Certain Cut-to-Length Carbon Steel Plate From Brazil; Final Results of Countervailing Duty Expedited Sunset Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of final results of countervailing duty expedited sunset review: Certain cut-to-length carbon steel plate from Brazil.

SUMMARY:

On September 1, 1999, the Department of Commerce (“the Department”) published the notice of initiation of the sunset review of the countervailing duty order on certain cut-to-length carbon steel plate (“cut-to-length plate”) from Brazil. On the basis of a notice of intent to participate and adequate substantive comments filed on behalf of domestic interested parties and inadequate response (in this case, no response) from respondent interested parties, we determined to conduct an expedited 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. The net countervailable subsidy is identified in the Final Results of Review section of this notice.

EFFECTIVE DATE:

April 6, 2000.

FOR FURTHER INFORMATION CONTACT:

Mark D. Young, Import Administration, International Trade Administration, U.S. Department of Commerce, Washington, DC 20230; telephone: (202) 482-6397.

SUPPLEMENTARY INFORMATION:

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 Uruguay Round Agreements Act (“URAA”). In addition, unless otherwise indicated, all citations to the Department of Commerce's (“the Department's”) 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'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”).

Background

On September 1, 1999, the Department published the notice of initiation of the sunset review of the countervailing duty order on cut-to-length plate from Brazil (64 FR 47767). The Department received a Notice of Intent to Participate on behalf of Bethlehem Steel Corporation and U.S. Steel Group, a unit of USX Corporation (“the domestic interested parties”), within the deadline specified in section 351.218(d)(1)(i) of the Sunset Regulations. The domestic interested parties claimed interested party status under section 771(9)(C) of the Act, as U.S. manufacturers of cut-to-length plate. We received a complete substantive response from the domestic interested parties on October 1, 1999, within the 30-day deadline specified in the Sunset Regulations under section 351.218(d)(3)(i). In their substantive response, the domestic interested parties stated that they were the petitioner in the original investigation of cut-to-length plate from Brazil. We did not receive a substantive response from any respondent interested party to these proceedings. As a result, pursuant to 751(c)(3)(B) of the Act and 19 CFR 351.218(e)(1)(ii)(C) of the Department's regulations, the Department determined to conduct an expedited, 120-day, review of this order.

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). The review at issue concern a transition order within the meaning of section 751(c)(6)(C)(i) of the Act. Therefore, the Department determined that the sunset review of the countervailing duty order on cut-to-length plate from Brazil is extraordinarily complicated and extended the time limit for completion of the final results of this review until not later than March 29, 2000, in accordance with section 751(c)(5)(B) of the Act.

Scope of Reviews

The products covered by this countervailing duty order constitute one “class or kind” of merchandise: certain cut-to-length plate. These products include 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 of the United States (“HTSUS”) under item numbers 7208.31.0000, 7208.32.0000, 7208.33.1000, 7208.33.5000, 7208.41.0000, 7208.42.0000, 7208.43.0000, 7208.90.0000, 7210.70.3000, 7210.90.9000, 7211.11.0000, 7211.12.0000, 7211.21.0000, 7211.22.0045, 7211.90.0000, 7212.40.1000, 7212.40.5000, and 7212.50.0000. Included within the 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 beveled or rounded at the edges. Excluded is grade X-70 plate. These HTSUS item numbers are provided for convenience and customs purposes. The Department's written description remains dispositive.

The Department has made one scope ruling on the subject merchandise from Brazil. The following product was determined to be within the scope of the order:

This review covers all imports from all manufacturers and exporters of cut-to-length plate from Brazil.

Analysis of Comments Received

All issues raised in this case by parties to this sunset review are addressed in the “Issues and Decision Memorandum” (“Decision Memo”) from Jeffrey A. May, Director, Office of Policy, Import Administration, to Robert S. LaRussa, Assistant Secretary for Import Administration, dated March 29, 2000, which is hereby adopted by this notice. The issues discussed in the Decision Memo include the likelihood of continuation or recurrence of a countervailable subsidy, the net countervailable subsidy, 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 room B-099 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/import_admin/records/frn/. The paper copy and electronic version of the Decision Memo are identical in content.

Final Results of Reviews

We determine that revocation of the countervailing duty order on cut-to-length plate from Brazil would be likely to lead to continuation or recurrence of a countervailable subsidy at the rates listed below:

Because receipt of benefits provided by the Government of Brazil's (“GOB's”) countervailable program Exemption of IPI and Duties on Imports under Decree-Law 2324 is contingent upon exports, this program fall within the definition of an export subsidy under Article 3.1(a) of the Subsides Agreement.

All of the other programs provided by the GOB are, however, programs that could be found inconsistent with Article 6.1 of the Subsidies Agreement if the net subsidy exceeds 5 percent ad valorem as measured in accordance with Annex IV of the Subsidies Agreement. However, the Department does not have enough information to calculate or determine whether the total ad valorem subsidization of the subject merchandise from these programs exceeds five-percent or whether they were meant to cover operating losses or to be used as direct forgiveness of debt. Nor does the Department believe such calculation or determination would be appropriate in the course of a sunset review. Instead, we are providing the Commission with the program descriptions listed below.

Equity Infusions

This program enabled USIMINAS and COSIPA to receive equity infusions from the GOB in the following years: USIMINAS, 1980 to 1988; and COSIPA, 1977 through 1991. We determined that equity infusions by the GOB into USIMINAS, in these years, and COSIPA in years 1997 through 1989 and 1991 were made on terms inconsistent with commercial considerations.

Fiscal Benefits by Virtue of the CDI

The CDI provides for the reduction of up to 100 percent of the import duties and up to 10 percent of the IPI tax (value-added tax) on certain imported machinery for specific projects.

IPI Rebate Program Under Law 7554/86

This Program consists of a rebate of 95 percent of the IPI tax paid on domestic sales of industrial products.

BNDES Financing

In this program, loans were provided on terms inconsistent with commercial considerations because the companies that received the loans were uncreditworthy.

Provision of Infrastructure

This program provides preferential interest on purchasing agreements with a government-owned steel holding company.

This notice also serves as the only reminder to parties subject to administrative protective orders (“APO”) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305 of the Department's regulations. Timely notification of the return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.

We are issuing and publishing these results and notice in accordance with sections section 751(c), 752, and 777(i)(1) of the Act.