65 FR 25910, May 4, 2000 

[C-122-815]

 
Pure Magnesium and Alloy Magnesium From Canada: Preliminary 
Results of Countervailing Duty Administrative Reviews

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

ACTION: Notice of preliminary results of countervailing duty 
administrative reviews.

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SUMMARY: The Department of Commerce is conducting administrative 
reviews of the countervailing duty orders on pure magnesium and alloy 
magnesium from Canada for the period January 1, 1998 through December 
31, 1998. We have preliminarily determined that certain producers/
exporters have received net subsidies during the period of review. If 
the final results remain the same as these preliminary results, we will 
instruct the Customs Service to assess countervailing duties as 
detailed in the Preliminary Results of Reviews section of this notice. 
Interested Parties are invited to comment on these preliminary results 
(see the Public Comment section of this notice).

EFFECTIVE DATE: May 4, 2000.

FOR FURTHER INFORMATION CONTACT: Annika O'Hara or Craig Matney, AD/CVD 
Enforcement, Group I, Office 1, Import Administration, U.S. Department 
of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 
20230; telephone: (202) 482-3798 or (202) 482-1778, respectively.

Case History

    On August 31, 1992, the Department of Commerce (``the Department'') 
published in the Federal Register the countervailing duty orders on 
pure magnesium and alloy magnesium from Canada (57 FR 39392). On August 
11, 1999, the Department published a notice of ``Opportunity to Request 
Administrative Review'' of these countervailing duty orders (64 FR 
43649). We received timely requests for review from Norsk Hydro Canada 
Inc. (``NHCI''), the Government of Quebec (``GOQ''), and the 
petitioner. We initiated these reviews, covering calendar year 1998, on 
October 1, 1999 (64 FR 53318). In accordance with 19 CFR 351.213(b), 
these reviews cover NHCI, the only producer or exporter of the subject 
merchandise for which a review was specifically requested. These 
reviews cover 16 subsidy programs.
    On November 30, 1999, we issued countervailing duty questionnaires 
to NHCI, the GOQ, and the Government of Canada (``GOC''). We received 
questionnaire responses from the GOC on January 12, 2000, and from NHCI 
and the GOQ on January 14, 2000.

Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the statute are 
references to the provisions of section 751(a) of the Tariff Act of 
1930, as amended by the Uruguay Round Agreements Act (``URAA''), 
effective January 1, 1995 (``the Act''). Unless otherwise indicated, 
all citations to the Department's regulations are to 19 CFR part 351 
(1999).

Scope of the Reviews

    The products covered by these reviews are shipments of pure and 
alloy magnesium from Canada. Pure magnesium contains at least 99.8 
percent magnesium by weight and is

[[Page 25911]]

sold in various slab and ingot forms and sizes. Magnesium alloys 
contain less than 99.8 percent magnesium by weight with magnesium being 
the largest metallic element in the alloy by weight, and are sold in 
various ingot and billet forms and sizes.
    The pure and alloy magnesium subject to review is currently 
classifiable under items 8104.11.0000 and 8104.19.0000, respectively, 
of the Harmonized Tariff Schedule of the United States (``HTSUS''). 
Although the HTSUS subheadings are provided for convenience and customs 
purposes, the written descriptions of the merchandise subject to the 
orders are dispositive.
    Secondary and granular magnesium are not included in the scope of 
these orders. Our reasons for excluding granular magnesium are 
summarized in Preliminary Determination of Sales at Less Than Fair 
Value: Pure and Alloy Magnesium From Canada, 57 FR 6094 (February 20, 
1992).

Period of Review

    The period of review (``POR'') for which we are measuring subsidies 
is from January 1, 1998 through December 31, 1998.

Subsidies Valuation Information

Discount Rate

    As noted below, the Department preliminarily finds that NHCI 
benefitted from one countervailable subsidy program during the POR: 
Article 7 grants from the Quebec Industrial Development Corporation. As 
in the investigations and previous administrative reviews of this case, 
we have used the company's cost of long-term, fixed-rate debt in the 
year in which this grant was approved as the discount rate for purposes 
of calculating the benefit pertaining to the POR.

Allocation Period

    In the investigations and previous administrative reviews of this 
case, the Department used, as the allocation period for non-recurring 
subsidies, the average useful life (``AUL'') of renewable physical 
assets in the magnesium industry as recorded in the Internal Revenue 
Service's 1977 Class Life Asset Depreciation Range System (``the IRS 
tables''), i.e., 14 years. In these administrative reviews, the 
Department is applying for the first time its new countervailing duty 
regulations. Pursuant to section 351.524(d)(2) of these regulations, 
the Department will use the AUL in the IRS tables as the allocation 
period unless a party can show that the IRS tables do not reasonably 
reflect the company-specific AUL or the country-wide AUL for the 
industry. If a party can show that either of these time periods differs 
from the AUL in the IRS tables by one year or more, the Department will 
use the company-specific AUL or the country-wide AUL for the industry 
as the allocation period.
    Neither NHCI nor the petitioner has contested using the AUL 
reported for the magnesium industry in the IRS tables. We are, 
therefore, continuing to allocate non-recurring benefits over 14 years.

Analysis of Programs

I. Program Preliminarily Determined to Confer Countervailable Subsidies

A. Article 7 Grant from the Quebec Industrial Development Corporation 
(``SDI'')
    SDI (Societe de Developpement Industriel du Quebec) administers 
development programs on behalf of the GOQ. SDI provides assistance 
under Article 7 of the SDI Act in the form of loans, loan guarantees, 
grants, assumptions of costs associated with loans, and equity 
investments. This assistance involves projects capable of having a 
major impact upon the economy of Quebec. Article 7 assistance greater 
than 2.5 million dollars must be approved by the Council of Ministers 
and assistance over 5 million dollars becomes a separate budget item 
under Article 7. Assistance provided in such amounts must be of 
``special economic importance and value to the province.'' (See Final 
Affirmative Countervailing Duty Determinations: Pure Magnesium and 
Alloy Magnesium from Canada, 57 FR 30946, 30948 (July 13, 1992) 
(``Magnesium Investigation'').)
    In 1988, NHCI was awarded a grant under Article 7 to cover a large 
percentage of the cost of certain environmental protection equipment. 
In the Magnesium Investigation, the Department determined that NHCI 
received a disproportionately large share of assistance under Article 
7. On this basis, we determined that the Article 7 grant was limited to 
a specific enterprise or industry, or group of enterprises or 
industries, and, therefore, countervailable. In these reviews, neither 
the GOQ nor NHCI has provided new information which would warrant 
reconsideration of this determination.
    In the Magnesium Investigation, the Department found that the 
Article 7 assistance received by NHCI constituted a non-recurring grant 
because it represented a one-time provision of funds. In the 
Preliminary Results of First Countervailing Duty Administrative 
Reviews: Pure Magnesium and Alloy Magnesium From Canada, 61 FR 11186, 
11187 (March 19, 1996), we found this determination to be consistent 
with the principles enunciated in the Allocation section of the General 
Issues Appendix (``GIA'') appended to the Final Countervailing Duty 
Determination; Certain Steel Products from Austria, 58 FR 37225, 37226 
(July 9, 1993). In the current review, no new information has been 
placed on the record that would cause us to depart from this treatment. 
Therefore, in accordance with section 351.524(b)(2) of our regulations, 
we have continued to allocate the benefit of this grant over time. We 
used our standard grant methodology as described in section 351.524(d) 
of the regulations to calculate the countervailable subsidy. We divided 
the benefit attributable to the POR by NHCI's total sales of Canadian-
manufactured products in the POR. On this basis, we preliminarily 
determine the countervailable subsidy from the Article 7 SDI grant to 

be 1.38 percent ad valorem for NHCI.

II. Programs Preliminarily Determined To Be Not Used

    We examined the following programs and preliminarily determine that 
NHCI did not apply for or receive benefits under these programs during 
the POR:
    
  • St. Lawrence River Environment Technology Development Program
  • Program for Export Market Development
  • The Export Development Corporation
  • Canada-Quebec Subsidiary Agreement on the Economic Development of the Regions of Quebec
  • Opportunities to Stimulate Technology Programs
  • Development Assistance Program
  • Industrial Feasibility Study Assistance Program
  • Export Promotion Assistance Program
  • Creation of Scientific Jobs in Industries
  • Business Investment Assistance Program
  • Business Financing Program
  • Research and Innovation Activities Program
  • Export Assistance Program
  • Energy Technologies Development Program
  • Transportation Research and Development Assistance Program III. Program Previously Determined To Be Terminated
  • Exemption from Payment of Water Bills In the last administrative reviews, covering calendar year 1997, the Department found that this program was terminated during the POR. In our final results, we stated that we, therefore, did not intend to continue to examine this [[Page 25912]] program in the future (see Pure Magnesium and Alloy Magnesium from Canada: Final Results of Countervailing Duty Administrative Reviews, 64 FR 48805, 48806 (September 8, 1999)). Preliminary Results of Reviews In accordance with 19 CFR 351.221(b)(4)(i), we calculated a subsidy rate for NHCI, the sole producer/exporter subject to these administrative reviews. For the period January 1, 1998, through December 31, 1998, we preliminarily determine the net subsidy rate for NHCI to be 1.38 percent ad valorem. We will disclose our calculations to the interested parties upon request pursuant to section 351.224(b) of the regulations. If the final results of these reviews remain the same as these preliminary results, the Department intends to instruct the Customs Service (``Customs'') to assess countervailing duties at the net subsidy rate. The Department also intends to instruct Customs to collect cash deposits of estimated countervailing duties at the rate of 1.38 percent on the f.o.b. value of all shipments of the subject merchandise from NHCI entered, or withdrawn from warehouse, for consumption on or after the date of publication of the final results of these administrative reviews. Because the URAA replaced the general rule in favor of a country- wide rate with a general rule in favor of individual rates for investigated and reviewed companies, the procedures for establishing countervailing duty rates, including those for non-reviewed companies, are now essentially the same as those in antidumping cases, except as provided for in section 777A(e)(2)(B) of the Act. The requested reviews will normally cover only those companies specifically named. See 19 CFR 351.213(b)(2). Pursuant to 19 CFR 351.212(c), for all companies for which a review was not requested, duties must be assessed at the cash deposit rate, and cash deposits must continue to be collected, at the rate previously ordered. As such, the countervailing duty cash deposit rate applicable to a company can no longer change, except pursuant to a request for a review of that company. See Federal-Mogul Corporation and The Torrington Company v. United States, 822 F. Supp. 782 (CIT 1993) and Floral Trade Council v. United States, 822 F. Supp. 766 (CIT 1993) (interpreting 19 CFR 353.22(e), the antidumping regulation on automatic assessment, which is identical to 19 CFR 355.22(g), the predecessor to 19 CFR 351.212(c)). Therefore, the cash deposit rates for all companies except the company covered by these reviews, will be unchanged by the results of these reviews. We will instruct Customs to continue to collect cash deposits for non-reviewed companies, (except Timminco Limited which was excluded from the orders during the investigations) at the most recent company- specific or country-wide rate applicable to the company. Accordingly, the cash deposit rate that will be applied to non-reviewed companies covered by these orders is that established in Pure and Alloy Magnesium From Canada; Final Results of the Second (1993) Countervailing Duty Administrative Reviews, 62 FR 48607 (September 16, 1997) or the company-specific rate published in the most recent final results of an administrative review in which a company participated. These rates shall apply to all non-reviewed companies until a review of a company assigned these rates is requested. In addition, for the period January 1, 1998, through December 31, 1998, the assessment rates applicable to all non-reviewed companies covered by these orders are the cash deposit rates in effect at the time of entry, except for Timminco Limited which was excluded from the orders in the original investigations. Public Comment Interested parties may request a hearing within 30 days of the date of publication of this notice. Any hearing, if requested, will be held two days after the scheduled date for submission of rebuttal briefs (see below). Interested parties may submit written arguments in case briefs within 30 days of the date of publication of this notice. Rebuttal briefs, limited to issues raised in case briefs, may be filed no later than five days after the date of filing the case briefs. Parties who submit briefs in these proceedings should provide a summary of the arguments not to exceed five pages and a table of statutes, regulations, and cases cited. Copies of case briefs and rebuttal briefs must be served on interested parties in accordance with 19 CFR 351.303(f). Representatives of parties to the proceeding may request disclosure of proprietary information under administrative protective order no later than 10 days after the representative's client or employer becomes a party to the proceeding, but in no event later than the date the case briefs, under 19 CFR 351.309(c)(1)(ii), are due. The Department will publish a notice of the final results of these administrative reviews within 120 days from the publication of these preliminary results. These administrative reviews and notice are in accordance with sections 751(a)(1) and 777(i)(1) of the Act. Dated: April 28, 2000. Troy H. Cribb, Acting Assistant Secretary for Import Administration. [FR Doc. 00-11173 Filed 5-3-00; 8:45 am] BILLING CODE 3510-DS-P