Certain Corrosion-Resistant Carbon Steel Flat Products; Cold-Rolled Carbon Steel Flat Products; and Cut-to-Length Carbon Steel Plate Products From Germany; Preliminary Results of Full Sunset Reviews

AGENCY:

Import Administration, International Trade Administration, Department of Commerce

ACTION:

Notice of preliminary results of full sunset reviews: Certain corrosion-resistant carbon steel flat products; cold-rolled carbon steel flat products; and cut-to-length carbon steel plate products from Germany.

SUMMARY:

On September 1, 1999, the Department of Commerce (“the Department”) initiated sunset reviews of the countervailing duty orders on certain corrosion-resistant carbon steel flat products, cold-rolled carbon steel flat products, and cut-to-length carbon steel plate products (collectively the “steel products”) from Germany (64 FR 47767) pursuant to section 751(c) of the Tariff Act of 1930, as amended (“the Act”). On the basis of notices of intent to participate filed on behalf of domestic interested parties and substantive responses filed on behalf of domestic and respondent interested parties, the Department is conducting full (240-day) sunset reviews. As a result of these reviews, the Department preliminarily finds that revocation of the countervailing duty orders would be likely to lead to continuation or recurrence of countervailing subsidies at the levels indicated in the Preliminary Results of Review section of this notice.

EFFECTIVE DATE:

March 27, 2000.

FOR FURTHER INFORMATION CONTACT:

Eun W. Cho or Melissa G. Skinner, Office of Policy for Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-1698 or (202) 482-1560, respectively.

SUPPLEMENTARY INFORMATION:

The Applicable Statute

Unless otherwise indicated, all citations to 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 regulations are to 19 CFR Part 351 (1999). Guidance on methodological or analytical issues relevant to the Department's conduct of sunset reviews is set forth in the Department 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).

Background

On September 1, 1999, the Department initiated sunset reviews of the countervailing duty orders on the steel products from Germany (64 FR 47767). We invited parties to comment. On the basis of notices of intent to participate filed on behalf of domestic interested parties and substantive responses filed on behalf of domestic and respondent interested parties, the Department is conducting full (240-day) sunset reviews. The Department is conducting these sunset reviews in accordance with sections 751 and 752 of the Act.

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). These reviews concern transition orders within the meaning of section 751(c)(6)(C)(i) of the Act. Therefore, on December 22, 1999, the Department determined that the sunset reviews of the countervailing duty orders on the steel products from Germany are extraordinarily complicated and extended the time limit for completion of the preliminary results of these reviews until not later than March 19, 2000, in accordance with section 751(c)(5)(B) of the Act.

Scope of Review

The products covered by these reviews are certain corrosion-resistant carbon steel flat products, cold-rolled carbon steel flat products, and cut-to-length steel plate products from Germany.

(1) Certain corrosion-resistant carbon steel flat products: The scope of countervailing duty order of certain corrosion-resistant carbon steel flat products (“corrosion-resistant”) includes flat-rolled carbon steel products, of rectangular shape, either clad, plated, or coated with corrosion-resistant metals such as zinc, aluminum, or zinc-, aluminum-, nickel- or iron-based alloys, whether or not corrugated or painted, varnished or coated with plastics or other nonmetallic substances in addition to the metallic coating, in coils (whether or not in successively superimposed layers) and of a width of 0.5 inch or greater, or in straight lengths which, if of a thickness less than 4.75 millimeters, are of a width of 0.5 inch or greater and which measures at least 10 times the thickness or if of a thickness of 4.75 millimeters or more are of a width which exceeds 150 millimeters and measures at least twice the thickness, as currently classifiable in the Harmonized Tariff Schedule (“HTS”) under item numbers 7210.31.0000, 7210.39.0000, 7210.41.0000, 7210.49.0030, 7210.49.0090, 7210.60.0000, 7210.70.6030, 7210.70.6060, 7210.70.6090, 7210.90.1000, 7210.90.6000, 7210.90.9000, 7212.21.0000, 7212.29.0000, 7212.30.1030, 7212.30.1090, 7212.30.3000, 7212.30.5000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 7212.60.0000, 7215.90.1000, 7215.90.5000, 7217.12.1000, 7217.13.1000, 7217.19.1000, 7217.19.5000, 7217.22.5000, 7217.23.5000, 7217.29.1000, 7217.29.5000, 7217.32.5000, 7217.33.5000, 7217.39.1000, and 7217.39.5000. Included in this scope are flat-rolled products of non-rectangular cross-section where such cross-section is achieved subsequent to the rolling process (i.e., products which have been worked after rolling)—for example, products which have been bevelled or rounded at the edges. Excluded from this scope are flat-rolled steel products either plated or coated with tin, lead, chromium, chromium oxides, both tin and lead (“terne plate”), or both chromium and chromium oxides (“tin-free steel”), whether or not painted, varnished or coated with plastics or other nonmetallic substances in addition to the metallic coating. Also excluded from this scope are clad products in straight lengths of 0.1875 inch or more in composite thickness and of a width which exceeds 150 millimeters and measures at least twice the thickness. Also excluded from this scope are certain clad stainless flat-rolled products, which are three-layered corrosion-resistant carbon steel flat-rolled products less than 4.75 millimeters in composite thickness that consist of a carbon steel flat-rolled product clad on both sides with stainless steel in a “20 percent-60 percent-20 percent” ratio.

On September 22, 1999, the Department issued the final results of a changed circumstances review and revoked the order with respect to certain corrosion-resistant steel.

(2) Certain cold-rolled carbon steel flat products: The scope of countervailing duty order of certain cold-rolled carbon steel flat products includes cold-rolled (cold-reduced) carbon steel flat-rolled products, of rectangular shape, neither clad, plated nor coated with metal, whether or not painted, varnished or coated with plastics or other nonmetallic substances, in coils (whether or not in successively superimposed layers) and of a width of 0.5 inch or greater, or in straight lengths which, if of a thickness less than 4.75 millimeters, are of a width of 0.5 inch or greater and which measures at least 10 times the thickness or if of a thickness of 4.75 millimeters or more are of a width which exceeds 150 millimeters and measures at least twice the thickness, as currently classifiable in the Harmonized Tariff Schedule (“HTS”) under item numbers 7209.11.0000, 7209.12.0030, 7209.12.0090, 7209.13.0030, 7209.13.0090, 7209.14.0030, 7209.14.0090, 7209.21.0000, 7209.22.0000, 7209.23.0000, 7209.24.1000, 7209.24.5000, 7209.31.0000, 7209.32.0000, 7209.33.0000, 7209.34.0000, 7209.41.0000, 7209.42.0000, 7209.43.0000, 7209.44.0000, 7209.90.0000, 7210.70.3000, 7210.90.9000, 7211.30.1030, 7211.30.1090, 7211.30.3000, 7211.30.5000, 7211.41.1000, 7211.41.3030, 7211.41.3090, 7211.41.5000, 7211.41.7030, 7211.41.7060, 7211.41.7090, 7211.49.1030, 7211.49.1090, 7211.49.3000, 7211.49.5030, 7211.49.5060, 7211.49.5090, 7211.90.0000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 7217.11.1000, 7217.11.2000, 7217.11.3000, 7217.19.1000, 7217.19.5000, 7217.21.1000, 7217.29.1000, 7217.29.5000, 7217.31.1000, 7217.39.1000, and 7217.39.5000. Included in this scope are flat-rolled products of non-rectangular cross-section where such cross-section is achieved subsequent to the rolling process (i.e., products which have been worked after rolling)—for example, products which have been bevelled or rounded at the edges. Excluded from this scope is certain shadow mask steel; i.e., aluminum-killed, cold-rolled steel coil that is open-coil annealed, has a carbon content of less than 0.002 percent, is of 0.003 to 0.012 inch in thickness, 15 to 30 inches in width, and has an ultra flat, isotropic surface.

(3) Certain cut-to-length carbon steel plate products: The scope of countervailing duty order on certain cut-to-length carbon steel plate products (“cut-to-length steel”) includes hot-rolled carbon steel universal mill plates (i.e., flat-rolled products rolled on four faces or in a closed box pass, of a width exceeding 150 millimeters but not exceeding 1,250 millimeters and of a thickness of not less than 4 millimeters, not in coils and without patterns in relief), of rectangular shape, neither clad, plated nor coated with metal, whether or not painted, varnished, or coated with plastics or other nonmetallic substances; and certain hot-rolled carbon steel flat-rolled products in straight lengths, of rectangular shape, hot rolled, neither clad, plated, nor coated with metal, whether or not painted, varnished, or coated with plastics or other nonmetallic substances, 4.75 millimeters or more in thickness and of a width which exceeds 150 millimeters and measures at least twice the thickness, as currently classifiable in the Harmonized Tariff Schedule (“HTS”) under item numbers 7208.40.3030, 7208.40.3060, 7208.51.0030, 7208.51.0045, 7208.51.0060, 7208.52.0000, 7208.53.0000, 7208.90.0000, 7210.70.3000, 7210.90.9000, 7211.13.0000, 7211.14.0030, 7211.14.0045, 7211.90.0000, 7212.40.1000, 7212.40.5000, and 7212.50.0000. Included are flat-rolled products of non-rectangular cross-section where such cross-section is achieved subsequent to the rolling process (i.e., products which have been worked after rolling) for example, products which have been bevelled or rounded at the edges. Excluded is grade X-70 plate.

On August 25, 1999, the Department issued the final results of a changed-circumstances review revoking the order in part, with respect to certain carbon cut-to-length steel plate with a maximum thickness of 80 mm in steel grades BS 7191, 355 EM and 355 EMZ, as amended by Sable Offshore Energy Project Specification XB MOO Y 15 0001, types 1 and 2.

The HTS item numbers are provided for convenience and custom purposes. The written description remains dispositive.

Analysis of Comments Received

All issues raised in substantive responses and rebuttals by parties to these sunset reviews are addressed in the Issues and Decision Memorandum (“Decision Memo”) from Jeffrey A. May, Director, Office of Policy, Import Administration, to Richard W. Moreland, Acting Assistant Secretary for Import Administration, dated March 20, 2000, which is hereby adopted and incorporated by reference into this notice. The issues discussed in the attached Decision Memo include the likelihood of continuation or recurrence of countervailable subsidy, the net countervailable subsidy likely to prevail were the order revoked, and the nature of the subsidy. 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 B-099, the Central Records Unit, of the Main Commerce building.

In addition, a complete version of the Decision Memo can be accessed directly on the Web at www.ita.doc.gov/importadmin/records/frn. The paper copy and electronic version of the Decision Memo are identical in content.

Preliminary Results of Review

We preliminarily determine that revocation of the countervailing duty orders would be likely to lead to continuation or recurrence of a countervailable subsidy at the following net subsidy rates.

Although the programs included in our calculation of the net countervailable subsidy likely to prevail if the orders were revoked do not fall within the definition of an export subsidy under Article 3.1(a) of the Subsidies Agreement, they may be subsidies described in 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. Moreover, we note that as of January 1, 2000, Article 6.1 has ceased to apply (see Article 31 of the Subsidies Agreement). As such, we are providing the Commission the following program descriptions:

Capital Investment Grants: This non-recurring program provided grants to reimburse a certain percentage of acquisition-cost of assets purchased or produced after July 1981 but prior to January 1986.

Investment Premium Act: Under this non-recurring program, which was supposedly in effect from 1969 through 1989, grants were provided to companies investing in specific regions of Germany for projects implemented by the company within three years of the certification.

Joint Scheme: This non-recurring program, which was signed in October 1969 and came into force in January 1970, was designed to assist companies in depressed areas.

Aid for Closure of Steel Operations: Based on two laws, this non-recurring program was created to reduce the economic and social costs of plant closings in the steel industry between 1987 and 1990.

Upswing East: This non-recurring program was established to provide a special investment allowance in five new states in Berlin.

TRA/BvS: The purpose of this non-recurring program is to take over the government-held assets in the former GDR and place them within the competition-directed market economy of the unified Germany.

SVK grant: The Government of Saarland and Dillinger's parent company, Usinor Sacilor, created a new holding company, DHS, making Dillinger and Saarstahl wholly-owned subsidiaries of DHS. In this restructuring process, the governments of Germany and Saarland forgave debts owed to them by Saarstahl. Also, private creditors forgave Saarstahl's debts as a part of the aforementioned restructuring.

Structural Improvement Aids: This program was created to provide funds for companies in the iron and steel industry to cover severance pay and transitional assistance for steel workers affected by the restructuring plan within the industry and to assist steel companies with the costs associated with plant closures.

Ruhr District Action Program: This program provided grants for investments in the Ruhr region. Under this program, grants relating to environmental protection were available exclusively to the steel industry.

ECSC 56: This program was created to provide assistance to persons who lost their jobs in iron, steel, and coal industries.

ECSC 54: This program was available only to the iron, steel, and coal industries to purchase new equipment or finance modernization.

ECSC 54 Interest: This program was available only to the iron, steel, and coal industries providing rebates during the restructuring and modernization of the industry beginning in the 1980's.

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 May 17, 2000. Interested parties may submit case briefs no later than May 8, 2000, 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 May 15, 2000. 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 and/or at a hearing, no later than July 27, 2000.

We are issuing and publishing this determination and notice in accordance with sections section 751(c), 752, and 777(i) of the Act.