NOTICES
DEPARTMENT OF COMMERCE
International Trade Administration
[C-122-815]
Preliminary Results of the Fifth Countervailing Duty Administrative Reviews;
Pure Magnesium and Alloy Magnesium From Canada
Thursday, April 30, 1998
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AGENCY: Import Administration, International Trade Administration, Department of Commerce.
ACTION: Notice of Preliminary Results of Countervailing Duty Administrative Reviews.
SUMMARY: The Department of Commerce 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
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well as for all non-reviewed companies, see the Preliminary Results of Reviews section of this notice. If the final results remain the same as these preliminary results, we will instruct the U.S. 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.
EFFECTIVE DATE: April 30, 1998.
FOR FURTHER INFORMATION CONTACT: Hong-Anh Tran or Beth Graham, AD/CVD Enforcement, Group 1, Office 1, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202) 482-0176 or (202) 482- 4105, respectively.
SUPPLEMENTARY INFORMATION:
Background
On August 31, 1992, the Department of Commerce (the Department) published in the Federal Register (57 FR 39392) the countervailing duty orders on pure and alloy magnesium from Canada. On August 4, 1997, the Department published a notice of "Opportunity to Request an Administrative Review" (62 FR 41925) of these orders. We received a timely request for review from Norsk Hydro Canada Inc. (NHCI) on August 29, 1997, and we initiated these reviews, covering the period January 1, 1996, through December 31, 1996, on September 25, 1997 (62 FR 50292).
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. Also, these reviews cover 17 subsidy programs.
On October 15, 1997, the Department issued questionnaires to NHCI, the Government of Canada (GOC), and the Government of Quebec (GOQ). We received a questionnaire response from NHCI, the GOC and the GOQ on November 21, 1997. The Department issued a supplemental questionnaire to NHCI on December 19, 1997, and received a response to it on December 23, 1997. On February 2, 1998, the GOQ submitted additional factual information.
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. All other references are to the Department's regulations of 19 CFR Part 351 et al. Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296; May 19, 1997, unless otherwise indicated.
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. Pure and alloy magnesium are currently classifiable under 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 purposes, our written description of the scope of this proceeding is dispositive.
Secondary and granular magnesium are not included in the scopes of these orders. Our reasons for excluding granular magnesium are summarized in the Preliminary Determination of Sales at Less Than Fair Value: Pure and Alloy Magnesium From Canada (57 FR 6094, February 20, 1992).
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 Socie1te1 du Parc Industriel et Portuaire de Be1cancour (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 30946, 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. We preliminarily determine that the net subsidy provided by this program is 0.46 percent ad valorem.
B. Article 7 Grants From the Que1bec Industrial Development Corporation
The Socie1te1 de De1veloppement Industriel du Que1bec (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 Que1bec. 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 30946, 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, we are not considering information submitted by the GOQ on February 2, 1998, regarding Article 7 assistance provided to other companies subsequent to the assistance granted to NHCI in 1988; information with respect to the distribution of benefits after the provision of the subsidy in question is irrelevent. (See Final Results of the Fourth Countervailing Duty Administrative Reviews: Pure Magnesium and Alloy Magnesium from Canada, (Magnesium from Canada Fourth Review) 62 FR 48812 (September 17, 1997).) For the reasons set forth in the Magnesium from Canada Fourth Review, we preliminarily determine in these reviews that the Article 7 assistance received by NHCI was a non-recurring grant.
We calculated the benefit from the non-recurring grant received by NHCI using the company's cost of long-term, fixed-rate debt as the discount rate and *23730 our declining balance methodology. We divided that portion of the benefit allocated to the POR by NHCI's total sales of Canadian-manufactured products. We preliminarily determine the net subsidy provided by this program to be 2.32 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:
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, 1996, through December 31, 1996, we preliminarily determine the net subsidy to be 2.78 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 351.213(b). 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)). 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 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 the most recently completed administrative proceeding, conducted pursuant to the statutory provisions that were in effect prior to the URAA amendments. See the Final Results of the Second Countervailing Duty Administrative Reviews: Pure Magnesium and Alloy Magnesium from Canada, 62 FR 48607 (September 16, 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, 1996, through December 31, 1996, 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 30 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 five 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 two 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 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 s 351.309(c)(ii), 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 review results are published in accordance with section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)), 19 CFR 351.213.
Dated: April 23, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-11527 Filed 4-29-98; 8:45 am]
BILLING CODE 3510-DS-P
63 FR 23728-01, 1998 WL 206918 (F.R.)
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