two ways: (1) The estimated sales value provided in the response overstates the value of landings of fresh whole fish, and (2) the allocation of benefits to the groundfish sector over production of all fish and shellfish distorts the subsidy conferred on the production of the subject merchandise. In addition, petition contends that the use of a per pound net subsidy calculation conforms with Department policy and avoids valuation difficulties (See Lamb Meat from New Zealand, 50 Fed. Reg. 37708 (Lamb) and Swine, supra). Finally, they argue that the use of national data understates the subsidy to the Atlantic Canada groundfish industry, since Atlantic Canada has received disproportionately higher benefits than the nation as a whole.
DOC Position: At verification, we learned that what we referred to in our preliminary decision as the value of landings was in fact the f.o.b. value of production. While mislabeled in our preliminary determination, we believe that this is the correct value over which benefits should be allocated. As stated in the "Scope of Investigation" section of this notice, the product designated as "fresh whole fish" goes through the production line where the fish can be processed by removal of heads, viscera, fins, or any combination thereof. Also, by definition, fillets (including fish steaks) are processed. Therefore, we believe that the value of production, and not the value of landings (i.e., the value of fish as it is landed off the vessel) is the proper value over which to allocate benefits.
(Cite as: 51 FR 10041, *10064)
With respect to the use of a per pound subsidy rate, the facts in Lamb and Swine were quite different from those in this case. In the two cited cases, we were dealing with coverting one animal (hogs or lamb) into one product (pork meat or lamb meat). Conversion from animal to product was very simple. In this case, we are dealing with a variety of species each having a different yield, being processed into numerous fish products.
In order to assess duties accurately on a per pound basis, we would have to calculate a separate subsidy rate for each species and for each product thereof. Information on the record does not enable us to do so. Regarding petitioner's contention on valuation difficulties, we have been informed by U.S. Customs that collecting cash deposits on an ad valorem basis can be done.
Finally, with respect to the allocation of benefits over the appropriate denominator, because we are dealing with data, we have allocated benefits over the appropriate production value of the group receiving benefits. If we look at a program providing benefits to the Atlantic fishing industry, for example, it is correct to divide by the f.o.b. value of production for Atlantic Canada. In those cases where, in the preliminary determination, benefits to one group were allocated over the value of production of a different group, corrections have been made and are reflected in this determination.
Comment 4: Petitioner contends that Canada's seasonal unemployment program for self-employed fishermen is countervailable on the grounds that it bestows a
(Cite as: 51 FR 10041, *10064)
benefit upon the production of groundfish and that the subsidy is specifically available to the Canadian fishing industry. Petitioner argues that: (1) The self-employed fishermen's program constitutes a specific statutory exception to Canada's unemployment insurance act: (2) the self-employed fishermen's provisions are inconsistent with the insurance scheme provided under the general act; (3) the unique features of the program, including the method by which it is financed leave no doubt that the program is separate; and (4) the benefit provider under the program is disproportionate.
DOC Position: Unemployment insurance, like social security or welfare, is the government provision of a service. Since unemployment insurance is the provision of a service by the government of Canada, we must determine whether the provision of unemployment insurance to self-employed fishermen under the Fishermen's Regulations is provided on preferential terms. When we compared the system of unemployment insurance for self-employed fishermen to the general unemployment system, we determined that the government of Canada did not extend unemployment insurance to self-employed fishermen on preferential terms. (See section III.A.4. of this notice).
The purpose of unemployment insurance is to provide benefits to workers who are unemployed. We, therefore, realize that workers in certain industries such as those working in seasonal or cyclical industries, will receive a higher ratio of return (in terms of benefits received to premiums paid) than the
(Cite as: 51 FR 10041, *10064)
average worker who remains fully employed throughout the year. The government does not extend preferential terms to the provision of unemployment insurance. Self-employed fishermen make premium payments at the same rate when employed and receive benefits on the same general terms when unemployed as to participants in the general unemployment insurance program in Canada.
Comment 5: Petitioner contends that under the Small Craft Harbours program benefits provided to improve infrastructure are countervailable because the infrastructure is used almost exclusively by fishermen and fish processors. Further, petitioner contends that small craft harbors are not part of Canada's transportation infrastructure. Petitioner contends that the program benefits two specific industries, commercial fishing and recreational boating, and that activities such as the construction and maintenance of wharves, gear storage facilities and power outlets are not inherently governmental activities. Finally, petitioner argues that the *10065
(Cite as: 51 FR 10041, *10065)
facilities are not made available on equal terms to any potential user, but rather, that licensed Canadian commercial fishing vessels are given preferential rates for services such as berthage at government-owned docks and are provided a countervailable subsidy.
DOC Position: To determine whether the provision of infrastructure provides a countervailable subsidy, we must determine whether (1) the government limits who can move into the area where the infrastructure has been built; (2) the
(Cite as: 51 FR 10041, *10065)
infrastructure is used by more than a specific enterprise or industry, or group of enterprises or industries; and (3) industries have equal access to, or receive benefits from the infrastructure on the basis of neutral criteria. We also stated in Carbon Steel Wire Rod from Saudi Arabia. (50 FR 4206) that where limitations on use do not result from government activities, but instead result from the inherent characteristics of the good or service being provided, the government actions do not confer a countervailable benefit.
The government of Canada is responsible for the administration and operation of all the harbors in the country. In 1973, the administration of the smaller harbors was moved to the jurisdiction of the Small Craft Harbours Directorate. No government limitation has been placed on the use of the harbors. Users of the harbors include fishermen, recreational boaters, commercial transport vessels, coastal boats, ferries, seaplanes, tourists, and boats and ships seeking shelter from storms. We therefore find that the small craft harbors are used by more than a specific industry or group of industries and that the only limitation on the use of these harbors is due to the inherent characteristics of the facilities. However, we do find the program to be countervailable, to the extent that commercial fishing vessels are provided with preferential rates for harbor services.
Comment 6: Petitioner maintains that the Atlantic Fisheries Management Program underwrites extensively research projects that provide direct and indirect
(Cite as: 51 FR 10041, *10065)
benefits to the fishing industry. Petitioner argues that the basis for DOC's preliminary determination, that the research results under the program are publicly available, ignores the express holding of the Court of International Trade in Agrexco Agricultural Export Co., Ltd. v. United States (Agrexco). DOC Position: In Agrexco, the court stated that it was immaterial whether government research was disseminated to all groups, in determining whether a subsidy was provided. Instead, the court stated that Commerce should determine whether the research and development is targeted to assist a particular industry. We believe that our determination that DFO research is not countervailable, does not conflict with Agrexco.
Much of DFO research is done in support of Canada's international fishing responsibilities, negotiations, and agreements. Other research is done to support and to provide advice on domestic fishing and marine policy. A review of the research conducted, sponsored, and published by DFO includes such areas as "Resource Prospects for Canada's Atlantic Fishing 1985-1990," "Larval Crab (Decapoda: Brachyura) Zoeas and Megalopas of the Scotia Shelf," and "Analysis of Lake and Drainage Area Counts and Measures for Selected Watersheds Across Ontario's Shield Region." We do not believe that the scope of research conducted by DFO is targeted to assist a particular industry.
Comment 8: Petitioner maintains that the federal Bait Services Program is not run on a commercial basis, because the federal government expends substantial
(Cite as: 51 FR 10041, *10065)
sums toward the program's annual operating expenses in order to keep the program afloat. Petitioner argues that the absorption of such operating losses proves that provision of bait is at a preferential price.
DOC Position: For the provision of a government good or service to be countervailable, it must be provided on preferential terms. To determine if this program provides bait at preferential prices, we compared prices of bait sold under the program with the price of bait charged by commercial bait suppliers. We verified that the price charged under the Bait Services Program is the same as that charged by commercial bait suppliers.
Respondents' Comments
Comment 1: Respondents argue that if a grant program is in existence for more than one year, grants under the program should be considered "recurring" and the grant amount expensed in the year of receipt. They further contend that if the estimated net subsidy for an individual program is de minimis the benefits under the program must be expensed in the year of receipt.
DOC Position: We disagree. Simply because a program provides grants to different recipients in more than one year does not make the grants given under the program "recurring." Recurring benefits are benefits which the same recipient can participate receiving year after year. Such benefits are
(Cite as: 51 FR 10041, *10065)
expensed in the year of receipt.
The de minimis threshold is applicable only after the estimated net subsidy rates for all programs are added together. Each program is not required to cross the de minimis threshold. We established this test to ensure that countervailable grants which could be de minimis in a given year if allocated over time, and thus, could lead to a negative determination, would be countervailed.
Comment 2: Respondents contend that the federal FILP and numerous provincial fishery loan and loan guarantee programs are not countervailable because the relevant government operates loan and loan guarantee programs for farmers or small businessmen on comparable terms. They further contend that there is evidence that the farm and fishery loan programs are linked in their genesis and continuing operation, and, therefore, the government has made loans and loan guarantees available to a wide range of industries. Respondents further contend that if we find the fishing loan and loan guarantee program to be countervailable, the appropriate benchmarks should be those charged under the farm program.
DOC Position: We have determined that the fishery laon and loan guarantee programs are countervailable. On a case-by-case analysis of interest rates, administration of funds, evidence of government policy to treat industries equally, and the purpose of the program as stated in enabling legislation, we
(Cite as: 51 FR 10041, *10065)
have concluded that the fishery loan programs are not integrally linked with other loan programs available to other sectors or industries. Furthermore, although other government loan programs may exist for the agricultural sector, these programs are not an alternative source of funds for fishermen. Therefore, we have used a commercial rate of interest as the benchmark because it is most representative of what a fisherman would otherwise have to pay for a loan in Canada.
Comment 3: Respondents argue that benefits provided under the IRDP are not countervailable because the designation of regions for benefits is based on neutral economic criteria. Respondents cite Certain Steel Products from the Federal Republic of Germany, (47 FR 39345) (German Steel) to support their position. Respondents also argue that IRDP benefits are provided to encourage economic development and expansion in all regions of Canada, and *10066
(Cite as: 51 FR 10041, *10066)
are provided to a wide variety of industries in every province in Canada.
DOC Position: We find no merit in the argument that according to our past determinations the provision of regional benefits based on neutral criteria is not countervailable. In our German Steel determination, assistance provided as part of a national policy to relieve unemployment was provided on identical terms across Germany; regional designations were merely for administrative convenience. Therefore, we did not find this program to be a regional subsidy. IRDP provides grants, in order to encourage economic development and
(Cite as: 51 FR 10041, *10066)
expansion, to different regions at different funding levels according to the tier designation of the region. The level of funding available to an eligible applicant is determined by geographic region. Thus, the region an applicant is in is determinative of the level of assistance and not simply an administrative convenience.
Comment 4: Respondents contend that, because RDIP provides grants to industries located throughout most of Canada, the Department erroneously concluded that development incentives provided under RDIP are limited to a specific group of enterprises or industries. Furthermore, respondents argue that section 771(5) of the Act does not support a regionality test, and that such a test should not be used to determine the existence of subsidies in this investigation.
DOC Position: We have consistently held that benefits provided on a regional basis are, by their very nature, provided to a specific group of enterprises or industries. In Certain Softwood Products from Canada, (48 FR 24159), we found RDIP to be countervailable because the designation of areas eligible for assistance was based on administrative discretion. Therefore, we found RDIP benefits limited to companies located within specific regions. We disagree with respondents' contention that the Department erred by determining RDIP countervailable, and we reaffirm the decision made in the above-referenced determination.
(Cite as: 51 FR 10041, *10066)
Comment 5: Respondents assert that the ITC program is a boardly-based tax incentive available to all taxpayers in Canada and that ITCs over 7 percent are not limited to specific regions. They claim that a taxpayer anywhere in Canada or abroad can make use of ITCs over 7 percent and that the benefit bestowed accrues to the taxpayer irrespective of where the investment is located. Thus, they claim there is no regional targeting under the ITC. Respondents also claim that due to the interaction between ITCs and the depreciation system in Canada, the net benefit to the taxpayer claiming an ITC may not equal the full amount of the credit.
DOC Position: Although the taxpayer who claims an ITC at a rate above seven percent need not be located in a particular region, the acquired asset used as a basis for claiming an ITC must be used in a particular region. The Canadian Income Tax Act clearly requires that to claim an ITC on an asset, at a rate higher than seven percent, the asset must be used in a prescribed region. Therefore, the higher ITC rates are limited to a group of enterprises or industries which use assets in certain regions. Thus, the higher ITC rates are countervailable.
While it may be true that all taxpayers in Canada may be benefitting from ITCs (as tax shelters, for example), it is also very likely that the regions where higher ITC rates are available are also benefitting from higher levels of investment due to the ITC rate structure which spurs investment in those
(Cite as: 51 FR 10041, *10066)
regions.
Regarding the interaction between ITCs and the depreciation system in Canada, we recognize that the after tax benefit to the taxpayer may, in some cases, not equal the full amount of the credit. However, it is the Department's policy to disregard secondary tax effects on countervailable subsidies. Any offsets to a countervailable subsidy are strictly limited by section 771(6) of the Act.
Comment 6: Respondents content that, because GDAs and ERDAs were signed with all the provinces, the agreements are not limited to a specific group of enterprises or industries. They argue that it is incorrect to require each subsidiary agreement to pass the specificity test. Moreover, they contend that because assistance is directed to infrastructure projects, virtually all sectors of the economy benefit.
DOC Position: The Department recognizes that all the provinces (with the exception of P.E.I. under the GDAs) have signed GDAs and ERDAs with the federal government. However, there are no GDA or ERDA programs per se. GDAs and ERDAs do not establish government programs, nor do they provide for the administration and funding of government programs. GDAs and ERDAs are merely legal agreements under which departments of the federal and provicial governments may cooperate in establishing and administering joint economic development programs in spheres of dual or conflicting jurisdiction. The implementation, administration and funding of industry-and regional-specific
(Cite as: 51 FR 10041, *10066)
programs occur exclusively through subsidiary agreements. Therefore, we have decided that in determining whether subsidiary agreement programs are limited to a specific enterprise or industry, or group of enterprises or industries, the proper level of analysis is the subsidiary agreement. Because we are analyzing each subsidiary agreement separately to determine if it meets the specificity test, it is irrelevant if some subsidiary agreements have funded infrastructure projects.
Comment 7: Respondents argue that ARDA assistance conferred benefits on a wide range of agriculture and rural economic development activities in Canada and is, consequently, generally available. They further contend that, because ARDA agreements are available to all provinces, assistance is not targeted to any particular region.
DOC Position: We disagree. See our discussion in Section I.B.1.
Comment 8: Respondents contend that, because the government utilized detailed financial analyses which forecasted encouraging future prospects for the industry in general, and for FPIL and NSP in particular, its opinion that these companies were equityworthy was commercially reasonable and its investment was consistent with commercial considerations. Respondents state that the companies' actual performance subsequent to the restructuring confirms the soundness of the government's investment. Furthermore, respondents contend that the fact that private investors purchased the same shares as the
(Cite as: 51 FR 10041, *10066)
government attests to the investments' commercial reasonableness.
DOC Position: We disagree. See our discussion in Section I.A.11.
Comment 9: Respondents contend that the Department incorrectly used the 1977 Class Life Asset Depreciaiton Range System of the United States Internal Revenue Service (the IRS tables) rather than Canadian Income Tax Regulations in its determination of the allocation period used for calculating the benefits of non-recurring grants.
DOC Position: In the Subsidies Appendix we stated that although we would prefer to use the estimated economic useful life of an asset as the allocation period, the IRS tables, which reflect reasonable accounting useful like, provide the best practicable means of consistently determining useful life. If we were to use different countries' tax tables for different cases, we might find different subsidy margins due solely to the different periods of allocation. Rather than this anomalous result, we *10067
(Cite as: 51 FR 10041, *10067)
believe it is just as reasonable, and makes for more consistent results, to use the U.S. IRS tables to determine the period over which to allocate benefits. Our belief is reinforced in this case, where the Canadian Income Tax Regulations estimate the useful life of boats at seven years. Such a short estimated useful life for fishing vessels implies that the Canadian Income Tax Regulations may not be a true indicator of the estimated useful life of an asset in Canada but may serve other purposes (i.e., providing for accelerated depreciation). During
(Cite as: 51 FR 10041, *10067)
verification of various loan programs, we noted that the loan terms for fishing vessels ranged from 15 to 25 years. This indicates that the Canadian Income Tax Regulations may be understating the useful life of assets in the fishing industry. Therefore, we determine that the IRS tables provide the best practicable means of consistently and objectively determining useful life.
Comment 10: Respondents contend that the activities of the promotions branch of the DFO Marketing Directorate are legitimate government functions as identified in Certain Fresh Cut Flowers from Mexico, (49 FR 15007) (Cut Flowers). They also argue that the promotion branch's attendance at the Boston and Dallas seafood fairs was a courtesy gesture and not a marketing activity.
DOC Position: The Cut Flowers determination characterizes the organizing and directing of trade shows abroad as a legitimate government function. Specific product promotion, however, rather than constituting a legitimate government function, is the assumption of an industry's advertising cost by the government. At verification, we obtained a photograph of the Canadian display at the Boston Seafood fair. The photograph clearly shows that Canadian cod and haddock were advertised during the Boston fair. Such promotional activities are outside the scope of Cut Flowers.
Comment 11: Respondents maintain that assistance provided to improve fish chilling facilities prevents fish spoilage and ensures a minimum quality of fish, and, as such, constitutes a legitimate government function similar to the
(Cite as: 51 FR 10041, *10067)
meat inspection service held not to be countervailable in Lamb, supra.
DOC Position: We agree that the maintenance of health and hygiene standards through government inspection services is a legitimate function of government. In this instance, however, the Canadian Federal and certain provincial governments are providing grants to the fishing industry to purchase capital equipment used in the production of the subject merchandise.
Comment 12: Respondents argue that if the Department calculates two subsidy rates, one for whole fish and a separate rate for fillets, it must apply the "upstream subsidy" analysis of section 771A of the Act to determine whether subsidies provided to harvesters of whole fish benefit the production of fillets.
DOC Position: Because we have calculated one rate for both whole fish and fillets, we need not consider this argument.
Comment 13: Respondents argue that subsidies provided to the fishing industry do not constitute benefits to a specific industry or group of industries ane are therefore, not countervailable. They contend that harvesters of fresh Atlantic groundfish make up a distinct industry which is included within the larger group of salt water fishing industries and that groundfish processors are also a separate industry within the group of fish products industries. Therefore, they contend that subsidies available to the group of fish products industries and salt water fishing industries are available to more than a
(Cite as: 51 FR 10041, *10067)
specific group of enterprises or industries. Respondents also analogize the fishing industry to the agricultural sector, asserting that the fishing industry, similar to the agricultural sector, consists of more than a group of industries.
DOC Position: We disagree. The fisheries programs investigated conferred benefits on two specific industries, the salt water fishing industry and the seafood products industry, and as such, these programs were available to no more than a group of industries. Furthermore, the fishing industry is not analogous to the agricultural sector. The agricultural sector consists of a vast number of distinct inductries which, inter alia, produce: fruits, vegetables, grains, tree nuts, tobacco, nursery products, ornamental floriculture, dairy products, meat products, eggs; raise: cattle, hogs, sheep, goats, poultry, horses, furbearing animals and rabbits; and provide: crop planting and harvesting services. The salt water fishing and seafood products industries do not include the same varied and diverse range of productive activities as does the agricultural sector.
Comment 14: Respondents argue that the unemployment insurance system is a universal system which does not benefit any specific industry uniquely or disproportionately. They point out that the beneft rate is the same for fishermen and other workers, and that premiums are paid at the same rate for fishermen as for other workers. Respondents contend that fishermen are
(Cite as: 51 FR 10041, *10067)
generally governed by the Unemployment Insurance Act (U.I.), with minor modifications to account for the circumstances of nominal self-employment and the seasonality of the fishery. They also argue that, due to unpredictable circumstances of fish unavailability and fishery closures, fishermen are subject to the risk of involuntary unemployment just as other workers. Finally, respondents argue that U.I. benefits are not a grant on the production of groundfish because they pay fishermen not to fish, and actually increase the costs of the fishing industries.
DOC Position: We determined that the terms of this program for self-employed fishermen were not preferential when compared to Canada's general unemployment program. See our discussion in Sectin III.A.4.
Comment 15: Respondents maintain that it is well recognized that if the government either provides infrastructure or funds infrasturcture projects; there is no subsidy because any benefits are available to and used by all industries on a non-preferrential basis. Thus, respondents argue that under the SCRPP, infrastructure projects such as highway construction, airport construction and runway repair were funded and that these projects did not selectively benefit any specific group of industries or enterprises. Respondents assert that the Department should analyze the SCRPP program in its entirety and not each separate project funded from SCRPP moneys. DOC Position: As stated above, in examining the SCRPP, we looked at the use of
(Cite as: 51 FR 10041, *10067)
funds and not their source. We find the grant to fishermen administered by the DFO to be countervailable because it is limited to a specific industry. The fact that the DFO receives it funds under the Budget of Canada or the National Treasury, does not mean that we look at all programs authorized by the Canadian Budget and funded from the National Treasury in determining whether DFO grants to fishermen are limited to a specific industry or group of industries. Similarly, the fact that some departments used additional SCRPP funds to accelerate the building of airports or highways, does not mean that a grant program for fishermen is not countervailable.
Comment 16: Respondents also argue that under the Small Craft Harbours program, Canada maintains its transportation infrastructure and that no *10068
(Cite as: 51 FR 10041, *10068)
specific industry or enterprise is benefitted.
DOC Position: We agree that infrastructure facilities do not provide countervailable benefits if they are available to and used by all potential users on a non-preferential basis. However, in examining the Small Craft Harbours programs, we found that fishermen paid preferential users fees and therefore, that they received a countervailable benefit.
Comment 17: Respondents argue that the government of the Nova Scotia's Industrial Development Division administers a wide variety of programs designed to promote safety and improve working conditions in the fishing industry, to minimize risk associated with the introduction of technological innovations,
(Cite as: 51 FR 10041, *10068)
and to raise the quality standards applicable to the fishing industry as a whole. As such, respondents contend that these programs do not reduce the overhead associated with production operations or contribute significantly to capital improvements, and that they are therefore, not countervailable.
DOC Position: We verified that under this program the government disbursed funds which were used by fishermen to invest in a wide range of capital equipment including fishing vessels, fishing gear, and storage and handling containers. Recipients also received grants covering costs of projects such as the construction of private wharves, bait storage facilities and gear sheds. These grants provide countervailable benefits under the countervailing duty law. Respondents' contention that government funding of these projects does not reduce overhead or contribute to capital improvement is untenable.
Comment 18: Respondents contend that programs providing grants for the purchase, construction and modernization of fishing vessels are not countervailable because, both in intent and effect, the grants provided benefitted boat builders, not fishermen. They state that as the legislative history indicates, the vessel assistance programs were designed to assist the Canadian shipbuilding industry, and not the fishermen. they further state that vessel assistance grants simply compensate for the ''artificially inflated prices" realized by Canadian shipbuilders. Finally, with respect to vessels constructed by fishermen themselves, respondents argue that because the
(Cite as: 51 FR 10041, *10068)
fishermen must use locally-produced materials, the entire amount of the grant received by the fishermen is passed on to the suppliers of the locally-sourced construction materials. Respondents are joined in these arguments by an economic consultant, working on behalf of the American Seafood Distributors Association (ASDA).
DOC Position: We disagree. Respondents have not provided any conclusive evidence to support either their argument on intent, or on effect. With respect to intent, respondents have provided two isolated excerpts from legislative disucssions on vessel grants, one from 1974 and one from 1978. We cannot conclude from either excerpt that the intent of the government was to provide benefits to the shipbuilding industry. One only needs to examine the enabling federal and provincial legislation to realize that the intent of the various governments was to benefit fishermen. Benefits are only available for vessels engaged in commercial fishing activities. If the governments intended to benefit the shipbuilding industry, why were only fishing vessels eligible for coverage Respondents acknowledge in their pre-hearing brief that the government represented this program as benefitting fishermen. In fact, in a February 7, 1986, press release, the Canadian Minister of Fisheries and Oceans, when announcing the federal FVIP termination, stated that ''when the program was introduced, there were very few sources of capital for fishermen who wished to build new boats. That has now changed and banks, trust companies, credit
(Cite as: 51 FR 10041, *10068)
unions and provincial loan boards all provide funds for this purpose." The logical conclusion from this statement is that the government intended to provide funding to enable professional fishermen to purchase or construct fishing vessels.
With respect to the argument on effect, other than a limited number of price quotations on foreign built vessels, respondents and the ASDA rely on an economic study conducted in 1979 for the DFO. This study, which concluded that fishermen do not benefit from vessel subsidies, had as one of its stated purposes, "in the face of the threatening U.S. countervail suit, to recommend an alternative to help fishermen." The author of that study stated that ''due to the lack of available data and knowledge about the nature of the shipbuilding industry and, indeed, about the fishermen themselves, much effort has been expended on analysis which is purely descriptive in nature." With respect to the price elasticity of demand, the author states that "to estimate the price elasticity of demand, one needs to know the various quantities which buyers will purchase at different prices, ceteris paribus. The only prices that could be obtained were the estimated costs of vessels, quoted by the builders of subsidized vessels. The changes brought about by the subsidy program could be determined if one knew the prices of vessels before and after the subsidy came into effect. We only have the latter." And, with respect to the price elasticity of supply, she further states, "one needs to know something about
(Cite as: 51 FR 10041, *10068)
the quantities and prices of the inputs which are used in the production of vessels. How these inputs are combined to produce a given output is also helpful information. There is no such data available on the Nova Scotia boatbuilding yard." She concludes by stating, "the data that are available are very sparse, difficult to locate, and totally inadequate for the purpose of analyzing government subsidy programs." Based on these statements by the author herself, we do not believe that respondents have presented any credible evidence to support their contention that grants under these vessel programs benefit shipbuilders, not fishermen. Nor has any evidence been provided to demonstrate that subsidies are passed through to suppliers of locally-sourced construction materials.
Verification
In accordance with section 776(a) of the Act, we verified the information used in making our final determination. During verification, we followed standard verification procedures, including meeting with government officials, inspection of documents and ledgers, and tracing the information in the responses to source documents, accounting ledgers, financial statements and annual reports.
(Cite as: 51 FR 10041, *10068)
Suspension of Liquidation
In accordance with section 703(d) of the Act, we instructed the U.S. Customs Service to suspend liquidation of all entries of certain fresh Atlantic groundfish from Canada which are entered, or withdrawn from warehouse, for consumption on or after January 9, 1986, the date of publication of our preliminary determination in the Federal Register. The liquidation of all entries, entered or withdrawn from warehouse, for consumption will continue to be suspended, and as of the date of publication of this notice in the Federal Register, the Customs Service should require a cash deposit or bond for each such entry in the amount of 5.82 percent ad valorem. This suspension will remain in effect until further notice.
ITC Notification
In accordance with section 705 of the Act, we will notify the ITC of our *10069
(Cite as: 51 FR 10041, *10069)
determination. In addition, we are making available to the ITC all non-privileged and non-confidential information relating to this investigation. We will allow the ITC access to all privileged and confidential information in our files, provided the ITC confirms it will not disclose such information, either publicly or under an administrative protective order,
(Cite as: 51 FR 10041, *10069)
without the written consent of the Deputy Assistant Secretary for Import Administration.
The ITC will determine whether these imports materially injure, or threaten material injury to, a U.S. industry 45 days after the date of publication of this notice. If the ITC determines that material injury, or the threat of material injury, does not exist, this proceeding will be terminated and all estimated duties deposited or securities posted as a result of the suspension of liquidation will be refunded or cancelled. If, however, the ITC determines that injury exists, we will issue a countervailing duty order, directing Customs officers to assess a countervailing duty on groundfish from Canada entered, or withdrawn from warehouse, for consumption on or after the date of the suspension of liquidation as indicated in the "Suspension of Liquidation" section of this notice. This notice is published pursuant to section 705(d) of the Act (19 U.S.C. 1671(d)).
Paul Freedenberg,
Assistant Secretary for Trade Administration.
March 14, 1986.
(Cite as: 51 FR 10041, *10069)
[FR Doc. 86-6255 Filed 3-21-86; 8:45 am]
BILLING CODE 3510-DS-M