[Federal Register: May 8, 2002 (Volume 67, Number 89)]
[Page 30874-30876]
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DEPARTMENT OF COMMERCE
International Trade Administration
[C-122-815]
Pure Magnesium and Alloy Magnesium from Canada: Preliminary
Results and Partial Rescission 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 through December 31,
2000. We have preliminarily determined that certain producers/exporters
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. Based on
information provided by Magnola Metallurgy Inc., we are rescinding the
review with respect to this company.
Interested parties are invited to comment on these preliminary
results (see the Public Comment section of this notice).
EFFECTIVE DATE: May 8, 2002.
FOR FURTHER INFORMATION CONTACT: Sally Hastings or Craig Matney, AD/CVD
Enforcement, Group I, Office 1, Import Administration, U.S. Department
of Commerce, 14th Street and Constitution Avenue, N.W., Washington,
D.C. 20230; telephone: (202) 482-3464 or (202) 482-1778, respectively.
SUPPLEMENTARY INFORMATION:
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). The
Department published a notice of ``Opportunity to Request
Administrative Review'' of these countervailing duty orders (66 FR
39729) on August 1, 2001. We received a timely request for review of
Norsk Hydro Canada, Inc. (``NHCI'') and Magnola Metallurgy Inc.
(``Magnola'') from the petitioner, Magnesium Corporation of America. We
initiated these reviews for calendar year 2000 on October 1, 2001 (66
FR 49924).
[[Page 30875]]
On October 16, 2001, we issued countervailing duty questionnaires
to NHCI, Magnola, the Government of Qu'ebec (``GOQ''), and the
Government of Canada (``GOC''). We received questionnaire responses
from the GOQ and GOC on November 26, 2001, and from NHCI on December
10, 2001. A supplemental questionnaire was issued to NHCI on April 3,
2002, and NHCI submitted its supplemental questionnaire response on
April 16, 2002.
Partial Rescission
We received letters from Magnola on November 8 and 9, 2001. Based
on information presented by Magnola, on November 16, 2001, the
Department notified Magnola of its intent to rescind these
administrative reviews with respect to Magnola and its affiliates
pursuant to 19 CFR 351.213(d). (See Letter from Susan Kuhbach to
Elliott Feldman dated November 16, 2001, a public version of which is
available in the Public Files of the Central Records Unit, B-099 of the
main Commerce building.) Accordingly, these reviews now cover NHCI, a
producer/exporter of the subject merchandise, and 16 subsidy programs.
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''). In addition, unless otherwise
indicated, all citations to the Department's regulations are to 19 CFR
Part 351 (2001).
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 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 inPreliminary 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 through December 31, 2000.
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.
Pursuant to section 351.524(d)(2) of the countervailing duty
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-
[[Page 30876]]
manufactured products in the POR. On this basis, we preliminarily
determine the countervailable subsidy from the Article 7 SDI grant to
be 1.59 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 From Which NHCI No Longer Receives a Countervailable
Benefit
Exemption from Payment of Water Bills
In the administrative reviews covering calendar year 1997 the
Department found that NHCI's benefits from this program had been
exhausted and NHCI's participation in this program had ended. We also
found that no residual benefits were being provided or received and no
substitute program had been implemented. In our final results, we
stated that we, therefore, did not intend to continue to examine this
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)). Consistent with this
determination and in the absence of any new allegation, we did not
examine this program in these reviews.
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 through December 31,
2000, we preliminarily determine the net subsidy rate for NHCI to be
1.59 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
1.59 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 through December 31, 2000, 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).
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 preliminary results are published pursuant
to sections 703(f) and 777(i) of the Act.
Dated: May 1, 2002.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 02-11467 Filed 5-7-02; 8:45 am]
BILLING CODE 3510-DS-S