DEPARTMENT OF COMMERCE



International Trade Administration

[C-122-815]





Pure Magnesium and Alloy Magnesium From Canada; Preliminary

Results of the Fourth Countervailing Duty Administrative Reviews for

the 1995 Period of Review



AGENCY: Import Administration, International Trade Administration,

Department of Commerce.



ACTION: Notice of preliminary results of countervailing duty

administrative reviews.





SUMMARY: The Department of Commerce (the Department) is conducting

administrative reviews of the countervailing duty orders on pure

magnesium and alloy magnesium from Canada. For information on the net

subsidy for the reviewed company, as well as for all non-reviewed

companies, please see the Preliminary Results of Reviews section of

this notice. If the final results remain the same as these preliminary

results of administrative reviews, we will instruct the U.S. Customs

Service (Customs) to assess countervailing duties as detailed in the

Preliminary Results of Reviews section of this notice. Interested

Parties are invited to comment. (See Public Comment section of this

notice.)



EFFECTIVE DATE: May 12, 1997.



FOR FURTHER INFORMATION CONTACT: Sally Hastings or Cynthia Thirumalai,

AD/CVD Enforcement, Group 1, Office 1, Import Administration,

International Trade Administration, U.S. Department of Commerce, 14th

Street and Constitution Avenue, NW., Washington, DC 20230; telephone:

(202) 482-3464 or (202) 482-4087, respectively.



SUPPLEMENTARY INFORMATION:



Background



    On August 31, 1992, the Department published in the Federal

Register (57 FR 39392) the countervailing duty orders on pure and alloy

magnesium from Canada. On August 12, 1996, the Department published a

notice of ``Opportunity to Request an Administrative Review'' (61 FR

41771) of these countervailing duty orders. We received timely requests

for review from NHCI on August 20, 1996 and from the Gouvernment du

Quebec (GOQ) on August 21, 1996 and we initiated these reviews,

covering the period January 1, 1995 through December 31, 1995, on

September 15, 1996 (61 FR 48882).

    In accordance with 19 CFR 355.22(a), these reviews cover only the

producer or exporter of the subject merchandise for which reviews were

specifically requested. Accordingly, these reviews cover only NHCI.

Also, these reviews cover seventeen programs.

    On October 30, 1996, the Department issued questionnaires to NHCI,

the Government of Canada (GOC), and the GOQ. The Department received

questionnaire responses from NHCI, the GOC and the GOQ on December 3,

1996. The Department issued supplemental questionnaires to NHCI and the

GOQ on April 10, 1997 and received supplemental questionnaire responses

from both parties on April 24, 1997.



Applicable Statute



    Unless otherwise indicated, all citations to the statute are

references to the provisions of the Tariff Act of 1930, as amended by

the Uruguay Round Agreements Act (URAA) effective January 1, 1995 (the

Act). The Department is conducting these administrative reviews in

accordance with section 751(a) of the Act.



Scope of the Reviews



    The products covered by these reviews are 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. Secondary and

granular magnesium are not included. Pure and alloy magnesium are

currently provided for in subheadings 8104.11.0000 and 8104.19.0000,

respectively, of the Harmonized Tariff Schedule (HTS). Although the HTS

subheadings are provided for convenience and Customs



---- page 25925 ----



purposes, our written descriptions of the scopes of these proceedings

is dispositive.



Analysis of Programs



I. Programs Previously Determined to Confer Subsidies



    A. Exemption from Payment of Water Bills

    Pursuant to a December 15, 1988 agreement between NHCI and La

Societe du Parc Industriel et Portuaire de Becancour (Industrial Park),

NHCI is exempt from payment of its water bills. Except for the taxes

associated with its bills, NHCI does not pay the invoiced amounts of

its water bills.

    In the Final Affirmative Countervailing Duty Determinations: Pure

Magnesium and Alloy Magnesium from Canada (Magnesium from Canada) 57 FR

30948 (July 13, 1992), the Department determined that the exemption

received by NHCI was limited to a specific enterprise or industry, or

group of enterprises or industries because no other company receives

such an exemption. In these reviews, neither the GOQ nor NHCI provided

new information which would warrant reconsideration of this

determination.

    We preliminarily determine the countervailable benefit to be the

amount NHCI would have paid absent the exemption. To calculate the

benefit under this program, we divided the amount NHCI would have paid

for water during the POR by NHCI's total POR sales of Canadian-

manufactured products on an F.O.B. basis. We preliminarily determine

that the net subsidy provided by this program is 0.50 percent ad

valorem.



B. Article 7 Grants from the Quebec Industrial Development Corporation

    The Societe de Developpement Industriel du Quebec (SDI) 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

Magnesium from Canada, 57 FR 30949 (July 13, 1992).)

    In 1988, NHCI was awarded a grant under Article 7 to cover a large

percentage of the cost of certain environmental protection equipment.

In Magnesium from Canada, we 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. In these

reviews, neither the GOQ nor NHCI provided new information which would

warrant reconsideration of this determination.

    For the reasons set forth in the Final Results of the Third

Countervailing Duty Administrative Reviews: Pure Magnesium and Alloy

Magnesium from Canada, 62 FR 18749 (April 17, 1997), we preliminarily

determine in these reviews that the Article 7 assistance received by

NHCI was a non-recurring grant because it represented a one-time

provision of funds. In these reviews, neither the GOQ nor NHCI provided

new information which would warrant reconsideration of this

determination.

    We calculated the benefit from the grant received by NHCI using the

company's cost of long-term, fixed-rate debt as the discount rate and

our declining balance methodology, consistent with 19 CFR 355.49. We

divided that portion of the benefit allocated to the POR by NHCI's

total sales of Canadian-manufactured products on an F.O.B. basis. We

preliminarily determine the net subsidy provided by this program to be

2.68 percent ad valorem.





II. Programs Preliminarily Found Not to be Used



    We preliminarily find that NHCI did not apply for or receive

benefits under the following 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.



Preliminary Results of Reviews



    In accordance with 19 C.F.R. 355.22(c)(4)(ii), we calculated an

individual subsidy rate for each producer/exporter subject to these

administrative reviews. For the period January 1, 1995 through December

31, 1995, we preliminarily determine the net subsidy for NHCI to be

3.18 percent ad valorem. If the final results of these reviews remain

the same as these preliminary results, the Department intends to

instruct Customs to assess countervailing duties as indicated above.

The Department also intends to instruct Customs to collect cash

deposits of estimated countervailing duties as indicated above of the

F.O.B. invoice price on 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

355.22(a). Pursuant to 19 CFR 355.22 (g), 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)). Therefore, the

cash deposit rates for all companies except those 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



---- page 25926 ----



orders during the investigation), at the most recent company-specific

or country-wide rate applicable to the company. Accordingly, the cash

deposit rates that will be applied to non-reviewed companies covered by

these orders are those established in Pure and Alloy Magnesium from

Canada: Final Results of the First (1992) Countervailing Duty Reviews

(62 FR 13857 (March 24, 1997)). 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, 1995 through December

31, 1995, 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 during the original investigation).



Public Comment



    Parties to these proceedings may request disclosure of the

calculation methodology and interested parties may request a hearing

not later than 10 days after the date of publication of this notice.

Interested parties may submit written arguments in case briefs on these

preliminary results within 30 days of the date of publication. Rebuttal

briefs, limited to arguments raised in case briefs, may be submitted

seven days after the time limit for filing the case brief. Parties who

submit an argument in this proceeding are requested to submit with the

argument (1) a statement of the issue, and (2) a brief summary of the

argument. Any hearing, if requested, will be held seven days after the

scheduled date for submission of rebuttal briefs. Copies of case briefs

and rebuttal briefs must be served on interested parties in accordance

with 19 CFR 355.38.

    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 355.38, are due.

    The Department will publish the final results of these

administrative reviews, including the results of its analysis of issues

raised in any case or rebuttal briefs or at a hearing.

    These administrative reviews and notice are in accordance with

section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)).



    Dated: May 5, 1997.

Robert S. LaRussa

Acting Assistant Secretary for Import Administration.

[FR Doc. 97-12204 Filed 5-9-97; 8:45 am]

BILLING CODE 3510-DS-P





The Contents entry for this article reads as follows:



International Trade Administration

NOTICES

Countervailing duties:

  Magnesium, pure and alloy, from--

    Canada, 25924