82-617

47 FR 26321

NOTICES

DEPARTMENT OF COMMERCE

Preliminary Affirmative Countervailing Duty Determinations; Certain
Steel Products From the Federal Republic of Germany

Thursday, June 17, 1982

*26321

AGENCY: International Trade Administration, Commerce.

ACTION: Preliminary affirmative countervailing duty determinations.

SUMMARY: We preliminarily determine certain benefits which constitute subsidies within the
meaning of the countervailing duty law are being provided to manufacturers, producers, or
exporters in the Federal Republic of Germany ("FRG") of certain steel products, as described in
the "Scope of Investigations" section of this notice. The estimated net subsidy for each
firm is indicated in the "Suspension of Liquidation" section of this notice. Therefore, we are
directing the U.S. Customs Service to suspend liquidation of all entries of the products subject to
these determinations which are entered, or withdrawn from warehouse, for consumption, and to
require a cash

*26322

deposit or bond on these products in the amount equal to the estimated net subsidy. We are
excluding from these preliminary affirmative determinations two producers in the FRG receiving
subsidies in amounts preliminarily determined to be de minimis.

If these investigations proceed normally, we will make our final determinations by August 24,
1982.

EFFECTIVE DATE: June 17, 1982.

FOR FURTHER INFORMATION CONTACT:

Mary S. Clapp, 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) 377-2438.

SUPPLEMENTARY INFORMATION:

Preliminary Determinations

Based upon our investigations, we preliminarily determine there is reason to believe or suspect
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 the
FRG of certain steel products, as described in the "Scope of Investigations" section of this notice.
For purposes of these investigations, the following programs are preliminarily found to be
subsidies:
FRG government grants
State government grants
Federal research and development ("R & D") assistance
ECSC loans and loan guarantees
ECSC housing loans
Capital infusions by the FRG
Regional development programs
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 January 11, 1982 we received petitions from United States Steel Corporation; counsel for
Bethlehem Steel Corporation; and counsel for Republic Steel Corporation, Inland Steel Company,
Jones & Laughlin Steel, Inc., National Steel Corporation, and Cyclops Corporation ("the Five"), filed
on behalf of the U.S. industry producing carbon steel structural shapes, hot- rolled carbon steel
plate, hot-rolled carbon steel sheet and strip and cold- rolled carbon steel sheet and strip. The
petitions 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 the FRG of the steel products listed above. Counsel for Bethlehem Steel Corporation and counsel
for the Five also alleged that "critical circumstances" exist, as defined in section 703(e) of the Act.
We found the petitions to contain sufficient grounds upon which to intitiate countervailing
duty investigations, and on Feburary 1, 1982 we initiated countervailing duty
investigations (47 FR 5741). We stated that we expected to issue preliminary determinations by
April 6, 1982. We subsequently determined that the investigations are "extraordinarily
complicated," as defined in section 703(c) of the Act, and postponed our preliminary
determinations for 65 days until June 10, 1982 (47 FR 11738).

Since the FRG is a "country under the Agreement" within the meaning of section 701(b) of the Act,
injury determinations are required for these investigations. Therefore, we notified the U.S.
International Trade Commission ("ITC") of our initiations. On February 26, 1982 the ITC
preliminarily determined that there is a reasonable indication that these imports are materially
injuring 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 the FRG in Washington, D.C. On April 30, 1982 we
received the responses to the questionnaires. Supplemental responses were received on May 17,
1982.

Scope of Investigations

The products covered by these investigations are:
Carbon steel structural shapes.
Hot-rolled carbon steel plate.
Hot-rolled carbon steel sheet and strip.
Cold-rolled carbon steel sheet and strip.
The products are fully described in Appendix A which appears with the notice of "Preliminary
Affirmative Countervailing Duty Determinations, Certain Steel Products from Belgium," in
this issue of the Federal Register. (The product
definition of hot-rolled carbon steel sheet and strip has been amended since the initiation of these
investigations (47 FR 5739-40).) AG der Dillinger Hu>= 4ttenwerke ("Dillinger"), Thyssen AG
("Thyssen"), Stahlwerke Peine-Salzgitter AG ("P & S"), Klockner-Werke AG ("Klockner"), Stahlwerke
Rochling-Burbach GmbH ("Rochling"), Estel Hoesch-Werke AG ("Hoesch"), Fried. Krupp
Hu>=4ttenwerke AG ("Krupp"), and Otto Wolff AG ("Otto Wolff") are the only known producers and
exporters in the FRG of the subject products which were exported to the United States. The period
for which we are measuring subsidization is the calendar year 1981.

Analysis of Programs

In their responses, the government of the FRG and the Delegation of the Commission of the
European Communities provided data for the applicable periods. Additionally, we received
information from the following firms, which produced and exported the following products under
investigation, which were exported to the United States:

Firms and Carbon Steel Products

Dillinger--Hot-rolled carbon steel plate, hot-rolled carbon steel sheet and
strip, and cold-rolled carbon steel sheet and strip
Thyssen--Carbon steel structural shapes, hot-rolled carbon steel plate, hot- rolled carbon steel
sheet and strip, and cold-rolled carbon steel sheet and strip
P & S--Carbon steel structural shapes, hot-rolled carbon steel plate, hot-rolled carbon steel sheet
and strip, and cold-rolled carbon steel sheet and strip
Klockner--Hot-rolled carbon steel plate, hot-rolled carbon steel sheet and strip, and cold-rolled
carbon steel sheet and strip
Hoesch--Carbon steel structural shapes, hot-rolled carbon steel plate, hot- rolled carbon steel
sheet and strip, and cold-rolled carbon steel sheet and strip
Krupp--Carbon steel structural shapes, hot-rolled carbon steel plate, hot- rolled carbon steel sheet
and strip, and cold-rolled carbon steel sheet and strip
Otto Wolff--Cold-rolled carbon steel sheet and strip
Rochling did not submit a response but is known to be a producer and exporter of the carbon steel
structural shapes under investigation, which were exported to the United States.
Throughout this notice, general principles applied by the Department of Commerce to the facts of
the current investigations concerning certain steel
products are described in detail in Appendix B, which appears with the notice of "Preliminary
Affirmative Countervailing Duty Determinations, Certain Steel Products 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 *26323
(Cite as: 47 FR 26321, *26323)

Communities (hereinafter Appendix C). Based upon our preliminary analysis of the petitions and
responses to our questionnaires, we have preliminarily determined the following.

I. Programs Preliminarily Determined To Be Subsidies

We preliminarily determine that subsidies are being provided to manufacturers, producers, or
exporters in the FRG of the certain steel products included in these investigations under the
programs listed below.

A. FRG Government Investment Grants

1. Regional Incentive Programs. Domestic investors establishing new plants or involved in the
modernization or expansion of existing operations in certain regions of the FRG receive cash grants
as a percentage of capital investment costs. These incentives are available to industries situated in
regions in
which unemployment levels are high or in which industrial development, rationalization,
enlargement, or restructuring is underway.
The grants may come from several government ministries but must conform to the guidelines set in
the Investment Premium Act of 1969. Because that Act targets relief for economically depressed
areas, there is a regional preference, and the grants are therefore countervailable.
Subsidy amounts were determined by using the grants methodology described in Appendix B and a
15 year average useful life of capital assets. Benchmarks used in the calculations were based on the
average commercial lending interest rates as reported by the Deutsche Bundesbank. Calculated
subsidies were then divided by the value of total steel production in 1981 to calculate the ad
valorem subsidy.
Companies Receiving Benefits:
Krupp. Under the Investment Premium Act, Krupp received grants in 1980 and 1981. We
calculated an ad valorem subsidy of 0.013 percent for these grants.
Klockner. Under the Investment Premium Act, Klockner received grants in 1980 and 1981. We
calculated an ad valorem subsidy of 0.005 percent for these grants.
Dillinger. Under the Investment Premium Act, Dillinger received grants from 1977 through 1981.
We calculated an ad valorem subsidy of 0.011 percent for these grants.

Hoesch. Under the Investment Premium Act, Hoesch received grants from 1977 through 1981. We
calculated an ad valorem subsidy of 0.083 percent for these grants.
Otto Wolff. Under the Investment Premium Act, Otto Wolff received grants from 1974 through
1981. We calculated an ad valorem subsidy of 0.037 percent for these grants.
P & S. Under the Investment Premium Act, P & S received grants from 1977 through 1981. We
calculated an ad valorem subsidy of 0.276 percent for these grants.

2. Improvement of Regional Trade Program. This program provides federal and state government
investment funding through loans and grants to regional projects. The investments are aimed at
promoting safe working conditions. Since this program provides subsidies for specific regions of
the FRG, we find it to be countervailable.
The loan and grants given under this program were treated according to the appropriate
methodologies described in Appendix B. The calculation of the benefit from the loan was based on a
benchmark interest rate, the average commercial lending interest rate as reported by the Deutsche
Bundesbank. The calculation of the benefit from grants was based on a 15 year average useful life of
capital assets.
The benchmarks used in the calculations were based on the average commercial
lending interest rates as reported by the Deutsche Bundesbank. The resulting subsidies were
allocated across the value of total steel production for the company.
Company Receiving Benefits:
Krupp. Under the Improvement for Regional Trade Program, we calculated ad valorem subsidies of
0.006 percent for the loan and 0.020 percent for the grants.

B. State Government Grants

Some state governments provide grants to the steel industry in their states independently of
federal government programs. These grants are directed at specific industries, including the steel
industry, within the state. For this reason we find these grants to be countervailable.
To calculate the subsidies we used the grant methodology described in Appendix B and a 15 year
average life of capital assets. We allocated the resulting subsudies across the value of total steel
production for the company in 1981.
Companies Receiving Benefits:
Thyssen. The state of North Rhine-Westphalia gave Thyssen a grant to be used for emissions
control. The grant was given in installments from 1976 through 1981. We calculated an ad valorem
subsidy of 0.038 percent for this grant.

Klockner. As a result of investments made in connection with the "KS Method," a new technological
process developed by Klockner, the company received grants in 1980 and 1981 from the state of
Niedersachsen. We calculated an ad valorem subsidy of 0.002 percent for these grants.

C. FRG/State Investment Grants

The Umweltbundesamt (Department of Environmental Protection) of the FRG and the various
states, including North Rhine-Westphalia, provide grants for improvements and equipment to
protect the environment in specified areas of the FRG. The programs are not confined to the steel
industry. Emphasis is placed on combating pollution in the highly populated Ruhr area.
We preliminarily determine the subsidies to these companies under these programs are
countervailable because they are targeted at specific regions. We used the grants methodology
described in Appendix B and a 15 year average useful life of capital assets. We allocated the
resulting subsidies across the value of total steel production for the company in 1981.
The benchmarks used in the calculations are based on the average commercial lending interest rate
as reported by the Deutsche Bundesbank.
Companies Receiving Benefits:
Klockner. We calculated an ad valorem subsidy of 0.044 percent for these grants.
Krupp. We calculated an ad valorem subsidy of 0.011 percent for these grants.
Hoesch. We calculated an ad valorem subsidy of 0.024 percent for these grants.

D. Research and Development Grants

1. Federal Ministry of Research and Technology ("BMFT"). This Ministry provides funds for
long-term R & D projects with high research and technology risks. The BMFT has targeted its
research funds on several specific focal points such as iron and steel research, energy and reactor
safety, and marine research and technology. Funds provided are a certain percentage of the
estimated R & D costs with an obligation on the part of the recipients to turn R & D results over to
the BMFT. The BMFT then makes these results available to German industry upon request.
We note that the BMFT generally intends to support all industrial activities. In practice, however,
the BMFT allocates its funds to specific industrial sectors, one of which is iron and steel. Inasmuch
as the BMFT sets funds aside specifically for use by the iron and steel industry, we find the R & D
grants to be countervailable.

*26324

In our R & D subsidy calculations we allocated the total amount of each grant in 1981 across the
value of total German steel production for that
year because the results of an R & D project become the property of the BMFT, which makes the
results available to all other German steel companies. Each grant was used for an item which is
relatively small and is normally expensed in the year received (see Appendix B).
We calculated an ad valorem subsidy of 0.089 percent to all companies for these grants.

2. Federal/State R & D Grants. Krupp received R & D grants from the Ministry of Economics and the
state of North Rhine-Westphalia for further development of a particular technology. These grants
generally are designed to support all industrial activities. As implemented, these programs allocate
funds to specific industrial sectors, including the steel industry, and are therefore countervailable.
In calculating subsidies we took into account the fact that the results of the R & D project become
the property of the Ministry and the state, who then make the results available to all other German
steel companies. Consequently we allocated the subsidies across the value of all German steel
production in 1981. We allocated the total amount of the grants for 1981 directly across all steel
production for that year because we considered that the grant was used for an item which is
relatively small and is normally expensed in the year received (as described in Appendix B).
We calculated an ad valorem subsidy of 0.004 percent to all companies for these grants.

E. Regional Labor Program

On July 12, 1979 the federal government promulgated a program under section 91 of the Labor
Promotion Act of 1969 applicable to regions with special employment problems. Funding provided
by this section goes to the employing company to reimburse its expenses for training unemployed
workers sent to it for that purpose by public employment offices. Because this program is regional
in its application and there is administrative preference, we preliminarily determine that such
subsidies are countervailable.
To determine the subsidy for each company, we used the labor subsidy methodology described in
Appendix B. The resulting subsidy was allocated across the value of total steel production of each
company. Because we considered that the grant was used for an item which is relatively small and
is normally expensed in the year received, we allocated the entire amount to the year of receipt (as
described in Appendix B).
Companies Receiving Benefits:
We calculate ad valorem subsidies of 0.050 percent for Krupp, 0.028 percent for Thyssen, and
0.011 percent for Otto Wolff under this program.

F. Capital Infusion

Through the infusion of capital into the free reserve account and the purchase of newly issued
share capital of Salzgitter AG ("SAG"), the FRG government has provided assistance to P & S, a
wholly-owned subsidiary of SAG. SAG itself is wholly-owned by the FRG government through the
Ministry of Finance.
Total govenment assistance received by SAG over the period is as follows:

-----------------------------------------------------------------
Fiscal year Amount Form of assistance
-----------------------------------------------------------------
1977 .......... DM 37,500,000 ......... Equity purchase.
1977 .......... DM 12,500,000 ......... Capital infusion.
1978 .......... DM 37,500,000 ......... Equity purchase.
1978 .......... DM 162,500,000 ........ Capital infusion.
1979 .......... DM 250,000,000 ........ Capital infusion.
-----------------------------------------------------------------

Under a profit transfer agreement, P & S is obligated to transfer its profits to SAG, and in turn, SAG
is required to cover the losses of P & S. SAG's other subsidiaries operate under a similar
arrangement. The recent losses for P & S are listed below:

----------------------------------------------------
Fiscal year ending Losses transferred to SAG
----------------------------------------------------
Sept. 30, 1977 ........ DM (148,504,446).
Sept. 30, 1978 ........ DM (145,535,132).
Sept. 30, 1981 ........ DM (172,579,508).
----------------------------------------------------

Since SAG is wholly owned by the FRG government and since it covers the losses incurred by P & S,
we are preliminarily determining that this loss coverage is a direct pass through of funds from the
FRG government through SAG to P & S. We therefore find the transfer of losses from P & S to SAG to
be a countervailable subsidy on the products.
We applied the grants methodology in Appendix B and a 15 year average useful life of capital assets
to the P & S losses which SAG absorbed while receiving FRG government funds. The benchmark
used in the calculations is based on the average commercial lending interest rate as reported by the
Deutsche Bundesbank. We then divided the total subsidy by the company's 1981 value of steel
production and calculated an ad valorem subsidy of 2.792 percent.

G. Loan Guarantees From the ECSC

For a full explanation of this program refer to Appendix C.
To calculate the subsidy we used the loan guarantees methodology in Appendix B and allocated the
subsidy across all of the company's steel production. The benchmark used in the calculation is the
average commercial lending interest rate as reported by the Deutsche Bundesbank.
Company Receiving Benefits:
P & S. According to the calculation method described above, P & S received subsidies in 1981. We
calculated an ad valorem subsidy of 0.058 percent for these loan guarantees.

H. Loans From the ECSC

For a full explanation of this program refer to Appendix C.
To calculate the subsidy we used the loans methodology described in Appendix B. The benchmark
used in the calculations is the average commercial lending interest rate as reported by the
Deutsche Bundesbank. We allocated the subsidies to the value of each company's total steel
production.

----------------------------------------------------------------
Companies receiving benefits Ad valorem subsidy (percent)
----------------------------------------------------------------
Krupp .................................................... 0.194
Hoesch .................................................... .041
P & S ..................................................... .385
Dillinger ................................................. .453
Thyssen ................................................... .005
Klockner .................................................. .631
Otto Wolff ................................................ .627
----------------------------------------------------------------

I. ECSC Housing Loans for Workers

For a full explanation of this program refer to Appendix C.
To calculate the subsidies we used the loans methodology described in Appendix B and allocated
the subsidies to all of the company's steel production. The benchmark used in the calculations is
based on the average commercial lending interest rate as reported by the Deutsche Bundesbank.
For Hoesch and P & S we determined an ad valorem subsidy of 0.003 percent.

J. Special Case: Rochling

Rochling did not respond to our questionnaire. We preliminarily determine therefore that all of the
above programs, from which the petitioners alleged that Rochling benefited, are subsidies to
Rochling. Subsidies were calculated on the basis of the best information available. In calculating
these subsidies we used the highest rate calculated for each program which was utilized by other
companies under these investigations. Where programs were specific to Rochling, we calculated
subsidies on the basis of publicly available company data. The ministry of

*26325

Defense R & D program, alleged to be a subsidy to Rochling, most resembled BMFT R & D projects;
therefore we used the same rate.
The programs and ad valorem subsidies are:

Percent
Investment Premium Act ................ 0.276
BMFT ................................... .083
Ministry of Defense R & D .............. .083
ECSC Loan Guarantees ................... .050
ECSC Loans ............................. .631

The programs specific to Rochling were loans that were conditionally repayable, depending on
future profits. Because profits were unlikely, we regarded the benefits as grants and calculated
subsidies using the grants methodology in Appendix B and a 15 year average useful life of capital
assets. We allocated the resulting subsidies across the total value of steel production of the
company. The benchmark used in the calculations is based on the average commercial lending
interest rate as reported by the Deutsche Bundesbank. We determined an ad valorem subsidy of
7.500 percent on these conditionally repayable loans.

II. Programs Preliminarily Determined Not To Be Subsidies

We preliminarily determine that the FRG government is not providing subsidies to manufacturers,
producers, or exporters of certain steel products under the following programs.

A. R & D Grants From the ECSC

For a full explanation of this program refer to Appendix C.

B. Federal Loan Guarantees

The FRG guarantees loans made by commercial lenders to industrial firms. They are provided
according to budgetary legislation and are meant to serve national social and economic objectives
not realizable without such financial guarantees. Such guarantees enable steel companies to
borrow at rates lower than they would otherwise pay. Since the loan guarantees are available on
equal terms to all industrial borrowers in the FRG, and since we have no indication that a specific
industry or group of industries is the main beneficiary of these guarantees, we preliminarily
determine that these loan guarantees are not countervailable. We will seek additional information.

C. European Recovery Program ("ERP")

This program which developed out of American postwar rehabilitation assistance in Western
Europe is reserved exclusively for industrial rehabilitation and promotion. Since ERP loans are
available to all branches of industry on equal terms, and since we have no indication that a specific
industry or group of industries is the main beneficiary of these loans, we preliminarily determine
that this program is not countervailable. We will seek additional information.

D. Coal Programs

Petitioners cite three programs that they believe reduce the cost of producing coking coal and
claim these cost reductions are passed on to steel users in the form of lower prices. The programs
are: (1) Federal and state government payments to coal producers for the difference between the
actual cost of production and a lower price, meant to reflect a world market price (i.e., delivered to
Rotterdam), at which the coal is sold to steel companies; (2) reimbursement by coal companies to
"distant-point" steel companies for a portion of their higher than average coal freight costs; and (3)
an "extraction subsidy" which is some form of government compensation to coal producers to
cover certain mining costs on which we will seek additional information.

1. Price Support Program. Because German coal seams were no longer sufficiently profitable, their
owners--which included German steel producers-- had sought to close down many of them about
1967. Such closures conflicted with the FRG's policy of maintaining jobs for miners and fostering
relative energy independence. The FRG intervened and required the coal owners-- including steel
producers--to maintain the operation of mines through Ruhrkohle, a joint venture coal company
formed in 1969. Simultaneously the FRG agreed to provide financial assistance to German coal
production so as to
lessen (but not eliminate) the difference between German and world market prices, and to severely
limit the importation of coal into Germany. As a result, German steel producers cannot buy
significant amounts of coking coal at world market prices but are forced to pay higher prices for
apparently subsidized German coal.
The cost compensation benefit conferred by the FRG government on coking coal could constitute a
countervailable subsidy on steel, if it were a benefit to a specific enterprise or industry. Although a
slight majority of German coking coal is used by the German iron and steel industry, a significant
portion (about 45 percent in 1980) is used in the FRG for purposes other than steelmaking (e.g., by
the chemical and non-ferrous metal industries and for home heating). Since German coking coal is
generally available on equal terms and used for purposes other than steelmaking, the FRG
assistance to the coking coal industry is not a subsidy to the German steel industry.

2. Reimbursement of Freight Costs. The coal companies reimburse a portion of the
higher-than-average cost of hauling coal to distant steel mills. The funds for reimbursement come
from contributions by all the FRG steel companies, most of whom do not receive any
reimbursement.
We preliminary determine that the industry as a whole supports the freight reimbursement
program from its own contributions, and that there is no subsidy for a collective cost of doing
business which the industry pays for itself.

3. ECSC Coal. The ECSC provides various production and marketing grants to EC coal and coke
producers; however, we do not consider this assistance to confer a subsidyon the FRG steel
industry for the reasons given in Appendix C.

E. FRG Labor Assistance

Steel companies participate in various federal and state programs meant to assist workers
dislocated by changes in the job market. These programs are discussed below:

1. Federal. The Labor Promotion Act of 1969 provided assistance for labor under the following
sections:

a. Article 54. Under this article the Federal Employment Institute (Bundesanstalt Fur Arbeit) ("BA")
provides employers with loans or "subsidies" to help defray the cost to the employer of carrying a
hard-to-place employee who is in training on the job.

b. Article 49. This program is similar to that of Article 54, except that it applies to workers already
hired who need retraining in new skills because their old skills have become redundant to the
company.

c. Articles 41 and 47. These programs resemble Articles 49 and 54, except that they provide for
training assistance which is paid directly to workers who take
part in training that will enable them to move to another job.

d. Article 97. Under this article the Federal Employment Institute provides grants to employers for
the wage costs of older employees who are additionally taken on and employed in order to relieve
unemployment among older employees. Such grants are available for employees who could not be
placed in a job in the near future.

*26326

Conclusions

All of the above programs administered by BA under the Labor Promotion Act of 1969 are part of a
national manpower policy. Because these programs are available to all industries on equal terms
and because we have no indication that a specific industry or group of industries is the main
beneficiary of these labor programs, we preliminarily determine that they are not countervailable.
However, we will seek further information on the Articles 41 and 47 programs.

2. State.

a. Government of North Rhine-Westphalia. The government of North Rhine-Westphalia
provides funds to companies to assist those groups in the population which have particular
difficulties in finding a job, especially young people. Funds can be applied to training or to the
creation of additional positions.

b. Jobs for Disabled Persons. Investment grants from the Landschaftsverbank Westfalen-Lippe and
Landschaftsverbank Rheinland are intended as an extra incentive to all suitable firms voluntarily
to make available more jobs for the disabled.

Conclusions

Our preliminary examination indicates that the state labor assistance programs are available on
equal terms to all industries in the relevant political subdivision and are not specific to the steel
industry. For this reason we preliminarily determine that state labor assistance is not
countervailable.

F. Labor Assistance from the ECSC Rehabilitation Aids

For a full explanation of this program refer to Appendix C.

G. ECSC Industrial Reconversion Loans

For a full explanation of this program refer to Appendix C.

III. Programs Preliminarily Determined Not To Be Utilized

We preliminarily determine that the following programs which were described in the notice of
"Initiation of Countervailing Duty Investigations" are not utilized by the manufacturers,
producers, or exporters of the products subject to these investigations.

A. The European Regional Development Fund (("ERDF")

This is a European Economic Community ("EEC") institution whose purpose is to provide funding
for industrial projects that are designed to correct regional imbalances within the EEC. The fund
also awards "interest subsidies" on European Investment Bank loans. Based upon our investigation
to date, we preliminarily determine that no company under investigation receives ERDF funds.

B. European Investment Bank ("EIB")

The EIB was established by the Treaty of Rome to fund projects that serve regional needs in the
Community. Funds are drawn from debt instruments floated on the capital markets and from
investment earnings. In the case of the FRG, none of the responding companies indicated that they
carried any loans from the
EIB. Therefore, we preliminarily determine that this program has not been utilized.

C. State Government Loan Guarantees

State governments provide guarantees to commercial lenders on loans to industry. Information on
the specific purposes of loans receiving guarantees and on the types of firms whose loans qualify
for the guarantees is not immediately available. None of the respondents indicated that they carry
any loans guaranteed by state governments. Therefore, we preliminarily determine that this
program has not been utilized.

D. State Government Loans

State governments lend directly to industrial firms on concessionary terms such as preferential
interest rates. Loans are granted generally to finance specific social programs or area rehabilitation
projects. We have no evidence that any respondents obtained such loans. Therefore, we
preliminarily determine that this program has not been utilized.

Negative Determination of Critical Circumstances

Counsel for Bethlehem Steel Corporation and counsel for the Five alleged that imports of certain
carbon steel products from the FRG 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 these investigations were initiated, U.S. imports of carbon steel structural shapes from the
FRG amounted to 5,169 net tons in February, 7,583 net tons in March, and 8,832 net tons in April
(the most recent month for which import statistics are available). U.S. imports of hot-rolled carbon
steel plate were 3,245 net tons in February, 2,374 net tons in March, and 2,143 net tons in April.
U.S. Imports of hot-rolled carbon steel sheet and strip were 20,836 net tons in February, 23,902
net tons in March, and 19,742 net tons in April. U.S. imports of cold-rolled carbon steel sheet and
strip were 32,314 net tons in February, 16,087 net tons in March, and 9,493 net tons in April.
In the context of this industry, these products have not recently been massively imported from the
FRG over a relatively short period. Therefore, critical circumstances do not exist for carbon steel
structural shapes, hot- rolled carbon steel plate, hot-rolled carbon steel sheet and strip or cold-
rolled carbon steel sheet and strip from the FRG.

Verification

In accordance with section 776(a) of the Act, we will verify all data used in making our final
determinations.

Suspension of Liquidation

In accordance with section 703 of the Act, we are directing the U.S. Customs Service to suspend
liquidation of entries of carbon steel structural shapes, hot-rolled carbon steel plate, hot-rolled
carbon steel sheet and strip, and cold-rolled carbon steel sheet and strip which 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:

-------------------------------------------------------------------------------
Ad valorem
rate
(percent)
-------------------------------------------------------------------------------
Manufacturer/producer/exporter:
AG der Dillinger Huttenwerke ............................................ 0.551
Stahlwerke Peine-Salzgitter AG .......................................... 3.603
Klockner-Werke AG ....................................................... 0.769
Stahlwerke Rochling-Burbach GmbH ........................................ 8.623
Fried. Krupp Huttenwerke AG ............................................. 0.640
Otto Wolff AG ........................................................... 0.751
All other FRG manufacturers/producers/ exporters:
Carbon Steel Structural Shapes .......................................... 8.623
All Other Products: hot-rolled carbon steel plate, hot-rolled
carbon steel sheet and strip, and cold-rolled carbon steel
sheet and strip ....................................................... 3.603
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Where a company specifically listed above has not exported a particular product during the period
for which we are measuring subsidization, the cash deposit or bond amount should be based on the
highest rate for products that were exported by that company.
Entries of these products produced and exported by Estel Hoesch-Werke AG and Thyssen AG are
excluded from the suspension of liquidation.

*26327

This suspension will remain in effect until further notice.

Exclusions From the Preliminary Affirmative Countervailing Duty Determinations

Two of the firms investigated, Hoesch and Thyssen, received subsidies in amounts we have
preliminarily determined are de minimis. The subsidies to Hoesch and Thyssen are 0.349 and
0.178 percent ad valorem, respectively. We have preliminarily excluded these firms from these
preliminary affirmative countervailing duty determinations. No cash deposit or bond shall
be required on entries of the subject merchandise produced and exported by these companies
from the FRG.

ITC Notification

In accordance with section 703(f) of the Act, we will notify the ITC of our determinations. 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 these preliminary
determinations at 10:00 a.m. on July 8, 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 July 1, 1982. Oral
presentations will limited to issues raised in the briefs.
All written views should be filed in accordance with 19 CFR 355.34, on or before July 19, 1982, at
the above address and in at least ten copies.

Gary N. Horlick,

Deputy Assistant Secretary for Import Administration.

June 10, 1982.

[FR Doc. 82-16248 Filed 6-14-82; 9:30 am]

BILLING CODE 3510-25-M