66 FR 13910, March 8, 2001
                                                             C-475-817
                                                             Sunset Review
                                                             Public Document


MEMORANDUM TO: Bernard T. Carreau, fulfilling the duties of
               Assistant Secretary for Import Administration

FROM:          Jeffrey A. May
               Director 
               Office of Policy


SUBJECT:       Issues and Decision Memorandum for the Full Sunset Review of 
               the Countervailing Duty Order on Oil Country Tubular Goods 
               ("OCTG") from Italy; Final Results 


Summary: 

We have analyzed the case brief submitted on behalf of Dalmine S.p.A.
("Dalmine"), and the rebuttal brief submitted on behalf of U.S. Steel Group, a
unit of USX Corp. ("U.S. Steel") in the full sunset review of the
countervailing duty order on oil country tubular goods ("OCTG") from Italy. We
recommend that you approve the positions we have developed in the Discussion of
the Issues section of this memorandum for these final results of review. Below
is the complete list of the issues in this full sunset review for which we
received comments by parties:

1. Automatic initiation 
2. Likelihood of continuation or recurrence of countervailable subsidies 
3. Net countervailable subsidy likely to prevail 


Background:

In our preliminary results, published on October 30, 2000 (65 FR 64668), we
found that revocation of the order would likely result in continuation or
recurrence of countervailable subsidies with a net rate of 1.47 percent for all
producers/exports in Italy.

On December 11, 2000, within the deadline specified in 19 CFR 351.309(c)(1)(i), 
we received a case brief on behalf of Dalmine. On December 18, 2000, we received
a rebuttal brief on behalf of U.S. Steel. Although a hearing was requested by
U.S. Steel, that request was subsequently withdrawn and no hearing was held in
this full sunset review.

Discussion of the Issues:

In accordance with section 751(c)(1) of the Act, the Department is conducting
this review to determine whether revocation of the countervailing duty order
would be likely to lead to continuation or recurrence of a countervailable
subsidy. Section 752(b) of the Act provides that, in making this determination,
the Department will consider the net countervailable subsidy determined in the
investigation and subsequent reviews, and whether any change in the program
which gave rise to the net countervailable subsidy has occurred and is likely
to affect that net countervailable subsidy. Pursuant to section 752(b)(3) of
the Act, the Department shall provide to the International Trade Commission
("the Commission") the net countervailable subsidy likely to prevail if the
order is revoked. In addition, consistent with section 752(a)(6) of the Act,
the Department shall provide to the Commission information concerning the
nature of the subsidy and whether it is a subsidy described in Article 3 or
Article 6.1 of the 1994 World Trade Organization ("WTO") Agreement on Subsidies
and Countervailing Measures ("Subsidies Agreement").

Below we address the responses of interested parties.

1. Automatic initiation

Interested Party Comments

In its case brief of December 11, 2000, Dalmine argues that U.S. law failed to
incorporate the presumption of automatic revocation found in Article 21.3 of
the WTO Agreement on Subsidies and Countervailing Measures ("SCM Agreement"),
opting instead for automatic initiation of sunset reviews in every case.(1)
Dalmine asserts that Article 21.3 of the SCM Agreement provides for two
exceptions to automatic revocation: (1) self-initiation by the authorities; or
(2) initiation based on a duly substantiated request made "by or on behalf of"
the domestic industry. Dalmine alleges that U.S. law is contrary to the SCM
Agreement because it does not require that self-initiation of a sunset review
be reserved for "special circumstances" and be based on "sufficient evidence of
dumping, injury, and causal link," citing Article 11.6 of the WTO Agreement.(2)
Thus, Dalmine concludes in its argument, the Department's initiation of a
sunset review in this case is "invalid and contrary to U.S. obligations under
the WTO SCM Agreement," and the order should be revoked as a result.

In its December 18, 2000, rebuttal brief, U.S. Steel argues that Dalmine's
claim that the Department's automatic initiation of this sunset review violates
U.S. obligations under the SCM Agreement should be rejected and is "devoid of
any merit." U.S. Steel asserts that Article 21.3 of the SCM Agreement provides
for self-initiation of five-year sunset reviews by investigating authorities
"like the Department." According to U.S. Steel, Article 11.6 of the SCM
Agreement applies to the initiation of countervailing duty investigations and
is inapplicable here. Thus, asserts U.S. Steel, there are no requirements
similar to those in Article 11.6 that are imposed on the self-initiation of
this sunset review. As a result, U.S. Steel argues that the Department's self-
initiation of this sunset review and U.S. law authorizing the Department's
action in so doing are in "full compliance with the relevant and applicable
provisions of the SCM Agreement."

Department's Position

The Department's automatic initiation of this sunset review is expressly
required by the Department's statute. See Section 751(c)(1) of the Act, which
provides that "... 5 years after the date of publication of ... a
countervailing duty order ... the administering authority ... shall conduct a
review to determine ... whether revocation of the countervailing ... duty order
would be likely to lead to continuation or recurrence of countervailable
subsidy...." (Emphasis added.) See also SAA at 879. This provision is
consistent with our obligations under the SCM Agreement.

2. Continuation or Recurrence of a Countervailable Subsidy:

Interested Party Comments

Dalmine requests that the Department find in its final results that
subsidization would not recur in the event of revocation and, as a result,
revoke the order. Dalmine asserts that, under Section 752(b) of the Act, the
Department must revoke the order unless it finds that revocation is likely to
lead to continuation or recurrence of a countervailable subsidy. Dalmine
stresses, in its argument, that the burden of proof is not on Dalmine to show
that the continuation or recurrence of countervailable subsidies is unlikely if
the order were revoked. Instead, Dalmine asserts that the Department, if it
were to make a finding in favor of continuation of the order, must make an
affirmative determination, weighing all the record evidence, that the
continuation or recurrence of countervailable subsidies is more likely than not
if the order were revoked. According to Dalmine, the record evidence shows that
all programs previously found to be countervailable have been terminated and
that any continuing benefits under these terminated programs have expired or
fallen below the de minimis level. Thus, Dalmine argues, although the record
evidence cannot prove that there is no possibility that countervailable
subsidies will continue or recur, the record evidence does not show that
countervailable subsidies are likely to continue or recur if the order were
revoked, and this compels revocation.

Dalmine further asserts that an administrative review does not need to be
conducted in order for the Department to examine record evidence that
recurrence or continuation of a countervailable subsidy is not likely. Dalmine,
citing section 752(b)(1)(B) of the Act, states that it is aware that the
Department "normally" reports the rate from an investigation or subsequent
review to the U.S. International Trade Commission ("ITC"), but argues that the
law recognizes that changes may occur after the most recent segment of a
proceeding and these change should be taken into account in a sunset review.
According to Dalmine, the Department should consider such changes in making its
likelihood determination, and, if it declines to consider changes in subsidy
programs that have not been previously examined in an administrative review,
then the Department is acting contrary to the statute and is rendering the
sunset review process a meaningless exercise biased toward continuation of the
order. Dalmine notes that the SAA states that "the participation of the foreign
government is indispensable, because only that government is in a position to
explain its actions and intentions with respect to present and future
subsidization."(3) In view of this, Dalmine argues, it is inconsistent for the
Department to disregard information provided by a foreign government on the
basis that no administrative review was conducted. Citing Final Results of Full
Sunset Review: Live Swine from Canada,(4) Dalmine argues that the Department
has previously accepted evidence of termination in a sunset review, where the
evidence was not verified during a previous administrative review. Dalmine
argues that the mere possibility of recurrence is not a sufficient basis for an
affirmative determination that subsidies are likely to recur, and that the
record evidence does not support such a finding. Further, Dalmine urges the
Department to accept its argument that the lack of a prior administrative
review in this case does not justify ignoring evidence of termination and
absence of residual benefits.

Dalmine continues its argument by addressing the details of the three programs
previously deemed countervailable in this proceeding.(5) Dalmine asserts that,
based on its prior responses in this sunset proceeding, as well as the
submissions of the European Commission (EC) and the Government of Italy, in
this sunset review, it has shown that all three programs were terminated and
are "unlikely to be reinstated." Dalmine asserts that benefits are unlikely to
be reinstated because the EC's Commission Decision 2496/96 prohibits the
granting of aid to the steel industry except in narrow circumstances. Thus,
according to Dalmine, EC and Italian policies against further subsidies to the
steel industry, viewed in conjunction with the termination of the subsidy
programs at issue, "strongly indicate[s]" that there is no reasonable
likelihood that those programs will be reinstated.

Dalmine next claims that the record evidence demonstrates that benefits to
Dalmine under the programs deemed countervailable have ceased. Dalmine
reiterates that these programs were terminated and alleges that any "residual"
benefit under any of the programs either ceased or fell below the de minimis
threshold by the time of this sunset review. Dalmine states that the
Department's Policy Bulletin dictates that, when the benefit stream will not
continue beyond the end of the sunset review, normally this should give rise to
the conclusion that the countervailable subsidy will not continue.(6) According
to Dalmine, the Department already calculated and verified the benefit streams
accruing under all three programs deemed countervailable in the original
investigation. Thus, it asserts, there is no need to recalculate the benefit
streams, or to reverify such figures, which it claims are fixed. Dalmine argues
that the Department need only compare the previously calculated benefit stream
amount for a given period with Dalmine's revenues for a corresponding period.
Dalmine asserts that this revenue figure is "readily available from Dalmine's
public independently audited financial statement" on the record in this sunset
review. Dalmine alleges that this record information, which it states the
Department has refused to consider, shows that the benefits under all three
programs either do not continue or are de minimis. Thus, Dalmine concludes, the
record evidence that the countervailable subsidy programs have been terminated,
and that the benefit stream from these programs is below de minimis, compels
revocation. 

Finally, Dalmine takes issue with the Department's statement, in the
preliminary Decision Memorandum for this sunset review, that a de minimis rate,
by itself, does not "automatically require" revocation of the order. Dalmine
urges the Department to consider its arguments and the record evidence and
conclude that the weight of all evidence on the record supports revocation.
According to Dalmine, the Department's statement in the preliminary results
Decision Memorandum that the Department cannot "assume" that other Italian
producers might not continue to receive benefits under Laws 796/76 and 675/77,
based on the decline of residual benefits to Dalmine, appears to impose "an
impossible burden that prior to the sunset review an administrative review must
be conducted for any and all possible producers or exporters of merchandise in
Italy." In summary, Dalmine reiterates its argument that the Department should
reconsider its position in the preliminary results that it may not consider
record evidence set forth in Dalmine's response because an administrative
review was not conducted in this case, and should revoke the order.

U.S. Steel argues that the Department correctly determined in the preliminary
results that revocation of the countervailing duty order in this case is likely
to lead to continuation or recurrence of countervailable subsidies. U.S. Steel
asserts that the Department's determination in the preliminary results is
supported by more than a "theoretical possibility" that revocation would lead
to the continuation or recurrence of countervailable subsidies. According to
U.S. Steel, without an administrative review having been conducted, any finding
that benefits under the programs at issue have ceased and any modification of
the subsidy rates determined in the investigation would "contravene the
statute, the Department's policy guidelines for sunset reviews, and the
Department's practice."

U.S. Steel alleges that respondent interested parties, such as Dalmine, are
required in a sunset review to provide evidence that is within their knowledge
and control to support their claims regarding the likely effects of revocation.
U.S. Steel asserts that Dalmine has failed to provide such evidence. In
addition, U.S. Steel claims that Dalmine's argument that the Department can
find in a sunset review that the benefits from certain subsidies have ceased
and can adjust subsidy rates from the investigation without an administrative
review is "flatly refuted by the SAA, the Department's Policy Bulletin, and its
practice." U.S. Steel cites the SAA(7) and argues that the Department normally
selects the rate from the investigation to report to the ITC, under section
752(b)(3) of the Act, because that is the only calculated rate that reflects
the behavior of exporters and foreign governments without an order in place.
U.S. Steel then cites the Department's Policy Bulletin(8) to assert that the
Department normally will not make adjustments to the net countervailable
subsidy rate determined in the original investigation where the Department has
not conducted an administrative review of the order. According to U.S. Steel,
the only exception to that rule is when the Department found in the original
investigation that a program had been terminated with no residual benefits
subsequent to the period of investigation. U.S. Steel argues that the
Department acted properly in denying Dalmine's request that it modify the rate
for certain subsidies and that it find that certain subsidies had ceased
altogether, consistent with the decision in Certain Corrosion-Resistant Carbon
Steel Flat Products; Cold-Rolled Carbon Steel Flat Products; and Cut-to-Length
Carbon Steel Plate Products from Germany: Final Results of Full Sunset
Review(9) 

("Certain Steel Products from Germany"), and its preference for basing
determination upon fully investigated and verified information rather than on
unverified information. Thus, U.S. Steel asserts that the Department properly
declined to take actions "that may not be taken in the absence of an
administrative review" and followed the appropriate legal standards in this
sunset review. As a result, U.S. Steel concludes that consideration of the
record evidence, under such standards, requires continuation of the order in
this case.

According to U.S. Steel, Dalmine has confused the termination of a subsidy
program with the cessation of benefits received under a program. U.S. Steel
alleges that the record evidence in this case shows that benefits continue,
even for subsidy programs investigated in this case that have been terminated,
for either Dalmine or for other Italian producers and exporters subject to the
countervailing duty order. Thus, U.S. Steel argues that the Department's
preliminary findings to this effect were correct and should be followed in the
final results.

Regarding Law 193/84, U.S. Steel asserts that, for a non-recurring subsidy,
the Department "normally will determine that a countervailable subsidy will
continue to exist when the benefit stream, as defined by the Department, will
continue beyond the end of the sunset review."(10) U.S. Steel alleges that
Dalmine has admitted that the benefit stream under that program will not
terminate until after the end of this sunset review, and, on this basis alone,
the Department must find that revocation of the order is likely to lead to the
continuation or recurrence of countervailable subsidies. U.S. Steel claims that
Dalmine's request for the Department to recalculate this subsidy by dividing
the benefit attributable to 1999 by Dalmine's sales revenue for 1999 (which
according to Dalmine would yield a de minimis benefit) is unsupported by U.S.
law. According to U.S. Steel, a subsidy rate may not be recalculated in a
sunset review in which the Department has not conducted an administrative
review.(11)

Next, U.S. Steel claims that the Department has already found that residual
benefits continue under law 675/77. Regarding Dalmine's argument that this
program was terminated in 1982 and it ceased providing benefits prior to this
sunset review, U.S. Steel argues that this does not constitute a program-wide
change as defined in the Department's regulations.(12) U.S. Steel states that a
program-wide change cannot be limited to an individual firm and that this
program may provide benefits to other Italian producers or exporters subject to
the order with loans still outstanding, even if Dalmine has repaid the loans it
received under the program. According to U.S. Steel, Dalmine's arguments seek
to evade the order-wide focus of a sunset review. U.S. Steel asserts that the
Department found, using Dalmine's data, that Dalmine accounted for less than 50
percent of the exports of subject merchandise from Italy to the United States
from 1995 to 1999.(13) Thus, according to U.S. Steel, it is appropriate for the
Department to consider residual benefits to producers and exporters of the
subject merchandise other than Dalmine. Citing to recent cases,(14) U.S. Steel
alleges that it is more than theoretical speculation, as claimed by Dalmine,
that other Italian producers have continued to benefit from such subsidies.
Specifically, according to U.S. Steel, the Department found in another case
that another steel producer which, like Dalmine, is a former subsidiary of ILVA
S.p.A., continued to benefit from subsidies provided under Law 675/77. See
Preliminary Results of the Full Sunset Review of the Countervailing Duty Order
on Grain-Oriented Electrical Steel from Italy, 65 FR 39129

(June 23, 2000) and accompanying Decision Memorandum, at Comment 20. Thus,
according to U.S. Steel, under the appropriate order-wide analysis in this
case, as mandated by the SAA and the Department's Policy Bulletin, the
Department should continue to find that there are likely to be residual
benefits to Italian producers and exporters of the subject merchandise under
Law 675/77.

Further, U.S. Steel alleges that Dalmine has provided no record evidence to
show that it has paid off its loans received under Law 796/76 or that benefits
under the program have ceased for other producers and exporters. According to
U.S. Steel, Dalmine's claim that the program was terminated and that benefits
have ceased is based on the original terms of the loan, but, as the Department
found in the preliminary results, there is no evidence on record to show that
Dalmine paid off the loans it received under this program. Without an
administrative review or evidence showing Dalmine's repayment of the loans at
issue, U.S. Steel alleges that the Department must find that Dalmine continues
to benefit from the exchange rate guarantee program. U.S. Steel further argues
that Dalmine has not "even attempted to refute the fact that other Italian
producers and exporters subject to the order could still be benefitting from
exchange rate guarantees that went into effect before the termination of the
program." In fact, in several other recent cases, according to U.S. Steel, the
Department has determined that steel producers in Italy continue to benefit
from this program.(15) As a result, U.S. Steel urges the Department to find
that the benefits from this subsidy program are likely to continue not only for
Dalmine, but also for other Italian producers and exporters of subject
merchandise, if the order is revoked.

U.S. Steel concludes that the Department's Policy Bulletin and the decision in
Certain Steel Products from Germany support the decision not to make a finding
that benefits have ceased under a subsidy program or to make any adjustment to
the subsidy rate for the program in the absence of an administrative review.
According to U.S. Steel, there have been no administrative reviews of this
countervailing duty order, although Dalmine could have requested one.(16) U.S.
Steel argues that the Department denied a claim "essentially identical to that
asserted by Dalmine here" for a recalculation of a benefit.(17) In addition,
U.S. Steel argues that Dalmine's reliance on Live Swine from Canada is
misplaced because, in that case, according to U.S. Steel, the Department
considered evidence of the termination of certain subsidy programs only after
finding that the respondent interested party had attempted to present such
evidence in three successive administrative reviews, but the Department had
declined to consider such evidence. Because Dalmine could have requested an
administrative review in this case, but chose not to do so, U.S. Steel asserts,
Live Swine from Canada is inapposite here. In summary, U.S. Steel asserts that
only in an administrative review can Dalmine's claims be subjected to full
investigation, verification, and comment by U.S. Steel and other domestic
interested parties.

Department's Position

We agree with petitioners that the record, for the reasons given below,
supports the Department's determination that, were the order to be revoked,
Italian producers of the subject merchandise would likely continue to receive
benefits from countervailable subsidies.

Drawing on the guidance provided in the legislative history accompanying the
Uruguay Round Agreements Act ("URAA"), specifically the SAA, H.R. Doc. No. 103-
316, vol. 1 (1994), the House Report, H.R. Rep. No. 103-826, pt.1 (1994), and
the Senate Report, S. Rep. No. 103-412 (1994), the Department issued its Sunset
Policy Bulletin providing guidance on methodological and analytical issues,
including the basis for likelihood determinations. The Department clarified
that determinations of likelihood will be made on an order-wide basis (see
section III.A.2 of the Sunset Policy Bulletin). Additionally, the Department
normally will determine that revocation of a countervailing duty order is
likely to lead to continuation or recurrence of a countervailable subsidy where
(a) a subsidy program continues, (b) a subsidy program has been only
temporarily suspended, or (c) a subsidy program has been only partially
terminated (see section III.A.3.a of the Sunset Policy Bulletin). Exceptions to
this policy are provided where a company has a long record of not using a
program (see section III.A.3.b of the Sunset Policy Bulletin). Finally, as
noted above, the Department will normally determine that a countervailable
subsidy is likely to continue when the benefit stream, as defined by the
Department, will continue beyond the end of the sunset review.

As recognized in the SAA, at 879, the House Report at 56, and the Sunset
Policy Bulletin at section III.A.2, the Department's determination in a sunset
review as to whether revocation would be likely to lead to a continuation or
recurrence of a countervailable subsidy must be made on an order-wide, rather
than a company-specific, basis. In this review, Dalmine presented evidence with
respect to the termination of the programs found in the investigation to be
countervailable subsidies. Dalmine also provided evidence in support of its
claim that, although it will continue to receive benefits from at least one of
the terminated programs (grants under Law 193/84) in the period after the
sunset review, those benefits will be at de minimis levels when compared to its
sales revenue for 1999. The record, however, includes no information even
purporting to demonstrate that the extent of benefits which other Italian
producers of the subject merchandise would receive beyond the end of the sunset
review would be de minimis or less.(18) Although Dalmine may, as it claims, be
the primary producer of subject merchandise, the Department has determined that
Dalmine accounted for less than 50 percent of the exports of subject
merchandise during the five-year period from 1995-1999 at issue in this review.
See Memorandum from Kathryn B. McCormick and James Maeder to Jeffrey A. May
Regarding Oil Country Tubular Goods From Italy: Adequacy of Respondent
Interested Parties' Response to the Notice of Initiation (August 22, 2000) at 2
(Public Document). Thus, the lack of information demonstrating that the extent
of benefits which producers of the subject merchandise other than Dalmine would
receive beyond the end of the sunset review would be de minimis or less alone
is sufficient to support the Department's finding, on an order-wide basis,
that, were the order to be revoked, Italian producers of subject merchandise
would likely continue to benefit from countervailable subsidies.

In addition, Dalmine has not demonstrated that it has repaid loans received
under Law 796/76 (providing for exchange rate guarantees on foreign currency
loans), or that other Italian producers have repaid loans granted under that
program or under Law 675/77 (providing for mortgage loans at subsidized
interest rates and payment of interest contributions). Problems such as the
need for the Department to document whether loans have been repaid, re-issued,
or even forgiven, and to examine new subsidies that have been granted since the
investigation, demonstrate why claims as to changes in the level of
subsidization are normally best addressed in the context of annual
administrative reviews. 

Although Dalmine argues that, in a sunset review, the burden of proof with
respect to the likelihood of continuation or recurrence of countervailable
subsidies lies with the Department, rather than with the respondents, section
351.218(d)(3)(iv) of the Department's regulations provides that, if an
interested party wants the Department to consider factors other than those
evidenced in the investigation and any subsequent administrative reviews, the
party must submit evidence of good cause for this in the substantive response.
As evidenced above, Dalmine has failed to make such a showing. Therefore, based
on the reasons given above, and consistent with the legislative history and the
Sunset Policy Bulletin, we continue to find that benefits of countervailable
subsidies to Italian producers/exporters of subject merchandise are likely to
continue or recur were the order revoked, and we will report to the Commission
the rate of 1.47 percent from the investigation for all such Italian
producers/exporters.

3. Net Countervailable Subsidy Likely to Prevail

Interested Party Comments

Dalmine asserts that the Department incorrectly determined that the net
countervailable subsidy that is likely to prevail if the order is revoked is
the original countervailing duty rate determined in the investigation. Dalmine
argues that the net countervailable subsidy likely to prevail if the order is
revoked would be zero or de minimis. Id. at 17. 

In their rebuttal, domestic interested parties assert that the Department
should apply its consistent policy of relying on the investigation rate when no
administrative review has occurred. Domestic Interested Parties' Rebuttal at 26.

Department's Position:

In the Sunset Policy Bulletin, the Department states that, consistent with the
SAA and House Report, the Department normally will select a rate from the
investigation as the net countervailable subsidy likely to prevail if the order
is revoked, because that is the only calculated rate that reflects the behavior
of exporters and foreign governments without the discipline of an order or
suspension agreement in place. However, this rate may not be the most
appropriate rate if, for example, the rate was derived from subsidy programs
which were found in subsequent reviews to be terminated, there has been a
program-wide change, or the rate ignores a program found to be countervailable
in a subsequent administrative review. Additionally, where the Department
determined company-specific countervailing duty rates in the original
investigation, the Department normally will report to the Commission company-
specific rates from the original investigation or where no company-specific
rate was determined for a company, the Department normally will provide to the
Commission the country-wide or "all-others" rate. See Sunset Policy Bulletin at
section III.B.2.

We agree with domestic interested parties that the investigation rate of 1.47
percent is an appropriate rate to provide to the Commission because the
Department has not conducted an administrative review of this order and this is
the only rate that reflects the behavior of Italian producers/exporters without
the discipline of the order. Since there has been no administrative review of
this order, the Department cannot determine that the subsidies conferred in the
original investigation have been terminated because: 1) the Department has not
been able to document whether loans have been repaid, re-issued, or even
forgiven, and to examine new subsidies that have been granted since the
investigation; and 2) the record of this sunset review includes no information
even purporting to demonstrate that the extent of benefits which other Italian
producers of the subject merchandise would receive beyond the end of the sunset
review would be de minimis or less.

As such, the Department will report to the Commission the original net
countervailable subsidy rate from the final determination as the magnitude of
the net countervailable subsidy rate likely to prevail if the order were
revoked, as contained in the Final Results of Review section of this decision
memorandum.

Nature of the Subsidy:

In the Sunset Policy Bulletin, the Department states that, consistent with
section 752(a)(6) of the Act, the Department will provide to the Commission
information concerning the nature of the subsidy, and whether the subsidy is a
subsidy described in Article 3 of the Subsidies Agreement. None of the programs
described above is a subsidy described in Article 3 of the Subsidies Agreement.

Final Results of Review

As a result of this review, including the analysis set forth in our
preliminary and final results, the Department finds that revocation of the
countervailing duty order would likely lead to continuation or recurrence of a
countervailable subsidy at the rate listed below:

Producer/Exporter                         Net Countervailable Subsidy (%)

All Producers/Exporters from Italy                     1.47


Recommendation

Based on our analysis of the comments received, we recommend adopting all of
the above positions. If these recommendations are accepted, we will publish the
Final Results of Review in the Federal Register.




AGREE_____ DISAGREE_____




Bernard T. Carreau
Deputy Assistant Secretary
  Import Administration

(Date)

_______________________________________________________________________________
footnotes:

1. Dalmine cites section 751(c)(1) of the Act, "the administering authority .
. . shall conduct a review to determine . . ." (emphasis added by Dalmine) to
support its statement that U.S. law provides for automatic initiation of sunset
reviews. 

2. Article 11.6 of the WTO Agreement states that self-initiation of an
investigation is reserved for "special circumstances," and permits the
authorities to proceed with initiation "only if they have sufficient evidence
of a subsidy, injury and a causal link." 

3. H.R. Doc. No. 316, Vol. 1, 103d Cong., 2d. Sess., at 880 (1994). 

4. 64 FR 60301, 60304 (November 4, 1999). 

5. Law 193/84, Law 675/77, and Law 796/76. 

6. Dalmine references the statement in the Sunset Policy Bulletin, at III.A.4.
However, as further discussed in the Sunset Policy Bulletin, at III.A.4, when
the Department is examining a subsidy for which the benefits are allocated over
time, the Department normally will determine that a countervailable subsidy is
likely to continue when the benefit stream, as defined by the Department, will
continue beyond the end of the sunset review. 

7. SAA at 890. 

8. See Sunset Policy Bulletin, 63 FR at 18876. 

9. See Certain Corrosion-Resistant Carbon Steel Flat Products; Cold-Rolled
Carbon Steel Flat Products; and Cut-to-Length Carbon Steel Plate Products From
Germany; Final Results of Full Sunset Reviews 65 FR 47407 (August 2, 2000), and
accompanying Decision Memorandum, at Comments 5-7.

10. See Sunset Policy Bulletin, 63 FR at 18875. 

11. See Sunset Policy Bulletin, 63 FR at 18876; see Decision Memorandum
accompanying Certain Steel Products from Germany, 65 FR 47407, at Comments 5-7
(Public Document). 

12. See 19 CFR Section 351.526(b)(1) (2000). 

13. See Memorandum from Kathryn B. McCormick and James Maeder to Jeffrey A.
May Regarding Oil Country Tubular Goods from Italy: Adequacy of Respondent
Interested Parties' Response to the Notice of Initiation at 2. (August 22,
2000) (Public Document). 

14. See U.S. Steel's December 18, 2000, Rebuttal Brief at page 15, footnote 47. 

15. See U.S. Steel's December 18, 2000, Rebuttal Brief at page 18, footnote 57. 

16. See 61 FR 41768, 62 FR 41925, 63 FR 42821, 64 FR 43649, and 65 FR 49962. 

17. See Final Results of the Full Sunset Review: Pure Magnesium and Alloy
Magnesium from Canada, 65 FR 41444 (July 5, 2000), and accompanying Decision
Memorandum, at Comment 2. 

18. Dalmine's data also does not demonstrate that even its own benefits would
necessarily be de minimis in the years following 1999. Although Dalmine argues
that its benefits would necessarily continue to decline thereafter, that is
true only as to the allocated benefits which form the numerator of the ratio.
If Dalmine's post-1999 sales revenues dropped significantly, even a smaller
absolute benefit could represent a larger percentage of such revenues. And, as
discussed below, it is based on the unsupported premise that no new subsidies
were granted during those five years to increase the benefit stream.