01-24232. Final Affirmative Countervailing Duty Determination: Pure Magnesium From Israel

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of final affirmative determination in a countervailing duty investigation.

SUMMARY:

The Department of Commerce (the Department) has made a final determination that countervailable subsidies are being provided to producers and exporters of pure magnesium from Israel. For information on the estimated countervailing duty rates, please see the “Suspension of Liquidation” section of this notice.

EFFECTIVE DATE:

September 27, 2001.

FOR FURTHER INFORMATION CONTACT:

Annika O'Hara or Melanie Brown, Office of AD/CVD Enforcement 1, Import Administration, U.S. Department of Commerce, Room 3096, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: [phone] or 482-4987, respectively.

SUPPLEMENTARY INFORMATION:

Applicable Statute and Regulations

Unless otherwise indicated, all citations to the Tariff Act of 1930, as amended (the Act), are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Act by the Uruguay Round Agreements Act (URAA). In addition, unless otherwise indicated, all citations to the Department's regulations are to 19 CFR part 351 (April 2000).

Petitioners

The petitioners in this investigation are the Magnesium Corporation of America (Magcorp), the United Steel Workers of America (USWA), USWA Local 8319, and Concerned Employees of Northwest Alloys, Inc. (collectively, petitioners).

Case History

Since the publication of the preliminary determination in the Federal Register (see Preliminary Affirmative Countervailing Duty Determination: Pure Magnesium from Israel, 66 FR 11144 (February 22, 2001) (Preliminary Determination)), the following events have occurred:

On March 13, 2001, we aligned the countervailing duty investigation of pure magnesium from Israel with the companion antidumping duty investigation at the request of the petitioners, in accordance with section 705(a)(1) of the Act. See Notice of Postponement of Preliminary Determinations of Sales at Less Than Fair Value: Pure Magnesium From Israel, the Russian Federation, and the People's Republic of China and Alignment of Final Countervailing Duty Determination With Final Antidumping Duty Determinations: Pure Magnesium From Israel, 66 FR 14546 (March 13, 2001).

We conducted verification of the questionnaire responses submitted by the only responding company in this investigation, Dead Sea Magnesium Ltd. (DSM) from May 6-8, 2001.

On May 14, 2001, based on a request from DSM (which is also the respondent in the companion antidumping duty investigation), we postponed the final antidumping determination until September 12, 2001. Because of the alignment of the countervailing duty investigation with the antidumping duty investigation, the final determination in the countervailing duty investigation was also postponed until September 12, 2001. See Notice of Postponement of Final Antidumping Determination and Extension of Provisional Measures and Postponement of Final Countervailing Duty Determination: Pure Magnesium From Israel; and Notice of Postponement of Final Antidumping Determination: Pure Magnesium From the Russian Federation, 66 FR 24324 (May 14, 2001).

On June 21 and 22, 2001, we received case briefs from DSM, the petitioners, and Rossborough Manufacturing Co. L.P. (Rossborough), an interested party in this investigation. Rebuttal briefs were filed by DSM and the petitioners on June 28 and 29, 2001. No hearing was held because the parties withdrew their earlier requests for a hearing.

Although the deadline for this determination was originally September 12, 2001, in light of the events of September 11, 2001 and the subsequent closure of the Federal Government for reasons of security, the timeframe for issuing this determination has been extended by two days.

Scope of Investigation

The scope of this investigation includes imports of pure magnesium products, regardless of chemistry, form, or size, including, without limitation, ingots, raspings, granules, turnings, chips, powder, and briquettes.

Pure magnesium includes: (1) Products that contain at least 99.95 percent primary magnesium, by weight (generally referred to as “ultra-pure” magnesium); (2) products that contain less than 99.95 percent but not less than 99.8 percent primary magnesium, by weight (generally referred to as “pure” magnesium); (3) chemical combinations of pure magnesium and other material(s) in which the pure magnesium content is 50 percent or greater, but less than 99.8 percent, by weight, that do not conform to an “ASTM Specification for Magnesium Alloy” ^[1] (generally referred to as “off-specification pure” magnesium); and (4) physical mixtures of pure magnesium and other material(s) in which the pure magnesium content is 50 percent or greater, but less than 99.8 percent, by weight. Excluded from this order are mixtures containing 90 percent or less pure magnesium by weight and one or more of certain non-magnesium granular materials to make magnesium-based reagent mixtures. The non-magnesium granular materials which the Department is aware are used to make such excluded reagents are: lime, calcium metal, calcium silicon, calcium carbide, calcium carbonate, carbon, slag coagulants, fluorspar, nephaline syenite, feldspar, aluminum, alumina (Al₂ O₃), calcium aluminate, soda ash, hydrocarbons, graphite, coke, silicon, rare earth metals/mischmetal, cryolite, silica/fly ash, magnesium oxide, periclase, ferroalloys, dolomitic lime, and colemanite. A party importing a magnesium-based reagent which includes one or more materials not on this list is required to seek a scope clarification from the Department before such a mixture may be imported free of countervailing duties.

The merchandise subject to this investigation is classifiable under items 8104.11.00, 8104.19.00, and 8104.30.00 of the Harmonized Tariff Schedule of the United States (HTSUS). Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the merchandise under investigation is dispositive.

For a full discussion of scope comments and determinations, see the accompanying September 14, 2001 memorandum from Richard W. Moreland, Deputy Assistant Secretary for Import Administration, to Faryar Shirzad, Assistant Secretary for Import Administration, entitled “Issues and Decision Memorandum for the Final Determination in the Countervailing Duty Investigation of Pure Magnesium from Israel (“Decision Memorandum”), Comments 9 and 10.

Injury Test

Because Israel is a “Subsidies Agreement Country” within the meaning of section 701(b) of the Act, the International Trade Commission (ITC) is required to determine whether imports of the subject merchandise from Israel materially injure, or threaten material injury to, a U.S. industry. On December 13, 2000, the ITC published its preliminary determination finding that there is a reasonable indication that an industry in the United States is being materially injured by reason of imports from Israel of the subject merchandise (see Pure Magnesium from China, Israel, and Russia; Determinations, 65 FR 77910).

Period of Investigation

The period for which we are measuring subsidies (the POI) is calendar year 1999.

Analysis of Comments Received

All issues raised in the case and rebuttal briefs by parties to this administrative review are addressed in the Decision Memorandum, which is hereby adopted by this notice. Attached to this notice as Appendix I is a list of the issues which parties have raised and to which we have responded in the Decision Memorandum. Parties can find a complete discussion of all issues raised in this review and the corresponding recommendations in this public memorandum which is on file in the Central Records Unit, room B-099 of the main Department building. In addition, a complete version of the Decision Memorandum can be accessed directly on the Internet at http://ia.ita.doc.gov/​frn/​ under the heading “Israel.” The paper copy and electronic version of the Decision Memorandum are identical in content.

Suspension of Liquidation

In accordance with section 705(c)(1)(B)(i) of the Act, we have calculated an individual rate for DSM. Because DSM is the only respondent in this case, its rate serves as the all-others rate. We determine that the total estimated net subsidy rate is 16.52 percent ad valorem for DSM and for all other producers and exporters of the subject merchandise.

In accordance with our Preliminary Determination, we instructed the Customs Service to suspend liquidation of all entries of pure magnesium from Israel, which were entered or withdrawn from warehouse, for consumption on or after February 14, 2001, the date of the publication of our Preliminary Determination in the Federal Register. In accordance with section 703(d) of the Act, we instructed Customs to discontinue the suspension of liquidation for merchandise entered on or after June 22, 2001, but to continue the suspension of liquidation of entries made between February 14, 2001 and June 21, 2001.

We will issue a countervailing duty order and reinstate the suspension of liquidation under section 706(a) of the Act if the ITC issues a final affirmative injury determination and will require a cash deposit of estimated countervailing duties for such entries of merchandise in the amounts indicated above. If the ITC determines that material injury, or threat of material injury, does not exist, this proceeding will be terminated and all estimated duties deposited or securities posted as a result of the suspension of liquidation will be refunded or canceled.

ITC Notification

In accordance with section 705(d) of the Act, we will notify the ITC of our determination. In addition, we are making available to the ITC all non-privileged and non-proprietary information related to this investigation. We will allow the ITC access to all privileged and business proprietary information in our files, provided the ITC confirms that it will not disclose such information, either publicly or under an Administrative Protective Order (APO), without the written consent of the Assistant Secretary for Import Administration.

Return or Destruction of Proprietary Information

In the event that the ITC issues a final negative injury determination, this notice will serve as the only reminder to parties subject to an APO of their responsibility concerning the destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Failure to comply is a violation of the APO.

This determination is published pursuant to sections 705(d) and 777(i) of the Act.

Dated: September 14, 2001.

Faryar Shirzad,

Assistant Secretary for Import Administration.

Appendix

List of Comments and Issues in the Decision Memorandum

Comment 1: The Department failed to take into account the effects of the privatization of ICL.

Comment 2: The Department should change the AUL used to allocate non-recurring subsidies over time.

Comment 3: The infrastructure grant is not countervailable.

Comment 4: The Department should treat DSM's ECIL grant as multiple grants.

Comment 5: The Department should use uncreditworthy discount rates to allocate benefits.

Comment 6: Use of variable discount rates.

Comment 7: The Department should correct DSW's 1993 interest rate

Comment 8: The Department should change its calculation of the benefits conveyed by the EIRD grants

Comment 9: Reconsideration of industry standing

Comment 10: Scope

Footnotes

1.  The meaning of this term is the same as that used by the American Society for Testing and Materials in its Annual Book of ASTM Standards: Volume 01.02 Aluminum and Magnesium Alloys.