NOTICES
DEPARTMENT OF COMMERCE
Carbon Steel Wire Rod From France; Preliminary Affirmative
Countervailing Duty Determination
Wednesday, July 14, 1982
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AGENCY: International Trade Administration, Commerce.
ACTION: Preliminary affirmative countervailing duty determination.
SUMMARY: We preliminarily determine that certain benefits which constitute subsidies
within the meaning of the countervailing duty law are being provided to
manufacturers, producers, or exporters in France of carbon steel wire rod, as described
in the "Scope of the Investigation" section of this notice. The estimated net subsidy for
each firm is indicated in the "Suspension of
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Liquidation" section of this notice.
Therefore, we are directing the U.S. Customs Service to suspend liquidation of all entries
of the product subject to this determination which are entered, or withdrawn from
warehouse, for consumption, and to require a cash deposit or bond on this product in the
amount equal to the estimated net subsidy. If this investigation proceeds normally, we
will make our final determination by September 21, 1982.
EFFECTIVE DATE: July 14, 1982.
FOR FURTHER INFORMATION CONTACT:
Nicholas C. Tolerico, Office of Investigations, Import Administration, International
Trade Administration, U.S. Department of Commerce, 14th Street and Constitution
Avenue, NW., Washington, D.C. 20230; telephone 202-377-4036.
SUPPLEMENTARY INFORMATION:
Preliminary Determination
Based upon our investigation, we preliminarily determine that there is reason to believe
or suspect that certain benefits which constitute subsidies within the meaning of section
701 of the Tariff Act of 1930, as amended ("the Act"), are being provided to
manufacturers, producers, or exporters in France of carbon steel wire rod, as described
in the "Scope of the Investigation" section of this notice. For purposes of this
investigation, the following programs are preliminarily found to be subsidies:
Export credit insurance;
Preferential financing including equity infusions;
Grants;
Regional development incentives;
Certain labor-related aid;
ECSC worker housing loans;
Assistance to iron ore suppliers;
Research and development.
We estimate the net subsidy to be the amount indicated for each firm in the "Suspension of
Liquidation" section of this notice.
Case History
On February 8, 1982 we received a petition from counsel for Atlantic Steel Corp.,
Georgetown Steel Corp., Georgetown Texas Steel Corp., Keystone Consolidated, Inc., Korf
Industries, Inc., Penn-Dixie Steel Corp., and Raritan River Steel Co., filed on behalf of the
U.S. industry producing carbon steel wire rod. The petition alleged that certain benefits
which constitute subsidies within the meaning of section 701 of the Act are being
provided, directly or indirectly, to the manufacturers, producers, or exporters in
France of carbon steel wire rod. Counsel for petitioners also alleged that "critical
circumstances" exist, as defined in section 703(e) of the Act.
We reviewed the petition, and on March 1, 1982, determined that an investigation should
be initiated (47 FR 9262). In our notice we stated that we expected to issue a preliminary
determination by May 1, 1982. We subsequently determined that the investigation was
"extraordinarily complicated," as defined in section 703(c) of the Act, and postponed our
preliminary determination to no later than July 8, 1982 (47 FR 17319).
Since France is a "country under the Agreement" within the meaning of section 701(b) of
the Act, an injury determination is required for this investigation. Therefore, we notified
the U.S. International Trade Commission ("ITC") of our initiation. On March 25, 1982, the
ITC preliminarily determined that there is a reasonable indication that these imports are
materially injuring or threatening material injury to a U.S. industry.
We presented questionnaires concerning the allegations to the Delegation of the
Commission of the European Communities and to the government of France at its
embassy in Washington, D.C. On May 7, 1982 we received the responses to the
questionnaires. A supplemental response was received on May 25, 1982.
Scope of the Investigation
For the purpose of this investigation, the term "carbon steel wire rod" covers a coiled,
semi-finished, hot-rolled carbon steel product of approximately round solid cross
section, not under 0.02 inch nor over 0.74 inch in diameter, not tempered, not treated,
and not partly manufactured, and valued over 4 cents per pound, as currently provided
for in item 607.17 of the Tariff Schedules of the United States.
Societe des Acieries et Laminoirs de Lorraine ("Sacilor"), Societe Metallurgique de
Normandie ("Normandie"), and Union Siderurgique du Nord et de l'Est de la France
("Usinor") are the only known producers in France of the subject product exported to
the United States. The period for which we are measuring subsidization is the 1981
calendar year.
Analysis of Programs
In their responses, the government of France and the Delegation of the Commission of
the European Communities provided data for the applicable periods. Additionally, we
received information from Sacilor and Normandie, which produced and exported carbon
steel wire rod to the United States in 1981. Sacilor is an integrated steel producer and a
holding company for subsidiaries producing both steel and non-steel products. Of this
group, only Sacilor is known to produce carbon steel wire rod. For purposes of this
determination, we have treated benefits to Sacilor as benefits to all steel production,
Therefore, for each program preliminarily determined to be a subsidy to Sacilor, we
allocated the subsidy over the total value of Sacilor's steel production, and the
production of its two known steel-producing subsidiaries, Societe Lorraine de Laminage
Connu ("Sollac") and Societe Lorraine et Meridionale de Laminage Continu ("Solmer").
Subsequent references to "Sacilor's total value of production" throughout this notice refer
to the total value of Sacilor's Solmer's and Sollac's steel production. We allocated the
benefits from the programs preliminarily determined to be subsidies to Normandie over
the total value of Normandie's steel production. Usinor did not export carbon steel wire
rod to the United States in 1981, and therefore was not sent a questionnaire.
Throughout this notice, general principles applied by the Department of Commerce to the
facts of the current investigation concerning carbon steel wire rod are described in detail
in Appendix B, which appears with the notice of "Preliminary Affirmative
Countervailing Duty Determination, Carbon Steel Wire Rod from Belgium", in this
issue of the Federal Register (hereinafter, Appendix B). Appendix C, which also appears
with the above cited Belgium Federal Register notice, is a description of programs
administered by organizations of the European Communities ("EC") (hereinafter,
Appendix C). Appendices B and C are identical to Appendices B and C published on June
17, 1982, with our notice of "Preliminary Affirmative Countervailing Duty
Determinations," Certain Steel Products from Belgium (47 FR 26300). Based upon our
analysis to date of the petition and responses to our questionnaires, we preliminarily
determine the following.
I. Programs Preliminarily Determined To Be Subsidies
We preliminarily determine that subsidies are being provided to manufacturers,
producers, or exporters in France of carbon steel wire rod under the programs listed
below.
A. Export Credit Insurance. The Compagnie Francaise d'Assurance pour le Commerce
Exterieur ("COFACE") is a government corporation that provides export insurance to
cover commercial,
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political, exchange rate and inflation risks. In reviewing the
1980 annual report (the most recent report available), we found that, while the company
showed an overall profit, its insurance activities operated at a deficit. Revenues from
financial and real estate investments allowed COFACE to offset the operating deficit on
insurance. Our preliminary review of the annual reports for 1976-1979 revealed a pattern
of yearly operating deficits on insurance activities that were offset by revenues from
investments. This pattern of operating deficits on insurance activities indicates that
COFACE does not charge premiums sufficient to cover long-term operating costs and
losses. We preliminarily determine that this is an export subsidy within the meaning of
the countervailing duty law.
Based on the information currently available, Normandie is the only company in this
investigation insuring its exports to the U.S. through COFACE. A portion of Normandie's
U.S. accounts receivable is insured against commercial risk. From data contained in
COFACE's 1980 profit and loss statement, we calculated the 1980 operating deficit on
COFACE's insurance activities as a percentage of net premiums received. By applying this
percentage to the premiums paid by Normandie to COFACE on shipments to the United
States in 1980, we calculated the total benefit to Normandie on insured exports to the
United States. We found a subsidy of 0.124 percent ad valorem on carbon steel wire rod
exports to the United States by allocating the total benefit received by Normandie over
the total value of its exports to the United States in 1980. We used this 1980-based figure
as the best available information for the benefit of this subsidy to Normandie in 1981.
B. Preferential Financing Including Equity Infusions. Petitioners alleged preferential
financing in the form of low-interest loans and loan guarantees, and the conversion of
accumulated debt.
A number of French government and EC organizations have issued loans and/or loan
guarantees to the French steel industry. The majority of these loans were provided by the
following institutions:
Fonds de Developpement Economique et Social ("FDES"). Created by Parliament in 1955,
FDES lends funds to government-owned and privately held corporations for industrial
development or relocation of facilities to further the government's regional development
objectives. Loan applications are filed with the Ministry of the Economy and Finance, but
the decision to issue a loan rests with the FDES Board, which is composed of government
ministers whose agencies are involved in economic policy. Usually, loans are secured by
a mortgage or a pledge. The source of FDES loan funds is a line item in the national budget.
Because FDES provides loans on a regional basis, we consider these loans to be subsidies
within the meaning of the countervailing duty law.
Credit National. Credit National is a government credit institution with special legal
status, which issues loans to the French industry, particularly the steel industry. Loan
funds are raised by offering bonds in the public marketplace. Credit National also acted as
the conduit through which FDES loans were granted to the steel industry. In addition, the
French government, either directly or through Credit National, guarantees some loans to
the steel companies. Until 1979, a yearly guarantee fee averaging 0.5 percent of the
principal was paid by the company receiving a loan guarantee. The current charge is 0.25
percent of the principal of the loan. Because Credit National loans and loan guarantees are
industry-specific, they are considered to be subsidies within the meaning of the
countervailing duty law.
European Coal and Steel Community ("ECSC") and European Investment Bank ("EIB")
Loans and Loan Guarantees. A description of ECSC and EIB loans and loan guarantees, and
the reasons we consider them countervailable, are presented in Appendix C.
Both Normandie and Sacilor received loans and loan guarantees through these
institutions. Each company's unique circumstances are addressed below.
1. Normandie The subsidy amounts for loans made by FDES, Credit National and the ECSC
to Normandie, at rates below the commercial benchmark for a comparable loan in the
year of issuance and still outstanding in 1981, are calculated according to the
methodology outlined in Appendix B in the section dealing with preferential loans and
loan guarantees for creditworthy companies. We compared what Normandie would have
paid normal commercial lenders in 1981 with what the company actually paid on
preferential loans in that year. To determine what Normandie would have paid normal
commercial lenders, we used as the commercial benchmark the average annual yield to
maturity of newly issued corporate bonds on the Paris securities market. Accordingly, we
found a subsidy of 0.428 ad valorem.
2. Sacilor Petitioners alleged that Sacilor is uncreditworthy. Based on information in the
responses and our analyses of Sacilor's financial statements, we preliminarily conclude
that by the end of 1975, Sacilor was uncreditworthy. Sacilor has recorded significant
operating losses in each year since 1975 (from a low of FF 1.1 billion in 1979 to a high of
FF 2.4 billion in 1977), and has had increasingly higher debt/equity ratios in each year
since 1975. Significant and persistent operating losses, coupled with high debt/equity
ratios, are indicative of an uncreditworthy situation. Although Sacilor has received some
loans from commercial banks since 1975, the majority of commercial banking institutions
in France have been nationalized since the late 1940s. Consequently, it would be difficult
to consider these loans as conclusive proof of the creditworthiness of the company.
Beginning in 1978, the government of France instituted a major recapitalization and
restructuring program for the steel industry, hereinafter referred to as the "Rescue Plan."
Sacilor participated in this plan, but Normandie was not included. Under this plan, the
government converted loans made by the institutions identified above, as well as loans
from other sources, into Loans of Special Characteristics (Prets a Caracteristiques
Speciales or "PACS"). The government also granted new loans and loan guarantees
through FDES, Credit National and other government agencies. Additionally, the
government made a series of equity infusions in Sacilor through which it became a
shareholder.
Sacilor's preferential loans and loan guarantees, PACS, and equity infusions have been
treated in the following four ways:
a. Preferential Loans and Loan Guarantees Issued Prior to the End of 1975. The subsidies
resulting from preferential rates for loans and loan guarantees made prior to 1975 by
FDES, Credit National, the ECSC and the EIB to Sacilor at rates below the commercial
benchmark for a comparable loan in the year of issuance and for which principal was still
outstanding in 1981, are calculated according to the general methodology outlined in
Appendix B in the section dealing with loans and loan guarantees for creditworthy
companies. Using this methodology, we compared what Sacilor would have paid normal
commercial lenders in 1981 with what the company actually paid on preferential loans in
that year. To determine what Sacilor would have paid normal commercial lenders, we
used the benchmark described above.
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Accordingly, we computed a subsidy of .033 percent ad valorem for Sacilor.
b. Preferential Loans and Loan Guarantees Made After 1975. Because we consider Sacilor
uncreditworthy after 1975, loans and loan guarantees issued since then by French
government organizations, the ECSC, and the EIB, with principal still outstanding during
1981, are treated as loans and loan guarantees to companies considered uncreditworthy.
For the reasons described in Appendix B, we treated these loans as equity investments
and compared Sacilor's rate of return on investment in 1981 with the average rate of
return on investment in France less the 1981 principal and/or interest payments made
by Sacilor on these loans. The average rate of return on investment in France was based
on the annual average yield to maturity of newly issued bonds on the Paris market. We
will not countervail a loan subsidy to a creditworthy or uncreditworthy company for
more than if the government gave the principal as an outright grant. Where the equity
methodology produced a higher amount, we included in our calculation the subsidy
which would exist if the equity were treaty as a grant. (Both methodologies are described
in Appendix B in the sections dealing with grants and loans and loan guarantees to
uncreditworthy companies). Accordingly, we found a subsidy of 5.082 percent ad
valorem for Sacilor.
c. Loans and Loan Guarantees Converted Into Loans of Special Characteristics (PACS). By
1978, the debt of Sacilor to FDES, Credit National, the ECSC, the EIB, the Groupement de
l'Industrie Siderurgique ("GIS"), other specialized financial institutions such as
Groupement Interprofessionnel Financier Antipollution ("GIFIAP"), and banks had
become quite large. The companies, stockholders, government and other creditors
agreed that the burden of servicing this debt had to be reduced. The result was the Rescue
Plan described above. Most of the debt owed by Sacilor to government agencies and
specialized financial institutions was converted into PACS, which carry an interest rate of
0.1 percent, with no obligation to repay principal unless the company becomes profitable
again. In addition to the initial 1978 conversions, PACS were also issued to Sacilor
between 1978 and 1981. The benefits of these PACS were calculated using the equity
methodology for loans to uncreditworthy companies as described above. We calculated a
subsidy of 4.386 percent ad valorem for Sacilor. In calculating the benefit of the loans
that were converted into PACS, we did not include those PACS that were subsequently
cancelled in exchange for stock. These are discussed in part (d) below.
d. Equity Infusions. Between 1978 and 1981, the government of France made the
following equity infusions in Sacilor:
Investment of capital in Sacilor in exchange for shares of stock,
Advances of capital to Sacilor in 1979 and 1981, and
Cancellation of PACS at the end of 1981 in exchange for additional shares.
At the end of this period, the government's share of ownership in Sacilor reached
approximately 90 percent. As stated above, Sacilor recorded significant and persistent
losses in each year since 1975, ranging from FF 1.1 billion of FF 2.4 billion. Therefore, it is
doubtful that the government's equity infusions were consistent with commercial
considerations.
Since Sacilor's stock was traded on the Paris Bourse during the time span covering the
government's equity infusions (see equity section in Appendix B), we calculated average
stock prices for the period preceding each of the government's actions. We then
compared the market value of the new stock issued to the government with the actual
value to the company of the government's equity infusions. If the actual value was greater
than the market value, we found the difference to be a grant and allocated it over 15
years, the average useful life of capital assets in the steel industry (See the grant section in
Appendix B). This figure in turn was allocated over Sacilor's total steel production.
Accordingly, we computed an ad valorem subsidy of 8.998 percent.
C. Grants. There is evidence that under the Rescue Plan, Sacilor also received
refunds from the government for interest on loans that were not converted into PACS. Because
this interest was refunded, it was not captured in our subsidy calculations on loans and
loan guarantees. Such refunds are considered to be grants to a specific company and are
therefore countervailable. The subsidy rate was calculated using 15 years, the average
useful life of capital assets in the steel industry, according to the methodology outlined in
Appendix B in the section dealing with grants. As was the case in certain steel products
from France (47 FR 26315), Sacilor did not provide us with the annual amounts of these
refunds. Therefore, for purposes of this preliminary determination, we are using as best
information available the subsidy rate attributable to these refunds for Usinor in certain
steel products from France. Accordingly, we find Sacilor's ad valorem subsidy for these
refunds to be .222 percent.
In 1980, the French government authorized a grant to Normandie which was apparently
tied to the industrial use of a LBE process converter. Funds were received by Normandie
in 1981. As explained in Appendix B, we allocated this grant over 15 years, the average
useful life of capital assets in the steel industry. This figure in turn is allocated over
Normandie's total steel production. Accordingly, we found an ad valorem subsidy of .001
percent.
D. Regional Development Incentives. The government of France provides a series of tax
and non-tax regional incentives to French and foreign businesses to establish new, or to
expand existing, businesses in certain French regions. The Delegation a l'Amenagement
du Territoire et a l'Action Regionale ("DATAR") coordinates the programs of various
government agencies and ministries. For incentive purposes, France is divided into four
zones. Each zone, or part of a zone, is eligible for different types of assistance. The
assistance includes development grants, non-industrial grants, research and
development grants, decentralization indemnities and job training subsidies. Job training
assistance is provided through individual agreements with the Fonds National de l'Emploi
("FNE"). These agreements are available to reimburse training expenses for establishing
facilities in certain zones and for converting declining facilities.
We consider the regional incentives provided through these programs to be subsidies
within the meaning of the U.S. countervailing duty law because each zone is eligible
for only certain types of assistance.
Based on information currently available, the only regional incentive program utilized
was labor assistance provided through FNE and AFOREST, a regional training
organization. Sacilor received grants from FNE and AFOREST for worker training and
retraining. We were not informed as to the types of jobs for which workers were retrained.
For purposes of this preliminary determination, we assume they were for jobs within the
steel industry. Therefore, we consider them to be subsidies. We are seeking additional
information as to the types of jobs for which workers were retrained.
The ECSC contributed a portion of the FNE grants to Sacilor. That portion,
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where
known, has been factored out of the allocation of net benefits received in 1981 by Sacilor.
(For a discussion of ECSC grants for labor assistance, see Appendix C.)
We treated the payments received by Sacilor from FNE and AFOREST in 1981 as a grant
generally expensed in one year and allocated it over the total value of Sacilor's steel
production. (See the section dealing with grants in Appendix B.) Accordingly, we
calculated a subsidy rate of .035 percent ad valorem.
E. Certain Labor-Related Aid. French corporations have statutory and contractual
obligations to their employees in case of interruption or cessation of employment. The
government has provided assistance to relieve the steel companies of labor-related
obligations under the law. We prelimarily find this to be a subsidy under the
countervailing duty law. At this time, we are not fully aware of the extent or duration
of the companies' responsibilities under the law. We are seeking more complete
information on the companies' legal obligations. The aid received by each company is
discussed below.
1. Sacilor Under the Rescue Plan, the government and Sacilor concluded an agreement
through which Sacilor is reimbursed by the government after compensating laid-off
workers and implementing early retirement programs. We preliminarily determine this
reimbursement to be a grant to the company. We allocated this grant over five years
because that was the projected length of time of the Rescue Plan. We then allocated the
1981 benefit over the total value of Sacilor's 1981 steel production to arrive at a subsidy
of 1.125 percent ad valorem.
2. Normandie The government of France does not permit Normandie to fire workers,
and requires specific approval for layoffs. When such layoffs do occur, Normandie is
obligated by law to pay the affected workers 50 percent of their normal salary. The
government, acting through FNE, reimburse Normandie for at least 50 percent of that
amount. We preliminarily find this reimbursement to be a countervailable grant to the
company. Because the reimbursement was less than one percent of the total value of
production and was used for items which would normally be expensed in one year (see
Appendix B), we allocated the grant amount over the total value of Normandie's 1981
steel production. (See section in Appendix B dealing with labor subsidies and grants.)
Using this method, the subsidy is 0.510 percent ad valorem.
F. ECSC Worker Housing Loans. Labor-related aid was also provided to Sacilor and
Normandie by the ECSC. Both companies were allocated loans for the housing of workers.
Based on current information, it appears that Sacilor received the loan and then passed a
portion on to its employees; Normandie indicated that its employees received such loans
directly from the ECSC. Our reasons for preliminarily determining that the ECSC
assistance for worker housing loans constitutes a subsidy are presented in Appendix C.
The aid provided to each company is discussed below.
1. Sacilor Based on information contained in its response, it has been preliminarily
determined that Sacilor received the housing loan allocation directly, and then passed it
on to employees. However, the monies actually passed on to its employees in 1981 were
less than one percent of the loan amount. As we do not know the percentage of the ECSC
1981 budget financed by borrowings (See section dealing with ECSC housing loans in
Appendix C), we applied the 1980 percentage, as the best information available, to
Sacilor's 1981 loan in order to derive that portion of the ECSC housing loan that is
countervailable. Where such loans are given directly to a company which disburses only
a small portion of the loan, we calculate the subsidy using the appropriate methodology
for preferential loans to the company. This loan was made after 1975, the year we
concluded that Sacilor became uncreditworthy. Therefore, the appropriate methodology
to calculate the benefit of this loan was the equity methodology described above and
outlined in Appendix B in the section dealing with loans and loan guarantees to
uncreditworthy companies. Accordingly, we found an ad valorem subsidy of .001
percent.
2. Normandie In 1975, Normandie received two worker housing loans from the ECSC.
Based on current information, Normandie merely acted as a conduit for the loan funds
which the ECSC provided directly to the workers. As explained in Appendix C, we
compute the subsidy conveyed by this type of program using the methodology described
in the labor subsidies' section of Appendix B. Since the two loans totaled less than one
percent of the total value of steel production, we consider them expensed in the year
received. Therefore, we found no subsidy accruing to Normandie in 1981 from these
loans.
G. Research and Development ("R&D"). Research and development directed at the French
steel industry is provided through the Institut de Recherches de la Siderurgie Francaise
("IRSID"). IRSID was established by the French steel companies which underwrite a major
portion of IRSID's budget. However, the government contributes at least three percent of
IRSID's yearly budget.
Because IRSID's research is industry-specific and because there is no evidence at this time
that the results of the research are publicly available, we find that portion of IRSID's
budget funded by the government to be countervailable. However, we have insufficient
information both on IRSID's budget and on R&D assistance that may have been provided
to the companies on this and other products to calculate an ad valorem subsidy rate. We
have asked for additional information regarding IRSID.
II Programs Preliminarily Determined Not To Be Subsidies
We preliminarily determine that subsidies are not being provided to manufacturers,
producers, or exporters in France of carbon steel wire rod under the following program.
Assistance to Coal Suppliers
The government of France, which directly or indirectly owns all French coal producers,
makes available to Charbonnages de France ("CDF") such assistance as may be necessary
to equalize the selling price of coal produced in France with the world market price for
each type of coal. Even though the French coal industry appears to be subsidized, we do
not consider this assistance to confer a countervailable benefit on the French steel
industry for the following reasons. The apparently subsidized coal companies are
unrelated to the steel companies, and their coal transactions are conducted at arm's
length. Moreover, the French steel companies purchase coal at similar or even lower
prices without regard to French government assistance to the coal industry. Over 75
percent of the French steel industry's coal requirements during 1981 were supplied by
non-French sources, including the United States, which accounted for 25 percent of all
coking coal and coke utilized.
With regard to allegations that Sacilor indirectly benefited from German federal and state
assistance to coal producers in Germany, refer to Appendix B. ECSC provides various
production and marketing grants to EC coal and coke producers; however, we do not
consider this assistance to confer a countervailable benefit on the French
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steel
industry for the reasons given in Appendix C.
III. Programs Preliminarily Determined Not To Be Utilized
We preliminarily determine that the following programs which petitioners alleged to
convey subsidies are not utilized by the manufacturers, producers, or exporters in
France of carbon steel wire rod.
A. Export Financing. In France, exports may be financed or guaranteed through the
Commission Interministerielle des Garanties et du Credit au Commerce Exterieur and the
Banque Francaise du Commerce Exterieur ("BFCE"). At this time, we have no evidence
that Sacilor or Normandie availed themselves of these programs.
B. Special Fund for Industrial Adaptation. Petitioners alleged that French steel companies
received grants and preferential loans through the Fonds Special d'Adaptation
Industrielle ("FSAI"). FSAI was established in 1978 to promote job creation and industrial
diversification in the steel, textile, shipbuilding and coal regions of France. Respondents
state that they received no benefits from FSAI.
C. Loan Guarantees from the ECSC. Respondents state that they received no ECSC loan
guarantees. This program is described in Appendix C.
D. European Regional Development Funds ("ERDF"). This program is explained in
Appendix C. Responents state analysis that they received no ERDF funds.
E. Research and Development Grants from the ECSC. This program is described in
Appendix C. Sacilor and Normandie state that they received no R&D grants from the
ECSC.
IV. Programs for Which Additional Information Is Needed
The programs listed below were alleged by the petitioners to be subsidies. At this time, we
do not have sufficient information upon which to determine whether these programs are
providing manufacturers, producers, or exporters in France of carbon steel wire rod,
benefits which constitute subsidies within the meaning of the countervailing duty law.
We will seek additional information regarding these programs before reaching a final
determination.
A. Research and Development Assistance. A government organization, Direction
Generale de la Recherche Scientifique et Technique, provided a small amount of research
and development funding to Sacilor. We are seeking additional information because we
are not aware of whether this program is industry- or sector-specific, and whether the
results of this assistance are publicly available (see Appendix B).
B. Energy Assistance. Both Sacilor and Normandie received a few small grants from the
Agence pour les Economies d'Energie ("AEE"). The AEE is a government agency created in
1974 to provide grants for fostering energy efficiency. Grants received from the agency
may to be repayable if target efficiency levels are not met. Since it is not clear that this
organization provides benefits on other than a country-wide basis, we will seek additional
information before making a determination.
C. Regional Development/Regional Anti-Pollution Agencies. Created by Law No. 64-1245
of 1964, these regional agencies provide incentives for the installation of anti-pollution
devices. The agencies collect dues for their operation and in return award "bonuses" and
loans to combat pollution. Normandie and Soumont have received a few small grants and
loans from such agencies.
Due to insufficient information both on the availability of this assistance within and across
regions, and on the operating income and expenses of these agencies, we are unable to
determine at this time if the grants and loans received under this program are
countervailable.
D. Caisse des Depots et Consignations ("CDC"). CDC is a government agency that invests
funds deposited in the Caisses d'Epargne (the French savings banks). CDC makes both
short- and long-term loans to various industries, including steel. Any loans made by CDC
to Sacilor after 1975 that were converted into PACS or cancelled have been included in
parts 2 (b), (c), and (d) of the preferential financing section. For CDC loans made to
Normandie, and for CDC loans made to Sacilor prior to the end of 1975 with principal still
outstanding during 1981, we will seek additional information.
E. Housing Assistance. Two organizations, UNICAL and Banque Federative du Credit
Mutuel, have provided a few small loans to Soumont (Normandie). At this time we have
insufficient information to determine whether this assistance constitutes a subsidy.
F. French Government Assistance to Iron Ore Suppliers. Petitioners alleged that French
manufacturers of carbon steel wire rod benefit from government subsidies to iron mines.
The situations of the respondents are discussed below.
1. Normandie Mines de Soumont (Soumont) is Normandie's wholly-owned iron- mining
subsidiary. Loans and grants were provided to Soumont by a number of organizations. We
have preliminarily determined that Soumont received countervailable assistance in the
form of a preferential loan from Credit National. We will seek additional information on
the other sources of Soumont's loans and grants. We will also seek information to
determine if Normandie is receiving a benefit which constitutes a subsidy as a result of its
transactions with Soumont.
2. Sacilor Sacilor indicated that its iron-mining subsidiary received no grants or other
assistance from the government of France. It indicated further that it purchased iron ore
from unrelated sources in other countries at world market prices.
Sacilor claims that French or foreign corporations may purchase iron ore from French
producers at the same price as the French steel producers, but does not state at what
price. We will seek additional information as to whether government assistance is
provided to Sacilor through French iron ore suppliers.
Negative Determination of Critical Circumstances
Counsel for the petitioners alleged that imports of the product under investigation
present "critical circumstances." Under section 703(e)(1) of the Act, critical
circumstances exist when the alleged subsidy is inconsistent with the Subsidies Code of
the General Agreement on Tariffs and Trade and "there have been massive imports of the
class or kind of merchandise which is the subject of the investigation over a relatively
short period."
Since this investigation was initiated, U.S. imports of carbon steel wire rod totaled 1,326
net tons in February, 4,878 net tons in March, 4,631 net tons in April and 11,507 net tons
in May, the most recent month for which import statistics are available.
In the context of this industry, this product has not recently been massively imported
from France over a relatively short period of time. Therefore, critical circumstances do
not exist for carbon steel wire rod.
Verification
In accordance with section 776(a) of the Act, we will verify all the information used in
making our final determination.
Suspension of Liquidation
In accordance with section 703 of the Act, we are directing the U.S. Customs Service to
suspend liquidation of all entries of carbon steel wire rod which
*30559
are entered, or
withdrawn from warehouse, for consumption, on or after the date of publication of this
notice in the Federal Register, and to require a cash deposit or bond, for each such entry
of the merchandise in the amounts indicated below:
---------------------------------------------------------------
Manufacturer/producer/exporter Ad valorem rate (percent)
---------------------------------------------------------------
Sacilor ................................................ 19.882
Normandie ............................................... 1.063
All Others ............................................. 19.882
---------------------------------------------------------------
This suspension will remain in effect until further notice.
ITC Notification
In accordance with section 703(f) of the Act, we will notify the ITC of our determination.
In addition, we are making available to the ITC all nonprivileged and nonconfidential
information relating to this investigation. We will allow the ITC access to all privileged
and confidential information in our files, provided the ITC confirms that it will not
disclose such information, either publicly or under an administrative protective order,
without the written consent of the Deputy Assistant Secretary for Import Administration.
Public Comment
In accordance with section 355.35 of the Commerce Department Regulations, if
requested, we will hold a public hearing to afford interested parties an opportunity to
comment on this preliminary determination at 10:00 a.m. on August 10, 1982 at the U.S.
Department of Commerce, Room 6802, 14th Street and Constitution Avenue, NW.,
Washington, D.C. 20230. Individuals who wish to participate in the hearing must submit a
request to the Deputy Assistant Secretary for Import Administration, Room 3099B, at the
above address within ten days of this notice's publication. Requests should contain (1) the
party's name, address, and telephone number; (2) the number of participants; (3) the
reason for attending; and (4) a list of the issues to be discussed. In addition, prehearing
briefs must be submitted to the Deputy Assistant Secretary by August 3, 1982. Oral
presentations will be limited to issues raised in the briefs. All written views should be filed
in accordance with 19 CFR 355.34, on or before August 13, 1982, at the above address
and in at least ten copies.
Gary N. Horlick,
Deputy Assistant Secretary for Import Administration.
July 8, 1982.
[FR Doc. 82-18991 Filed 7-13-82; 8:45 am]
BILLING CODE 3510-25-M