68 FR 25339, May 12, 2003
DEPARTMENT OF COMMERCE
International Trade Administration
[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, 2001 through December
31, 2001. We preliminarily find that certain producers/exporters have
received countervailable 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 Review'' 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 12, 2003.
FOR FURTHER INFORMATION CONTACT: Melanie Brown, 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) 482-4987
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). On August
6, 2002, the Department published a notice of ``Opportunity to Request
Administrative Review'' of these countervailing duty orders (67 FR
50856). We received a timely request for review of Norsk Hydro Canada,
Inc. (``NHCI'') and Magnola Metallurgy, Inc. (``Magnola'') from the
petitioner, U.S. Magnesium, LLC. On September 25, 2002, we initiated
this review covering shipments of subject merchandise from NHCI and
Magnola (67 FR 60210).
On December 3, 2002, we published Pure and Alloy Magnesium from
Canada: Correction of Notice of Initiation and Partial Rescission of
Countervailing Duty Administrative Review (67 FR 71936). In that
notice, we stated that the correct POR for these administrative reviews
is January 1, 2001 through December 31, 2001, and rescinded the reviews
with respect to Magnola, because Magnola is currently a party in a new
shipper administrative review covering the same POR and the same
subject merchandise. Therefore, in accordance with 19 CFR 351.213(b),
these reviews cover NHCI, a producer/exporter of the subject
merchandise. These reviews cover 16 subsidy programs.
On December 5, 2002, we issued countervailing duty questionnaires
to NHCI, the Government of Quebec (``GOQ''), and the Government
of Canada (``GOC''). We received questionnaire responses from the GOQ
and the GOC on January 13, 2003, and from NHCI on January 27, 2003.
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 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, 2001 through December 31, 2001.
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 these cases, 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 these cases, 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
[[Page 25340]]
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. Therefore, we
continue 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 is provided for projects
that are 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 continue 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 1.68 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 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 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)).
Alleged Over-assessment of Countervailing Duties
In its January 27, 2003 questionnaire response, NHCI contends that
the Department should adjust the assessment rate applied to the value
of entries made during the POR in order to avoid alleged over-
countervailing in connection with cash deposits retained on 1997
entries. NHCI states that the Department issued appropriate liquidation
instructions to the Customs Service (``Customs'') following the
completion of the 1997 administrative review, but that Customs
erroneously liquidated hundreds of NHCI entries at the cash deposit
rate at the time of entry, rather than at the rate established in the
final results of the 1997 administrative review.
The Department does not have the authority to address what is
essentially a customs protest issue concerning entries from a prior,
completed review in the context of this administrative review. Parties
cannot revive an issue for which the deadlines for a proper challenge
have already passed by raising it in an on-going administrative
proceeding. Therefore, the Department will not address an issue which
is not properly before the agency in this review.
Preliminary Results of Review
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, 2001, through
December 31, 2001, we preliminarily find the net subsidy rate for NHCI
to be 1.68 percent ad valorem. We will disclose our calculations to the
interested parties in accordance with section 351.224(b) of the
regulations.
Assessment Rates
If the final results of these reviews are affirmative, the
Department intends to instruct Customs to assess countervailing duties
at the net subsidy rate. The Department will issue appropriate
assessment instructions directly to the Customs Service within 15 days
of publication of the final results of these reviews. For the period
January 1, 2001, through December 31, 2001, the assessment rates
applicable to
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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.
Cash Deposit Instructions
The Department also intends to instruct Customs to collect cash
deposits of estimated countervailing duties at the rate of 1.68 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.
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.
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: May 5, 2003.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 03-11742 Filed 5-9-02; 8:45 am]