Stainless Steel Sheet and Strip in Coils From France: Notice of Amended Final Determination Pursuant to Final Court Decision and Revocation of Order

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of Amended Final Determination Pursuant to Final Court Decision and Revocation of Order.

SUMMARY:

On September 24, 2002, the United States Court of International Trade (“CIT”) sustained the Department of Commerce's (“the Department”) second remand determination of the Final Affirmative Countervailing Duty Determination: Stainless Steel Sheet and Strip in Coils from France, 64 FR 30774 (June 8, 1999) (“French Stainless”). See Allegheny Ludlum Corp. v. United States, 182 F. Supp. 2d 1357 (2002) (“Allegheny II”). The Department appealed this decision to the United States Court of Appeals for the Federal Circuit (“Federal Circuit”). On May 13, 2004, the Federal Circuit affirmed the CIT's decision in Allegheny II. See allegheny Ludlum Corp. v. United States, 367 F.3d 1339 (Fed. Cir. 2004) (“Appellate Decision”). Because all litigation in this matter has concluded, the Department is issuing this amended final determination in French Stainless in accordance with the CIT's decision and revoking the countervailing duty order.

EFFECTIVE DATE:

September 1, 2004.

FOR FURTHER INFORMATION CONTACT:

Jesse Cortes at (202) 482-3986, AD/CVD Operations 1, Office I, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Background

On June 8, 1999, the Department published the final affirmative countervailing duty determination in French Stainless. The Department published the related countervailing duty order on August 6, 1999. See Amended Final Determination: Stainless Steel Sheet and Strip in Coils From the Republic of Korea; and Notice of Countervailing Duty Orders: Stainless Steel Sheet and Strip in Coils From France, Italy, and the Republic of Korea, 64 FR 42923 (August 6, 1999) (“CVD Order”). In its final determination, the Department found that a portion of the countervailable subsidy benefits bestowed on French steel producer Usinor Sacilor prior to a stock sale privatization passed through to Usinor, the privatized company and the respondent in the investigation. Usinor and one of the petitioners, Allegheny Ludlum Corporation (“Allegheny” or “the petitioner”), challenged this determination before the CIT. See Usinor v. United States, Court No. 99-09-00573 and Allegheny Ludlum v. United States, Court No. 99-09-00566. The cases were subsequently consolidated as Allegheny Ludlum v. United States, Court No. 99-09-00566 (also referred to as “French Stainless”). On December 22, 1999, the CIT issued an injunction enjoining the Department from liquidating Usinor's, Ugine S.A.'s and Uginox's entries of subject merchandise that were entered, or withdrawn from warehouse, for consumption (1) on or after November 17, 1998, and before March 17, 1999; and (2) on or after August 6, 1999.

On February 2, 2000, while French Stainless was pending before the CIT, the Federal Circuit issued a ruling in Delverde SRL v. United States, 202 F.3d 1360 (Fed. Cir. 2000), reh'g granted in part, (June 20, 2000) (“Delverde III”), which had a direct impact on the change-in-ownership methodology at issue in French Stainless. Specifically, the Federal Circuit ruled that the Tariff Act of 1930, as amended by the Uruguay Round Agreements Act effective January 1, 1995 (“the Act”), did not allow the Department to presume, pursuant to a per se ruling, that subsidies granted to the former owner of a company's assets automatically “passed through” to the new owner following a sale; rather, the statute required the Department to examine the particular facts and circumstances of the sale, and determine whether the new owner directly or indirectly received both a financial contribution and a benefit. Id. at 1364. In light of Delverde III, the Department asked the CIT to remand French Stainless for reconsideration of the change-in-ownership issues. On August 15, 2000, with the parties' consent, the CIT remanded French Stainless to the Department to issue a determination consistent with U.S. law and Delverde III. See Allegheny Ludlum Corp. v. United States, Court No. 99-09-00566, Remand Order (August 15, 2000).

On December 13, 2000, having taken Delverde III into consideration, the Department issued the Final Results of Redetermination Pursuant to Court Remand, Allegheny Ludlum Corp., et al., v. United States, Consol. Court No. 99-09-00566, Remand Order (CIT August 15, 2000) (December 13, 2000) (“Remand Determination I”). In that redetermination, having found (based on an analysis of certain factors) that Usinor was the same legal person before and after privatization, the Department determined that pre-privatization subsidy benefits remained attributable to Usinor following privatization. See Remand Determination I at 20.

On January 4, 2002, rejecting the Department's same-person analysis as contrary to the requirements of Delverde III, the CIT again remanded French Stainless to the Department. See Allegheny Ludlum Corp. v. United States, 182 F. Supp. 2d 1357 (2002) (“Allegheny I”).

Despite disagreement with the CIT's interpretation of Delverde III, the Department proceeded with a further redetermination as remanded and, on June 3, 2002, issued the Results of Redetermination Pursuant to Court Remand, Allegheny Ludlum Corp. et al., v. United States, Court No. 99-09-00566, Remand Order (CIT January 4, 2002) (June 3, 2002) (“Remand Determination II”). In that redetermination, applying a fair-market-value analysis, the Department concluded that the purchasers/new owners of Usinor did not receive new countervailable subsidies as a result of the privatization transaction.

On September 24, 2002, upon consideration of Remand Determination II, the CIT issued Allegheny Ludlum Corp. v. United States, 246 F. Supp. 2d 1304 (2202) (“Allegheny II”) sustaining the results of Remand Determination II.

The Department subsequently appealed the case to the Federal Circuit. On May 13, 2004, the Federal Circuit issued the Appellate Decision, which affirmed the CIT's Allegheny II decision sustaining the results of Remand Determination II. Because there is now a final and conclusive decision in the court proceeding, effective as of the publication date of this notice, we are amending the final determination and establishing the revised countervailing duty rates set forth below.

In a contemporaneous but separate proceeding, on November 17, 2003, the Department published a 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 (Nov. 17, 2003). The Department implemented, among other determinations, its Section 129 determination with respect to the CVD Order. The result was a revocation of the CVD Order effective November 7, 2003. The Department instructed U.S. Customs and Border Protection (“CBP”) to discontinue suspension of liquidation of shipments of subject merchandise entered, or withdrawn from warehouse, for consumption on or after November 7, 2003.

Finally, the Department conducted two administrative reviews of the CVD Order. See Stainless Steel Sheet and Strip in Coils from France: Final Results of Countervailing Duty Administrative Review, 67 FR 62098 (Oct. 3, 2002) and Stainless Steel Sheet and Strip in Coils from France: Final Results of Countervailing Duty Administrative Review, 68 FR 53963 (Sept. 15, 2003). As a consequence of the injunction issued by the CIT on December 22, 1999, the Department did not order the liquidation of any entries covered by the administrative reviews. Those entries shall be liquidation as set forth below.

Amended Final Determination and Revocation of Order

Because there is now a final and conclusive decision in the court proceeding, effective as of the publication date of this notice, we are amending the final determination to reflect the results of Remand Determination II, i.e., that the countervailable subsidy rate for Usinor during the period of investigation is 0.00 percent ad valorem. Because Usinor was the only known producer/exporter of the subject merchandise, we are also revoking the CVD Order for all entries after November 17, 1998 (the date on which the Department published the preliminary countervailing duty determination in French Stainless) through November 7, 2003 (the date on which the Department implemented its Section 129 determination on French Stainless).

Accordingly, pursuant to section 705(c)(2)(A)-(B) of the Act and effective as of the publication of this notice, the Department will instruct CBP to terminate the suspension of liquidation of, and liquidation without regard to countervailing duties, all entries entered, or withdrawn from warehouse, for consumption on or after November 17, 1998, and before March 17, 1999 (the date the Department instructed CBP to discontinue the suspensions of liquidation), and all entries entered, or withdrawn from warehouse, for consumption on or after August 6, 1999 (the date on which the Department published the CVD Order), and before November 7, 2003.

This determination is published pursuant to sections 705(d) and 777(i) of the Act.