GERMANY: SUBSIDY PROGRAMS AIMED AT INDUSTRIAL SECTORS

GERMANY

SUBSIDY PROGRAMS AIMED AT INDUSTRIAL SECTORS
Last Changes Made July 2006

Effective February 15, 2000, Import Administration began publishing "Decision Memos" to reduce the size of antidumping and countervailing duty Federal Register notices. In cases in which a memo was published, you will find a link to the memo listed below.

In addition, in the following programs, in instances below in which a proceeding was a Sunset Review, you will see the letters SR after the product name.

COUNTERVAILABLE SUBSIDY PROGRAMS

The subsidy programs listed below have been investigated by the Department and have been found to be "countervailable" in the cases listed and during the periods reviewed based on the criteria established in the Tariff and Trade Act of 1930, as amended. Please refer to this Act for further detail of the criteria applied. In addition, you may click on the cases listed below the subsidy program title for a full explanation of the Department's analysis in those cases.

Please note that some of the programs listed below are funded and administered by the European Community.

CHEMICALS

Enrichment Technology Research and Development Program

Low Enriched Uranium (2004) 71 FR 10062 (2/28/06-prelim & intent to revoke order); 71 FR 38626 (6/7/07-final & revocation of order); Final Memo
Low Enriched Uranium (2003) 70 FR 10986 (3/7/05-prelim); 70 FR 40000 (7/12/05-final); Final Memo
Low Enriched Uranium (5/14/01-12/31/02) 69 FR 5498 (2/5/04-prelim); 69 FR 40869 (7/7/04-final); Final Memo
Low Enriched Uranium (1999) 66 FR 24329 (5/14/01-prelim); 66 FR 65903 (12/21/01-final); Final Memo; Amended

Under this program, the German government promoted the research and development of uranium enrichment technologies. The Federal Ministry for Research and Technology provided a series of grant disbursements for the funding of research and development projects. One portion of the funds were repayable within five years. No portion of any of the disbursements received was repaid. We determined that this program was countervailable because it provided a financial contribution and conferred a benefit. In addition, we determined that this program was specific to an industry.

Forgiveness of Centrifuge Enrichment Capacity Subsidies

The German government provided funds to support the promotion of an uranium enrichment industry under two agreements: the 'Risk Sharing Agreement' and the 'Profit Sharing Agreement.' Under the terms of assistance under these agreements, the company was obliged to make repayments based on the financial performance of the company. However, when the company merged with its counterparts in the Netherlands and the United Kingdom, the company and the German Government negotiated a basis to terminate the repayment obligations of these agreements. We determined that the assistance provided under this program was specific, provided a financial contribution and conferred a benefit on the company. Therefore, this program is countervailable.

STEEL PRODUCTS

Aid for the Closure of Steel Operations

Certain Steel Products (SR) 65 FR 16176 (3/27/00-prelim); Prelim Memo; 65 FR 47407 (8/2/00-final); Final Memo
Certain Steel Products (1991) 57 FR 57772 (12/7/92-prelim); 58 FR 37315 (7/9/93-final)
Cut-to-Length Carbon Steel Plate (1997/98) 65 FR 54496 (9/8/00-prelim); 66 FR 3985 (1/17/01-final); Final Memo not used
Wire Rod (2000) 67 FR 5991 (2/8/02-prelim); 67 FR 169 (08/30/02-final); Final Memo not used Amended

Under this program and pursuant to the Rules on Providing Funds to Iron and Steel Companies to Give Social Assistance to Structural Adjustment, the federal and state governments provided grants to the iron and steel industry for expenses incurred with respect to displaced employees. In addition, the federal government adopted the Guideline for Granting Aid to the Iron and Steel Industry, which increased the lump sum settlement for employees retiring during the period January 1, 1987 to December 31, 1990. Because these programs were limited to the iron and steel industry, we determined that they were specific, and, therefore, countervailable.

Assurance of Liquidity Provided to Private Banks by the Government of Saarland

Steel Wire Rod (1996) 62 FR 41945 (8/4/97-prelim); 62 FR 54992 (10/22/97-final)

In 1986, the Governor of Saarland agreed to forgive all debts owed to it by Saarstahl and to secure the liquidity of Saarstahl as it had in the past. We determined that by assuring the future liquidity of Saarstahl, the Government of Saarland effectively guaranteed that Saarstahl would have the funds to satisfy its future obligations, which included outstanding debt to the banks.

Capital Investment Grants

Carbon Pipes and Tubes (1981) 47 FR 44826 (10/12/82-prelim); Investigation Terminated 47 FR 49058 (10/29/82) not used
Certain Steel Products (SR) 65 FR 16176 (3/27/00-prelim); Prelim Memo; 65 FR 47407 (8/2/00-final); Final Memo
Certain Steel Products (1991) 57 FR 57772 (12/7/92-prelim); 58 FR 37315 (7/9/93-final)
Cut-to-Length Carbon Steel Plate (1997/98) 65 FR 54496 (9/8/00-prelim); 66 FR 3985 (1/17/01-final); Final Memo not used

This program, an amendment to the Steel Investment Allowance Act, provided grants amounting to 20 percent of the acquisition cost of assets purchased or produced prior to January 1, 1986, and ordered or produced after July 30, 1981. Because this program is limited to the iron and steel industry, we determined it to be countervailable.

Debt Forgiveness by Private Banks

In 1986, private banks agreed to forgive debt owed to them by a company if the Governments of Germany and Sweden forgave all debt owed to them by the company, and if the Government of Sweden secured the future liquidity of the company. The debt forgiveness constitutes a countervailable subsidy.

ECSC Housing Loans for Workers

Certain Steel Products (1981) 47 FR 26321 (6/17/82-prelim); 47 FR 39345 (9/7/82-final)

No program description available.

ECSC Interest Rate Rebates

Certain Steel Products (1991) 57 FR 57772 (12/7/92-prelim); 58 FR 37315 (7/9/93-final) not used
Certain Steel Products (1981) 47 FR 26321 (6/17/82-prelim); 47 FR 39345 (9/7/82-final)
Cut-to-Length Carbon Steel Plate (1997/98) 65 FR 54496 (9/8/00-prelim); 66 FR 3985 (1/17/01-final); Final Memo not used
Wire Rod (2000) 67 FR 5991 (2/8/02-prelim); 67 FR 169 (08/30/02-final); Final Memo not used Amended

The ECSC provides interest rate rebates on all of part of loans it makes to companies. The rebate, in the form of a reduced rate, is granted on the condition that some of the new jobs created will reserved primarily for workers made redundant in ECSC industries. We determined that this program is industry specific and is therefore countervailable.

ECSC Article 54 Loans

Article 54 loans are provided for the purpose of purchasing new equipment or financing modernization. Because this program is limited to the iron and steel industry, we determined that these loans were countervailable.

ECSC Loan Guarantees

No program description available.

ECSC Redeployment Aid Under Article 56(2)(b) (Worker Assistance)

Carbon Pipes and Tubes (1981) 47 FR 44826 (10/12/82-prelim); Investigation Terminated 47 FR 49058 (10/29/82)
Certain Steel Products (SR) 65 FR 16176 (3/27/00-prelim); Prelim Memo; 65 FR 47407 (8/2/00-final); Final Memo
Certain Steel Products (1991) 57 FR 57772 (12/7/92-prelim); 58 FR 37315 (7/9/93-final)
Certain Steel Products (1981) 47 FR 26321 (6/17/82-prelim); 47 FR 39345 (9/7/82-final)
Cut-to-Length Carbon Steel Plate (1997/98) 65 FR 54496 (9/8/00-prelim); 66 FR 3985 (1/17/01-final); Final Memo not used
Hot-Rolled Lead and Bismuth Steel (1997) 64 FR 16915 (4/7/99-prelim); Review Terminated 64 FR 44489 (8/16/99)
Hot-Rolled Lead and Bismuth Steel (1991) 57 FR 42971 (9/17/92-prelim); 58 FR 6233 (1/27/93-final)
Wire Rod (2000) 67 FR 5991 (2/8/02-prelim); 67 FR 169 (08/30/02-final); Final Memo Amended
Steel Wire Rod (1996) 62 FR 41945 (8/4/97-prelim); 62 FR 54993 (10/22/97-final)

Under Article 56(2)(b) of the European Coal and Steel Community ("ECSC") Treaty, persons employed in the iron, steel, and coal industries who lose their jobs may receive assistance for social adjustment.

Forgiveness of Saarstahl's Debt in 1989

Hot-Rolled Lead and Bismuth Steel (1997) 64 FR 16915 (4/7/99-prelim); Review Terminated 64 FR 44489 (8/16/99)
Hot-Rolled Lead and Bismuth Steel (1991) 57 FR 42971 (9/17/92-prelim); 58 FR 6233 (1/27/93-final)
Wire Rod (2000) 67 FR 5991 (2/8/02-prelim); 67 FR 169 (08/30/02-final); Final Memo Amended
Steel Wire Rod (1996) 62 FR 41945 (8/4/97-prelim); 62 FR 54992 (10/22/97-final)

This program provided debt forgiveness to a steel firm. Prior to 1989, Saarstahl, a German steel company, received large amounts of assistance from the Government of Saarland and the Government of the Federal Republic of Germany. Repayment of these funds became contingent on the steel company returning to profitability. In 1989, in order to facilitate the combination of Saarstahl with another steel firm, the Governments of Saarland and the Federal Republic of Germany agreed to forgive Saarstahl's debt.

Forgiveness of Ispat Hamburger Stahlwerke's (IHSW's) Debt in 1994

Wire Rod (2000) 67 FR 5991 (2/8/02-prelim); 67 FR 169 (08/30/02-final); Final Memo Amended
Steel Wire Rod (1996) 62 FR 41945 (8/4/97-prelim); 62 FR 54993 (10/22/97-final)

Under this program, a steel producer had DM 154 million in debt waived when it was privatized. We determined that this debt forgiveness constituted a countervailable subsidy.

Interest Rebates on ECSC Article 54 Loans

Article 54 loan interest rebates were granted to steel companies during the restructuring and modernization of the industry beginning in the 1980s. Funds were provided by the ECSC operational budget while deficits in the operational budget are made up by Member State contributions. We determined that these interest rebates are countervailable because they are limited to the iron and steel industry.

Social Aid for Workers in the Coal and Steel Industries

Cut-to-Length Carbon Steel Plate (1997/98) 65 FR 54496 (9/8/00-prelim); 66 FR 3985 (1/17/01-final); Final Memo not used

No program description available.

State Government Grants

Certain Steel Products (1981) 47 FR 26321 (6/17/82-prelim); 47 FR 39345 (9/7/82-final)

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, and are therefore countervailable.

State Investment Grants

Carbon Pipes and Tubes (1981) 47 FR 44826 (10/12/82-prelim); Investigation Terminated 47 FR 49058 (10/29/82)

The state of North Rhine-Westfalia provided funding to Hoesch to build a continuous coil feeder. We determined that this program is countervailable because the allocation of state funds for the program was industry specific.

Subsidies Related to the Saarstahl/Dillinger Merger

In April 1989, an agreement was reached between the Government of Saarland and Dillinger's parent company regarding the purchase of Saarstalh Volklingen GmbH. The Government of Saarland contributed the assets of Saarstalh and made a cash contribution in return for a percentage ownership in the holding company. Pursuant to the purchase agreement, the Governments of Germany and Saarland forgave all of the outstanding debts owed to them by Saarland. We determined that the debt forgiveness is countervailable because it was limited to a specific enterprise or industry, or group of enterprises or industries.

SUBSIDY PROGRAMS FOUND TO BE NOT COUNTERVAILABLE

The subsidy programs listed below have been investigated by the Department and have been found to be "not countervailable" in the cases listed and during the periods reviewed based on the criteria established in the Tariff and Trade Act of 1930, as amended. Please refer to this Act for further detail of the criteria applied. In addition, you may click on the cases listed under the subsidy program title for a full explanation of the Department's analysis in each case where the subsidy program has been examined.

STEEL PRODUCTS

BRITE/EuRAM Research and Development Project

Hot-Rolled Lead and Bismuth Steel (1997) 64 FR 16915 (4/7/99-prelim); Review Terminated 64 FR 44489 (8/16/99)

Under the BRITE/EuRAM project, participants receive research and development assistance in the form of grants from the European Community (EC).

Coal Programs

Three programs fall under the category of coal programs. Please see the cases listed below for a description of those programs.

ECSC Production and Marketing Grants
Certain Steel Products (1981) 47 FR 26321 (6/17/82-prelim); 47 FR 39345 (9/7/82-final)

The ECSC provides various production and marketing grants to EC coal and coke producers. However, we determined that this aid is not a countervailable subsidy for the FRG steel industry.
Price Support Program
Certain Steel Products (1981) 47 FR 26321 (6/17/82-prelim); 47 FR 39345 (9/7/82-final)

Because German coal seams were no longer sufficiently profitable, their owners, including 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 to maintain the operation of mines through Ruhrkohle,a joint venture coil company formed in 1969. Simultaneously, the FRG agreed to provide financial assistance to German coal production so as to lessen the difference between German and world market prices, and to severely limit the importation of coal into Germany. 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.
Reimbursement of Freight Costs
Carbon Pipes and Tubes (1981) 47 FR 44826 (10/12/82-prelim); Investigation Terminated 47 FR 49058 (10/29/82) not used
Certain Steel Products (1981) 47 FR 26321 (6/17/82-prelim); 47 FR 39345 (9/7/82-final)

Under this program, 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 determined that the industry as a whole supports this program from its own contributions, and there is no subsidy for a collective cost of doing business which the industry pays for itself.

ECSC Coal and Coke Aids

Carbon Pipes and Tubes (1981) 47 FR 44826 (10/12/82-prelim); Investigation Terminated 47 FR 49058 (10/29/82) not used

No program description available.

ECSC Research and Development Grants

Carbon Pipes and Tubes (1981) 47 FR 44826 (10/12/82-prelim); Investigation Terminated 47 FR 49058 (10/29/82)
Certain Steel Products (1981) 47 FR 26321 (6/17/82-prelim); 47 FR 39345 (9/7/82-final)
Hot-Rolled Lead and Bismuth Steel (1997) 64 FR 16915 (4/7/99-prelim); Review Terminated 64 FR 44489 (8/16/99)

Under Article 55 of the ECSC Treaty, assistance is available to promote technical and economic research relating to the production and increased use of coal and steel, and to occupational safety in the coal and steel industries. Since the end of 1986, the program has been funded solely through levies on steel producing companies. We determined that this program is not countervailable because the program was provided by levies on participating steel companies and because the program stipulates that the results of research conducted under this program be made publicly available.

Saarstahl's Bankruptcy Social Plan

Steel Wire Rod (1996) 62 FR 41945 (8/4/97-prelim); 62 FR 54995 (10/22/97-final) not used
Wire Rod (2000) 67 FR 5991 (2/8/02-prelim); 67 FR 169 (08/30/02-final); Final Memo Amended

Under this plan, the Government of Saarland provided two and one-half months salary to laid-off steel workers. This plan was negotiated by Saarstahl, a steel producer, with the Government of Saarland, and incorporated under the German bankruptcy law. The Government paid the worker's salaries, and in turn filed a claim against the firm. We determined that this did not constitute a countervailable subsidy.

State Coal Assistance

Carbon Pipes and Tubes (1981) 47 FR 44826 (10/12/82-prelim); Investigation Terminated 47 FR 49058 (10/29/82) not used

No program description available.

Subsidies Leading up to the 1997 Reorganization

Hot-Rolled Lead and Bismuth Steel (1997) 64 FR 16915 (4/7/99-prelim); Review Terminated 64 FR 44489 (8/16/99)
Wire Rod (2000) 67 FR 5991 (2/8/02-prelim); 67 FR 169 (08/30/02-final); Final Memo Amended

Saarstahl's bankruptcy trustees approved a reorganization plan for Saarstahl in 1997. Under that plan, the GOS transferred a portion of its shareholdings in Saarstahl to KfW, Saarstahl Treuhand, and Dillinger. The new owners, as well as the GOS, agreed to make a payment totaling DM 120 million to an escrow account. The share paid by each was proportional to its ownership of Saarstahl. We found that the debt elimination that occurred as a result of the bankruptcy proceeding did not confer a subsidy on Saarstahl. We found, further, that bankruptcy protection is available to all types of companies in Germany and that Saarstahl was not treated differently than other companies. Therefore, we found no subsidy from the debt elimination.

Subsidy to Saarstahl Resulting From Delaying the Repeal of a Tax Exemption Under the 1997 Act on the Continuation of Company Tax Reform

Wire Rod (2000) 67 FR 5991 (2/8/02-prelim); 67 FR 169 (08/30/02-final); Final Memo Amended

In October 1997, the German parliament passed a comprehensive corporate tax reform under which specific tax exemptions would be repealed. However the tax exemption repeal was delayed until January 1, 1998. We determined that this repeal was not specifically to help Saarstahl. Therefore, this program is not countervailable.

SUBSIDY PROGRAMS DETERMINED NOT TO EXIST

The following subsidy programs were alleged by the petitioning industries and were investigated by the Department. However, during the investigation we found no evidence that such programs actually existed. If you click on the cases listed under the subsidy program title, you will be linked to each case in which the subsidy program was referenced. It is possible that, while the program named did not exist, a similar program having a different name actually was investigated. If this is the case, you will find that program listed elsewhere in this library.

No programs listed.

SUBSIDY PROGRAMS THAT HAVE BEEN TERMINATED

The subsidy programs listed below have been investigated by the Department and have been found to have been terminated based on the criteria established in the Tariff and Trade Act of 1930, as amended. Please refer to this Act for further detail of the criteria applied. In addition, you may click on the cases listed below the subsidy program title for a full explanation of the Department's analysis in each of these cases.

Ruhr District Action Program

(Terminated 1984) From 1980 through 1984, the Ruhr District Action Program provided grants for investments in the Ruhr region. Funds for this program were provided by both the federal government and the Government of North Rhein-Westfalia. Under this program, grants relating to environmental protection were available exclusively to the steel industry. The portion of the funds provided to the steel industry under the framework of this plan by the Government of North Rhein- Westfalia were provided in conjunction with the state's Air Pollution Control Program. Because the portion of the program that involves environmental cleanup grants is limited to the steel industry, we determined that the program was countervailable.

Structural Improvement Assistance Aids

Certain Steel Products (SR) 65 FR 16176 (3/27/00-prelim); Prelim Memo; 65 FR 47407 (8/2/00-final); Final Memo
Certain Steel Products (1991) 57 FR 57772 (12/7/92-prelim); 58 FR 37315 (7/9/93-final)
Cut-to-Length Carbon Steel Plate (1997/98) 65 FR 54496 (9/8/00-prelim); 66 FR 3985 (1/17/01-final); Final Memo not used
Steel Wire Rod (1996) 62 FR 41945 (8/4/97-prelim); 62 FR 54995 (10/22/97-final) not used
Wire Rod (2000) 67 FR 5991 (2/8/02-prelim); 67 FR 169 (08/30/02-final); Final Memo Amended

(Terminated 1986) On December 28, 1983, the Directive for the Provision of Structural Improvement Assistance to Companies in the Iron and Steel Industry was enacted. This program provided funds for companies in the iron and steel industry to (1) cover severance pay and transitional assistance for steel workers affected by the restructuring plan within the industry, and (2) assist steel companies with the costs associated with plant closures. Because this program is limited to the iron and steel industry, we determined the program to be limited to a specific enterprise or industry or group of enterprises or industries, and, therefore, countervailable. Even though this program has been terminated, residual benefits result to companies depending on the terms of their aid.

SUBSIDY PROGRAMS THAT HAVE NOT BEEN USED

When potential subsidy programs are investigated and found not to be used by the companies being investigated, the Department makes no determination as to their countervailability. If you click on the cases listed under the subsidy program title, you will be linked to each case in which the subsidy program was referenced.

STEEL PRODUCTS

Consolidation Funds

Wire Rod (2000) 67 FR 5991 (2/8/02-prelim); 67 FR 169 (08/30/02-final); Final Memo not used Amended

No program description available.

ECSC Article 56 Conversion Loans

Carbon Pipes and Tubes (1981) 47 FR 44826 (10/12/82-prelim); Investigation Terminated 47 FR 49058 (10/29/82) not used
Certain Steel Products (1991) 57 FR 57772 (12/7/92-prelim); 58 FR 37315 (7/9/93-final) not used
Cut-to-Length Carbon Steel Plate (1997/98) 65 FR 54496 (9/8/00-prelim); 66 FR 3985 (1/17/01-final); Final Memo not used

No program description available.

Federal and State Government Loan Guarantees under the Steel Restructuring Plan

Certain Steel Products (1991) 57 FR 57772 (12/7/92-prelim); 58 FR 37315 (7/9/93-final) not used
Cut-to-Length Carbon Steel Plate (1997/98) 65 FR 54496 (9/8/00-prelim); 66 FR 3985 (1/17/01-final); Final Memo not used

No program description available.

Loans with Reduced Interest Rates under the Steel Restructuring Plan

No program description available.

1984 Equity Infusion for Ispat Hamburger Stahlwerke (IHSW)

Steel Wire Rod (1996) 62 FR 41945 (8/4/97-prelim); 62 FR 54995 (10/22/97-final) not used

Through this program, the Government of Hamburg infused equity of DM 20 million into IHSW, a steel producer, through a loan to a firm that formed a limited partnership with IHSW. The loan repayment was contingent on IHSW being profitable and was used by the partner to purchase IHSW for the same amount as the loan. Given that we determined that IHSW's average useful life of assets was 10 years, this 1984 equity infusion did not give rise to benefits during the period of investigation, i.e., 1996.

Special Depreciation

Wire Rod (2000) 67 FR 5991 (2/8/02-prelim); 67 FR 169 (08/30/02-final); Final Memo not used Amended

No program description available.