[Federal Register Volume 64, Number 186 (Monday, September 27, 1999)]
[Notices]
[Pages 51954-51958]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-25073]
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DEPARTMENT OF COMMERCE
International Trade Administration
[C-508-605]
Preliminary Results of Full Sunset Review: Industrial Phosphoric
Acid From Israel
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results of full sunset review: industrial
phosphoric acid from Israel.
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SUMMARY: On March 1, 1999, the Department of Commerce (``the
Department'') initiated a sunset review of the countervailing duty
order on industrial phosphoric acid from Israel (64 FR 9970) pursuant
to section 751(c) of the Tariff Act of 1930, as amended (``the Act'').
On the basis of the notices of intent to participate and adequate
substantive responses filed on behalf of the domestic and respondent
interested parties, the Department is conducting a full (240 day)
review. In conducting this sunset review, the Department preliminarily
finds that termination of the countervailing duty order would be likely
to lead to continuation or recurrence of a countervailable subsidy. The
net countervailable subsidy and the nature of the subsidy are
identified in the ``Preliminary Results of Review'' section of this
notice.
FOR FURTHER INFORMATION CONTACT: Kathryn B. McCormick or Melissa G.
Skinner, Office of Policy for Import Administration, International
Trade Administration, U.S. Department of Commerce, 14th Street &
Constitution Avenue, NW, Washington, D.C. 20230; telephone: (202) 482-
1698 or (202) 482-1560, respectively.
Effective Date: September 27, 1999.
Statute and Regulations
This review was 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'') and 19 CFR Part 351(1998) in
general. 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'').
Scope
This order covers shipments of Israeli industrial phosphoric acid
(``IPA''). The subject merchandise was originally classifiable under
item number 416.30 of the Tariff Schedules of the United States
Annotated (``TSUSA''); currently, it is classifiable under item number
2809.20.00 of the Harmonized Tariff Schedule of the United States
(``HTSUS''). Although the TSUSA and HTSUS item numbers are provided for
convenience and customs purposes, the written description remains
dispositive.
This review covers all producers and exporters of industrial
phosphoric acid from Israel.
History of the Order
The Department published its final affirmative countervailing duty
determination on industrial phosphoric acid from Israel in the Federal
Register on July 7, 1987 (52 FR 25447) and issued the countervailing
duty order on August 19, 1987 (52 FR 31057). The Department found the
following programs to confer subsidies:
(1) Encouragement of Capital Investments Law Grants
(2) Long-Term Industrial Development Loans
(3) Bank of Israel Export Production, Shipment, and Import-for Export
Fund Loans
(4) Exchange Rate Risk Insurance Scheme
(5) Encouragement of Research and Development Law Grants
The Department determined the estimated net subsidy to be 19.46
percent for Haifa Chemicals Ltd.(``Haifa'') and 6.02 percent for all
other producers and exporters of IPA from Israel. In this case, the
Government of Israel (``GOI'') provided to eligible exporters
preferential short-term financing in local and foreign currencies
through the Bank of Israel Export Production, Shipment, and Import-for
Export Fund Loans programs. However, the Department verified that,
since 1985, the loans under these funds were provided only in foreign
currencies and were no longer at preferential terms. In cases in which
program-wide changes have occurred prior to a preliminary determination
and where the changes are verifiable, the Department's practice is to
adjust the duty deposit rate to correspond to the eventual duty
liability. Accordingly, the Department did not include the BOI export
loan benefits in the duty deposit rate, for which the final results
were 15.11 for Haifa and 5.36 percent for all others. 1
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\1\ See Final Affirmative Countervailing Duty Determination:
Industrial Phosphoric Acid from Israel, 52 FR 25447, 25449 (July 7,
1987).
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The Department has conducted the following administrative reviews
since the issuance of the order:
------------------------------------------------------------------------
Net subsidy
Period of review Citation (percent)
------------------------------------------------------------------------
(1) 5 Feb 87-31 Dec 87............. 56 FR 2751............ 5.96
(2) 1 Jan 88-31 Dec 88............. 56 FR 50854........... 9.18
(3) 1 Jan 89-31 Dec 89............. 56 FR 50854........... 11.26
(4) 1 Jan 90-31 Dec 90............. 57 FR 39391........... 12.11
(5) 1 Jan 91-31 Dec 91............. 59 FR 5176............ 6.98
(6) 1 Jan 92-31 Dec 92............. 61 FR 28841........... 3.84
(7) 1 Jan 93-31 Dec 93............. 61 FR 28841........... 5.49
(8) 1 Jan 94-31 Dec 94............. 61 FR 53351........... 8.06
[[Page 51955]]
(7) 1 Jan 95-31 Dec 95............. 63 FR 20612........... 8.77
(9) 1 Jan 96-31 Dec 96............. 64 FR 2879............ 5.89
(10) 1 Jan 97-31 Dec 97............ 64 FR 49460........... 5.65
------------------------------------------------------------------------
In the first administrative review (56 FR 2751), the Department
determined that Israeli producers of IPA benefitted from the following
countervailable subsidy programs: (1) Encouragement of Capital
Investments Law (``ECIL'') Grants; (2) Long-Term Industrial Development
(``LTID'') Loans; (3) the Exchange Rate Risk Insurance Scheme
(``ERIS''); and (4) Encouragement of Research and Development Law
(``EIRD'') Grants. The Department continued to find net subsidies from
ECIL and ERIS Grants, and LTID Loans in the administrative reviews from
1988 through 1991.2
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\1\ (Haifa: 19.46).
\2\ See Industrial Phosphoric Acid from Israel; Final Results of
Countervailing Duty Administrative Reviews, 56 FR 50854 (October 9,
1991); Industrial Phosphoric Acid from Israel; Final Results of
Countervailing Duty Administrative Reviews, 57 FR 39391(August 31,
1992); Industrial Phosphoric Acid from Israel; Final Results of
Countervailing Duty Administrative Reviews, 59 FR 5176 (February 3,
1994).
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In the 1992 period of review, the Department found benefits flowing
from (1) ECIL Grants, (2) LTID Loans, and (3) EIRD Grants; in 1993, the
programs (1) ECIL Grants, (2) LTID Loans, and (3) ERIS, were found to
confer subsidies (61 FR 28841).
In the administrative reviews of periods after 1993,3
the Department found no further benefits from the ERIS; however,
continued net subsidies were found under the ECIL Grants program and
the resumption of net subsidies under the EIRD program. In 1999, the
Department completed its administrative review (64 FR 2879) for the
1996 period of review, and again, net subsidies were found under the
ECIL and EIRD Grants programs. Additionally, the Department found net
subsidies from two new programs: the Infrastructure and Environmental
Grants programs (id.).
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\3\ See Industrial Phosphoric Acid from Israel; Final Results of
Countervailing Duty Administrative Reviews, 61 FR 53351 (October 11,
1996); Industrial Phosphoric Acid from Israel; Amended Final Results
of Countervailing Duty Administrative Reviews, 63 FR 20612 (April
27, 1998); Industrial Phosphoric Acid from Israel; Final Results of
Countervailing Duty Administrative Reviews, 64 FR 2879 (January 19,
1999); Industrial Phosphoric Acid from Israel; Final Results and
Partial Recission of Countervailing Duty Administrative Review, 64
49460 (September 13, 1999).
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Background
On March 1, 1999, the Department published a notice of initiation
of a sunset review of the countervailing duty order on IPA from Israel
(64 FR 9970), pursuant to section 751(c) of the Act. The Department
received a Notice of Intent to Participate on the behalf of domestic
producers Albright and Wilson Americas Inc. (``A&W''), FMC Corporation
(``FMC''), and Solutia Inc. (``Solutia'') (hereinafter, collectively
``domestic interested parties'') and respondent interested parties, the
Government of Israel (``GOI'') and Rotem Amfert Negeve Ltd.
(``Rotem''), an exporter of industrial phosphoric acid, on March 15,
1999, within the deadline specified in section 351.218(d)(1)(i) of the
Sunset Regulations. The domestic interested parties claimed interested
party status under sections 771(9)(C) of the Act, as domestic producers
of IPA. The GOI is an interested party pursuant to section 771(9)(B) of
the Act as the government of a country in which IPA is produced and
exported; Rotem is an interested party pursuant to section 771(9)(A) of
the Act as a foreign producer and exporter of subject merchandise.
The GOI has participated in every segment of the proceeding before
the Department related to the subject merchandise. Rotem, the 1992
successor to Negev Phosphates Ltd. (``Negev''),4 the initial
respondent interested party, has participated in every administrative
review after 1990.
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\4\ See Industrial Phosphoric Acid from Israel; Final Results of
Antidumping Changed Circumstances Review, 59 FR 6944 (February
14,1994).
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Of the domestic interested parties, FMC and Monsanto Company
(``Monsanto'') were the petitioners in the original countervailing duty
investigation,5 and they requested and participated in each
administrative review through 1994. A&W joined with FMC in requesting
and participating in each review thereafter.
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\5\ In the United States, there is a newly created company,
Solutia, that is now responsible for the IPA business previously
operated by Monsanto (see March 31, 1999 Substantive Response of
domestic interested parties at 3).
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We received adequate substantive responses from the domestic and
respondent interested parties on March 31, 1999, within the 30-day
deadline specified in the Sunset Regulations under section
351.218(d)(3)(i). As a result, pursuant to 19 CFR 351.218(e)(2), the
Department determined to conduct a full review.
In accordance with 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).
Therefore, on June 21, 1999, the Department determined that the sunset
review of the countervailing duty order on IPA from Israel is
extraordinarily complicated, and extended the time limit for completion
of the final results of this review until not later than January 25,
2000, in accordance with section 751(c)(5)(B) of the Act.6
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\6\ See Industrial Phosphoric Acid from Israel (C-508-605) and
Industrial Phosphoric Acid from Belgium (A-423-602): Extension of
Time Limit for Final Results of Five-Year Reviews, 64 FR 34189 (June
25, 1999).
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Determination
In accordance with section 751(c)(1) of the Act, the Department is
conducting this review to determine whether termination 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
and 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 to the Commission information concerning the nature of the
subsidy and whether it 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 preliminary determinations concerning continuation
or recurrence of a countervailable subsidy, the net countervailable
subsidy likely to prevail if the order is revoked,
[[Page 51956]]
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
Drawing on the guidance provided in the legislative history
accompanying the Uruguay Round Agreements Act (``URAA''), specifically
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
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).
Interested Party Comments
The domestic interested parties assert that the history of the
order and the nature and extent of the subsidies show that revocation
of the countervailing duty order on IPA from Israel will result in the
continuation or recurrence of a countervailable subsidy. They assert
that, in the last ten years following the issuance of the order, Rotem
has continued to receive significant benefits under a variety of
countervailable subsidy programs (see March 31, 1999 Substantive
Response of domestic interested parties at 12). As noted earlier, in
the 1996 administrative review, the Infrastructure and Environmental
Grant programs were two new programs found to confer subsidies on
Israel producers of IPA.
The GOI and Rotem (Negev) do not argue that there is no likelihood
that revocation of the order will lead to continuation of a
countervailable subsidy. Rather, they argue that revocation of the
countervailing duty order will have no effect on the U.S. producers of
industrial phosphoric acid (see March 31, 1999 Substantive Response of
respondent interested parties at 3-5).
In their rebuttal comments the domestic interested parties argue
that the respondents failed to address the question of likelihood and,
therefore, the Department should conduct an expedited review on the
basis of facts available and find that revocation of the countervailing
duty order would result in continuation of a countervailable
subsidy.7
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\7\ See April 8, 1999 Industrial Phosphoric Acid from Israel;
Comments Submitted in Rebuttal to the Substantive Responses of the
Government of Israel and Rotem Amfert Negev Ltd. at 2.
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Department's Determination
Although the Department found that the Exchange Rate Risk Insurance
Scheme was terminated and provides no current benefits,8 and
that the Long-Term Industrial Development Loans Program was not used
during the 1996 review period (64 FR 2879 (January 19, 1999)), the
Department did find evidence of programs that continued to confer
countervailable subsidies on Israeli producers of IPA. The programs
include the Encouragement of Capital Investments Law and the
Encouragement of Industrial Research and Development Grants. In
addition, the Department found new programs determined to confer
subsidies: the Infrastructure Grant Program and the Environmental Grant
Program. Therefore, it is reasonable to assume that these programs
continue to exist and are utilized. Pursuant to the SAA at 888, the
Department concludes that continuation of these programs are highly
probative of the likelihood of continuation or recurrence of
countervailable subsidies.9
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\8\ See Industrial Phosphoric Acid from Israel; Final Results of
Countervailing Duty Administrative Reviews, 61 FR 28841, 28844 (June
6, 1996).
\9\ See Industrial Phosphoric Acid from Israel; Final Results of
Countervailing Administrative Reviews, 64 FR 2879, 2881 (January 19,
1999).
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Net Countervailable Subsidy
In the Sunset Policy Bulletin, the Department stated that,
consistent with the SAA and House Report, the Department normally will
select a rate from the investigation as the net countervailable subsidy
likely to prevail if the order is revoked, 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. The Department noted that this rate may not be the most
appropriate rate if, for example, the rate was derived 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.10
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\10\ See section III.B.3 of the Sunset Policy Bulletin.
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Interested Party Comments
The domestic interested parties assert that the Department should
use the net subsidy rates determined in the original investigation as
the rates likely to prevail if the countervailing duty order were
revoked. As noted above, the net subsidy rate determined in the
original investigation was 19.46 percent for Haifa, and 6.02 percent
for all other imports of IPA from Israel. The domestic interested
parties argue that the original duty deposit rate of 15.11 percent is
appropriate for Haifa in light of its lack of cooperation and the
Department's authority to use an adverse inference (see March 31
Substantive Response of domestic interested parties at 19). Further,
the domestic interested parties suggest that the Department could use
for Rotem the 12.11 percent rate from the 1990 review, since it
indicates that subsidies have been and can be made available to Israeli
producers (id.). However, the domestic interested parties argue that
the Department should not adopt for Rotem any rate lower than 5.89
percent, the rate determined by the Department in the administrative
review of the 1996 period (id.).
The respondent interested parties assert that the countervailing
duty rate that is likely to prevail is the current rate of 5.89 percent
or less. They note that, in the last several reviews, the Department
has determined that (1) Rotem has been the only exporter of the subject
merchandise to the United States and that (2) there is only one subsidy
program providing benefits to Rotem's production of the subject
merchandise: the Encouragement of Capital Investment Law (ECIL)
program, under which Rotem received infrastructure grants, some of
which have been found to benefit subject merchandise (see March 31,
1999 Substantive Response of respondent interested parties at 7). Of
the 5.89 percent subsidy found in the last review, 5.58 percent of that
amount was from ECIL grants (id.).
The respondent interested parties argue that ECIL grants are
domestic subsidies not contingent upon exports or exporting, and
therefore, do not provide an incentive to export (id.). Further, since
they are non-recurring grants, under the Department's grant
methodology, grants given in earlier years provide diminishing benefits
throughout the benefit stream, and
[[Page 51957]]
benefits afforded by these grants cannot increase if the countervailing
duty order is eliminated. Moreover, the respondent interested parties
argue that the subsidy from the grants has further diminished as a
result of a series of privatizations of Rotem (id.).
Respondent interested parties assert that higher subsidy findings
for Rotem's IPA were the result of the Department's finding that
another program, the Exchange Rate Risk Insurance Program provided
substantial export subsidies to Rotem. They argue that, since the
latter program has been terminated, it should not be considered in the
Department's determination of the countervailing duty rate that is
likely to prevail (see April 8, 1999 Substantive Response of respondent
interested parties). With respect to the Long-term Industrial
Development Loans, the respondent interested parties note that this
program provides no residual benefits (id. at 9). Further, the
respondent interested parties argue, the Encouragement of Research and
Development Grants, and Infrastructure and Environmental Grants were
found to provide very minimal subsidies (id.).
The respondent interested parties assert that if the Department
uses the rate from the original determination, the starting point
should be the deposit rate of 5.36 percent adjusted for terminated
programs. Likewise, with respect to Haifa Chemicals, Ltd., the
respondent interested parties argue that the original deposit rate of
15.11 percent for Haifa should be adjusted for terminated programs (id.
at 11).
In their rebuttal comments, the domestic interested parties
disagree with the respondent interested parties' argument that
Department should adjust the rates from the original investigation
downward by subtracting the amount of the subsidy arising from the now-
terminated Exchange Rate Risk Program.11 The domestic
interested parties argue that, if the Department were to exercise its
discretion to adjust the net original net subsidy rates, then, in the
interest of accuracy, the Department would also have to adjust for
every change to every program found to provide a subsidy in the
original investigation. Moreover, if the Department determines an
adjusted rate, then actions, such as grant and loan deferrals, could be
taken temporarily to lower that rate in order to have an impact on a
scheduled or pending review.12
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\11\ See April 8, 1999 Industrial Phosphoric Acid from Israel;
Comments Submitted in Rebuttal to the Substantive Responses of the
Government of Israel and Rotem Amfert Negev Ltd at 5.
\12\ Id. at 6.
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In their rebuttal comments, the respondent interested parties
reiterate that the Department should use the original deposit rate as
the starting point for determining the rate likely to prevail. They
argue that, in determining the rate for Haifa, the Department should
subtract from the original rate of 15.11 percent 8.87 percent
represented by the Exchange Rate Risk Insurance Scheme, a program that
has been terminated and provides no current benefits.13
Thus, the deposit rate should be 6.24 percent. Further, the respondent
interested parties argue that, on account of the termination of the
Exchange Rate Risk Insurance Scheme, the Department should also adjust
Rotem's original deposit rate. As such, 4.78 percent representing
ERIS's benefits should be deducted from the original margin of 5.36 for
all others, with a result of 0.58. However, respondent interested
parties acknowledge that this rate is untenable in light of the most
administrative review for the 1996 period, and that the Department
should provide to the Commission the rate of 5.89, the rate from this
review.14
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\13\ See April 8, 1999 Sunset Review of Countervailing Duty
Order on Industrial Phosphoric Acid from Israel; Comments on U.S.
Producers' Substantive Response at 4.
\14\ Id.
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Department's Determination
Consistent with the SAA and House Report, the Department normally
will select a rate from the investigation as the net countervailable
subsidy likely to prevail if the order is revoked, 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. In some instances, however, the rate from the
original investigation may not be the most appropriate rate if, for
example, the rate was derived 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.15
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\15\ See section III.B.3 of the Sunset Policy Bulletin.
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As noted above, since the issuance of the order, the Department has
determined that the Exchange Rate Risk Insurance Scheme was terminated
(61 FR 28841, 28844 (June 6, 1996)). Furthermore, in the 1996 period of
review, the Department determined that two new programs, the
Infrastructure Grant Program and the Environmental Grant Program,
confer countervailable subsidies on Rotem.16 Therefore,
consistent with section III.B.3 of the Sunset Policy Bulletin, the
Department preliminarily determines that the rate from the original
investigation is not probative of the net countervailable subsidy rate
likely to prevail if the order were revoked.
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\16\ See Industrial Phosphoric Acid From Israel: Final Results
of Countervailing Duty Administrative Review, 64 FR 2879 (January
19, 1999).
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Sections III.B.3.a and III.B.3.c of the Sunset Policy Bulletin
provide that the Department may adjust the net countervailable subsidy
where the Department has conducted an administrative review of the
order and found that a program was terminated with no residual benefits
and no likelihood of reinstatement, or where the Department found a new
countervailable program. Additionally, section III.B.3.d of the Sunset
Policy Bulletin provides that where the Department has conducted an
administrative review of an order and determined to increase the net
countervailable subsidy rate for any reason, the Department may adjust
the net countervailable subsidy rate determined in the original
investigation to reflect the increase of the rate.
The Department agrees with respondent interested parties that the
deposit rates from the original investigation should be adjusted to
reflect that, after 1993, the Exchange Rate Risk Insurance Scheme was
terminated without residual benefits after 1993. Therefore, we are
subtracting the rate from the investigation for this program.
Additionally, the rates should be adjusted to reflect the
identification of two new countervailable programs: the Infrastructure
Grant Program and the and the Environmental Grant Program. Therefore,
we are adding the rates from these programs as first identified in the
1996 review (64 FR 2879).
Finally, we agree with the interested parties that the
countervailable subsidy rate from the Encouragement of Capital
Investments Law Grants program has significantly increased since the
original investigation. Over the life of this order, there has been a
consistent pattern of increased usage of the grants provided under this
program. Because of the continued increase in usage of this program,
despite the existence of the order, we preliminarily determine that the
rate for this program from the original investigation should be
adjusted to reflect this increased usage of the program. Therefore, we
are adding to the original investigation rate the rate from this
program, as found in
[[Page 51958]]
the 1996 review (id.). As a result, the Department preliminarily
determines that the net countervailable subsidies that would be likely
to prevail in the event of revocation of the order are 10.93 percent
for Haifa and 5.97 percent for all others, including Rotem (see
September 21, 1999, Memorandum to File Regarding Calculation of the Net
Countervailable Subsidy).
Nature of the Subsidy
In the Sunset Policy Bulletin, the Department states that,
consistent with section 752(a)(6) of the Act, the Department will
provide to 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 Subsidies Agreement. The domestic and respondent
interested parties did not address this issue in their substantive
responses of March 31, 1999.
Because the receipt of benefit under the Bank of Israel Export
Loans program is contingent on exports, this program falls within the
definition of an export subsidy under Article 3.1(a) of the Subsidies
Agreement. The remaining programs, although not falling within the
definition of an export subsidy under Article 3.1(a) of the Subsidies
Agreement, could be found to be inconsistent with Article 6 if the net
countervailable subsidy exceeds five percent, as measured in accordance
with Annex IV of the Subsidies Agreement. The Department, however, has
no information with which to make such a calculation, nor do we believe
it appropriate to attempt such a calculation in the course of a sunset
review. Rather, we are providing the Commission with the following
program descriptions.
The Encouragement of Capital Investments Law (ECIL) Grants. In the
1987 original investigation, the Department found that Negev
Phosphates, Ltd. (``Negev'') and Haifa Chemicals, Ltd. received
countervailable subsidies from this program, the benefits of which
depend on the geographic location of the eligible enterprises. ECIL
Grants were found to confer subsidies in each subsequent administrative
review.
Long-Term Industrial Development (``LTID'') Loans. Funded by the
GOI, this program enabled approved enterprises in a number of diverse
industries to obtain LTID Loans. Like ECIL grants, these loans are
project-specific and the interest rates charged on these loans depend
on the Development Zone location of the borrower. The Department found
LTID Loans to confer subsidies in the administrative reviews for the
periods 1988 through 1993.
Exchange Rate Risk Insurance Scheme (``ERIS''). Operated by the
Israeli Foreign Trade Risk Insurance Corporation (``IFTRIC''), ERIS
insures exporters against losses which result when the rate of
inflation exceeds the rate of devaluation and the new Israeli shekel
value of an exporter's foreign currency receivable does not rise enough
to cover increases in local costs. The ERIS is optional and open to any
exporter willing to pay a premium to IFTRIC. The Department determined
that subsidies from this program were terminated in 1993.17
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\17\ See Industrial Phosphoric Acid from Israel; Final Results
of Countervailing Duty Administrative Reviews, 61 FR 28841, (June 6,
1996).
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Encouragement of Research and Development Law (``EIRD'') Grants.
Israeli manufacturers, producers or exporters of IPA may benefit from
research and development grants under this program. With the exception
of the 1988, 1989 and 1991 administrative reviews, the Department found
the EIRD Law Grants to be countervailable in each yearly review since
the issuance of the order.
Infrastructure Grant Program. In the administrative review of the
1996 period, the Department found that this program enables the GOI to
establish new industrial areas by partially reimbursing companies for
their costs of developing the infrastructure in certain geographical
zones.
Environmental Grant Program. Additionally, in the 1996
administrative review, the Department found that the GOI administers
this countervailable subsidy program to provide for companies financial
assistance for the adaptation of existing industrial facilities to new
environmental requirements.
Preliminary Results of Review
As a result of this review, the Department finds that revocation of
the countervailing duty order would be likely to lead to continuation
or recurrence of a countervailable subsidy at the rates listed below:
------------------------------------------------------------------------
Margin
Manufacturer/exporter (percent)
------------------------------------------------------------------------
Haifa, Ltd.................................................. 10.93
All Others.................................................. 5.97
------------------------------------------------------------------------
This five-year (``sunset'') review and notice are in accordance
with sections 751(c), 752, and 777(i)(1) of the Act.
Dated: September 21, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-25073 Filed 9-24-99; 8:45 am]
BILLING CODE 3510-DS-P
