Stainless Steel Plate in Coils From Italy; Preliminary Results of the Full Sunset Review of the Countervailing Duty Order

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of preliminary results of full sunset review: stainless steel plate in coils from Italy.

SUMMARY:

On April 1, 2004, the Department initiated a sunset review of the countervailing duty (“CVD”) order on stainless steel plate in coils (“SSPC”) from Italy pursuant to section 751(c) of the Tariff Act of 1930, as amended (“the Act”). See Initiation of Five-Year (Sunset) Reviews, 69 FR 17129 (April 1, 2004). On the basis of substantive responses filed by domestic and respondent interested parties, the Department is conducting a full sunset review. As a result of this review, the Department preliminarily finds that revocation of the countervailing duty order would likely lead to continuation or recurrence of subsidies at the levels indicated in the Preliminary Results of Review section of this notice.

EFFECTIVE DATE:

October 21, 2004.

FOR FURTHER INFORMATION CONTACT:

Hilary Sadler, Esq., 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) 482-4340.

SUPPLEMENTARY INFORMATION:

Department's Regulations

The Department's procedures for the conduct of sunset reviews are set forth in 19 CFR 351.218. 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) (“Policy Bulletin”).

Background

On April 1, 2004, the Department initiated a sunset review of the countervailing duty (“CVD”) order on SSPC from Italy pursuant to section 751(c) of the Tariff Act of 1930, as amended (“the Act”). See Initiation of Five-Year (Sunset) Reviews, 69 FR 17129 (April 1, 2004). The Department received a notice of intent to participate from Allegheny Ludlum Corp. (“Allegheny Ludlum”), North America Stainless (“NAS”), and the United Steelworkers of America, AFL-CIO/CLC (“USWA”), the domestic interested parties (collectively “domestic interested parties”), within the applicable deadline (April 16, 2004) specified in section 351.218(d)(1)(i) of the Sunset Regulations. See Response of the Domestic Interested Parties at 2, May 3, 2004 (“Domestic Response”). All domestic interested parties claimed interested-party status under section 771(9)(C) and (D) of the Act, as a U.S. producer of the domestic like product or a certified union whose workers are engaged in the production of the subject merchandise in the United States. Domestic Response. The USWA was a petitioner in the investigation and has been involved in this proceeding since its inception. Id. at 6. Armo, Inc., J&L Specialty Steels, Inc., Lukens Inc., were also petitioners in the original investigation but are either no longer producers of subject merchandise or are scheduled to cease production of SSPC within in this month. Id. According to the domestic parties of this review, two unions, Butler Armco Independent Union and Zanesville Armco Independent Organization, that were original petitioners are not participating in this sunset review because very few workers at these unions are engaged in the production of SSPC in the United States. Id. at 7. The domestic interested parties have participated as a group at various segments of this order. Id.

The Department received a complete substantive response to the notice of initiation on behalf of three respondent interested parties: the Government of Italy (“GOI”), the Delegation of the European Commission (“EC”), and TKAST. On May 3, 2004, we received substantive responses from all three respondent interested parties expressing their willingness to participate in this review as the authority responsible for defending the interest of the Member States of the European Union. See Responses of the GOI (unpaginated), May 3, 2004, (“GOI Response”); EC (unpaginated), April 30, 2004, (“EC Response”); and TKAST, May 3, 2004 (“TKAST Response”) at 2. All respondent interested parties note that they have in the past participated in this proceeding. On May 3, 2004, we received a substantive response from TKAST, a foreign producer and exporter of the subject merchandise as well as the respondent interested party under section 771(9)(A) of the Act, expressing its willingness to participate in this review as well as the Section 129 review. See TKAST Response at 2.

On May 3, 2004, we received a complete substantive response from the domestic interested parties within the 30-day deadline specified in the Department's Regulations under section 351.218(d)(3)(i). See Domestic Response.

We received rebuttal comments from the domestic interested parties on May 10, 2004. On June 10, 2004, pursuant to section 351.309(e)(ii), TKAST filed comments on the Department's adequacy determination stating that the Department's determination of respondents' inadequacy was incorrect and should be reconsidered. See Letter of TKAST, Stainless Steel Plate from Italy (Sunset): Adequacy of Responses (June 10, 2004). On June 10, 2004, Allegheny Ludlum Corporation, North American Stainless and the United Steelworkers of America, petitioners in this case, filed comments arguing that the Department's adequacy determination was correct and that the expedited review is warranted. See Letter of Domestic Interested Parties, Stainless Steel Plate in Coils from Belgium, Canada, Italy, South Africa, South Korea and Taiwan: Five Year (“Sunset”) Reviews of Antidumping Duty and Countervailing Duty Orders (June 10, 2004).

In a sunset review, the Department normally will conclude that there is adequate response to conduct a full sunset review where respondent interested parties account for more than 50 percent, by volume, of total exports of subject merchandise to the United States. See 19 CFR 351.218(e)(1)(ii)(A). TKAST accounted for more than the 50 percent threshold that the Department normally considers to be an adequate response under 19 CFR section 351.218(e)(I)(ii)(A). On July 13, 2004, the Department determined that the responses by TKAST, the only respondent company in this review, the GOI, and the EC provided an adequate basis for a full review. See Memorandum for James J. Jochum, Assistant Secretary, Import Administration, from Ronald K. Lorentzen, Acting Director, Office of Policy, Re: Sunset Review of Stainless Steel Plate in Coils from Italy; Adequacy of Respondent Interested Party Response to the Notice of Initiation, July 13, 2004. Therefore, the Department is conducting a full sunset review in accordance with 19 CFR 351.218(e)(2)(I).

Scope of Review

The product covered by this order 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 these orders 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. In addition, certain cold-rolled stainless steel plate in coils is also excluded from the scope of this order. The excluded cold-rolled stainless steel plate in coils is defined as that merchandise which meets the physical characteristics described above that has undergone a cold-reduction process that reduced the thickness of the steel by 25 percent or more, and has been annealed and pickled after this cold reduction process. The merchandise subject to these orders is currently classifiable in the Harmonized Tariff Schedule of the United States (HTSUS) 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 HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of the orders is dispositive.

Analysis of Comments Received

All issues raised in the substantive responses and rebuttals by parties to this sunset review are addressed in the “Issues and Decision Memorandum” (“Decision Memo”) from Ronald K. Lorentzen, Acting Director, Office of Policy, Import Administration, to Jeffrey A. May, Acting Assistant Secretary for Import Administration, dated October 15, 2004, which is hereby adopted by this notice. The issues discussed in the accompanying Decision Memo include the likelihood of continuation or recurrence of countervailable subsidies and the net 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 the Central Records Unit, 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 http://www.ia.ita.doc.gov/frn,, under the heading “Italy.” The paper copy and electronic version of the Decision Memo are identical in content.

Preliminary Results of Review

The Department notes that on November 7, 2003, the U.S. Trade Representative requested the Department, pursuant to section 129(b)(4) of the Uruguay Round Agreements Act, to implement the determination in the Section 129 Memo. See Notice of Implementation Under Section 129 of the Uruguay Round Agreements Act: Countervailing Measures Concerning Certain Steel Products From the European Communities, 68 FR 64858, (November 17, 2003). Accordingly, the Department revised the cash deposit rates for TKAST and “all others” to reflect the impact that privatization had on non-recurring, allocable subsidies for the countervailing duty order on SSPC from Italy. Id. We, therefore, revised the net subsidy rates for TKAST to 1.62 percent and all others to 1.61 percent.

We preliminarily determine that revocation of the countervailing duty order on SSPC from Italy would be likely to lead to continuation or recurrence of countervailable subsidies at the rate listed below:

Any interested party may request a hearing within 30 days of publication of this notice in accordance with 19 CFR 351.310(d)(i). Any hearing, if requested, will be held on December 22, 2004. Interested parties may submit case briefs no later than December 13, 2004, 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 December 20, 2004, in accordance with 19 CFR 351.309(d)(I). 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 briefs, not later than February 25, 2005.

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