Grain-Oriented Electrical Steel From Italy; Preliminary Results of Full Sunset Review of Countervailing Duty Order

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of preliminary results of full sunset review: grain-oriented electrical steel from Italy.

SUMMARY:

On December 1, 1999, the Department of Commerce (“the Department”) initiated a sunset review of the countervailing duty order on grain-oriented electrical steel (“GOES”) from Italy (64 FR 67247) 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 responses from respondent interested parties, the Department determined to conduct an full (240-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 Preliminary Results of Review.

EFFECTIVE DATE:

June 23, 2000.

FOR FURTHER INFORMATION CONTACT:

Kathryn B. McCormick or James Maeder 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) 482-1930 or (202) 482-3330, 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 December 1, 1999, the Department initiated a sunset review of the countervailing duty order on GOES from Italy (64 FR 67247), pursuant to section 751(c) of the Act. The Department received a notice of intent to participate on behalf of Allegheny Ludlum Corporation (“Allegheny Ludlum”), AK Steel Corporation (“AK Steel”), Butler Armco Independent Union, the United Steelworkers of America AFL-CIO/CLC, and the Zanesville Armco Independent Union (collectively, “domestic interested parties”), within the applicable deadline (December 16, 1999) specified in section 351.218(d)(1)(i) of the Sunset Regulations. Allegheny Ludlum and AK Steel claimed interested-party status under section 771(9)(C) of the Act, as U.S. producers of a domestic like product. The unions listed above are interested parties pursuant to section 771(9)(D) of the Act, because they are certified or recognized unions or groups of workers representative of the industry engaged in the manufacture, production, or wholesale in the United States of the domestic like product.

Domestic interested parties state that Alleghney Ludlum, Armco Inc. (“Armco”), United Steel Workers of America, Butler Armco Independent Union, and Zanesville Armco Independent Union were the petitioners in the initial investigation (see January 3, 2000, substantive response of domestic interested parties at 5). Domestic interested parties note that, on September 30, 1999, AK Steel acquired Armco, and assumed control of Armco's production of GOES. Id. Accordingly, AK Steel is the successor of petitioner Armco, and has replaced Armco as domestic interested party for purposes of this sunset review and all other administrative reviews. Id. Additionally, domestic interested parties state that they are participants in the ongoing administrative review. Id.

On December 20, 1999, we received a response from the European Union Delegation of the European Commission (“EC”) expressing its willingness to participate in this review as the authority responsible for defending the interest of the Member States of the European Union (“EU”) (see December 20, 1999, response of the EC at 1-2). On December 29, 1999, we received a response from the Government of Italy (“GOI”) expressing its willingness to participate in this review, as the government of a country in which subject merchandise is produced and exported. The EC and GOI note that they have in the past participated in this proceeding (see December 20, 1999, response of the EC at 2, and the December 29, 1999, response of the GOI at 1).

On January 3, 2000, we received a complete substantive response from domestic interested parties, within the 30-day deadline specified in the Sunset Regulations under section 351.218(d)(3)(i), and a complete substantive responses from Acciai Speciali Terni S.p.A. (“AST”) and Acciai Speciali Terni USA, Inc. (“AST-USA”), respondent interested parties under section 771(9)(A) of the Act because AST is a foreign producer and exporter of the subject merchandise and AST-USA is an importer of subject merchandise.

On January 10, 2000, we received rebuttal comments from domestic interested parties. Pursuant to 19 CFR 351.218 (e)(2)(i), the Department determined to conduct a full (240-day) sunset review of this order.

On January 12, 2000, we requested from the GOI and AST clarification of the data submitted in their responses of December 29, 1999, and January 3, 2000, respectively, to be submitted by January 22, 2000. On January 21, 2000, we received a response from AST in response to the Department's request for additional information concerning the volume of company shipments; we also received a request from the GOI, which we granted, for an extension of the deadline to submit a response until February 1, 2000. Subsequently, on February 1, 2000, we received a response from the GOI to our above request.

On February 11, 2000, the Department received the public version of a document from domestic interested parties in which they state that, despite the new information from the GOI, their research indicates that there have been significant volumes of GOES shipped by AST to the United States (see February 11, 2000, comments of domestic interested parties at 2-3). Further, domestic interested parties requested that the Department require AST to provide specific information in a supplemental response concerning the disposition of each shipment listed in the domestic interested parties' exhibit (id. at 3); however, the Department did not comply with this request.

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)(i) of the Act. Accordingly, on January 20, 2000, the Department determined that the sunset review of GOES from Italy is extraordinarily complicated, and extended the time limit for completion of the preliminary results of this review until not later than June 19, 2000 (65 FR 3206), in accordance with section 751(c)(5)(B) of the Act.

Scope of Review

The merchandise subject to this review is Italian GOES, which is a flat-rolled alloy steel product containing by weight at least 0.6 percent of silicon, not more than 0.08 percent of carbon, not more than 1.0 percent of aluminum, and no other element in an amount that would give the steel the characteristics of another alloy steel, of a thickness of no more than 0.56 millimeter, in coils of any width, or in straight lengths which are of a width measuring at least ten times the thickness. The merchandise is currently classifiable in the Harmonized Tariff Schedule (“HTS”) under item numbers 7225.10.0030, 7226.10.1030, 7226.10.5015, and 7226.10.5065. Although HTS subheadings are provided for convenience and customs purposes, our written description of the scope of this proceeding is 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 Troy H. Cribb, Acting Assistant Secretary for Import Administration, dated June 19, 2000, which is hereby adopted by this notice. The issues discussed in the Decision Memo include the likelihood of continuation or recurrence of subsidy and the net countervailable subsidy likely to prevail were the order revoked. 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 memo are identical in content.

Preliminary 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.

Nature of the Subsidy

In the Sunset Policy Bulletin (63 FR 18876), the Department states that, consistent with section 752(a)(6) of the Act, the Department will provide to the Commission information concerning the nature of the subsidy, and whether the subsidy is a subsidy described in Article 3 or Article 6.1 of the Subsidies Agreement. Although the programs at issue do not fall within Article 3 of the Subsidies Agreement, some or all of them could be found to be inconsistent with Article 6.1. For example, the net countervailable subsidy may exceed five percent. 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 with program descriptions in our Decision Memo.

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 August 16, 2000, in accordance with 19 CFR 351.310(d). Interested parties may submit case briefs no later than August 7, 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 August 14, 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, no later than October 26, 2000.

This five-year (“sunset”) review and notice are in accordance with sections 751(c), 752, and 777(i)(1) of the Act.