NOTICES
DEPARTMENT OF COMMERCE
International Trade Administration
[C-351-604]
Final Results of Expedited Sunset Review: Brass Sheet and Strip From Brazil
Friday, September 3, 1999
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AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of final results of expedited sunset review: brass sheet and strip from
Brazil.
SUMMARY: On February 1, 1999, the Department of Commerce ("the Department") initiated
a sunset review of the countervailing duty order on brass sheet and strip from Brazil
(64 FR 4840) 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 (in this case, no
response) from respondent interested parties, the Department determined to conduct an
expedited (120 day) review. As a result of this review, the Department finds that
termination of the countervailing duty order would be likely to lead to continuation or
recurrence of a countervailable subsidy.
FOR FURTHER INFORMATION CONTACT: Kathryn B. McCormick or Melissa G. Skinner,
Office of Policy for Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street & Constitution Avenue, NW, Washington, DC 20230;
telephone: (202) 482-1698 or (202) 482-1560, respectively.
EFFECTIVE DATE: September 3, 1999.
Statute and Regulations
This review was conducted pursuant to sections 751(c) and 752 of the Act. The
Department's procedures for the conduct of sunset reviews are set forth in Procedures for
Conducting Five-year ("Sunset") Reviews of Antidumping and Countervailing Duty
Orders, 63 FR 13516 (March 20, 1998) ("Sunset Regulations"). 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").
Scope
This order covers shipments of coiled, wound-on-reels (traverse wound), and cut-to-length
brass sheet and strip (not leaded or tinned) from Brazil. The subject merchandise has,
regardless of width, a solid rectangular cross section over 0.0006 inches (0.15 millimeters)
through 0.1888 inches (4.8 millimeters) in finished thickness or gauge. The chemical
composition of the covered products is defined in the Copper Development Association
("C.D.A.") 200 Series or the Unified Numbering System ("U.N.S.") C2000; this review does
not cover products with chemical compositions that are defined by anything other than
C.D.A. or U.N.S. series. The merchandise is currently classified under Harmonized Tariff
Schedule ("HTS") item numbers 7409.21.00 and 7409.29.00. The HTS item numbers are
provided for convenience and U.S. Customs purposes. The written description remains
dispositive.
History of the Order
In the original investigation, the Department received information on two Brazilian
producers and exporters that accounted for substantially all exports of brass sheet and
strip to the United States during the period of investigation. In its final affirmative
countervailing duty determination (52 FR 1218, January 12, 1987), the Department
concluded that the Government of Brazil was providing countervailable subsidies to
exporters of the subject merchandise through four programs: (1) Preferential Working
Capital Financing for Exports (CACEX); (2) Income Tax Exemption for Export Earnings; (3)
Export Financing Under the CIC-CREGE 14-11 Circular; and (4) Import Duty Exemption
Under Decree-Law 1189 of 1979. [FN1] We estimated the net subsidy to be 6.13 percent ad
valorem, and, on the basis of a program-wide change in the Preferential Working Capital
Financing for exports program which occurred prior to the preliminary determination, we
established a cash deposit rate of 3.47 percent ad valorem for all manufacturers, producers,
or exporters of brass sheet and strip from Brazil.
FN1 See Final Affirmative Countervailing Duty Determination: Brass Sheet and Strip
From Brazil, November 10, 1986 (51 FR 40837).
The Department has since conducted one administrative review (56 FR 56631 (November
6, 1991)) of this countervailing duty order, covering the period January 1, 1990,
through December 31, 1990. In the Department's preliminary results of the administrative
review, and supported by the Department's final results of the administrative review, the
Department determined that each of the four programs found to provide countervailable
benefits in the investigation had been terminated. Preferential Working Capital Financing
for Exports was terminated, effective August 30, 1990, by Central Bank Resolution 1744.
Loans under this program were officially suspended on February 22, 1989, until the
program was terminated. The program of Income Tax Exemption for Export Earnings,
which eliminated the tax exemption and established a prevailing tax rate of 30 percent for
domestic and export earnings for 1991, was effectively terminated by Decree Law 8034,
April 12, 1990. Export Financing Under the CIC-CREGE 14-11 Circular (which became
CIC-OPCRE 6-2-6) was deemed to be terminated as it had set interest rates equal to those of
market rate loans as of September 20, 1988, and there is no evidence of current or future
changes. Finally, the Import Duty Exemption Under Decree Law 1189 was officially
terminated by the Government of Brazil by Decree Law 7988, Article 7, on December 28,
1989. In its final results of review, the Department noted that substantial documentation,
including verification reports, confirmed the termination without replacement of these four
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countervailable subsidy programs. [FN2] As a result of the review, the Department
set the duty deposit at zero. No additional reviews have been conducted.
FN2 See Brass Sheet and Strip From Brazil; Final Results of Countervailing Duty
Administrative Review, 56 FR 56631 (November 6, 1991).
Background
On February 1, 1999, the Department initiated a sunset review of the countervailing
duty order on brass sheet and strip from Brazil (64 FR 4840), pursuant to section 751(c)
of the Act. On February 16, 1999, the Department received a Notice of Intent to Participate
on behalf of Heyco Metals, Inc. ("Heyco"), Hussey Copper Ltd. ("Hussey"), Olin
Corporation-Brass Group ("Olin"), Outokumpu American Brass ("Outokumpu") (formerly
American Brass Company), PMX Industries, Inc. ("PMX"), Revere Copper Products, Inc.
("Revere"), the International Association of Machinists and Aerospace Workers, the United
Auto Workers (Local 2367), and the United Steelworkers of America (AFL/CIO-CLC)
(hereinafter, collectively "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 sections 771(9)(C) and (D) of the Act as domestic brass mills,
rerollers, and unions engaged in the production of brass sheet and strip. With the exception
of Heyco, all of the aforementioned parties were original petitioners in this case.
We received a complete substantive response from the domestic interested parties on
March 3, 1999, within the 30-day deadline specified in the Sunset Regulations under section
351.218(d)(3)(i); we did not receive a substantive response from any government or
respondent interested party to this proceeding. As a result, pursuant to 19 CFR
351.218(e)(1)(ii)(C), the Department determined to conduct an expedited, 120-day, review
of this order.
The Department determined that the sunset review of the countervailing duty order
on brass sheet and strip from Brazil is extraordinarily complicated. 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).
(See section 751(c)(6)(C) of the Act.) Therefore, on June 7, 1999, the Department extended
the time limit for completion of the final results of this review until not later than August 30,
1999, in accordance with section 751(c)(5)(B) of the Act. [FN3]
FN3 See Porcelain-on-Steel Cooking Ware From the People's Republic of China,
Porcelain-on-Steel Cooking Ware From Taiwan, Top-of-the-Stove Stainless Steel Cooking
Ware From Korea (South) (AD & CVD), Top-of-the-Stove Stainless Steel Cooking Ware From
Taiwan (AD & CVD), Standard Carnations From Chile (AD & CVD), Fresh Cut Flowers From
Mexico, Fresh Cut Flowers From Ecuador, Brass Sheet and Strip From Brazil (AD & CVD),
Brass Sheet and Strip From Korea (South), Brass Sheet and Strip From France (AD & CVD),
Brass Sheet and Strip From Germany, Brass Sheet and Strip From Italy, Brass Sheet and
Strip From Sweden, Brass Sheet and Strip From Japan, Pompon Chrysanthemums From
Peru: Extension of Time Limit for Final Results of Five-Year Reviews, 64 FR 30305 (June 7,
1999).
Determination
In accordance with section 751(c)(1) of the Act, the Department is conducting this review
to determine whether termination of the countervailing duty order would be likely to
lead to continuation or recurrence of a countervailable subsidy. Section 752(b) of the Act
provides that, in making this determination, the Department shall consider the net
countervailable subsidy determined in the investigation and subsequent reviews, and
whether any change in the program which gave rise to the net countervailable subsidy is
likely to affect that net countervailable subsidy. Pursuant to section 752(b)(3) of the Act,
the Department shall provide to the International Trade Commission ("the Commission") the
net countervailable subsidy likely to prevail if the order is revoked. In addition, consistent
with section 752(a)(6), the Department shall provide to the Commission information
concerning the nature of the subsidy and whether it is a subsidy described in Article 3 or
Article 6.1 of the 1994 WTO Agreement on Subsidies and Countervailing Measures
("Subsidies Agreement").
The Department's determinations concerning continuation or recurrence of a
countervailable subsidy are discussed below. In addition, the domestic interested parties'
comments with respect to these issues are addressed within the respective sections.
Continuation or Recurrence of a Countervailable Subsidy
Drawing on the guidance provided in the legislative history accompanying the Uruguay
Round Agreements Act ("URAA"), specifically, the Statement of Administrative Action
("SAA"), H.R. Doc. No. 103-316, vol. 1 (1994), the House Report, H.R. Rep. No. 103-826, pt.1
(1994), and the Senate Report, S. Rep. No. 103-412 (1994), the Department issued its Sunset
Policy Bulletin providing guidance on methodological and analytical issues, including the
basis for likelihood determinations. The Department clarified that determinations of
likelihood will be made on an order-wide basis (see section III.A.2 of the Sunset Policy
Bulletin). Additionally, the Department normally will determine that revocation of a
countervailing duty order is likely to lead to continuation or recurrence of a
countervailable subsidy where (a) a subsidy program continues, (b) a subsidy program has
been only temporarily suspended, or (c) a subsidy program has been only partially
terminated (see section III.A.3.a of the Sunset Policy Bulletin). Exceptions to this policy are
provided where a company has a long record of not using a program (see section III.A.3.b
of the Sunset Policy Bulletin).
In addition to considering the guidance cited above, section 751(c)(4)(B) of the Act
provides that the Department shall determine that revocation of an order is likely to lead to
continuation or recurrence of dumping where a respondent interested party waives its
participation in the sunset review. Moreover, pursuant to the SAA, at 881, in a review of a
countervailing duty order, when the foreign government has waived participation, the
Department shall conclude that revocation of the order would be likely to lead to a
continuation or recurrence of a countervailable subsidy for all respondent interested
parties. [FN4] In the instant review, the Department did not receive a response from the
foreign government or from any other respondent interested party. Pursuant to section
351.218(d)(2)(iii) of the Sunset Regulations, this constitutes a waiver of participation.
FN4 See 19 CFR 351.218(d)(2)(iv).
In their substantive response, the domestic interested parties assert that, consistent with
the Act and SAA, and absent significant evidence to the contrary, continuation, temporary
suspension or partial termination of a subsidy program will be highly probative of the
likelihood of continuation or recurrence of countervailable subsidies (see March 3, 1999
Substantive Response of domestic interested parties at 33).
In their March 12, 1999 comments, the domestic interested parties assert that the
Department should find that revocation of the countervailing duty order on brass sheet
and strip from Brazil will result in the continuation or recurrence of a countervailable
subsidy on the basis of the failure of respondent interested parties to file a complete
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substantive response to the Department's notice of initiation.
The domestic interested parties argue that this is consistent with 19 U.S.C. 1675(c)(4)(B)
and the SAA, which provide that, where the government waives participation, the
Department will conclude that revocation or termination would be likely to lead to
continuation of countervailable subsidies (see March 12, 1999 comments of domestic
interested parties at 3).
In this sunset review, as argued by the domestic interested parties, the Department is
required by section 751(c)(4)(B) of the Act to find likelihood on the basis that the
government of Brazil and the respondents waived their right to participate in this review.
The participation of the government that has provided subsidies is necessary to determine
that the producers/exporters of subject merchandise no longer receive subsidies and,
without such participation, we must conclude that the producers/exporters continue to be
subsidized. Therefore, consistent with the statute and SAA, the Department determines that
revocation of the order is likely to result in continuation or recurrence of a countervailable
subsidy.
Net Countervailable Subsidy
In the Sunset Policy Bulletin, the Department states that, consistent with the SAA and House
Report, the Department normally will select a rate from the investigation because that is the
only calculated rate that reflects the behavior of exporters and foreign governments
without the discipline of an order or suspension agreement in place. However, the Sunset
Policy Bulletin also allows for adjustments to be made to the net subsidy rate likely to
prevail where programs have either been terminated, with no residual benefits, and where
the Department has found new countervailable programs to exist. [FN5] Additionally,
where the Department determined company-specific countervailable subsidy rates in the
original investigation, the Sunset Policy Bulletin states that the Department will report to
the Commission company-specific rates for those companies from the original investigation
as well as an "all others" rate (see Sunset Policy Bulletin at section III.A.4).
FN5 See sections III.B.1, III.B.3.A, and III.B.3.C of the Sunset Policy Bulletin.
The domestic interested parties cite the SAA statement that the Administration intends that
Commerce normally will select the rate from the investigation because that is the only
calculated rate that reflects the behavior of exporters and foreign governments without the
discipline of an order in place (see March 3, 1999 Substantive Response of domestic
interested parties at 45). Therefore, the domestic interested parties argue that the
Department should determine that the net countervailable subsidy likely to prevail should
be the country-wide rate of 3.47 percent, the rate set forth in the original investigation.
The Department disagrees with the domestic interested parties' position with respect to the
appropriate subsidy rate to be reported to the Commission. As acknowledged by the
domestic interested parties, in this case, the Department found that all of the
countervailable subsidy programs have been terminated, without likelihood of
reinstatement. Absent information on usage of other countervailable subsidy programs, the
Department has no basis on which to determine the net countervailable subsidy likely to
prevail.
Nature of the Subsidy
In the Sunset Policy Bulletin, the Department states that, consistent with section 752(a)(6)
of the Act, the Department will provide information to the Commission 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. In their March 3, 1999 substantive response, the domestic
interested parties, did not address this issue. However, since all of the known
countervailable programs have been terminated, there is no nature of the subsidy to report
to the Commission.
Final Results of 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. However, as a result of termination of all known countervailable programs, the
Department is unable to determine the net countervailable subsidy likely to prevail.
This notice serves as the only reminder to parties subject to administrative protective
order (APO) of their responsibility concerning the disposition of proprietary information
disclosed under APO in accordance with 19 CFR 351.305 of the Department's regulations.
Timely notification of return/destruction of APO materials or conversion to judicial
protective order is hereby requested. Failure to comply with the regulations and the terms
of an APO is a sanctionable violation.
This five-year ("sunset") review and notice are in accordance with sections 751(c), 752,
and 777(i)(1) of the Act.
Dated: August 30, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-23045 Filed 9-2-99; 8:45 am]
BILLING CODE 3510-DS-P