[Federal Register Volume 63, Number 172 (Friday, September 4, 1998)]
[Notices]
[Pages 47263-47267]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-23914]
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DEPARTMENT OF COMMERCE
International Trade Administration
[C-791-806]
Preliminary Affirmative Countervailing Duty Determination and
Alignment of Final Countervailing Duty Determination With Final
Antidumping Duty Determination: Stainless Steel Plate In Coils From
South Africa
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: September 4, 1998.
FOR FURTHER INFORMATION CONTACT: Dana Mermelstein, Robert Copyak, or
Kathleen Lockard, Office of CVD/AD Enforcement VI, Import
Administration, U.S. Department of Commerce, Room 3099, 14th Street and
Constitution Avenue, NW, Washington, DC 20230; telephone (202) 482-
2786.
Preliminary Determination
The Department of Commerce (the Department) preliminarily
determines that countervailable subsidies are being provided to the
Columbus Joint Venture, a producer and exporter of stainless steel
plate in coils from South Africa. For information on the estimated
countervailing duty rates, please see the ``Suspension of Liquidation''
section of this notice.
Petitioners
The petition in this investigation was filed by Allegheny Ludlum
Corporation, Armco, Inc., J & L Specialty Steel, Inc., Lukens Inc.,
United Steelworkers of America, AFL-CIO/CLC, Butler Armco Independent
Union, and Zanesville Armco Independent Organization, Inc. (the
petitioners).
Case History
Since the publication of the notice of initiation in the Federal
Register, the following events have occurred. See Notice of Initiation
of Countervailing Duty Investigations: Stainless Steel Plate in Coils
from Belgium, Italy, the Republic of Korea, and the Republic of South
Africa, 63 FR 23272 (April 28, 1998) (Initiation Notice). On May 8,
1998 we issued countervailing duty questionnaires to the Government of
South Africa (GOSA) and the producers/exporters of the subject
merchandise. On June 1, 1998, we postponed the preliminary
determination of this investigation until August 28, 1998. See Notice
of Postponement of Time Limit for Countervailing Duty Investigations:
Stainless Steel Plate in Coils from Belgium, Italy, the Republic of
Korea, and the Republic of South Africa, 63 FR 31201 (June 8, 1998).
We received responses to our initial questionnaires from the GOSA
and the Columbus Joint Venture, the only producer/exporter of the
subject merchandise during the POI, on June 29, 1998. On April 30,
1998, Petitioners provided additional information with respect to seven
programs on which the Department did not initiate. On June 17, 1998, we
initiated on two additional programs. See ``Memorandum to Maria Harris
Tildon, Acting Deputy Assistant Secretary for AD/CVD Enforcement II,
Regarding Petitioners' Allegations,'' a public document on file in the
CRU. On June 18, 1998, we issued a questionnaire on these programs. The
response to that questionnaire was received on July 27. We issued
several supplemental questionnaires between July 14 and August 10 and
received responses from August 3 through August 17.
The Applicable Statute and Regulations
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 effective January 1, 1995 (the Act).
In addition, unless otherwise indicated, all citations to the
Department's regulations are to the current regulations as codified at
19 CFR 351 and published in the Federal Register on May 19, 1997 (62 FR
27295).
Scope of Investigation
For purposes of this investigation, the product covered is certain
stainless steel plate in coils. Stainless steel is an alloy steel
containing, by weight, 1.2 percent or less of carbon and 10.5 percent
or more of chromium, with or without other elements. The subject plate
products are flat-rolled products, 254 mm or over in width and 4.75 mm
or more in thickness, in coils, and annealed or otherwise heat treated
and pickled or otherwise descaled. The subject plate may also be
further processed (e.g., cold-rolled, polished, etc.) provided that it
maintains the specified dimensions of plate following such processing.
Excluded from the scope of this investigation are the following: (1)
plate not in coils, (2) plate that is not annealed or otherwise heat
treated and pickled or otherwise descaled, (3) sheet and strip, and (4)
flat bars.
The merchandise subject to this investigation is currently
classifiable in the Harmonized Tariff Schedule of the United States
(HTS) at subheadings: 7219.11.00.30, 7219.11.00.60, 7219.12.00.05,
7219.12.00.20, 7219.12.00.25, 7219.12.00.50, 7219.12.00.55,
7219.12.00.65, 7219.12.00.70, 7219.12.00.80, 7219.31.00.10,
7219.90.00.10, 7219.90.00.20, 7219.90.00.25, 7219.90.00.60,
7219.90.00.80, 7220.11.00.00, 7220.20.10.10, 7220.20.10.15,
7220.20.10.60, 7220.20.10.80, 7220.20.60.05, 7220.20.60.10,
7220.20.60.15, 7220.20.60.60, 7220.20.60.80, 7220.90.00.10,
7220.90.00.15, 7220.90.00.60, and 7220.90.00.80. Although the HTS
subheadings are provided for convenience and Customs purposes, the
written description of the merchandise under investigation is
dispositive.
Injury Test
Because South Africa 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 South Africa materially injure, or threaten
material injury to, a U.S. industry. On May 28, 1998, the ITC published
its preliminary determination that there is a reasonable indication
that an industry in the United States is being materially injured, or
threatened with material injury, by reason of imports from South Africa
of the subject merchandise (62 FR 49994).
Alignment With Final Antidumping Duty Determination
On May 27, 1998 the petitioners submitted a letter requesting
alignment of the final determination in this investigation with the
final determination in the companion antidumping duty investigations.
See Initiation of Antidumping Investigations: Stainless Steel Plate in
Coils From Belgium, Canada, Italy, Republic of South Africa, Republic
of Korea, and Taiwan, 63 FR 20580 (April 27, 1998). In accordance with
section 705(a)(1) of the Act, we are aligning the final determination
in this investigation with the final antidumping duty determinations in
the antidumping investigations of stainless steel plate in coils.
Period of Investigation
The period for which we are measuring subsidies (the POI) is
calendar year 1997.
Facts Available
Section 776(a)(1) of the Act requires the Department to use facts
available if ``necessary information is not available on the record.''
In this investigation, information necessary to our analysis of the
Columbus Joint Venture (CJV) was
[[Page 47264]]
unavailable on the record. Pursuant to section 782(d), we gave CJV the
opportunity to cure the deficiencies, but the information was not
provided in time for the preliminary determination. Therefore, we have
resorted to facts available as discussed in the ``Allocation Period''
and ``IDC/Impofin Financing'' sections below.
Company History
In 1988, Samancor Limited (Samancor) and Highveld Steel and
Vanadium (Highveld) formed the Columbus Joint Venture to explore the
possibility of establishing a world-class, 500,000-ton capacity,
stainless steel facility in South Africa. In 1991, the partners
examined the option of building a plant in South Africa and made a
proposal to the Industrial Development Corporation of South Africa
(IDC) that it take a capital stake in the joint venture. The IDC is a
state-owned corporation, established in 1940, to further the economic
development goals of the South African government. The partners
approached the IDC because it provides equity investments and
facilitation and guarantee of financing for projects which contribute
to furthering the GOSA's economic development objectives. After being
approached by the partners, the IDC performed a detailed analysis of
the 1991 proposal and decided to participate in the investment subject
to certain conditions: that the project be based on the expansion of an
existing facility rather than on the construction of a new plant; and,
that its implementation be delayed pending the establishment of a
program providing tax benefits for capital investments (see discussion
of the section 37E program, below).
To meet the IDC's condition, in October 1991, Samancor and Highveld
purchased an existing stainless steel facility, the Middleburg Steel &
Alloys (MS&A) company. In 1992, the partners again approached the IDC.
Based on a revised proposal, the IDC and the two partners conducted a
detailed feasibility study to identify the prospects for the venture.
The IDC made a counteroffer to the partners which was accepted.
Samancor, Highveld, and the IDC entered into a new partnership
agreement which is the basis for the current structure of the CJV.
Effective January 1, 1993, the IDC became a one-third and equal partner
in the venture.
The implementation of the CJV expansion project began in 1993 and
was undertaken over the course of two and one-half years. The expansion
was completed in 1995. The CJV produces a range of stainless steel
products including subject merchandise.
Subsidies Valuation Information
Allocation Period
In the past, the Department has relied upon information from the
U.S. Internal Revenue Service on the industry-specific AUL in
determining the allocation period for non-recurring subsidies. See
General Issues Appendix (GIA), 58 FR 37227, appended to the Final
Countervailing Duty Determination; Certain Steel Products from Austria,
et al., 58 FR 37217 (July 9, 1993). However, in British Steel plc v.
United States, 879 F. Supp. 1254 (CIT 1995) (British Steel I), the U.S.
Court of International Trade (the Court) ruled against this allocation
methodology. In accordance with the Court's remand order, the
Department calculated a company-specific allocation period for non-
recurring subsidies based on the AUL of non-renewable physical assets.
This remand determination was affirmed by the Court on June 4, 1996.
See British Steel plc v. United States, 929 F. Supp. 426, 439 (CIT
1996) (British Steel II). Thus, we intend to determine the allocation
period for non-recurring subsidies using company-specific AUL data
where reasonable and practicable. See, e.g., Certain Cut-to-Length
Carbon Steel Plate from Sweden; Final Results of Countervailing Duty
Administrative Review, 62 FR 16551 (April 7, 1997).
In this investigation, the Department has followed the Court's
decision in British Steel, and requested that the respondent submit
information relating to its average useful life of assets. However,
despite repeated requests, the CJV has not provided the information
required to calculate a company-specific AUL. Therefore, as facts
available, we are relying on the U.S. Internal Revenue Service
depreciation tables, which report a schedule of 15 years for the
productive equipment used in the steel industry.
Discount Rates
The Department normally uses, as the discount rate, the average
commercial long-term fixed interest rate available in the country under
investigation. However, we were unable to obtain this information prior
to the preliminary determination; the only information on the record on
long-term fixed interest rates in South Africa is the long-term
government bond rate. Therefore, for purposes of the preliminary
determination, we have used the long-term government bond rate as the
discount rate. We will seek a rate for the final determination that
better reflects an average long-term commercial fixed interest rate in
South Africa.
I. Programs Preliminarily Determined To Be Countervailable
A. Benefits Under Section 37E of the Income Tax Act
The GOSA established section 37E of the Income Tax Act to promote
capital investment in order to foster long-term economic development.
The purpose of the program is to encourage investment in large
industrial expansion projects in value-added sectors of the economy.
For projects approved as valued-added processes, section 37E allows for
depreciation of capital assets and the deduction of pre-production
interest and finance charges in advance, that is, in the year the costs
are incurred rather than the year the assets go into use. The program
also allows taxpayers in loss positions to receive ``negotiable tax
credit certificates'' (NTCCs) in the amount of the cash value of the
section 37E tax deduction (i.e., deduction multiplied by the tax rate).
The NTCCs can be sold (normally at a discount) to any other taxpayer,
who then can use them to pay taxes. The program does not provide for
accelerated depreciation, nor does it provide for additional finance
charge-related deductions beyond those available under the South
African tax code; the advantage to users of this program is the receipt
of these tax deductions in advance, i.e., when the expenses are
incurred rather than when the equipment is put into use.
Eligibility for section 37E benefits is determined on a project-by-
project basis by a committee appointed by the Minister of Finance in
concurrence with the Minister of Trade and Industry. According to
section 37E, a project's eligibility is contingent upon being
designated a ``value-added process.'' Qualifying investments had to be
made between September 12, 1991 and September 11, 1993. Applicants had
to submit comprehensive information which demonstrated: (1) that the
project would add at least 35 percent to the value of the raw material
or intermediate product processed; (2) that the project would be
carried out on an internationally competitive scale; and (3) that the
taxpayer would utilize foreign term credits when importing capital
goods for the project.
The CJV became eligible to receive section 37E benefits in 1993,
two years before the completion of the expansion of CJV's plant in
1995. Because the CJV is a partnership rather than a tax-paying
corporation, section 37E benefits earned by the CJV are claimed by the
partners.
[[Page 47265]]
When determining whether a program is countervailable, we must
ascertain whether it provides benefits to a specific enterprise,
industry, or group thereof. We examined whether the program is de jure
specific and found that the implementing legislation does not limit
eligibility for the program to an enterprise, industry, or group
thereof. We then analyzed whether the program meets the criteria for de
facto specificity defined under section 771(5A)(D)(iii) of the Act,
i.e., whether the actual recipients of the subsidy are limited in
number, whether an enterprise, industry, or group thereof is a
predominant user of the subsidy, whether an enterprise, industry, or
group thereof receives a disproportionately large amount of the
subsidy, or whether the authority providing the subsidy has exercised
discretion in the decision to grant the subsidy indicates that an
enterprise, industry, or group thereof is favored over others. We
examined information about the recipients, including the number of
enterprises and industries, and the distribution of benefits granted.
The record indicates that only 13 companies were approved to receive
benefits and fewer than 13 companies actually received benefits under
the section 37E program. See Decision Memorandum, dated August 28,
1998, public version on file in the Central Record's Unit (CRU), room
B-099 of the main Commerce building (Decision Memorandum). Thus, we
preliminarily determine that section 37E is de facto specific as the
actual recipients of the subsidy are limited in number.
The Department normally considers that a benefit arises from a tax
program in the amount of the difference between the taxes paid and the
taxes that would have been paid absent the program. However, the
section 37E program does not operate as a normal tax program. The
purpose of the program is to promote capital investment. According to
the IDC, ``[t]he accelerated tax allowances reduce the peak funding
requirements of major capital investment projects.'' See IDC 1992
Annual Report, Annexure 7 of the July 31, 1998 Questionnaire Response,
public version on file in the CRU. Through this program, capital
requirements for investments are reduced, as evidenced by the partners'
views that the program was essential in reducing the start-up costs of
the venture. See Petition at Exhibit S-8, public version on file in
CRU. Furthermore, there is a cash flow impact regardless of the
company's tax position. As such, we consider that, although the section
37E program is a ``tax'' program, it would be inappropriate to treat it
as a tax program. Rather, the 37E program is like a capital
contribution and therefore should be treated accordingly.
The section 37E program provides a financial contribution within
the meaning of section 771(5)(D)(ii) of the Act as it constitutes
revenue foregone by the GOSA. Because section 37E provides only for the
claiming of depreciation and finance-related deductions in advance of
the normal period, the benefit within the meaning of section 771(5)(E)
of the Act, is the value to the company of being able to claim the
depreciation in advance. Therefore, we preliminarily determine that the
section 37E program constitutes a countervailable subsidy within the
meaning of section 771(5) of the Act. In addition, since the section
37E program reduces a company's capital requirements, and because the
receipt of section 37E benefits required express government approval,
we preliminarily determine that it is more appropriate to treat the
assistance provided under section 37E as a non-recurring subsidy. See
GIA, 58 FR at 37226.
To determine the benefit, we ascertained the value of the section
37E allowances to the company. First, we calculated the cash value of
each 37E claim by multiplying the total allowance claimed in each year
by the relevant tax rate. Then, we determined the time value of
obtaining the allowance in advance, in this case, by two years, by
discounting the cash value of each allowance. The difference between
the tax value of the allowances and the discounted amount is the
benefit to the company. This analysis is akin to the discounting by a
commercial bank of the face value of a negotiable instrument obtained
in advance of its maturity, for example, an invoice or a letter of
credit submitted by an exporter. Finally, because we consider that the
section 37E assistance should be allocated over time as a nonrecurring
subsidy, we treated the benefit realized in each year as a non-
recurring grant using our standard grant methodology. Since the CJV did
not report its AUL, as facts available, we are relying on the IRS
depreciation schedule of 15 years as the allocation period. We summed
the amounts allocated to the POI and divided by CJV's total sales.
Accordingly, we preliminarily determine the countervailable subsidy to
be 1.94 percent ad valorem for the CJV.
B. Import Financing through Impofin, Ltd. and the IDC
The IDC and its wholly-owned subsidiary, Impofin, Ltd., facilitate
and guarantee foreign credits for the importation of capital goods into
South Africa. The program was established in 1989 and was designed to
facilitate foreign lending to South African firms; the availability of
foreign credit in South Africa was extremely limited at that time. The
IDC/Impofin maintain blanket credit lines with banks in numerous
countries which are used in two ways. First, the IDC may act as an
intermediary lending authority, borrowing funds through these credit
lines from the foreign bank and lending them to the South African firm.
Second, based on these credit lines, the South African firm may
negotiate its own supply contract loan with the foreign lender which is
then guaranteed by the IDC. Any company seeking financing for the
purchase of foreign capital equipment may apply to Impofin to use the
program. Whether the financing is arranged through the IDC/Impofin or
directly with the foreign lender, it is guaranteed through the IDC/
Impofin program. The IDC charges a fee for its guaranteeing and
facilitating services.
The CJV used the IDC/Impofin financing program to finance all of
its foreign capital equipment sourcing. Of the 23 U.S. dollar-
denominated loans, twelve are held by the IDC or Impofin with the
foreign lender, the funds re-loaned to CJV, and the financing
guaranteed by the IDC/Impofin. For the remaining eleven loans, the IDC/
Impofin arranged for CJV to hold the loan contract directly with the
foreign lender and then the IDC/Impofin provided the guarantee.
The Department considers government-guaranteed loans to constitute
a financial contribution within the meaning of section 771(5)(D) of the
Act. With respect to the CJV, the IDC/Impofin arranged for and
guaranteed all the import financing for the capital equipment purchased
for the expansion project. This guaranteed financing represents a
financial contribution by the GOSA. Loan guarantees confer a benefit as
provided under section 771(5)(E)(iii) ``if there is a difference, after
adjusting for any difference in guarantee fees, between the amount the
recipient of the guarantee pays on the guaranteed loan and the amount
the recipient would pay for a comparable commercial loan if there were
no guarantee by the authority.'' A comparison of the benchmark interest
rate to the interest rate charged on the guaranteed loans
[[Page 47266]]
indicates for some of the loans that the interest rate is less than the
interest rate on a comparable commercial loan.
Next, we analyzed whether the program is specific in law (de jure
specificity), or in fact (de facto specificity), within the meaning of
subsections 771(5A)(D)(i) and (iii) of the Act. The enacting
legislation for the IDC/Impofin does not explicitly limit eligibility
for these financing programs to an enterprise, industry, or group
thereof. Thus, we find that the law is not de jure specific, and we
must analyze whether the program meets the de facto criteria defined
under section 771(5A)(D)(iii). We examined information provided by the
GOSA and found that since 1990, the ``fabricated metal products'' and
``basic metal manufacture'' industries have been predominant users of
the program. These industries have received more than fifty percent, by
value, of the total guaranteed loans awarded over the life of the
program. On this basis, we find IDC/Impofin guaranteed financing to be
de facto specific within the meaning of section 771(5A)(D)(iii) of the
Act. Therefore, we preliminarily determine that the IDC/Impofin
guaranteed financing program constitutes a countervailable subsidy
within the meaning of section 771(5) of the Act.
To calculate the benefit, we used the Department's standard long-
term fixed rate loan methodology. We included in the calculation the
fees paid by the CJV to the IDC for the financing and guaranteeing
services. We plan to gather information on commercial loan guarantee
practices and add commercial guarantee fees to the benchmark rate for
the final determination. All of the loans were denominated in U.S.
dollars. Because respondent did not provide information about long-term
U.S. dollar borrowing in South Africa in time for this preliminary
determination, we resorted to facts available to determine the
appropriate benchmark. (See ``Facts Available'' section above.)
Therefore, we used Moody's average yield on selected long-term
corporate bonds as reported by the Federal Reserve as the benchmark
interest rate. We summed the benefits received during the POI and
divided that amount by CJV's total sales. Accordingly, we preliminarily
determine the countervailable subsidy to be 0.20 percent ad valorem for
the CJV.
II. Program Preliminarily Determined To Be Not Countervailable
Capital Contributions/ IDC Participation in the Columbus Joint
Venture
As discussed in the ``Company History'' Section above, in 1988,
Highveld and Samancor formed the Columbus Joint Venture to explore the
possibility of establishing a stainless steel facility in South Africa.
In 1991, the partners proposed that the IDC make a capital investment
in the venture. The IDC performed a detailed analysis of the 1991
proposal and decided to participate in the investment subject to
certain conditions: that the project would be based on the expansion of
an existing facility and that its implementation would be delayed
pending the establishment of the section 37E program. In 1992, after
the partners acquired an existing facility for the purpose of
implementing the IDC's recommendations, the partners approached the IDC
with a revised proposal. Based on this proposal, the IDC and the two
partners conducted a detailed feasibility study to identify the
prospects for the venture. The IDC made a counteroffer to the partners
which was accepted. Effective January 1, 1993, the IDC became a one-
third and equal partner in the venture. Samancor, Highveld, and the IDC
entered a new partnership agreement which is the basis for the current
structure of the CJV.
The Department considers the government's provision of equity or
start-up capital to constitute a benefit ``* * * if the investment
decision is inconsistent with the usual investment practice of private
investors, including the practice regarding the provision of risk
capital, in the country in which the equity infusion is made.'' See
771(5)(E)(i) of the Act. The Department applies this standard in a
case-by-case analysis of the commercial context in which the investment
decision is made. Thus, we must determine whether the IDC's decision to
participate in the CJV was consistent with the usual investment
practices of private investors in South Africa.
While Samancor and Highveld are both private investors, their
participation in the venture, per se, is not a sufficient basis for
determining whether the IDC's participation is consistent with usual
investment practices. By the time the IDC decided to invest, Samancor
and Highveld had been partners in this investment for five years. Both
already had substantial stakes in the project, including the purchase
of the MS&A facility in 1991. Thus, their evaluation of the CJV
expansion project was affected by their interest in protecting their
existing investment and they may have been willing to accept a higher
level of risk than another private investor would. Therefore, their
continued participation is not the appropriate background against which
to examine the IDC's decision, and we have focused our analysis on the
independent basis for the IDC's decision in order to determine whether
it was consistent with the investment practices of a private investor.
As discussed above, in 1991 and 1992, the partners made detailed
presentations to the IDC of the risks and projected returns of the
project. The IDC agreed to participate in the venture subject to
modifications designed to increase the rate of return of the project by
lowering its initial capital requirements. In 1992, with assistance
from the partners, the IDC conducted a feasibility study to analyze the
strengths and weaknesses of the venture and to project its financial
performance, based upon the expansion of the MS&A facility. This
detailed analysis, which respondents submitted for the record, is the
primary basis for the IDC's decision to invest in the CJV.
Given the proprietary nature of the feasibility study, the specific
analysis and projections contained in the study cannot be addressed in
this public notice. See Decision Memorandum. The study is based on
reasonable assumptions and concludes that the CJV was a viable venture
which would provide a positive real rate of return on the IDC's
investment. The study concludes that the average nominal rate of return
for the project would be 19.13 percent.
We compared the projected return on the investment to information
available for other investments in South Africa during this period.
Because of the proprietary nature of the feasibility study, this
analysis cannot be detailed in this public notice. See Decision
Memorandum. The nominal rate of return of 19.13 percent exceeds
government bond yields. While the projected real rate of return is not
outstanding, it is comparable to returns provided by other investment
instruments including bonds and industrial stocks. While we plan to
gather more information about commercial investment practices in South
Africa in order to inform our analysis for the final determination, the
information thus far on the record indicates that the projected return
was adequate and it supports a finding that the IDC's investment
decision was consistent with the behavior of a reasonable private
investor.
Finally, we examined the structure of the partnership itself, to
determine whether the IDC assumed more than its share of the risks
involved in the venture or less than its share of the potential
earnings. The three partners
[[Page 47267]]
contributed capital to the venture equally. They all account for one-
third of the project's year-end results in their financial statements,
in accordance with the normal practice for partnerships. They each hold
the same number of seats on the CJV's board. To the extent that the
IDC's commitments and obligations to the joint venture differ from the
other partners, these differences reflect the IDC's role as an
investor, in contrast to the other partner's experience in industrial
operations. Furthermore, the IDC took steps to protect its level of
risk from the investment. For example, where the IDC has assumed more
than its pro-rata share of the risk, such as guaranteeing Impofin
financing, it has required counterguarantees from the other partners,
so the risk is shared.
While the partnership is structured so that the IDC's role in the
CJV is slightly different from that of the other two partners, the
agreement stipulates equal cash participation, equal representation on
the Board of Directors, and equal distribution of any returns on the
investments. In addition, the IDC was pro-active in protecting its
investment by requiring measures to ensure that the risks would be
equally distributed with the other partners. The IDC recommended ways
to increase the project's earnings potential and negotiated safeguards
in the partnership agreement. The IDC appears to have assumed only an
amount of risk that is commensurate with its level of participation as
a partner.
The IDC's decision to invest in the CJV appears to be based upon a
reasonable analysis that the project was viable, an informed assessment
that the IDC would realize a positive real rate of return on its
investment, and a partnership based on the equal distribution of the
risks. On this basis, we preliminarily determine that the IDC's capital
contribution into the CJV was not inconsistent with the normal practice
of private investors in South Africa, and thus, does not constitute a
countervailable subsidy within the meaning of the Act.
IV. Programs Preliminarily Determined To Be Not Used
Based on the information provided in the responses, we
preliminarily determine that the company under investigation did not
apply for or receive benefits under the following programs during the
POI.
A. Low Interest Rate Finance for the Promotion of Exports (LIFE)
Scheme, which the GOSA reports is the same program as the Low Interest
Rate Scheme for the Promotion of Exports
B. Competitiveness Fund
C. Export Assistance Under the Export Marketing Assistance and the
Export Marketing and Investment Assistance Programs
D. Regional Industrial Development Program (RIDP)
E. Export Marketing Allowance
F. Multi-Shift Scheme
Verification
In accordance with section 782(i) of the Act, we will verify the
information submitted by respondents prior to making our final
determination.
Suspension of Liquidation
In accordance with section 703(d)(1)(A)(i) of the Act, we have
calculated an individual rate for CJV, the sole manufacturer/exporter
of the subject merchandise. We preliminarily determine that the total
estimated net countervailable subsidy rate is 2.14 percent ad valorem.
Because we only investigated one producer/exporter, CJV, rate will also
serve as the ``all others'' rate. Therefore, the ``all others'' rate is
2.14 percent ad valorem.
In accordance with section 703(d) of the Act, we are directing the
U.S. Customs Service to suspend liquidation of all entries of plate in
coils from South Africa, which are entered or withdrawn from warehouse,
for consumption on or after the date of the publication of this notice
in the Federal Register, and to require a cash deposit or bond for such
entries of the merchandise in the amount of 2.14 percent ad valorem.
This suspension will remain in effect until further notice.
ITC Notification
In accordance with section 703(f) of the Act, we will notify the
ITC of our determination. In addition, we are making available to the
ITC all nonprivileged and nonproprietary information relating 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, without the written consent
of the Assistant Secretary, Import Administration.
If our final determination is affirmative, the ITC will make its
final determination within 45 days after the Department makes its final
determination.
Public Comment
In accordance with 19 CFR 351.310, we will hold a public hearing,
if requested, to afford interested parties an opportunity to comment on
this preliminary determination. The hearing is tentatively scheduled to
be held 57 days from the date of publication of the preliminary
determination at the U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW, Washington, DC 20230. Individuals who wish to
request a hearing must submit a written request within 30 days of the
publication of this notice in the Federal Register to the Assistant
Secretary for Import Administration, U.S. Department of Commerce, Room
1870, 14th Street and Constitution Avenue, NW, Washington, DC 20230.
Parties should confirm by telephone the time, date, and place of the
hearing 48 hours before the scheduled time.
Requests for a public hearing should contain: (1) the party's name,
address, and telephone number; (2) the number of participants; and, (3)
to the extent practicable, an identification of the arguments to be
raised at the hearing. In addition, six copies of the business
proprietary version and six copies of the nonproprietary version of the
case briefs must be submitted to the Assistant Secretary no later than
50 days from the date of publication of the preliminary determination.
As part of the case brief, parties are encouraged to provide a summary
of the arguments not to exceed five pages and a table of statutes,
regulations, and cases cited. Six copies of the business proprietary
version and six copies of the nonproprietary version of the rebuttal
briefs must be submitted to the Assistant Secretary no later than 55
days from the date of publication of the preliminary determination. An
interested party may make an affirmative presentation only on arguments
included in that party's case or rebuttal briefs. Written arguments
should be submitted in accordance with 19 CFR 351.309 and will be
considered if received within the time limits specified above.
This determination is published pursuant to sections 703(f) and
777(i) of the Act.
Dated: August 28, 1998.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 98-23914 Filed 9-3-98; 8:45 am]
BILLING CODE 3510-DS-P
