duty order
on Live Swine from Canada as demonstrating that the Department has, as
a matter of course, revisited its de facto specificity determinations
from one segment of a proceeding to another. We continue to believe
that the situation in the Magnesium reviews can be distinguished from
the situation in Live Swine from Canada. As explained in the First,
Second, and Third Magnesium Reviews the facts underlying our analyses
in Live Swine from Canada differ from the situation here. Because those
facts have not changed, we continue to make the identical distinction
in the current reviews. For a full discussion of the distinction made
between the revisiting specificity determinations in Live Swine from
Canada and the Magnesium case, see First Magnesium Reviews at 13861,
Second Magnesium Reviews at 48609, and Third Magnesium Reviews at
18753.)
Comment 3: Appropriate Time of Specificity Determination:
``Bestowal'' or Disbursement
The GOQ argues that although the Department concluded in the First
Magnesium Reviews and the Third Magnesium Reviews that the proper time
period for a specificity determination is the time of bestowal, the
Department did not examine specificity in the original period of
investigation (POI) at the time of bestowal. Rather, the Department
examined specificity at the time of approval of the funds. The GOQ
states that it is confused by the Department's policy to determine
specificity at a time when no funds have been provided to NHCI. The GOQ
argues that the time of bestowal for the purpose of a specificity
determination should refer to the time of actual disbursement of funds,
and should not refer to the time funds are approved by the granting
authority.
DOC Position
We disagree with the GOQ's assertion that the Department's
specificity analysis during the original investigations should have
been conducted based on the time of actual disbursement of funds. We
acknowledge that the specificity determination in the original
investigations was based on the action of the granting authority, i.e.,
the GOQ, at the time of approval. However, we note that the Department
uses the terms ``approval'' and ``bestowal'' interchangeably in this
context. The time of bestowal or approval is the appropriate basis for
the specificity determination because it most directly demonstrates
whether a government has limited the benefits bestowed upon an
enterprise or industry, or group thereof.
Comment 4: Relevance of New Information
The GOQ maintains that given the Department's responsibility to
make a finding of specificity and countervailability based on the
information relevant to the POR, the Department should consider any new
assistance provided by SDI since the end of the original POI. To this
end, the GOQ provided information on the Article 7 assistance extended
up to, and including, the POR in a submission dated January 15, 1997.
According to the GOQ, this new factual information was apparently
considered irrelevant information by the Department.
DOC Position
As stated above, the proper time period for a specificity
determination is the time of bestowal. Therefore, information submitted
by the GOQ concerning assistance that was provided subsequent to the
time of bestowal of the assistance granted to NHCI under Article 7 of
the SDI Act is not relevant to the specificity determination. The
remaining information presented by the GOQ on the Article 7 assistance
granted prior to and including the time of bestowal of NHCI's Article 7
benefits is nearly identical to that utilized by the Department in its
original specificity determination. Differences between the updated
information on Article 7 provided by the GOQ and information used in
the original specificity determination are sufficiently small so as not
to compromise the original specificity determination. Fourth Magnesium
Reviews at 48815.
Comment 5: Relevance of Article 9 Information
The GOQ argues that assistance under Article 9 should be included
in the Article 7 specificity analysis because Article 9 was the
predecessor of Article 7 and the provisions of Article 9 functioned
basically the same as those of Article 7.
DOC Position
We disagree. The GOQ did not provide any information which would
allow us to make a determination on whether Article 9 and Article 7
should be considered integrally linked or otherwise considered a single
program for purposes of our specificity analysis (see Section
355.43(b)(6) of the 1989 Proposed Regulations). Information on the
record in these proceedings with respect to Article 9 consists only of
a statement by the GOQ in its case brief that Article 9 was the
predecessor of Article 7. This is an insufficient basis to determine
that the two programs should be treated as one.
Final Results of Review
In accordance with 19 CFR 355.22(c)(4)(ii), we calculated an
individual subsidy rate for each producer/exporter subject to these
administrative reviews. For the period January 1, 1996 through December
31, 1996, we determine the net subsidy for NHCI to be 2.78 percent ad
valorem. We will instruct Customs to assess countervailing duties in
this amount for all entries of NHCI's merchandise during this period.
The Department will also instruct Customs to collect cash deposits of
estimated countervailing duties of 2.78 percent of the f.o.b. invoice
price on all shipments of subject merchandise from NHCI, entered, or
withdrawn from warehouse, for consumption on or after the date of
publication of the final results of these reviews.
Because the URAA replaced the general rule in favor of a country-
wide rate with a general rule in favor of individual rates for
investigated and reviewed companies, the procedures for establishing
countervailing duty rates, including those for non-reviewed companies,
are now essentially the same as those in antidumping cases, except as
provided for in section 777A(e)(2)(B) of the Act. Consequently, the
requested review will normally cover only those companies specifically
named (19 CFR 355.22(a)). Pursuant to 19 CFR 355.22(g), for all
companies for which a review was not requested, duties must be assessed
at the cash deposit rate, and cash deposits must continue to be
[[Page 45048]]
collected at the rate previously ordered. As such, the countervailing
duty cash deposit rate applicable to a company can no longer change,
except pursuant to a request for a review of that company. See Federal-
Mogul Corporation and The Torrington Company v. United States, 822 F.
Supp. 782 (CIT 1993) and Floral Trade Council v. United States, 822 F.
Supp. 766 (CIT 1993) (interpreting 19 CFR 353.22(e), the antidumping
regulation on automatic assessment, which is identical to 19 CFR
355.22(g)). Therefore, the cash deposit rates for all companies except
NHCI are unchanged by the results of these reviews.
We will instruct Customs to continue to collect cash deposits for
non-reviewed companies at the most recent company-specific or country-
wide rate applicable to the company, except from Timminco Limited
(which was excluded from the order in the original investigations).
Accordingly, the cash deposit rates that will be applied to non-
reviewed companies covered by these orders are those established in the
administrative reviews completed for the most recent POR, conducted
pursuant to the statutory provisions that were in effect prior to the
URAA amendments. See Fourth Magnesium Reviews. This rate shall apply to
all non-reviewed companies until a review of a company assigned this
rate is requested. In addition, countervailing duties will be assessed
on any entries during the period January 1, 1996 through December 31,
1996, for all non-reviewed companies at the cash deposit rates in
effect at the time of entry.
This notice serves as a reminder to parties subject to
administrative protective order (APO) of their responsibility
concerning the disposition of proprietary information disclosed under
APO in accordance with 19 CFR 355.34(d). Timely written notification of
return/destruction of APO materials or conversion to judicial
protective order is hereby requested. Failure to comply with the
regulations and the terms of an APO is a sanctionable violation.
These administrative reviews and notice are in accordance with
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)).
Dated: August 18, 1998.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 98-22664 Filed 8-21-98; 8:45 am]
BILLING CODE 3510-DS-P
