[Federal Register Volume 64, Number 165 (Thursday, August 26, 1999)]
[Notices]
[Pages 46646-46651]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-22197]
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DEPARTMENT OF COMMERCE
International Trade Administration
[C-201-505]
Preliminary Results of Expedited Sunset Review: Porcelain-on-
Steel Cooking Ware From Mexico
AGENCY: Import Administration, International Trade Administration, U.S.
Department of Commerce.
ACTION: Notice of Preliminary Results of Expedited Sunset Review:
Porcelain-on-Steel Cooking Ware from Mexico.
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SUMMARY: On February 1, 1999, the Department of Commerce (``the
Department'') initiated a sunset review of the countervailing duty
order on porcelain-on-steel cooking ware from Mexico pursuant to
section 751(c) of the Tariff Act of 1930, as amended (``the Act''). On
the basis of a notice of intent to participate filed on behalf of
domestic interested parties and adequate substantive responses filed on
behalf of domestic and respondent interested parties, the Department is
conducting a full sunset review. As a result of this review, the
Department preliminarily determines that revocation of the
countervailing duty order would not be likely to lead to continuation
or recurrence of a countervailing subsidy.
For Further Information Contact: Martha V. Douthit or Melissa G.
Skinner, Office of Policy for Import Administration, International
Trade Administration, U.S. Department of Commerce, 14th St. &
Constitution Ave., NW., Washington, D.C. 20230; telephone (202) 482-
3207 or (202) 482-1560, respectively.
Effective Date: August 26, 1999.
Statute and Regulations
This review is being conducted pursuant to sections 751(c) and 752
of the Act. The Department's procedures for the conduct of sunset
reviews are set forth in Procedures for Conducting Five-year
(``Sunset'') Reviews of Antidumping and Countervailing Duty Orders, 63
FR 13516 (March 20, 1998) (``Sunset Regulations''). Guidance on
methodological or analytical issues relevant to the Department's
conduct of sunset reviews is set forth in the Department's Policy
Bulletin 98:3--Policies Regarding the Conduct of Five-year (``Sunset'')
Reviews of Antidumping and Countervailing Duty Orders; Policy Bulletin,
63 FR 18871 (April 16, 1998) (``Sunset Policy Bulletin'').
[[Page 46647]]
Scope
Imports covered by this order are shipments of porcelain-on-steel
(``POS'') cooking ware from Mexico, except teakettles, which do not
have self-contained electric heating elements. All of the foregoing are
constructed of steel, and are enameled or glazed with vitreous glasses.
This merchandise is classifiable under item number 7323.94.0020 of the
Harmonized Tariff Schedule (HTSUS). The HTS item number is provided for
convenience and customs purposes. The written description remains
dispositive.
History of the Order
On October 10, 1986, the Department issued a final affirmative
countervailing duty determination on POS cooking ware from
Mexico.1 During the investigation, the Department reviewed
two companies, Cinsa, S.A. (``Cinsa'') and Troqueles y Esmaltes, S.A.
(``TRES'').2 The Department calculated a country-wide
estimated net subsidy of 1.97 percent ad valorem based on two programs
found to confer subsidies--the Fund for the Promotion of Exportation of
Mexican Manufactured Products (FOMEX), 1.69 percent ad valorem, and the
Fund for Industrial Development (FONEI), 0.28 percent ad valorem. As a
result of a program-wide change in the FOMEX program, which occurred
prior to the preliminary determination, the Department adjusted the
duty deposit rate to 1.90 percent ad valorem.3 On December
12, 1986, the countervailing duty order on POS cooking ware from Mexico
was published in the Federal Register.4
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\1\ See Final Affirmative Countervailing Duty Determination;
Porcelain-on-Steel Cooking Ware from Mexico, Mexico, 51 FR 36447
(October 10, 1986).
\2\ TRES subsequently became Acero Porcelanizada, S.A.
(``APSA'').
\3\ The duty deposit rate attributable to FOMEX was reduced to
1.62 percent ad valorem.
\4\ See Porcelain-on-Steel Cooking Ware from Mexico
Countervailing Duty Order; 51 FR 44827 (December 12, 1986).
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Since the issuance of the countervailing duty order on POS cooking
ware from Mexico, the Department has conducted several administrative
reviews.5 In the administrative review covering January 1,
1990 through December 31, 1990, the Department found that the FOMEX
program was eliminated by decree published in the Diario Official on
December 30, 1989. Additionally, the Department found that effective
January 1, 1990, the Mexican Treasury Department transferred the FOMEX
trust to the Banco Nacional de Comercio Exterior, S.N.A.
(``Bancomext'') upon the elimination of the FOMEX loan program. The
Department found that the Bancomext program operates much like its
predecessor, FOMEX, and provided countervailable export subsidies. In
the same review, the Department found that the PITEX program (the
Program for Temporary Importation of Products used in the Production of
Exports) provided a countervailable export subsidy. For the first time,
the Department issued company-specific subsidy rates. (See 57 FR 562
(January 7, 1992) and 56 FR 48163 (September 24, 1991).) In the
administrative review covering the period January 1, 1993 through
December 31, 1993, the Department stated that FONEI, which provided
long-term loans at below-market rates, was a GOM trust administered by
the Banco de Mexico until its dissolution on December 31, 1989. (See 60
FR 39360 (August 2, 1995) and 60 FR 53165 (October 12, 1995).)
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\5\ See Porcelain-on-Steel Cooking Ware from Mexico; Final
Results of Countervailing Duty Administrative Review, 54 FR 13093
(March 30, 1989), Porcelain-on-Steel Cooking Ware from Mexico; Final
Results of Countervailing Duty Administrative Review, 55 FR 6666
(February 26, 1990), Porcelain-on-Steel Cooking Ware from Mexico;
Final Results of Countervailing Duty Administrative Review, 56 FR
2064 (June 6, 1991), Porcelain-on-Steel Cooking Ware from Mexico;
Final Results of Countervailing Duty Administrative Review, 57 FR
562 (January 7, 1992), Porcelain-on-Steel Cooking Ware from Mexico;
Final Results of Countervailing Duty Administrative Review, 60 FR
53165 (October 12. 1995), Porcelain-on-Steel Cooking Ware from
Mexico; Final Results of Countervailing Duty Administrative Review,
60 FR 62391 (December 6, 1995), and Porcelain-on-Steel Cooking Ware
from Mexico; Final Results of Countervailing Duty Administrative
Review, 61 FR 10726 (March 15, 1996). Twenty-two programs were made
available to manufacturers/producers/exporters of POS cooking ware
from Mexico since the countervailing duty order was placed in
effect. See the POS cooking ware from Mexico case information on the
Department's web site, http://www.ita.doc.gov/import__admin/records/
sunset/feb99.
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Background
On February 1, 1999, the Department initiated a sunset review of
the countervailing duty order on porcelain-on-steel cooking ware from
Mexico pursuant to section 751(c) of the Act. On February 16, 1999, the
Department received a Notice of Intent to Participate from Columbian
Home Products, LLC (``CHP''), within the deadline specified in section
351.218(d)(1)(i) of the Sunset Regulations. On March 3, 1999, the
Department received a complete substantive response from CHP, within
the deadline specified in section 351.218(d)(3)(i). CHP claimed
interested party status under section 19 U.S.C 1677(9)(C) as the sole
domestic manufacturer of porcelain-on-steel cooking ware. CHP asserts
that it participated in the original countervailing investigation.
The Department received substantive responses from respondent
interested parties, Cinsa, Esmaltaciones de Norte America, S.A. de C.V.
(ENASA), and from the Government of Mexico (``GOM'') (collectively
``Respondents''), within the 30-day deadline specified in the Sunset
Regulations under section 351.218(d)(3)(i). Cinsa claimed interested
party status as a foreign manufacturer and exporter of light-gauge POS
cook ware from Mexico. ENASA claimed interested party status as a
foreign manufacturer and exporter of heavy-gauge POS cooking ware from
Mexico. The GOM claimed interested party status within the meaning of
19 U.S.C. 1677(9)(B). Cinsa maintains that it was a respondent in the
original investigation and has participated in all of the subsequent
administrative reviews. ENASA maintains that it was incorporated in
1993, and began its shipments of POS cooking ware to the United States
in 1994. ENASA has been a participant in the two most recent
administrative reviews.6
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\6\ Cinsa and ENASA note that they are sister companies, each
100 percent owned subsidiaries of ISLO, S.A. de C.V., which in turn
is a wholly owned subsidiary of Grupo Industrial Saltillo, S.A. de
C.V. (``GIS'').
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The Department received rebuttal comments from CHP and Respondents
on March 12, 1999.7 Because we received complete substantive
responses from CHP, the GOM, and respondent foreign producers
accounting for significantly more than 50 percent of the value of
imports over the most recent five years, the Department is conducting a
full sunset review of this order.
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\7\ On March 5, 1999, the Department received a request from CHP
for an extension of deadline for filing rebuttal comments in this
sunset review. As a result, the Department granted a five day
extension for all participants eligible to file rebuttal comments.
The deadline for filing rebuttals to the substantive comments became
March 12, 1999, instead of the original deadline date of March 8,
1999.
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The Department determined that the sunset review of the
countervailing duty order on POS cooking ware from Mexico is
extraordinarily complicated. In accordance with section 751(c)(5)(C)(v)
of the Act, the Department may treat a review as extraordinarily
complicated if it is a review of a transition order (i.e., an order in
effect on January 1, 1995). (See section 751(c)(6)(C) of the Act.)
Therefore, on May 28, 1999 the Department extended the time limit for
completion of the final results of this review until not later than
August 20, 1999, in accordance with section 751(c)(5)(B) of the Act
(see 64 FR 28983).
[[Page 46648]]
Determination
In accordance with section 751(c)(1) of the Act, the Department is
conducting this review to determine whether revocation of the
countervailing duty order would be likely to lead to continuation or
recurrence of a countervailable subsidy. Section 752(b) of the Act
provides that, in making this determination, the Department shall
consider the net countervailable subsidy determined in the
investigation and subsequent reviews, and whether any change in the
program which gave rise to the net countervailable subsidy has occurred
that is likely to affect that net countervailable subsidy. Pursuant to
section 752(b)(3) of the Act, the Department shall provide to the
International Trade Commission (``the Commission'') the net
countervailable subsidy likely to prevail if the order is revoked. In
addition, consistent with section 752(a)(6), the Department shall
provide the Commission information concerning the nature of the subsidy
and whether the subsidy is a subsidy described in Article 3 or Article
6.1 of the 1994 WTO Agreement on Subsidies and Countervailing Measures
(``Subsidies Agreement'').
The Department's determination concerning continuation or
recurrence of a countervailable subsidy, the net countervailable
subsidy likely to prevail if the order is revoked, and nature of the
subsidy are discussed below. In addition, parties' comments with
respect to each of these issues are addressed within the respective
sections.
Continuation or Recurrence of a Countervailable Subsidy
Parties' Comments
In its substantive response, CHP argues that the history of this
proceeding indicates that Mexican producers and exporters of the
subject merchandise would likely continue to receive countervailable
subsidies from the Mexican Government if the order were revoked. CHP
argues that the FOMEX program, which was found to confer a
countervailable subsidy and was found to have been terminated, was
essentially replaced by the Bancomext program. Further, the Bancomext
program was found to confer a countervailable subsidy. Accordingly, CHP
argues that the Department should determine that the continued
existence of the FOMEX program, which was essentially replaced by the
Bancomext program, is a strong indication that Mexican producers would
likely continue to receive countervailable subsidies were the order
revoked.
With respect to the FONEI program, which CHP admits was found
terminated in December, 1989, CHP argues that the fact that the program
provided countervailable subsidies from the original investigation
through the seventh administrative review indicates that the program
could be reinstated and lead to future subsidization. Additionally, CHP
argues that the Department has never made a finding that the program
was not likely to be reinstated.
Finally, CHP argues that the PITEX program was found in the fourth
administrative review to confer a countervailable subsidy. Because the
program has not been discontinued, CHP asserts that the Department
should determine that were the order revoked, this program would likely
lead to continuation or recurrence of a countervailable subsidy.
In their substantive responses, Respondents argue that revocation
of the order will have no impact on the U.S. market or domestic
interested parties because no net countervailable subsidy has been
conferred on the subject merchandise since 1993 and because the
countervailing duty deposit rate has been zero since October 1995.
Respondents argue that the GOM terminated one of the two programs found
in the original investigation to confer countervailable benefits (FOMEX
export and pre-export loans) and that the GOM now provides loans to
Mexican companies (Bancomext loans and FONEI loans) consistent with
commercial considerations, thereby eliminating countervailable
benefits. Therefore, Respondents argue there is no likelihood that
Mexican producers of POS cooking ware could be able to obtain
countervailable benefits were the order revoked.
The GOM argues that because it no longer provides export loans or
long-term loans that are inconsistent with commercial considerations--
in compliance with its obligations pursuant to the Mexico-United States
Understanding Regarding Subsidies and Countervailing Duties (the
``Understanding'')--a subsidy rate from a period before the agreement
took effect does not provide a basis for a determination of likelihood
of continuation or recurrence of a countervailable subsidy. Finally,
the GOM argues that, had this investigation been conducted under the
current statute, a final country-wide subsidy rate of 1.97 percent
would be found de minimis and, as a result, the Department would issue
a negative final countervailing duty determination.
In its rebuttal comments CHP argues that although the FOMEX and
FONEI programs have changed since the time of the original
investigation, these changes do not provide a sufficient basis for
finding that the programs will not be used in the future to provide
subsidies to Mexican POS cooking ware manufacturers and exporters.
Specifically, CHP argues that, as admitted by respondents, the FOMEX
program has not been permanently terminated, but instead it continues
to exist in a slightly altered form as the Bancomext program. CHP
asserts, therefore, that it would be simple for the GOM to use this
program to provide subsidies to Mexican exporters of POS cooking ware.
CHP further argues that respondents provided no evidence to suggest
that changes in the FONEI program are either binding or permanent. CHP
argues that Mexico's elimination of the preferential element of FONEI
loans represents an exercise of administrative discretion which could
be reversed at any time. In conclusion, CHP argues, therefore, that the
Department should find that FONEI is likely to be reinstated as a
subsidy program in the event the order is revoked.
Finally, CHP argues that contrary to respondent's assertions, the
1985 Understanding does not reduce the likelihood of future
countervailable subsidization of subject merchandise. Referring to the
terms of the Understanding, CHP asserts that the terms of the
Understanding do not prohibit the use of domestic subsidies. Further,
CHP notes that Mexico continued to provide export subsidies (in the
form of PITEX) after the Understanding came into effect. Additionally,
CHP argues that the Understanding does not prohibit Mexico from
providing export subsidies, rather, it entitles the United States to
refuse to afford merchandise from Mexico an injury test in any pending
or future countervailing duty determination. In this connection, CHP
notes that as a WTO member country, Mexico is entitled to an injury
test regardless of the Understanding.
In conclusion, CHP argues that any recent decline in usage of the
programs found countervailable over the life of the order is not
indicative of what is likely to occur if the order is revoked. Rather,
as is clear from the terms of the Understanding, the Mexican Government
continues to be permitted to confer subsidies upon its manufacturers
and exporters. CHP argues that, accordingly, the Department should
determine that revocation of the order would likely lead to
continuation
[[Page 46649]]
or recurrence of a countervailable subsidy.
In its rebuttal comments the GOM asserts that the arguments
presented by CHP do not provide sufficient evidence or reasoning to
demonstrate that, given the producer-exporters commercial history and
current situation, there is a ``need'' to continue imposition of the
order. Referring to Article 21.1 of the Subsidies Agreement, the GOM
asserts that Commerce is required to demonstrate that there is a
``need'' to continue the order and that such a determination must be
demonstrable on the basis of evidence. Further, the GOM asserts that
the arguments presented by CHP do not provide sufficient evidence or
reasoning to demonstrate that, if the order is revoked, it is
``likely'' that exporters would continue to benefit from subsidization
at significant margins.
The GOM argues that contrary to CHP's assumption that FOMEX and
Bancomext are the same, FOMEX was terminated over ten years ago.
Additionally, although the FOMEX funds were taken in by Bancomext,
Bancomext is an entirely separate entity from FOMEX. Furthermore, the
GOM asserts that the only company in this case that benefitted from any
Bancomext loan, no longer exists. The GOM argues, therefore, that CHP's
assertion that Mexican producers would likely continue to benefit from
subsidies is a presumption unsupported by evidence or reasons.
Similarly, with respect to the FONEI domestic loan program which
was terminated in 1989, the GOM argues that CHP's assertion that there
is an indication that the program could be reinstated and provide
future subsidization because the program continued to have a
diminishing countervailable benefit (down to 0.01 percent in 1993)
until the 7th review, does not provide any evidence or reason as to why
the GOM would be interested in reinstating such a program. Further, the
GOM argues that CHP does not provide any evidence as to how the program
could be considered a prohibited or actionable subsidy as established
in articles 3, 5, or 6.1 of the Subsidies Agreement.
With respect to the PITEX program, the GOM first notes that the
program was not considered in the context of the investigation and
therefore has never been determined to cause injury to the U.S.
industry, as required by articles 15.5, 15.9, and 21.1 of the Subsidies
Agreement. Additionally, the GOM asserts that PITEX was only used by a
single company that no longer exists. As such, the GOM argues that
there is no reason to presume that exporters will continue to benefit
from a program that they have never used and, if such a presumption is
made, it must be demonstrated by the Department.
The GOM also argues that the producers and exporters affected by
this order have changed over the life of the order. Specifically, of
the two companies investigated in the original investigation--Cinsa and
TRES (later know as APSA)--APSA no longer exists. Therefore, the GOM
argues that it would be inappropriate for the Department to consider
the effect of the subsidy margins for APSA in the context of an order-
wide review. Rather, the Department should, analogous to its practice
of calculating separate subsidy margins in an original investigation or
review, determine likelihood specific to each producer.
The GOM expresses its belief that CHP's assumptions relied on
polices identified in the Sunset Policy Bulletin, policies which the
GOM believes may be inconsistent with the WTO and the Subsidies
Agreement. The GOM asserts that the policies, and general assumptions
contained therein, appear to operate to effectively require the
continued imposition of countervailing duties and place the burden on
respondents to prove the assumptions wrong. The GOM argues that,
contrary to the policies, the Department bears the burden of
demonstrating, with evidence, the issues regarding ``necessity'' and
``likelihood.''
In their rebuttal comments, Cinsa and ENASA (``respondent
companies'') argue that CHP's assertions are not correct and the
information before the Department establishes that if the order were
revoked, subsidization would not recur. Respondent companies argue that
CHP's assertions ignore several facts relevant to the Department's
determination. First, CHP, although acknowledging that the country-wide
rate has been de minimis since 1993, fails to give effect to the
Department's finding of zero subsidization. Further, CHP fails to give
effect to the Department's determination that Cinsa (the respondent
which presently accounts for the vast majority of Mexican exports of
POS cooking ware to the United States) has had company-specific
countervailing duty rates of de minimis since 1989, a period of ten
years.
Similar to the GOM, respondent companies argue that TRES, later
known as APSA--the company that received most of the countervailable
subsidies before becoming a zero rate company in 1993--no longer exists
and, as such, cannot possibly obtain future countervailable subsidies.
Further, respondent companies argue that it is inappropriate to assert
that subsidization would recur if the order were revoked based largely
upon the historical receipt of net countervailable subsidies by a
respondent that no longer exists. Rather, the Department's
determination of likelihood should be based upon the experience of the
companies that presently exist and have the potential to produce and
export subject merchandise to the United States.
Respondent companies also argue that the Understanding (which has
been fully implemented) and other multilateral agreements to which both
Mexico and the United States are parties, have been responsible for the
termination of export subsidies and the elimination of the preferential
elements from loan programs. Therefore, the magnitude of subsidization
that may have existed prior to Mexico's undertaking of its current
international obligations to eliminate improper subsidization does not
provide a rational basis for determining the magnitude of subsidization
that would likely prevail at this point in time if the order were
revoked.
Respondent parties argue that CHP is incorrect in its attempt to
have the Department assign the net subsidy rate from FOMEX to
Bancomext. Rather, they argue that the Department should confirm its
previous findings that the FOMEX program was terminated and then should
separately determine whether any subsidization under the Bancomext
program would recur if the order were revoked. With respect to
Bancomext, Respondent parties argue that the only time the Department
imposed countervailing duties attributable to Bancomext was in the 1990
administrative review and, even there, the duties were with regard to
TRES/APSA, a company that no longer exists. Further, Respondent parties
argue that given that in the most recently completed administrative
reviews the Department determined that the Bancomext program provided
zero or de minimis benefits, the likely net countervailable subsidy
rate that would prevail if the order were revoked would continue to be
zero.
With respect to the FONEI program, Respondent parties argue that
CHP's position is untenable. First, Respondent parties note that, in
the 1993 review, the Department determined that the net benefit
attributable to this previously revoked, long-term loan program was a
de minimis 0.01 percent. Further, even if the ten-year loan (the
maximum term under the program) which provided the
[[Page 46650]]
benefit in the original investigation has been taken out in 1985, the
benefit stream would have terminated in 1995. Even if a 10-year loan
had been taken out in the final year of the program (1989), the benefit
stream would terminate in 1999. Therefore, Respondent parties argue
that no possible benefit stream from a FONEI loan that could exist
beyond the date of revocation.
Lastly, with respect to the PITEX program, Respondent companies
argue that the information before the Department establishes that if
the order were revoked there would be no likely net countervailable
subsidy to existing POS cooking ware manufacturers and exporters.
Again, Respondent parties argue that only TRES/APSA ever received a net
countervailable subsidy from PITEX and that the Department has found
PITEX not used by any other company examined by the Department.
Further, Respondent companies argue that PITEX is countervailable only
to the extent that import duties are refunded or not collected for
imported machinery or spare parts used in the production of export
merchandise and that, in the 1989 review, the Department found that
PITEX benefits were not countervailable to the extent that they are
attributable to products that were physically incorporated into re-
exported merchandise. Additionally, Respondent parties refer to the
Department's Sunset Policy Bulletin and argue that the Department
recognizes that it is not appropriate to attribute future usage of a
program to companies that have never been found to have used that
program. In conclusion, Respondent parties argue that because the
Department has never found that Cinsa or ENASA have used
countervailable elements of the PITEX program, it would be contrary to
stated Departmental policy to attribute a net countervailable subsidy
for PITEX to existing POS cooking ware companies.
Department's Preliminary Determination
Drawing on the guidance provided in the legislative history
accompanying the Uruguay Round Agreement Act (``URAA''), specifically
the Statement of Administrative Act (``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), the
Department issued its Sunset Policy Bulletin providing guidance on
methodological and analytical issues, including the basis for
likelihood determinations. The Department clarified that the
determinations of likelihood will be made on an order-wide basis (see
section III.A.2. of the Sunset Policy Bulletin). Additionally, the
Department normally will determine that revocation of a countervailing
duty order 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 (see section III.A.3.a of
the Sunset Policy Bulletin). Exceptions to this policy are provided
where a company has a long record of not using a program (see section
III.A.3.b of the Sunset Policy Bulletin).
The Sunset Policy Bulletin, at section III.A.3.a, states that,
consistent with the SAA at 888, 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. However, the Sunset Policy Bulletin also provides that,
where a program has been officially terminated by the foreign
government, this will be probative of the fact that the program will
not continue or recur if the order is revoked. (See Sunset Policy
Bulletin at section III.A.5.)
As noted above, in the final affirmative countervailing duty
determination the Department determined that Mexican producers/
exporters of the subject merchandise were benefitting from
countervailable subsidies under the FOMEX and FONEI programs. In
subsequent administrative reviews, the Department found that the FOMEX
and FONEI programs were terminated in 1989. CHP argues that the FOMEX
program continues to exist by virtue of the fact that remaining funds
were transferred to the still existent Bancomext program. However, as
the Department determined in the 1990 administrative review, the FOMEX
program was officially eliminated by decree in December, 1989.
Additionally, the Department confirmed this determination in the final
results of the 1993 administrative review when it explained that the
FOMEX program was terminated on December 31, 1989 and effective January
1, 1990, the FOMEX trust was transferred to Bancomext. The Department
has, in numerous reviews, investigated Bancomext as a separate program.
Therefore, given that the FOMEX program was terminated by official
decree, we preliminarily determine that the FOMEX program has been
eliminated.
With respect to the FONEI program, we preliminarily determine that
the program has been eliminated without residual benefit. In the 1993
administrative review, the Department stated that FONEI was a GOM trust
administered by the Banco de Mexico until its dissolution on December
31, 1989. CHP does not argue that the program still exists. Rather,
they argue that the program could be easily reinstated. We are not
persuaded by mere assertions, however. Rather, based on the
Department's prior findings with respect to FONEI and absent evidence
to the contrary, we preliminarily determine that the FONEI program has
been eliminated and is not likely to be reinstated. Further, we agree
with respondents that any potential remaining countervailable benefit
from 10-year, long-term loans granted prior to the 1989 termination of
the FONEI program would not continue beyond 1999.
With respect to the PITEX program, we note that none of the parties
argued that the program has been terminated. Rather, CHP argues that we
should find that countervailable subsidies are likely to continue or
recur were the order revoked based on a finding in the 1990
administrative review that one company, APSA, used the program for
temporary imports of machinery and spare parts that were not physically
incorporated into exported products. The Respondents argue that APSA is
the only company in this proceeding ever found to have received a
countervailable subsidy under this program, APSA no longer exists, and
other companies have a long track record of not using this program.
Therefore, PITEX should not be found likely to provide a
countervailable subsidy.
We preliminarily determine that there is a long track record of
non-use of the PITEX program by companies that are currently, and are
likely to be, producing and exporting POS cooking ware to the United
States. In the administrative review of the antidumping duty order on
POS cooking ware from Mexico covering the period December 1, 1996
through November 31, 1997, the Department found that APSA had been sold
in 1997 and that Cinsa had incorporated some of APSA's production
equipment into its facility (see Porcelain-on-Steel Cookware from
Mexico: Final Results of Antidumping Duty Administrative Review, 64 FR
26934 (May 18, 1999)). Therefore, we agree that APSA no longer exists.
As to whether companies other than APSA are likely to receive a
countervailable subsidy from the PITEX program, we agree with
respondents that, where a
[[Page 46651]]
company has a long track record of not using a program, 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. (See section III.A.3.b of the Sunset Policy
Bulletin.) We preliminarily determine, therefore, that there is no
likelihood of a countervailable subsidy from the PITEX program were the
order revoked.
With respect to the Bancomext program, CHP argues that Bancomext
should be considered a replacement for FOMEX and, therefore, CHP does
not independently address Bancomext. As noted above, the Department
determined that the Bancomext program was separate from the FOMEX
program. Further, Bancomext has been found to provide countervailable
subsidies to the extent that loans are provided at preferential rates.
None of the parties have argued that the Bancomext program has been
terminated. Rather, respondents argue that, as a result of the 1985
Understanding, the GOM altered its practice and no longer provides
loans on terms inconsistent with commercial considerations. The
Department has reviewed the Bancomext program during reviews covering
1990, 1993, and 1994. In each of these reviews, the Department found
countervailable subsidies were provided by the Bancomext program,
albeit at de minimis rates. Therefore, we do not agree with respondents
that the Bancomext no longer provides countervailable subsidies.
However, we do agree, based on a history of de minimis findings, that
there is no evidence to suggest that the Bancomext program is likely to
provide above de minimis countervailable subsidies, if any, were the
order revoked. Therefore, we preliminarily determine that the Bancomext
program is not likely to confer a countervailable subsidy were the
order revoked.
On the basis of the above analysis regarding the termination, non-
use, and de minimis subsidies, we preliminarily determine that
revocation of the countervailing duty order on POS cooking ware from
Mexico is not likely to result in continuation or recurrence of a
countervailable subsidy.
Net Countervailable Subsidy
Parties' Comments
In its substantive and rebuttal comments, CHP argues that in
accordance with the Department's policy, the Department should report
to the Commission a net countervailable subsidy of 3.84 percent as the
subsidy likely to prevail if the order were revoked. CHP argues that
the Department should add to the 1.97 percent subsidy from the original
investigation (attributable to FOMEX and FONEI) the 1.87 percent
subsidy rate found in the 1990 administrative review attributable to
PITEX.
In their substantive and rebuttal comments, the respondents argue
that the zero or de minimis rates from the most recent administrative
reviews are the rates likely to prevail if the order were revoked.
Department's Preliminary Determination
Because we preliminarily determine that a countervailable subsidy
is not likely to continue or recur were the order revoked, there is no
net countervailable subsidy to report to the Commission.
Nature of the Subsidy
Parties' Comments
Neither party specifically addressed this issue. As noted above,
however, the GOM did argue that the Department must be able to
demonstrate, with evidence, that any subsidy found likely to continue
or recur if the order were revoked is a subsidy inconsistent with
articles 3, 5, or 6 or the Subsidies Agreement.
Department's Position
Because we preliminarily determine that a countervailable subsidy
is not likely to continue or recur were the order revoked, there is no
nature of the subsidy to report to the Commission.
Preliminary Results of Review
As a result of this review, the Department preliminarily finds that
revocation of the countervailing duty order would not be likely lead to
continuation or recurrence of a countervailable subsidy. As a result of
this determination, the Department, pursuant to section 751(d)(2) of
the Act, preliminarily intends to revoke the order on POS cooking ware
from Mexico. Pursuant to section 751(c)(6)(A)(iv) of the Act, this
revocation would be effective January 1, 2000.
Any interested party may request a hearing within 30 days of
publication of this notice in accordance with 19 CFR 351.310(c). Any
hearing, if requested, will be held on October 20, 1999. Interested
parties may submit case briefs no later than October 11, 1999, in
accordance with 19 CFR 351.309(c)(1)(i). Rebuttal briefs, which must be
limited to issues raised in the case briefs, may be filed not later
than October 18, 1999. The Department will issue a notice of final
results of this sunset review, which will include the results of its
analysis of issues raised in any such comments, no later than December
28, 1999.
This five-year (``sunset'') review and notice are in accordance
with sections 751(c), 752, and 777(i)(1) of the Act.
Dated: August 20, 1999.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-22197 Filed 8-25-99; 8:45 am]
BILLING CODE 3510-DS-P
