Corrosion-Resistant Carbon Steel Flat Products from France; Final Results of Expedited Sunset Review of Countervailing Duty Order

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of Final Results of Expedited Sunset Review: Corrosion-Resistant Carbon Steel Flat Products from France.

SUMMARY:

On September 1, 1999, the Department of Commerce (“the Department”) initiated a sunset review of the countervailing duty order on corrosion-resistant carbon steel flat products from France (64 FR 47767) pursuant to section 751(c) of the Tariff Act of 1930, as amended (“the Act”). On the basis of a notice of intent to participate and adequate substantive comments filed on behalf of the domestic interested parties, as well as inadequate response from respondent interested parties, the Department determined to conduct an expedited (120 day) sunset review. Based on our analysis of the comments received, we find that revocation of the countervailing duty order would be likely to lead to continuation or recurrence of a countervailable subsidy at the levels listed below in the section entitled Final Results of the Review.

EFFECTIVE DATE:

April 6, 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 a sunset review of the countervailing duty order on corrosion-resistant carbon steel flat products from France (64 FR 47767). We invited parties to comment. On the basis of a notice of intent to participate and adequate substantive response filed on behalf of the domestic interested parties, as well as inadequate response from respondent interested parties, the Department determined to conduct an expedited (120 day) sunset review. The Department is conducting this sunset review 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). This review concerns a transition order within the meaning of section 751(c)(6)(C)(i) of the Act. Therefore, on December 22, 1999, the Department determined that the sunset review of the countervailing duty order on corrosion-resistant steel from France 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 Review

The products covered by this order are certain corrosion-resistant carbon steel flat products from France. These products include 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 of the United States (“HTSUS”) 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 the 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 the 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%-60%-20% ratio.

The HTSUS item numbers are provided for convenience and customs purposes. The written description remains dispositive.

Analysis of Comments Received

All issues raised in substantive responses 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 attached Decision Memo include the likelihood of continuation or recurrence of 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/import_admin/records/frn. The paper copy and electronic version of the Decision Memo are identical in content.

Final Results of Review

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

Although the programs included in our calculation of the net countervailable subsidy likely to prevail if the order were revoked do not fall within Article 3 of the Subsidies Agreement, some or all of them may be subsidies as described in Article 6.1. For example, the net countervailable subsidy may exceed 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 only providing the Commission the following program descriptions:

(1) PACS/FIS: This program of equity infusions was devised to restructure Usinor and its massive debt.

(2) Grants in the Form of Shareholders' Advances: The Government of France (“GOF”) financed the recurring needs of Usinor through shareholders’ advances beginning in 1982. These shareholders' advance carried no interest and there was no precondition for receipt of these funds.

(3) Investment Subsidies: Under this program the French companies would receive subsides from the GOF for the purchase of fixed assets. Because the relevant parties did not provide sufficient information, based on best information available, the Department determined that the Investment Subsidies are specific rather than generally available.

(4) Grants in the Form of Cancellation of Debt: The two former private majority shareholders of Usinor canceled a portion of debt owed to them by Usinor. The Department found that the debt forgiveness was provided at the direction of the GOF and, hence, countervailable.

(5) ECSC 54: Under this program, investment loans are provided by the European Union for the purpose of purchasing new equipment or financing modernization. Because these loans are only available to companies in steel and coal industries, the Department found the loans countervailable.

(6) CFDI: Under this program participative loans, which were by law available to all French companies, were issued by the CFDI. The borrower paid a lower-than-market interest rate plus a share of future profits according to an agreed upon formula. Because the GOF could not provide sufficient information, the Department determined that loans under this program are de facto limited to specific enterprise or industry and that, therefore, these loans are countervailable to the extent that they were provided on terms inconsistent with commercial considerations.

(7) ECSC 56: The main purpose of these grants are to assist workers affected by the restructuring of the coal and steel industries. Because the Department did not have information pertaining to some specific details, it assumed that the extra government contribution relieved Usinor of an obligation and, therefore, is countervailable in its entirety.

(8) Other Loan Guarantees: These guarantees were provided by, or were provided to guarantee loans from, Credit National, bank syndicates in which Credit National, participated, Caisse des Depots et Consignations, Groupement de l'Industrie Siderurgique, FDES, the ECSC, and the European Investment Bank. Because relevant parties did not provide sufficient information, the Department found, based on best information available, inter alia, the fees associated with these loan guarantees are specific rather than generally available, and therefore, countervailable.

(9) Other Participative Loans: Because the Department had no information regarding the category of these loans and about the programs and because these loans were not reported, based on best information available and the calculation of the benefit from these loans, the Department determined that these loans are countervailable.

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