[Federal Register: September 28, 2001 (Volume 66, Number 189)]
[Page 49635-49637]
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DEPARTMENT OF COMMERCE
International Trade Administration
[C-533-821]
Final Affirmative Countervailing Duty Determination: Certain Hot-
Rolled Carbon Steel Flat Products From India
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of final affirmative countervailing duty investigation.
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SUMMARY: On April 20, 2001, the Department of Commerce (the Department)
published in the Federal Register its preliminary affirmative
determination in the countervailing duty investigation of certain hot-
rolled carbon steel flat products from India for the period April 1,
1999 through March 31, 2000.
The net subsidy rates in the Final Determination differ from those
of the Preliminary Determination. The revised final net subsidy rates
for the investigated companies are listed below in the ``Suspension of
Liquidation'' section of this notice.
EFFECTIVE DATE: September 28, 2001.
FOR FURTHER INFORMATION CONTACT: Eric B. Greynolds at (202) 482-6071 or
Robert Copyak at (202) 482-2209, Office of AD/CVD Enforcement VI, Group
II, Import Administration, International Trade Administration, U.S.
Department of Commerce, Room 4012, 14th Street and Constitution Avenue,
NW., Washington, DC 20230.
SUPPLEMENTARY INFORMATION:
Applicable Statute and Regulations
Unless otherwise indicated, all citations to the statute are
references to the provisions effective January 1, 1995, the effective
date of the amendments made to the Tariff Act of 1930 (the Act) by the
Uruguay Round Agreements Act (URAA). In addition, unless otherwise
indicated, all citations to the Department's regulations are to the
regulations codified at 19 CFR part 351 (2000).
Background
On April 20, 2001, the Department published the preliminary results
of investigation on certain hot-rolled carbon steel flat products from
India. See Notice of Preliminary Affirmative Countervailing Duty
Determination and Alignment of Final Countervailing Determination with
Final Antidumping Duty Determinations: Certain Hot-Rolled Carbon Steel
Flat Products from India, 66 FR 20240 (April 20, 2001) (Preliminary
Results). This investigation covers the following manufacturer/
exporters: Steel Authority of India Limited (SAIL), Essar Steel Limited
(Essar), Ispat Industries Limited (Ispat), and the Tata Iron and Steel
Company Limited (TISCO). The investigation covers the period April 1,
1999, through March 31, 2000. The investigation covers 10 programs.
We invited interested parties to comment on the Preliminary
Determination. On August 20, 2001, we received comments from
petitioners and respondents. On August 30, 2001, we received rebuttal
comments from petitioners and respondents. At the request of the
Department, respondents subsequently submitted revised rebuttal
comments on September 6, 2001. A public hearing was held at the
Department of Commerce on September 5, 2001.
The Government of India (GOI) submitted a proposed suspension
agreement on April 20, 2001. The GOI proposed an agreement again on
August 6, 2001. The Department did not accept the GOI's proposals.
Although the deadline for this determination was originally
September 17, 2001, in light of the events of September 11, 2001, and
the subsequent closure of the Federal Government for reasons of
security, the timeframe for issuing this determination has been
extended by four days.
Scope of the Investigation
The merchandise subject to this investigation is certain hot-rolled
flat-rolled carbon-quality steel products of a rectangular shape, of a
width of 0.5 inch or greater, neither clad, plated, nor coated with
metal and whether or not painted, varnished, or coated with plastics or
other non-metallic substances, in coils (whether or not in successively
superimposed layers), regardless of thickness, and in straight lengths,
of a thickness of less than 4.75 mm and of a width measuring at least
10 times the thickness. Universal mill plate (i.e., flat-rolled
products rolled on four faces or in a closed box pass, of a width
exceeding 150 mm, but not exceeding 1250 mm, and of a thickness of not
less than 4 mm, not in coils and without patterns in relief) of a
thickness not less than 4.0 mm is not included within the scope of this
investigation.
Specifically included within the scope of this investigation are
vacuum degassed, fully stabilized (commonly referred to as
interstitial-free (IF)) steels, high strength low alloy (HSLA) steels,
and the substrate for motor lamination steels. IF steels are recognized
as low carbon steels with micro-alloying levels of elements such as
titanium or niobium (also commonly referred to as columbium), or both,
added to stabilize carbon and nitrogen elements. HSLA steels are
recognized as steels with micro-alloying levels of elements such as
chromium, copper, niobium, vanadium, and molybdenum. The substrate for
motor lamination steels contains micro-alloying levels of elements such
as silicon and aluminum.
Steel products included in the scope of this investigation,
regardless of definitions in the Harmonized Tariff Schedule of the
United States (HTS), are products in which: (i) Iron predominates, by
weight, over each of the other contained elements; (ii) the carbon
content is 2 percent or less, by weight; and (iii) none of the elements
listed below exceeds the quantity, by weight, respectively indicated:
1.80 percent of manganese, or
2.25 percent of silicon, or
1.00 percent of copper, or
0.50 percent of aluminum, or
1.25 percent of chromium, or
0.30 percent of cobalt, or
0.40 percent of lead, or
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1.25 percent of nickel, or
0.30 percent of tungsten, or
0.10 percent of molybdenum, or
0.10 percent of niobium, or
0.15 percent of vanadium, or
0.15 percent of zirconium.
All products that meet the physical and chemical description
provided above are within the scope of this investigation unless
otherwise excluded. The following products, by way of example, are
outside or specifically excluded from the scope of this investigation:
Alloy hot-rolled steel products in which at least one of
the chemical elements exceeds those listed above (including, e.g., ASTM
specifications A543, A387, A514, A517, A506).
SAE/AISI grades of series 2300 and higher.
Ball bearings steels, as defined in the HTS.
Tool steels, as defined in the HTS.
Silico-manganese (as defined in the HTS) or silicon
electrical steel with a silicon level exceeding 2.25 percent.
ASTM specifications A710 and A736.
USS Abrasion-resistant steels (USS AR 400, USS AR 500).
All products (proprietary or otherwise) based on an alloy
ASTM specification (sample specifications: ASTM A506, A507).
Non-rectangular shapes, not in coils, which are the result
of having been processed by cutting or stamping and which have assumed
the character of articles or products classified outside chapter 72 of
the HTS.
The merchandise subject to this investigation is classified in the
HTS at subheadings: 7208.10.15.00, 7208.10.30.00, 7208.10.60.00,
7208.25.30.00, 7208.25.60.00, 7208.26.00.30, 7208.26.00.60,
7208.27.00.30, 7208.27.00.60, 7208.36.00.30, 7208.36.00.60,
7208.37.00.30, 7208.37.00.60, 7208.38.00.15, 7208.38.00.30,
7208.38.00.90, 7208.39.00.15, 7208.39.00.30, 7208.39.00.90,
7208.40.60.30, 7208.40.60.60, 7208.53.00.00, 7208.54.00.00,
7208.90.00.00, 7211.14.00.90, 7211.19.15.00, 7211.19.20.00,
7211.19.30.00, 7211.19.45.00, 7211.19.60.00, 7211.19.75.30,
7211.19.75.60, and 7211.19.75.90. Certain hot-rolled flat-rolled
carbon-quality steel covered by this investigation, including: vacuum
degassed fully stabilized; high strength low alloy; and the substrate
for motor lamination steel may also enter under the following tariff
numbers: 7225.11.00.00, 7225.19.00.00, 7225.30.30.50, 7225.30.70.00,
7225.40.70.00, 7225.99.00.90, 7226.11.10.00, 7226.11.90.30,
7226.11.90.60, 7226.19.10.00, 7226.19.90.00, 7226.91.50.00,
7226.91.70.00, 7226.91.80.00, and 7226.99.00.00. Subject merchandise
may also enter under 7210.70.30.00, 7210.90.90.00, 7211.14.00.30,
7212.40.10.00, 7212.40.50.00, and 7212.50.00.00. Although the HTS
subheadings are provided for convenience and U.S. Customs purposes, the
Department's written description of the merchandise under investigation
is dispositive.
Analysis of Comments Received
All issues raised in the case and rebuttal briefs by parties to
this investigation are addressed in the ``Issues and Decision
Memorandum'' (Decision Memorandum) dated September 19, 2001, which is
hereby adopted by this notice. A list of issues which parties have
raised and to which we have responded, all of which are in the Decision
Memorandum, is attached to this notice as Appendix I. Parties can find
a complete discussion of all issues raised in this investigation and
the corresponding recommendations in this public memorandum which is on
file in room B-099 of the Main Commerce Building. In addition, a
complete version of the Decision Memorandum can be accessed directly on
the World Wide Web at http://www.enforcement.trade.gov, under the heading
``Federal Register Notices.'' The paper copy and electronic version of
the Decision Memorandum are identical in content.
Suspension of Liquidation
In accordance with section 705(c)(1)(B)(i)(I) of the Act, we have
calculated individual rates for the companies under investigation. For
the period April 1, 1999, through March 31, 2000, we determine the net
subsidy rates for the investigated companies to be as follows:
------------------------------------------------------------------------
Net subsidy
rate
Producer/Exporter (percent ad
valorem)
------------------------------------------------------------------------
Essar Steel Limited (Essar)................................ 8.32
Ispat Industries Limited (Ispat)........................... 31.94
Steel Authority of India Limited (SAIL).................... 18.38
Tata Iron and Steel Company Limited (TISCO)................ 9.26
All Others Rate............................................ 16.17
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As explained in the Decision Memorandum, we have applied the facts
available rate to Jindal. To calculate the ``all others'' rate, we
weight-averaged the individual rates of SAIL, Essar, TISCO, and Ispat
by each company's respective sales of subject merchandise made to the
United States during the POI.
Under Sec. 351.526 of the regulations, the Department can adjust
cash deposit rates to account for program-wide changes. During this
investigation, the Department verified that two programs have been
terminated subsequent to the POI. Therefore, we are adjusting the cash
deposit rates to take into account these program-wide changes. Thus, in
determining the cash deposit rates listed below, we have deducted the
subsidies found for these two programs from the overall subsidy rate
calculated for the investigated companies.
------------------------------------------------------------------------
Cash
deposit
Producer/Exporter rate
(percent ad
valorem)
------------------------------------------------------------------------
Essar Steel Limited (Essar)................................ 8.25
Ispat Industries Limited (Ispat)........................... 31.89
Steel Authority of India Limited (SAIL).................... 18.22
Tata Iron and Steel Company Limited (TISCO)................ 9.17
All Others Rate............................................ 16.08
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In accordance with our preliminary affirmative determination, we
instructed the U.S. Customs Service to suspend liquidation of all
entries of certain hot-rolled carbon steel flat products from India,
which were entered or withdrawn from warehouse, for consumption on or
after April 20, 2001, the date of the publication of our preliminary
determination in the Federal Register. In accordance with section
703(d) of the Act, we instructed the U.S. Customs Service to
discontinue the suspension of liquidation for merchandise entered on or
after August 18, 2001, but to continue the suspension of liquidation of
entries made between April 20, 2001 and August 17, 2001.
We will reinstate suspension of liquidation under section 706(a) of
the Act for all entries if the ITC issues a final affirmative injury
determination and will require a cash deposit of estimated
countervailing duties for such entries of merchandise in the amounts
indicated above. If the ITC determines that material injury, or threat
of material injury, does not exist, this proceeding will be terminated
and all estimated duties deposited or securities posted as a result of
the suspension of liquidation will be refunded or canceled.
ITC Notification
In accordance with section 705(d) of the Act, we will notify the
ITC of our determination. In addition, we are
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making available to the ITC all non-privileged and non-proprietary
information related to this investigation. We will allow the ITC access
to all privileged and business proprietary information in our files,
provided that the ITC confirms that it will not disclose such
information, either publically or under an administrative protective
order (APO), without the written consent of the Assistant Secretary for
Import Administration.
If the ITC determines that material injury, or threat of material
injury, does not exist, these proceedings will be terminated. If
however, the ITC determines that such injury does exist, we will issue
a countervailing duty order.
Return or Destruction of Proprietary Information
In the event that the ITC issues a final negative injury
determination, this notice will serve as the only reminder to parties
subject to APO of their responsibility concerning the destruction of
proprietary information disclosed under APO in accordance with 19 CFR
351.305(a)(3). Failure to comply is a violation of the APO.
This determination is published pursuant to sections 705(d) and
777(i) of the Act.
Dated: September 21, 2001.
Faryar Shirzad,
Assistant Secretary for Import Administration.
Appendix I--Issues and Decision Memorandum
Methodology and Background Information
I. The Net Subsidy Rate Attributable to Jindal Vijaynagar Ltd.
II. Subsidies Valuation Information
A. Allocation Period
B. Creditworthiness
C. Benchmarks for Loans and Discount Rate
III. Program-Wide Changes
Analysis of Programs
I. Programs Conferring Subsidies
A. Pre-Shipment and Post-Shipment Export Financing
B. Duty Entitlement Passbook Scheme
C. Advance Licenses
D. Special Import Licenses (SILs)
E. Export Promotion Capital Goods Scheme (EPCGS)
F. Loans from the Steel Development Fund (SDF) Fund
G. The GOI's Forgiveness of SDF Loans Issued to SAIL
H. GOI Forgiveness of Other Loans Issued to SAIL
I. Loan Guarantees from the GOI
J. Exemption of Export Credit from Interest Taxes
II. Programs Determined To Be Not Used
A. Income Tax Deductions Under Section 80 HHC
B. Grant-in-Aid Reported on SAIL's Annual Reports
III. Total Ad Valorem Rate
IV. Analysis of Comments
Comment 1: Steel Development Loans and Loan Forgiveness
Comment 2: Attribution of the GOI's Waiver of SAIL's SDF Loans
Comment 3: The Attribution of GOI Debt Forgiveness
Comment 4: Suspension of Interest Payments Due on SAIL's SDF
Loans During the POI
Comment 5: Countervailability of Advance Licenses
Comment 6: Countervailability of DEPS
Comment 7: Program-Wide Changes
Comment 8: Income Tax Deductions under Section 80HHC of the
Indian Tax Act
Comment 9: Uncreditworthy Allegations
Comment 10: Denominator to be Used for SAIL and Essar's Pre-
shipment Export Financing
Comment 11: Long-term Interest Rate Benchmark for Calculating
the Benefit to Essar from the Export Promotion Capital Goods Scheme
Comment 12: Sales Tax Obtained from the Sales of Special Import
Licenses
Comment 13: Exemption of Export Credit from Interest Tax
Comment 14: Ispat's Uninstalled and Common Capital Equipment
under the EPCGS
Comment 15: Ispat's Corrected FOB Sales Values
Comment 16: Value of DEPS Benefits Conferred on Ispat
Comment 17: Petitioners' Allegation of Errors in the Calculation
of Ispat's Subsidy Rate
Comment 18: Guarantee Fees Charged by the GOI for Loans Obtained
by SAIL from International Lending Institutions
Comment 19: Calculation of TISCO's Long-term Benchmark Interest
Rate
Comment 20: Calculation of Duty and Application Fees Actually
Paid by TISCO Under the EPCGS Program
Comment 21: Calculation of TISCO's SDF Loan Repayments
Comment 22: Calculation of TISCO's Short-Term Rupee-Denominated
Benchmark Interest Rate
Comment 23: Calculation of DEPS Program Rate for TISCO
Comment 24: Benefit to TISCO Under the EPCGS Program
Comment 25: Denominator for TISCO's Post-Shipment Export
Financing Program
Comment 26: Calculation of TISCO's SDF Loans
[FR Doc. 01-24404 Filed 9-27-01; 8:45 am]
BILLING CODE 3510-DS-P