DEPARTMENT OF COMMERCE
International Trade Administration
[C-475-830]
Preliminary Affirmative Countervailing Duty Determination and
Alignment of Final Countervailing Duty Determination With Final
Antidumping Duty Determination: Stainless Steel Bar From Italy
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Preliminary determination of countervailing duty investigation.
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EFFECTIVE DATE: June 6, 2001.
FOR FURTHER INFORMATION CONTACT: Suresh Maniam or Greg Campbell at
(202) 482-0176 and (202) 482-2239, respectively; Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, NW, Washington, DC 20230.
Preliminary Determination: The Department of Commerce (the
``Department'') preliminarily determines that countervailable subsidies
are being provided to producers or exporters of stainless steel bar
from Italy. For information on the estimated countervailing duty rates,
see infra section on ``Suspension of Liquidation.''
Case History
The following events have occurred since the publication of the
notice of initiation in the Federal Register. See Notice of Initiation
of Countervailing Duty Investigation: Stainless Steel Bar from Italy,
66 FR 7739 (January 25, 2001) (``Initiation Notice'').
On January 30, 2001, we issued countervailing duty questionnaires
to the Government of Italy (``GOI''), the European Commission (``EC''),
and the producers/exporters of the subject merchandise. On March 8,
2001, we published a postponement of the preliminary determination of
this investigation until May 29, 2001. See Stainless Steel Bar from
Italy: Postponement of Time Limit for Preliminary Determination of
Countervailing Duty Investigation, 66 FR 13911 (March 8, 2001).
On March 9, 2001, Acciaierie Bertoli Safau S.p.A. (``ABS'')
submitted a request to exclude certain merchandise from the scope of
this investigation. On March 26, 2001, the petitioners submitted an
objection to this request. See infra section on ``Scope of the
Investigation: Scope Comments'' for an analysis of these submissions
and the Department's resulting determination.
On March 26, 2001, we received questionnaire responses from the
GOI, the EC, and the responding companies (Trafileria Bedini S.r.l.
(``Bedini''), Acciaiera Foroni S.p.A. (``Foroni''), Italfond S.p.A.
(``Italfond''), Rodacciai S.p.A. (``Rodacciai''), and Acciaierie
Valbruna S.r.l. (``Valbruna'')/Acciaierie Bolzano S.r.l.
(``Bolzano'')). We did not receive a response to our questionnaire from
Cogne Acciai Speciali S.r.l. (``CAS'') (see infra section on ``Use of
Facts Available'' for our treatment of CAS in this investigation).
On April 9, 2001, and April 10, 2001, the petitioners submitted
comments regarding the questionnaire responses from Foroni, Valbruna,
and the GOI.
We issued supplemental questionnaires to the EC, Italfond, and
Rodacciai on April 19, 2001, and to the GOI, Bedini, Valbruna, and
Foroni on April 20, 2001.
We received responses to the supplemental questionnaires from the
EC on May 3, 2001, and from the GOI, Italfond, Rodacciai, Bedini,
Valbruna, and Foroni on May 11, 2001.
We issued a second supplemental questionnaire to Valbruna on May
14, 2001, and received a response from Valbruna on May 16, 2001.
On May 16, 2000, the petitioners filed comments regarding the
selection of an adverse facts available subsidy rate for CAS and, on
May 17, 2001, filed comments regarding the supplemental questionnaire
responses by Valbruna and the GOI.
The 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. In addition, unless otherwise
indicated, all citations to the Department's regulations are to our
regulations as codified at 19 CFR Part 351 (2000).
[[Page 30415]]
The Petitioners
The petition in this investigation was filed by Carpenter
Technology Corp., Crucible Specialty Metals, Electralloy Corp., Empire
Specialty Steel Inc., Slater Steels Corp., and the United Steelworkers
of America, AFL-CIO/CLC (collectively, ``the petitioners'').
Scope of the Investigation
For purposes of this investigation, the term ``stainless steel
bar'' includes articles of stainless steel in straight lengths that
have been either hot-rolled, forged, turned, cold-drawn, cold-rolled or
otherwise cold-finished, or ground, having a uniform solid cross
section along their whole length in the shape of circles, segments of
circles, ovals, rectangles (including squares), triangles, hexagons,
octagons, or other convex polygons. Stainless steel bar includes cold-
finished stainless steel bars that are turned or ground in straight
lengths, whether produced from hot-rolled bar or from straightened and
cut rod or wire, and reinforcing bars that have indentations, ribs,
grooves, or other deformations produced during the rolling process.
Except as specified above, the term does not include stainless
steel semi-finished products, cut length flat-rolled products (i.e.,
cut length rolled products which if less than 4.75 mm in thickness have
a width measuring at least 10 times in thickness, or if 4.75 mm or more
in thickness having a width which exceeds 150 mm and measures at least
twice the thickness), products that have been cut from stainless steel
sheet, strip or plate, wire (i.e., cold-formed products in coils, of
any uniform solid cross section along their whole length, which do not
conform to the definition of flat-rolled product), and angles, shapes
and sections.
The stainless steel bar subject to this investigation is currently
classifiable under subheadings 7222.11.00.05, 7222.11.00.50,
7222.19.00.05, 7222.19.00.50, 7222.20.00.05, 7222.20.00.45,
7222.20.00.75, and 7222.30.00.00 of the Harmonized Tariff Schedules of
the United States (``HTSUS'').
Although the HTSUS subheadings are provided for convenience and
customs purposes, the written description of the merchandise under
investigation is dispositive.
Scope Comments
On March 9, 2001, ABS, an Italian producer and exporter of
stainless steel bar, submitted a request to exclude hot-rolled
stainless steel bar (``hot-rolled bar'') greater than six inches in
diameter from the scope. On March 26, 2001, the petitioners submitted
an objection to ABS' scope exclusion request.
ABS first argued that no U.S. producer, to the best of its
knowledge, currently produces hot-rolled bar greater than six inches in
diameter. While U.S. producers do manufacture stainless steel bar
greater than six inches, ABS stated this is bar produced by forging
(``forged bar''), not by hot-rolling. Second, according to ABS, hot-
rolled bar and forged bar possess different physical and mechanical
properties. ABS argued that forged products have a more ``central
compactness'' and can be used for all applications. On the other hand,
ABS claimed, hot-rolled bar products have a more irregular structure
along the axis and are, therefore, only suitable for the production of
hollow products. According to ABS, while forged bar could be used in
the manufacture of hollow products as well, the cost of forging
stainless steel ingots into large diameter stainless steel bars would
be approximately three times the cost of hot-rolling the same ingots
into large diameter stainless steel bar. ABS claimed the difference is
due to higher equipment productivity and lower energy costs of a hot-
rolling line compared to a forging press. Third, ABS asserted, hot-
rolled bar and forged bar do not compete in the same market. ABS
suggested that customers requiring the internal physical properties
provided by forging would pay the higher price for forged bars, while
those not needing these physical properties would only pay for the
lower priced hot-rolled bars.
The petitioners argued that hot-rolled bar products should not be
differentiated from forged bar products because both hot-rolled and
forged bar can have the same essential physical and mechanical
properties. Moreover, the petitioners claimed, both forged and hot-
rolled bar undergo the same finishing operations, have the same end-use
applications, and enter the United States under the same tariff
schedule number. In addition, the petitioners argued ABS did not
identify the specific ``internal physical characteristics'' that would
enable the Department or the Customs Service to distinguish between the
hot-rolled and forged products. In the petitioners' view, ``better
central compactness'' is too vague a distinction for the Department to
quantify the differences. In reality, according to the petitioners, a
manufacturer can produce a product by either forging or hot-rolling to
meet the same specifications. As a result, the petitioners claimed the
qualities important to a customer are not based on the production
processes, but rather the specifications to be met. Finally, the
petitioners stated that Slater Steels Corporation, a U.S. stainless
steel producer, produces hot-rolled bar over six inches in diameter
and, accordingly, suggested that the argument for exclusion based on an
absence of U.S. production is unsupportable.
The scope of a proceeding is intended to accurately reflect the
product for which the domestic industry is seeking relief. See Preamble
to the CVD Regulations, 62 FR 27295, 27323. (November 25, 1998)
(``Preamble''). To ensure the scope is not unintentionally over-
inclusive, the Department seeks input from interested parties. Thus, in
the Initiation Notice, we set aside a period to receive comments that
would help us refine the scope language to better reflect the actual
product coverage intended by the domestic industry.
ABS has suggested that hot-rolled bar greater than 6 inches in
diameter is not produced in the United States, has different physical
properties from forged bar, and does not compete with forged bar. The
petitioners have stated that the U.S. industry does, in fact, produce
hot-rolled bar in this size, that no difference exists between hot-
rolled and forged bar, and that hot-rolled and forged bar do compete
with each other. Because the petitioners intended for this product to
be included in the scope, we have determined that the scope language is
not overly-inclusive with regard to this product. As a result, we have
not modified the scope of this investigation because the current scope
language includes hot-rolled bar, as intended by the petitioners.
Injury Test
Because Italy is a ``Subsidies Agreement Country'' within the
meaning of section 701(b) of the Act, the U.S. International Trade
Commission (``ITC'') is required to determine whether imports of the
subject merchandise from Italy materially injure, or threaten material
injury to, a U.S. industry. On February 23, 2001, the ITC published its
preliminary determination finding that there is a reasonable indication
of material injury or threat of material injury to an industry in the
United States by reason of imports of stainless steel bar from Italy.
See Stainless Steel Bar from France, Germany, Italy, Korea, Taiwan, and
the United Kingdom, 66 FR 11314 (February 23, 2001).
Alignment With Final Antidumping Duty Determination
On May 9, 2001, the petitioners submitted a letter requesting
alignment
[[Page 30416]]
of the final determination in this investigation with the final
determination in the companion antidumping duty investigation (see
Notice of Initiation of Antidumping Duty Investigations: Stainless
Steel Bar from France, Germany, Italy, Korea, Taiwan, and the United
Kingdom, 66 FR 7620 (January 24, 2001)). The companion antidumping duty
investigation and this countervailing duty investigation were initiated
on the same date and have the same scope. Therefore, in accordance with
section 705(a)(1) of the Act, we are aligning the final determination
in this investigation with the final determination in the antidumping
duty investigation of stainless steel bar from Italy.
In accordance with section 703(d) of the Act, the suspension of
liquidation resulting from this preliminary affirmative countervailing
duty determination will remain in effect no longer than four months.
Period of Investigation
The period of investigation (``POI'') for which we are measuring
subsidies is the calendar year 2000.
Changes in Ownership
On February 2, 2000, the U.S. Court of Appeals for the Federal
Circuit (``CAFC'') in Delverde Srl v. United States, 202 F.3d 1360,
1365 (Fed. Cir. 2000), reh'g en banc denied (June 20, 2000) (``Delverde
III''), rejected the Department's change-in-ownership methodology as
explained in the General Issues Appendix.\1\ The CAFC held that ``the
Tariff Act, as amended, does not allow Commerce to presume conclusively
that the subsidies granted to the former owner of Delverde's corporate
assets automatically `passed through' to Delverde following the sale.
Rather, the Tariff Act requires that Commerce make such a determination
by examining the particular facts and circumstances of the sale and
determining whether Delverde directly or indirectly received both a
financial contribution and benefit from the government.'' Delverde III,
202 F.3d at 1364.
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\1\ Final Affirmative Countervailing Duty Determination: Certain
Steel Products from Austria, 58 FR 37217, 37225 (July 9, 1993).
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Pursuant to the CAFC finding, the Department developed a new
change-in-ownership methodology, first announced in a remand
determination on December 4, 2000, following the CAFC's decision in
Delverde III, and also applied in Grain-Oriented Electrical Steel from
Italy; Final Results of Countervailing Duty Administrative Review, 66
FR 2885 (January 12, 2001). Likewise, we have applied this new
methodology in analyzing the changes in ownership in this preliminary
determination.
The first step under this new methodology is to determine whether
the legal person (entity) to which the subsidies were given is, in
fact, distinct from the legal person that produced the subject
merchandise exported to the United States. If we determine the two
persons are distinct, we then analyze whether a subsidy has been
provided to the purchasing entity as a result of the change-in-
ownership transaction. If we find, however, that the original subsidy
recipient and the current producer/exporter are the same person, then
that person benefits from the original subsidies, and its exports are
subject to countervailing duties to offset those subsidies. In other
words, we will determine that a ``financial contribution'' and a
``benefit'' have been received by the ``person'' under investigation.
Assuming that the original subsidy has not been fully amortized under
the Department's normal allocation methodology as of the POI, the
Department would then continue to countervail the remaining benefits of
that subsidy.
In making the ``person'' determination, where appropriate and
applicable, we analyze factors such as (1) continuity of general
business operations, including whether the successor holds itself out
as the continuation of the previous enterprise, as may be indicated,
for example, by use of the same name, (2) continuity of production
facilities, (3) continuity of assets and liabilities, and (4) retention
of personnel. No single factor will necessarily provide a dispositive
indication of any change in the entity under analysis. Instead, the
Department will generally consider the post-sale person to be the same
person as the pre-sale person if, based on the totality of the factors
considered, we determine the entity in question can be considered a
continuous business entity because it was operated in substantially the
same manner before and after the change in ownership.
We have preliminarily determined that CAS and Valbruna are the only
respondents with changes in ownership requiring this analysis because
no other respondent (or its predecessor) received subsidies prior to a
change in ownership that were not fully expensed or allocated prior to
the POI. Our findings with regard to the relevant changes in ownership
are as follows.
CAS
As noted infra in the ``Use of Facts Available'' section, CAS
withheld requested information regarding its changes in ownership.
Consequently, the Department is unable to determine, inter alia,
whether CAS and its pre-sale predecessors constitute a continuous
business entity. Consistent with section 776(b) of the Act, we have
made an adverse inference in selecting from the facts available with
respect to CAS. Specifically, we find that CAS and its predecessors are
continuing business entity for the purposes of a subsidy benefit
analysis. Accordingly, we preliminarily determine that certain
subsidies provided to the predecessor companies continue to benefit the
privatized CAS.
Valbruna
We have not made a finding for the purposes of this preliminary
determination as to whether pre-sale Bolzano and pre-sale Valbruna are
distinct persons from the respondent Valbruna. We note the potential
POI benefits for any pre-sale subsidies to Bolzano (e.g., Bolzano Law
25/81) are insignificant, amounting to 0.11 percent. Assuming arguendo
that these pre-sale subsidies continued to benefit Valbruna in the POI,
the preliminary ad valorem rate (reflecting, in full, any POI benefits
of pre-sale subsidies) for Valbruna would be de minimis. Therefore,
application of the change in ownership methodology is not relevant in
this investigation.
However, should we obtain any information subsequent to this
preliminary determination indicating the final ad valorem rate for
Valbruna should be above de minimis, we will give all parties
sufficient opportunity to comment on whether and how Bolzano's 1995
sale affects the POI benefit to Valbruna of any pre-sale subsidies.
Use of Facts Available
Sections 776(a)(2)(A) and (B) of the Act require the use of facts
available when an interested party withholds information requested by
the Department, or when an interested party fails to provide the
information required in a timely manner and in the format requested. In
selecting from among facts available, section 776(b) of the Act
provides that the Department may use an inference adverse to the
interests of a party if it determines that a party has failed to
cooperate to the best of its ability.
In this investigation, we are presented with an unusual situation.
CAS, a
[[Page 30417]]
company that was selected to respond to our CVD questionnaire, declined
to do so. However, in their responses to our questionnaires, the GOI
and EC reported much of the information regarding the assistance
provided to CAS. Also, because CAS was investigated in Wire Rod, the
record of that proceeding is a source of additional information about
CAS and the programs from which CAS benefitted.
Although CAS failed to cooperate to the best of its ability in
refusing to respond to our questionnaire, we cannot ignore the
information reported to us by the GOI and EC about subsidies given to
CAS. Therefore, for those programs where information provided by the
GOI or EC permits calculation of the subsidy to CAS, we have relied
upon that information.
With respect to information from Wire Rod, several programs
investigated in that proceeding are also being investigated in this
case. If a program was found to be specific, to have constituted a
financial contribution, or to have conferred a benefit in Wire Rod, and
no new information to the contrary has been provided in this
investigation, we have adopted the finding reached in Wire Rod. While
this information from Wire Rod regarding CAS may be characterized as
``facts available,'' we have not drawn an adverse inference in the
application of this information.
In addition to the subsidy amounts, it is also necessary to have
information on the value of CAS' sales in order to calculate the ad
valorem benefit of the subsidy and, where necessary, to perform the 0.5
percent expense test described in 19 CFR 351.524(b)(2). We obtained
CAS' total sales revenue amounts for the years 1997-1999 from a public
Dunn & Bradstreet report. Because a total sales value for the POI
(2000) is not available, we averaged sales revenues for the years 1997-
1999, and used this amount to represent POI sales. Sales over the
three-year period from 1997-1999 were relatively constant.
Where the value of CAS' exports during the POI was required, we
derived this amount using a ratio of CAS' export sales to total sales
provided in the Dunn & Bradstreet report ((see Memorandum to the File,
``Miscellaneous Information used for the Calculations,'' dated May 29,
2001 at Attachment 1 (``Miscellaneous Information Memo'')).
In those instances where the available information does not provide
a basis for calculating the subsidy to CAS, we have drawn an adverse
inference due to CAS' failure to cooperate to the best of its ability
in this investigation. Because no information has been provided
regarding the issue of whether CAS was the same entity before and after
privatization, we have treated CAS as the same entity, with the result
that CAS' full share of ILVA's subsidies have been attributed to CAS
(see infra section on Programs Preliminarily Determined to Be
Countervailable: Company-Specific Subsidies Conferred by the Government
of Italy). In another instance, we did not have information on the
actual amount of waste disposal offset payments received by CAS during
the POI (see infra section on Programs Preliminarily Determined to Be
Countervailable: Company-Specific Subsidies Conferred by the Regional
Government of Valle D'Aosta). Therefore, we have used the maximum
amount calculated by the granting regional government.
When employing an adverse inference, the statute indicates the
Department may rely upon information derived from, inter alia, the
petition. In doing so, however, the Department should ``to the extent
practicable'' corroborate the information from independent sources
reasonably at its disposal. See Statement of Administrative Action
accompanying H.R. 5110 (H.R. Doc. No. 103-316) (1994), at 870 regarding
use of ``secondary'' information. In this case, we have reviewed
information on the CAS website (www.cogne.com/en/history.html)
regarding the change in ownership of the company. While the company has
undergone some restructuring in recent years, there is no indication
that CAS is not the same entity before and after its privatization in
1994. Therefore, we preliminarily determine that the information
supplied by the petitioners regarding CAS' change of ownership has
probative value, and that we may appropriately rely upon it.
Subsidies Valuation Information
Allocation Period
Under 19 CFR section 351.524(b) of our regulations, non-recurring
subsidies are allocated over a period corresponding to the average
useful life (AUL) of the renewable physical assets used to produce the
subject merchandise. 19 CFR section 351.524(d)(2) creates a rebuttable
presumption that the AUL will be taken from the U.S. Internal Revenue
Service's 1977 Class Life Asset Depreciation Range System (the ``IRS
Tables''). For stainless steel bar, the IRS Tables prescribe an AUL of
15 years.
We have used the 15-year allocation period for all respondents,
with the following exceptions.
Subsidies to CAS and Valbruna That Were Countervailed in Wire Rod
Certain subsidies to CAS and Valbruna were countervailed in Wire
Rod. At the time of Wire Rod, it was our practice to calculate company-
specific AULs. For both CAS and Valbruna, the calculated AUL was 12
years. As a matter of practice, where a subsidy has been allocated over
a particular period, we will continue to use the same allocation period
for that subsidy from proceeding to proceeding. See, e.g., Final
Affirmative Countervailing Duty Determination: Stainless Steel Sheet
and Strip from France, 64 FR 30774, 30778 (June 8, 1999); see also
Final Affirmative Countervailing Duty Determination: Certain Cut-to-
Length Carbon-Quality Steel Plate from France, 64 FR 73277, 73280
(December 29, 1999). Therefore, for those subsidies to CAS and Valbruna
that were allocated over a 12-year period in Wire Rod, we have
continued to use the 12-year allocation period calculated in that
proceeding. However, for the final determination, we will consider
whether this earlier established practice is consistent with our
current regulations. For subsidies to these companies that were not
countervailed in Wire Rod, we have used the 15-year allocation period
from the IRS Tables. (See further discussion infra of Valbruna).
Foroni
For this investigation, Foroni calculated its company-specific AUL.
This AUL differs significantly from the 15-year AUL in the IRS Tables.
Further, Foroni claims its calculation is an estimate of its actual
useful life of assets and excludes any effects from the application of
accelerated depreciation, special charges, and/or asset revaluations
over the relevant years. Therefore, for purposes of this preliminary
determination, we find Foroni to have rebutted the presumption in favor
of the IRS Tables, according to 19 CFR section 351.524(d)(2), and we
have allocated non-recurring subsidies to this company over its
company-specific AUL.
Valbruna
Valbruna/Bolzano also calculated its company-specific AUL. However,
this company-specific AUL does not differ significantly from the period
in the IRS Tables. Therefore, we have allocated all subsidies received
by Valbruna/Bolzano, except those countervailed in Wire Rod, over 15
years.
For non-recurring subsidies to all respondents, we have applied the
``0.5
[[Page 30418]]
percent expense test'' described in 19 CFR section 351.524(b)(2) of our
regulations. Under this test, we compare the amount of subsidies
approved under a given program in a particular year to sales (total or
export, as appropriate) in that year. If the amount of subsidies is
less than 0.5 percent of sales, the benefits are allocated to the year
of receipt rather than being allocated over the AUL period.
Benchmarks for Loans and Discount Rates
Pursuant to 19 CFR section 351.505(a) and section 351.524(c)(3)(i),
the Department will use as long-term loan benchmarks and discount rates
the actual cost of long-term borrowing by the company, when available.
For the reasons discussed infra, we have not accepted actual borrowing
rates as reported by respondents. Instead, pursuant to 19 CFR section
351.505(a)(3)(ii), we have calculated the average cost of long-term
fixed-rate loans in Italy. Consistent with previous cases, we relied on
the Italian Interbank Rate (``ABI'') as the basis for the long-term
benchmark rate. See, e.g., Wire Rod, 64 FR at 40476-77; Final
Affirmative Countervailing Duty Determination: Stainless Steel Plate in
Coils From Italy, 64 FR 15508, 15511 (March 31, 1999) (``Plate in
Coils''); Final Affirmative Countervailing Duty Determination:
Stainless Steel Sheet and Strip in Coils From Italy, 64 FR 30624, 30627
(June 8, 1999) (``Sheet and Strip''); Final Affirmative Countervailing
Duty Determination: Certain Cut-to-Length Carbon Quality Steel Plate
From Italy, 64 FR 73244, 73248 (December 29, 1999) (``CTL Carbon
Plate'').
We added two amounts to this rate. First, an upward adjustment is
necessary because the ABI rate represents a long-term interest rate to
banks' most preferred customers with established low-risk credit
histories. For other customers, banks will typically add a spread
ranging from 0.55 percent to 4 percent, to the ABI rate depending on
the company's financial health. To reflect this, we have added the
average of this spread, 2.28 percent, to the ABI rate. Second, an
additional amount is needed to reflect the expenses associated with
long-term lending activities. See CTL Carbon Plate, 64 FR at 73248;
Plate in Coils, 64 at 15511; Sheet and Strip, 64 at 30627.
Specifically, we found these expenses amounted to 8.5 percent of the
interest charged and have added this amount to our benchmark. Id.
Rodacciai provided the ABI rate as its cost of long-term capital in
the years it received certain subsidies. However, because Rodacciai
provided no evidence the company was actually able to receive loans at
the ABI rate, we have preliminarily allocated non-recurring benefits
and calculated long-term loan benefits using the rate described above.
At verification, time permitting, we intend to verify whether Rodacciai
was actually able to obtain long-term financing at the ABI rate.
Valbruna has asked the Department to use as its long-term benchmark
rate, the interest rate it pays on three-month loans which it rolls
over at the end of every quarter. Valbruna suggests that large Italian
companies prefer loans with this three-month EURIBOR rate rather than
with ABI prime rates because they allow the company to borrow money in
Italian lire or Euros at an effective rate below the ABI prime rate.
The interest rate on these loans is equal to the three-month EURIBOR
rate plus a small spread in the favor of the lending bank.
We have not used these rates as our long-term benchmark for
Valbruna for the preliminary determination. First, we believe the
three-month EURIBOR rate should be viewed as a short-term interest
rate. Second, the fact that these quarterly loans are rolled over every
quarter, and Valbruna treats these loans as long-term loans for its own
purpose is not a sufficient reason to treat these loans as a substitute
for an actual long-term loan. Rates on long-term loans and short-term
loans may differ significantly. For instance, the rate on a long-term
loan may be higher to adequately compensate the lender for the
additional risk of default associated with lending money for a longer
period of time. The quarterly loans received by Valbruna, while
effectively resulting in a long-term loan for Valbruna, are, in
reality, a series of short-term loans in which the risk of default can
be regularly assessed. Presumably, at the end of every quarter and
depending upon, inter alia, the risk of default at that time, the rate
could be adjusted to account for increased or decreased risk or the
loan could be canceled due to unacceptable risk. Consequently, we have
preliminarily rejected the use of Valbruna's interest rate on these
quarterly loans as an appropriate long-term benchmark and have,
instead, allocated non-recurring subsidies and calculated long-term
loan benefits by using the rate described supra. Nevertheless, at
verification, as time permits, we will examine the loan provisions of
Valbruna's quarterly loans and, more generally, the use of an EURIBOR
rate as a substitute for the ABI rate.
For the years in which CAS/ILVA was uncreditworthy (see infra
section on ``Creditworthiness''), we calculated discount rates for
uncreditworthy companies in accordance with 19 CFR section
351.524(c)(3)(ii). To construct these benchmark rates, we used the
formula described in section 19 CFR section 351.505(a)(3)(iii), which
requires values for the probability of default by uncreditworthy and
creditworthy companies. For the probability of default by an
uncreditworthy company, we relied on the average cumulative default
rate reported for the Caa to C-rated category of companies as published
in Moody's Investors Service, ``Historical Default Rates of Corporate
Bond Issuers, 1920-1997,'' (February 1998). For the probability of
default by a creditworthy company we used the average cumulative
default rates reported for the Aaa to Baa-rated categories of companies
as reported in this study.\2\ See Miscellaneous Information Memo at
Attachment 3.
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\2\ Since publication of the CVD Regulations, Moody's Investors
Service no longer reports default rates for the Caa to C-rated
category of companies. Therefore, for the calculation of
uncreditworthy interest rates, we will continue to rely on the
default rates as reported in Moody Investor Service's publication as
of February 1998.
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In certain instances for CAS and Bedini, we needed short-term
interest rates for Italian lire denominated loans. However, neither of
these companies provided company-specific short-term rates. Therefore,
as a benchmark, we relied on the average, short-term interest rate in
Italy as reported in the International Financial Statistics (see
Miscellaneous Information Memo at Attachment 6).
Certain loans received by CAS were variable-interest rate loans
denominated in currencies other than in Italian lire. Similar to Wire
Rod, we were unable to find long-term rates denominated in the
appropriate currency in Italy. Nor were we able to find comparable
long-term, variable-interest rates on such loans. Therefore, as in Wire
Rod, for these loans we used the average yield-to-maturity on long-term
bond rates in the country of the currency, as reported in the
International Financial Statistics (see Miscellaneous Information Memo
at Attachment 6).
Equityworthiness
In the case of a government equity infusion, the Department
measures the benefit by examining the investment decision against the
usual investment practice of a private investor. 19 CFR section
351.507(a)(1). Specifically, the Department will compare the purchase
price paid by the government to prices
[[Page 30419]]
paid for new shares by private investors, if such prices exist. 19 CFR
section 351.507(a)(2). If actual private investor prices are
unavailable, the Department will determine the equityworthiness of a
company at the time of the equity infusion. 19 CFR section
351.507(a)(3). Moreover, unless a company provides new information
leading us to reconsider a previous finding of unequityworthiness, once
a determination of unequityworthiness has been made for certain years,
the Department's practice is to continue to find that company
unequityworthy for those same years in subsequent cases. See, e.g.,
Final Affirmative Countervailing Duty Determinations: Certain Steel
Products from Brazil, 58 FR 37295, 37297 (July 9, 1993) (``Certain
Steel from Brazil'').
In Wire Rod, ILVA and its predecessors were found to be
unequityworthy from 1985 through 1988, and from 1991 through 1992. 64
FR at 40477. No new information has been presented in this
investigation to warrant a reconsideration of this finding. Therefore,
based on this previous finding of unequityworthiness, in this
investigation, we continue to find ILVA and its predecessors
unequityworthy from 1985 through 1988, and from 1991 through 1992. CAS
did not receive any equity infusions directly during these years and,
thus, we do not need to make a decision as to its equityworthiness at
this time.
Creditworthiness
The examination of creditworthiness is an attempt to determine if
the company in question could obtain long-term financing from
conventional commercial sources. 19 CFR section 351.505(a)(4).
Moreover, unless a company provides new information leading us to
reconsider a previous finding of uncreditworthiness, once a
determination of uncreditworthiness has been made for certain years,
the Department's practice is to continue to find that company
uncreditworthy in those same years in subsequent cases. See, e.g., Id.;
Certain Steel from Brazil, 58 FR at 37297.
In Wire Rod, ILVA and its predecessors were found to be
uncreditworthy from 1982 through 1993. 64 FR at 40477. No new
information has been presented in this investigation to warrant a
reconsideration of this finding. Therefore, based on this previous
finding of uncreditworthiness, in this investigation, we continue to
find ILVA and its predecessors uncreditworthy from 1982 through 1993.
Thus, any benefits received by CAS or its predecessors in these years
have been determined using rates for uncreditworthy companies.
Also, in the Initiation Notice, the Department stated it would
examine Falck's creditworthiness in 1993-1994 and Bolzano's
creditworthiness in 1995-1996, if it was discovered that these
companies received equity infusions, loans or loan guarantees in these
years. Based on the responses, neither Falck nor Bolzano was approved
for any loans or allocable subsidies during these years. Therefore, we
have not examined these allegations of uncreditworthiness for these
years.
I. Programs Preliminarily Determined to Be Countervailable
Government of Italy Programs
1. Capacity Reduction Payments Under Article 2 of Law 193/1984
Article 2 of Law 193/1984 (``Article 2'') provided payments to
companies in the private steel sector to achieve capacity reductions
consistent with an agreement by the European Coal and Steel Community
(``ECSC'').
Valbruna and Bolzano (then owned by Falck) received funds under
this program. However, the benefits were allocated over the 12-year AUL
established in Wire Rod and, consequently, the benefit stream lapsed
prior to the POI. Similarly, Foroni reported receiving Article 2
grants, but the benefits from these grants would have been fully
allocated prior to the POI. Therefore, no benefit accrued to Foroni in
the POI. Only Rodacciai reported benefitting from Article 2 grants
during the POI.
In Wire Rod, we found Law 193/1983 to be specific and to provide a
financial contribution that conferred a countervailable benefit. 64 FR
at 40479. No information has been presented in this investigation to
warrant a reconsideration of this finding.
To calculate the subsidy rate, we allocated the grants received by
Rodacciai over the AUL and then divided the benefit attributable to the
POI by Rodacciai's total sales during the POI. Accordingly, we
preliminarily determine that a countervailable benefit of 0.02 percent
ad valorem exists for Rodacciai.
2. Law 451/94 Early Retirement Benefits
Passed in 1994, Law 451/94 enabled workforce reductions in the
Italian steel industry by allowing workers to retire early. The law
authorized early retirement for men at least fifty years of age and
women at least forty-seven years of age, and who met certain minimum
social security contribution requirements. Benefits were applied for
between 1994 to 1996 and, upon early retirement, workers received
benefits until their normal ages of retirement, for a maximum of ten
years. When workers reached their normal ages of retirement, the
company's planned retirement benefits would begin and Law 451/94
benefits would end.
In our previous investigations, we found assistance under Law 451/
94 to be specific and to provide a financial contribution that
conferred a countervailable benefit. Id. No information has been
presented in this investigation to warrant a reconsideration of this
finding.
In this investigation, pursuant to 19 CFR section 351.513(c) and
consistent with previous determinations, we have treated benefits
received under Law 451/94 as recurring grants to be expensed in the
year of receipt. Moreover, consistent with our previous determinations,
we treated one-half of the government payments as benefitting the
respondent. See, e.g., Plate in Coils, 64 FR at 15515; Sheet and Strip,
64 FR at 30629; CTL Carbon Plate, 64 FR at 73253. See also Preamble, 63
FR at 65380.
Only Valbruna and Italfond reported that some of their employees
retired early under this program. However, both companies also reported
that several employees had reached their normal retirement age prior to
the POI. Therefore, these employees are no longer receiving early
retirement benefits under Law 451/94 and are instead receiving their
normal retirement benefits from the respondent.
To calculate a subsidy rate, we first deducted these employees from
the total number of employees who were approved to receive benefits
during the application period, 1994 to 1996. The resulting number
(i.e., the number of employees who retired early and continued to
receive Law 451/94 benefits in the POI), categorized by employee type
(i.e., blue collar, white collar, and senior executive), was multiplied
by their respective average salary during the POI. Because the GOI made
payments to these workers equaling eighty percent of their salary, we
find forty percent of this amount benefitted the respondent. We then
divided this benefit by each recipient respondent's respective total
sales during the POI. Accordingly, we preliminarily determine that a
countervailable benefit of 0.13 percent ad valorem exists for Valbruna
and 0.18 percent ad valorem exists for Italfond.
[[Page 30420]]
3. Law 10/91
Under Law 10/91, the GOI provides funds for the development of
energy conserving technology. Law 10/91 authorized grants based on
applications submitted in 1991 and 1992. The GOI reported that CAS was
the only respondent receiving benefits under this program during the
POI.
In Plate in Coils, the Department found the aid provided under this
program constituted a financial contribution and provided a benefit in
the amount of the grants received. 63 FR at 15514. The Department also
determined Law 10/91 to be de facto specific within the meaning of
section 771(5A)(D)(iii) of the Act because ILVA (of which CAS was a
part of at the time), received a disproportionate share of the
benefits. Id. Thus, Law 10/91 was found to be countervailable. Id. No
information has been presented in this investigation to warrant a
reconsideration of these findings.
Because each grant under this program required separate approval,
we find the benefits under this program to be non-recurring. To
calculate the subsidy rate, we allocated the grants received by CAS
over a 15-year AUL, and divided the benefit attributable to the POI by
CAS' sales during the POI. Accordingly, we preliminarily determine that
a countervailable benefit of 0.15 percent ad valorem exists for CAS.
4. Law 549/95
Law 549/95 provided tax relief on fifty percent of reinvested
profits to all companies, except banks and insurance companies, located
in areas specified in EEC Regulation No. 2052/88 for the tax year 1996.
The amount of profit that could be excluded was limited to the amount
of investment exceeding the average amount of investments carried out
during the five previous tax years. Qualified investments under Law
549/95 included investments in new plants, the extension and
modernization of existing establishments, and the purchase of new
capital goods, including capital goods acquired through leasing
contracts.
The EC has required that benefits received by certain companies
under Law 549/95 be repaid. Steel companies, in particular, were
required to repay their benefits because Law 549/95 was found not
compatible with Article 4 of the ECSC Treaty, (Commission Decision on
State Aid Granted by Italy by Way of Tax Relief under Law No 549/95, OJ
L 47/6 (February 23,1999)). Pursuant to the EC decision, on February
26, 2001, the GOI issued a Notice of Ascertainment requiring repayment
of funds disbursed under this program. However, the GOI reported that
neither Bedini nor CAS has yet paid back these benefits. Furthermore,
the GOI reported that, on April 24, 2001, CAS filed an appeal to the
Notice of Ascertainment.
Because the GOI has forgone or not collected revenue otherwise due,
we find that the exemptions provided by Law 549/95 constitute financial
contributions within the meaning of section 771(5)(D)(ii) of the Act.
Even if the companies must repay these tax savings in the future, the
GOI is forgoing revenue because it is essentially financing, from the
time of their receipt and at zero interest, the tax benefits to be
repaid. Also, because Law 549/95 benefits are available only to
companies located within certain areas, we preliminarily find that
these funds are specific under section 771(5A)(D)(iv) of the Act.
To determine the benefit to CAS and Bedini under this program, we
have recognized the EC has ordered repayment and the GOI has taken
steps to recover the amounts (GOI, Ministry of Finance Circular n. 218/
E (September 15, 1998)). Consequently, we are treating the tax these
companies owe as short-term, zero-interest-rate loans, being rolled
over each year until repayment. This is consistent with our previous
findings where the EC has ordered repayments and, in compliance, the
GOI has instituted procedures to recover payments. See Certain Steel
Products from Germany; Final Affirmative Countervailing Duty
Determinations, 58 FR at 37316-19 (July 9, 1993). Thus, a benefit to
CAS and Bedini exists to the extent the amount paid on these government
``loans'' is less than the amount the firms would pay on a comparable
commercial loan. 19 CFR section 351.505(a).
We used the short-term interest rate described in the section on
``Subsidies Valuation Information: Benchmarks for Loans and Discount
Rates'' to determine what the respondents would have paid on a
comparable commercial loan. This benefit was then divided by the
respondents' total sales during the POI. Accordingly, we preliminarily
determine that a countervailable benefit of 0.01 percent ad valorem
exists for Bedini and 0.14 percent ad valorem exists for CAS.
Government of Bolzano Subsidies
5. Province of Bolzano Law 25/81, Articles 13 Through 15
Articles 13 through 15 of Law 25/81 (``Articles 13 through 15'')
are general aid measures providing grants to companies with limited
investments in technical fixed assets and targeting technological
investment, environmental investment, or restructuring projects. In
Wire Rod, we found that ``Article 13 through 15 establish different
eligibility requirements, different application procedures, different
levels of available aid, and different types of aid (grants and loans)
than assistance provided under other Articles of Law 25/81.'' 64 FR at
40486. Therefore, we considered assistance provided under Articles 13
through 15 separately from other assistance provided under Law 25/81.
In Wire Rod, we found Articles 13 through 15 to be specific and to
provide a financial contribution that conferred a countervailable
benefit. Id. No information has been presented in this investigation to
warrant a reconsideration of this finding.
On July 17, 1996, the EC issued a decision, C(96) 2064, finding the
aid granted under Law 25/81 to be illegal and ordering recovery of any
amounts disbursed. This decision, however, ``grandfathered'' any aid
approved prior to January 1, 1986 (i.e., aid approved prior to this
date did not have to be repaid). Bolzano received two grants under this
program prior to January 1, 1986, which were grandfathered, and two
loans and two grants after January 1, 1986, which were not
grandfathered. All of these grants and loans were previously
investigated in Wire Rod. Id. at 40485-46.
Regarding the two grants and two loans received after January 1,
1986, Falck (the prior owner of Bolzano) agreed to indemnify Valbruna
for any negative consequences resulting from the EC investigation. To
carry out its obligation, Falck repaid the funds, but decided to appeal
the EC decision requiring repayment. In December 1999, subsequent to
Wire Rod, the EC rejected Falck's appeal. Falck filed a second appeal
of the EC decision to the European Court of Justice (``ECJ'') on March
2, 2000. According to Valbruna, this is the last possibility of appeal
for Falck. Valbruna further claims the possibility of success in this
second appeal is highly unlikely because an appeal to the ECJ requires
a showing that the judgement by the lower court, the Court of First
Impression (``CFI''), contained an error of law. In fact, Valbruna
claims no appeal concerning state aids to the steel sector has ever
been successful since the formation of the CFI in 1989.
In Wire Rod, the Department countervailed the benefits received
under this program because Falck was still in the process of appealing
the EC
[[Page 30421]]
decision during the POI in that case, and it was unclear at the time
whether Falck would be successful. Id. However, we stated in Wire Rod
that we would reconsider this issue once a final judgement had been
rendered in the appeal taking place at the time. Id. For purposes of
this investigation, we preliminarily determine that the facts have
changed sufficiently from Wire Rod to allow us to conclude that the
assistance provided to Bolzano after January 1, 1986, should not be
countervailed. The funds have already been repaid by Falck and Falck
lost the appeal pending during Wire Rod. Given the diminished prospects
for Falck to recover the amount it has repaid, we preliminarily
determine that there is no benefit to Bolzano or Valbruna from the
grants and loans received under this program after January 1, 1986. If
Falck does prevail in its second appeal and the monies it has repaid
are refunded, it would be appropriate at that time to consider whether
a benefit exits.
Regarding the two grandfathered grants received before January 1,
1986, these grants were disbursed to Bolzano in semi-annual
installments until December 1992 for one grant and June 1990 for the
other. Consistent with Wire Rod, because these grants required separate
approvals, we are treating them as non-recurring benefits. Id. Also,
because grants received under this program were allocated over a 12-
year AUL in Wire Rod, we have continued to use the 12-year AUL period.
To determine the subsidy rate, we divided the amounts allocated to
the POI by Valbruna's total sales during the POI. Accordingly, we
preliminarily determine that a countervailable benefit of 0.11 percent
ad valorem exists for Valbruna.
Regional Government of Valle D'Aosta Subsidy Programs
6. Valle D'Aosta Regional Law 12/87
Law 12/87 of the Autonomous Region of Valle d'Aosta (``Regional
Government'') provides grants for the promotion of commercial
activities of local firms in other regions of Italy and abroad. Support
is provided to companies for participation in shows, fairs, and
exhibitions in Italy and abroad, and for participation in commercial
delegations abroad. Companies apply for funding for up to thirty
percent of the costs of promotional activities in Italy (up to ten
million lire) and forty percent of the costs of promotional activities
abroad (up to fifteen million lire).
In Wire Rod, we found Law 12/87 provides a financial contribution
within the meaning of section 751(5)(D)(1) of the Act. Id. at 40483. We
also determined this program constitutes an export subsidy because,
although the program is available for promotional activities both
within and outside Italy, we found the grants were only given for
export-related promotion activities. Id. The Regional Government did
not submit any information indicating that the nature of the grants
received by CAS in the POI has changed since Wire Rod. Therefore, we
continue to find this program provides a countervailable benefit.
In Wire Rod, we found these grants to be non-recurring because they
are exceptional and require separate government applications and
approval. Id. However, the grants examined in that investigation (i.e.,
those disbursed prior to and during the POI) were expensed in the year
of receipt. Therefore, we are not including those grants in our
calculation.
Similarly, all grants received since Wire Rod have been less than
0.5 percent test of CAS'' export sales in their respective years of
approval. Therefore, the benefits were expensed in their respective
year of receipt. For the amount approved and received in the POI, we
divided the benefit by CAS'' export sales in the POI. Accordingly, we
preliminarily determine that a countervailable benefit of 0.01 percent
ad valorem exists for CAS.
European Union Subsidies
7. ECSC Article 54 Loans
ECSC Article 54 Loans (``Article 54'') were made to steel
undertakings to carry out the investment programs established under the
ECSC Treaty. These loans finance the purchase of new equipment
modernization, and are made at interest rates slightly higher than the
rates obtained by the EC. The loans cannot exceed fifty percent of the
underlying eligible investment.
In Wire Rod, we found Article 54 loans to be specific and to
provide a financial contribution that conferred a countervailable
benefit. Id. at 40486. No information has been presented in this
investigation to warrant a reconsideration of this finding.
Valbruna, Bolzano, and CAS received Article 54 loans. However,
Valbruna's and Bolzano's loans were repaid prior to the POI. Thus, they
received no benefit during the POI. However, according to the EC
response, CAS did have Article 54 loans outstanding during the POI. As
facts available, we are using the information provided by the EC to
calculate a subsidy rate for CAS. These loans were variable-interest-
rate loans and certain of these loans were denominated in currencies
other than the Italian lire.
To calculate a subsidy rate, we first compared the cost of the
benchmark financing for each loan to the financing CAS received under
this program and found the loans provided a financial contribution with
the meaning of section 771(5)(D)(ii) of the Act. We then calculated the
difference during the POI between the interest actually paid and the
interest that would have been due on the benchmark loan. Finally, we
divided this benefit by CAS'' total sales during the POI. Accordingly,
we preliminarily determine that a countervailable benefit of 0.26
percent ad valorem exists for CAS.
8. European Social Fund
The European Social Fund (``ESF''), one of the Structural Funds
operated by the EC, was established in 1957 to improve workers'
employment opportunities and to raise their living standards. The main
purpose of the ESF is to make employing workers easier and to increase
the geographical and occupational mobility of workers within the
European Union (``EU''). It accomplishes this by providing support for
vocational training, employment, and self-employment.
Like the other EC Structural Funds, ESF seeks to achieve six
different objectives explicitly identified in the EC's framework
regulations for Structural Funds: Objective 1 is to promote development
and structural adjustment in underdeveloped regions; Objective 2 is to
assist areas in industrial decline; Objective 3 is to combat long-term
unemployment and to create jobs for young people, and people excluded
from the labor market; Objective 4 is to assist workers adapting to
industrial changes and changes in production systems; Objective 5 is to
promote rural development; and Objective 6 is to aid sparsely populated
areas in northern Europe.
The EU Member States are responsible for the identification of
projects to receive ESF financing and their subsequent implementation.
The Member States must also contribute to the financing of the
projects. In general, the maximum benefit provided by ESF is 50 percent
of the total cost of projects geared toward Objectives 2, 3, 4, and 5b,
and 75 percent of the project's total cost for Objective 1 projects.
For Objective 4 programs implemented in Italy, generally 45 percent of
the funding is provided by the EC and 35 percent by the GOI (under the
auspices of the Rotation Fund). Companies usually receive 50 percent of
the aid up-front
[[Page 30422]]
and the remainder upon satisfactory completion of the training program.
According to the questionnaire responses, the following respondents
received or benefitted from ESF grants: CAS, Valbruna, Rodacciai and
Bedini. We find these grants to constitute a financial contribution
within the meaning of section 771(5)(D)(i) of the Act.
All of these grants were given for Objective 4 projects involving
worker assistance in the form of employee training. The Department
considers worker assistance programs to provide a benefit to a company
when the company is relieved of a contractual or legal obligation it
would otherwise have incurred. 19 CFR section 357.513(a). Generally,
only limited information was provided in the questionnaire responses
about the purpose of these grants. However, one respondent, Bedini,
reported that its ESF grants were used to train its employees in the
``technical and scientific aspects of steel production, * * * the sales
and distribution of steel products, * * * and the general activities of
the company, i.e., technical personnel were trained about the technical
aspects of production.'' Bedini's May 14, 2001 supplemental response at
S-7. Moreover, in general, the respondents provided insufficient
information regarding the nature and extent of their normal vocational
training programs and job-skills enhancement practices (i.e., the sorts
of training and skills enhancement normally taking place in the absence
of ESF assistance).
We intend to examine this issue more closely at verification, time
permitting. However, because companies normally incur the costs of
training to enhance the job-related skills of their own employees, and
because the limited record information suggests that these ESF training
programs were related to the operations of the respondents, in lieu of
more detailed information to the contrary we preliminarily determine
these ESF grants have relieved the recipient respondents of obligations
that they otherwise would have incurred. Accordingly, we determine the
ESF grants received by CAS, Valbruna, Rodacciai and Bedini provided a
benefit under section 771(5)(E) of the Act to each recipient in the
amount of the respective grant.
Regarding the specificity of benefits under this program, neither
the EC nor the GOI has provided us with detailed industry and regional
distribution information on Objective 4 grants in Italy, despite our
explicit request for such information in the questionnaires and
supplemental questionnaires. Therefore, we find it appropriate to apply
an adverse inference and conclude that these grants are specific under
section 771(5A) of the Act.
Based on the foregoing, we find the ESF grants to CAS, Valbruna,
Rodacciai and Bedini to be countervailable subsidies.
The Department normally considers the benefits from worker-training
programs to be recurring. 19 CFR section 351.524(c)(1). However, we
found in Wire Rod, that ESF grants relate to specific, individual
projects and we treated them as non-recurring grants because each grant
required separate government approval. 64 FR at 40488; 19 CFR section
351.524(c)(2)(ii). In this investigation, because the amount of ESF
funding approved for each recipient was less than 0.5 percent of the
recipient's sales, we have expensed all reported ESF grants received in
the year of receipt for all recipient respondents. Because Bedini did
not receive any ESF grants in the POI, we found the program not used
for Bedini. For the remaining recipients, we divided the amount of ESF
grants received by each recipient in the POI by that recipient's total
POI sales. Accordingly, we preliminarily determine that the following
ad valorem rates exist for CAS, Valbruna, and Rodacciai, respectively:
0.11 percent, 0.01 percent, and 0.05 percent.
Company-Specific Subsidies Conferred by the Government of Italy
9. Restructuring Subsidies Provided to the Italian Steel Industry
Attributable to CAS
A. Equity Infusions to Finsider and ILVA
Because CAS did not respond to our questionnaire in this
investigation, we relied on information from the GOI and Wire Rod to
determine the amount of equity infusions benefitting CAS during the
POI. Both the GOI and Wire Rod indicated the GOI provided equity
infusions to Finsider up to 1988 and to ILVA in 1991-1992. However,
because we allocated these benefits over a 12-year AUL in Wire Rod, the
benefits provided to Finsider have been fully accounted for prior to
the POI. Thus, we preliminarily find only the equity infusions made to
ILVA in 1991-1992 continue to benefit CAS during the POI.
As in Wire Rod, we find the GOI's equity infusions in ILVA were
specific and provided a financial contribution which conferred a
benefit upon CAS. Under our new change-in-ownership methodology (see
supra section on ``Changes in Ownership'') and, as facts available, we
find CAS to be the same entity as its predecessor (see supra section on
``Use of Facts Available''). Accordingly, the equity infusion received
by the predecessor entity continues to fully benefit CAS.
To calculate CAS' share of these infusions in the larger company,
ILVA, we divided the value of CAS' assets in 1991 and 1992 by the total
value of ILVA's assets in 1991 and 1992, respectively. These ratios
were then applied to the 1991 and 1992 equity infusion received by ILVA
to determine the amount ultimately attributable to CAS.
Consistent with Wire Rod, the equity subsidies were allocated over
a 12-year AUL to determine the benefit during the POI. In addition,
because ILVA was uncreditworthy at the time it received the equity
infusion, this allocation was made using a discount rate for
uncreditworthy companies (see supra section on ``Subsidies Valuation
Information: Benchmarks for Loans and Discount Rates.'') We then
divided the benefit in the POI by CAS' total sales during the POI.
Accordingly, we preliminarily determine that a countervailable benefit
of 0.61 percent ad valorem exists for CAS.
B. Pre-Privatization Assistance and Debt Forgiveness
In Wire Rod, we determined the following:
Cogne S.p.A. acquired the shares of Robles S.r.l. and changed
the company's name to [CAS], in 1992. * * *
At the end of 1992, Cogne S.p.A. transferred most of the
productive assets of the Aosta facility to CAS through the capital
contribution procedure under Italian law. Under this procedure,
Cogne S.p.A. had assets (and liabilities) assessed under the
oversight of the Italian Court and contributed them to CAS in
exchange for shares in CAS worth exactly the net value of the
contribution. CAS officials explained that pursuant to the capital
contribution, CAS received the liabilities associated with the
production process, while Cogne S.p.A. retained the other
liabilities which were mostly long-term. From that point, CAS became
the operating company and Cogne S.p.A. entered into liquidation. * *
*
As of December 31, 1993, ILVA S.p.A. issued a guarantee on
behalf of Cogne S.p.A. for the uncovered liabilities of the firm,
and the anticipated costs of the liquidation process, for 380
billion lire. * * *
ILVA [was then divided] into three companies: ILVA Laminati
Piani, Acciai Speciali Terni, and ILVA in Liquidazione. * * * ILVA
in Liquidazione, retained responsibility for all of the ILVA
entities which could not be sold to private parties. * * * The
estimated costs of the liquidation, 10 trillion lire, covered all of
the ILVA companies including the subsidiaries. The costs associated
with the liquidation of
[[Page 30423]]
Cogne S.p.A. were included in that total. * * *
64 FR at 40478-40479 (citations omitted).
Because CAS did not respond to our questionnaire in this
investigation, we relied on information from the GOI and Wire Rod to
determine the amount of pre-privatization assistance and debt
forgiveness benefitting CAS during the POI.
As in Wire Rod, we continue to find the GOI, in making available
this pre-privatization assistance and debt forgiveness, provided a
financial contribution which was specific and conferred a benefit upon
CAS in the amount of Cogne S.p.A's total liabilities and losses assumed
by ILVA. Following the methodology used in Wire Rod to calculate the
subsidy rate, we used a discount rate for uncreditworthy companies, as
described supra in the section on ``Subsidies Valuation Information:
Benchmarks for Loans and Discount Rates,'' to allocate the benefits
over a 12-year AUL. We then divided the benefit attributable to the POI
by CAS'' total sales during the POI. Accordingly, we preliminarily
determine that a countervailable benefit of 10.12 percent ad valorem
exists for CAS.
Company Specific Subsidies Conferred by the Provincial Government of
Bolzano
10. Province of Bolzano Assistance
A. Lease of Bolzano Industrial Site to Valbruna
Falck sold Bolzano to Valbruna in 1995. Concurrent with the change
in ownership, Falck and Bolzano sold Bolzano's industrial site to the
Province of Bolzano (``Province''). The Province paid for the property
in full. At the same time, Valbruna negotiated with the Province to
lease the Bolzano industrial site and, on July 31, 1995, signed a
thirty-year lease. During the first two years of the lease, Valbruna
paid rent by absorbing environmental remediation and initial
extraordinary maintenance costs.
Although the Province provided some information on the market for
industrial property, apparently very little industrial property is
available in the Province. Valbruna and the Province provided some
information on leases between the Province and other private parties;
however, the amount of property covered by these leases is much smaller
than that covered by the Valbruna lease and, therefore, inappropriate
for comparison purposes. In any event, we do not find these leases to
represent a market-determined negotiation between private parties
because the rents are set by law at 4.0 percent per annum of each
property's net purchase price.
Consistent with Wire Rod, we determine that the Province has
provided a financial contribution with the meaning of section
771(5)(d)(3). We further determine that the Province's provision of
this lease is specific because it is limited to Valbruna.
In determining the existence and amount of the benefit, we have
compared the average annual return on industrial leased property in
Italy during the POI to the rent paid by Valbruna during the POI. This
comparison indicates that Valbruna received a benefit in the amount of
the difference.
Valbruna has suggested we account for the extraordinary maintenance
expenses it incurred during the POI. We preliminarily decline to do so.
Although the Italian Civil Code obliges a landlord to pay for
extraordinary maintenance, such as environmental remediation, this
obligation may be passed to the lessee. Evidence on the record in Wire
Rod indicated long-term leases, such as the one negotiated between
Valbruna and the Province, often require the lessee to take
responsibility for extraordinary maintenance. Id. at 40481. We
specifically found the extraordinary maintenance costs would have been
assigned to the lessee by a commercial landlord. Id. at 40484.
Therefore, consistent with Wire Rod, we find the average rate of return
on commercial leases remains an appropriate benchmark, without any
adjustments for such costs. However, we will examine this issue further
at verification, time permitting.
To calculate the subsidy to Valbruna during the POI, we divided the
benefit (i.e., the difference between the average rate of return on
leased commercial property in Italy during the POI and the actual rent
paid by Valbruna during the POI) by Valbruna's total sales during the
POI. Accordingly, we preliminarily determine that a countervailable
benefit of 0.15 percent ad valorem exists for Valbruna.
B. Environmental and Research and Development Assistance to Bolzano
Under Law 25/81
Valbruna reported receiving two grants under Law 25/81 for the
adaptation of existing facilities to new environmental requirements
(``environmental grants''). As discussed supra, we found assistance
provided under Article 13 through 15 of Law 25/81 to be countervailable
in Wire Rod. Environmental grants were not investigated in Wire Rod and
it is not clear which Article of Law 25/81 authorizes these
environmental grants. For the preliminary determination, we have
treated the environmental grants as being distinct from Articles 13
through 15 grants.
Although we received general information on the maximum amount of
benefits green-lighted by the EU, the Province provided insufficient
information regarding the specificity (particularly, de facto
specificity) of the environmental grants. Lacking this information, we
are drawing an adverse inference and, as facts available, we
preliminarily determine the environmental grants are specific within
the meaning of section 771(5A)(D)(iii) of the Act.
The two grants received by Valbruna under this program were
approved in 1998. To calculate the benefit during the POI, we allocated
these grants over Valbruna's AUL and divided the benefit attributable
to the POI by Valbruna's total sales during the POI. Accordingly, we
preliminarily determine that a countervailable benefit of 0.20 percent
ad valorem exists for Valbruna.
Company-Specific Subsidies Conferred by the Regional Government of
Valle D'Aosta
11. Valle D'Aosta Regional Assistance Associated With the Sale of CAS
In Wire Rod, we found the following fact pattern:
[W]hen CAS was privatized, the land and buildings were sold to
the Autonomous Region of Valle d'Aosta which now leases back the
facility to the new owners of CAS. The framework for this triangular
transaction among ILVA, CAS, and the Region was established through
the protocols of agreement signed November 19, 1993. The Region * *
* agreed to (1) purchase the land, including the hydroelectric
facilities owned by ILVA Centrali Elettriche S.p.A. (ICE) * * *, (3)
to cover the costs of environmental reclamation on the land * * *,
and (4) to supply electricity directly to CAS from the ICE plants.
In exchange, ILVA agreed to transfer CAS to a private party by
December 31, 1993, with a restructuring fund. The purchaser of CAS's
shares agreed to (1) vacate and abandon areas of the property not
used in production activity; and, (2) to guarantee positions for 800
employees after the privatization.
Id. FR at 40480.
A. Lease of Cogne Industrial Site
In Wire Rod, we determined the following facts regarding the lease
of the Cogne industrial site:
After the purchase of the land and buildings, Struttura Valle
d'Aosta S.r.l. (Structure), a company wholly-owned by the Region,
assumed the lease that had been
[[Page 30424]]
between Cogne S.p.A. and CAS for the use of the site until a new
lease could be negotiated. In 1996, Structure and CAS entered into a
thirty-year lease for the facility which produces subject
merchandise. The new lease implements the commitments set forth in
the protocols of agreement: the facility is leased to CAS; CAS
undertakes all maintenance on the facility (including extraordinary
maintenance); and CAS commits to vacate approximately 50 percent of
the property in favor of the Region. The lease was also designed to
provide for the stable employment of 800 employees at the facility.
* * *
The record evidence indicates that the average rate of return on
leased commercial property in Italy is 5.7 percent. * * * As an
average, this rate reflects different terms, lengths, and locations
of lease contracts throughout Italy. * * *
In applying the 5.7 percent rate, we have determined that no
adjustments to this rate are warranted for either depreciation or
extraordinary maintenance payments. * * *
Id. FR at 40481 (citations omitted).
Consistent with Wire Rod, we determine that the Regional Government has
provided a financial contribution within the meaning of section
771(5)(d)(iii). We further determine that the Regional Government's
provision of this lease is specific because it is limited to CAS.
In determining the existence and amount of the benefit, we have
compared the average annual return on industrial leased property in
Italy during the POI to the rent paid by CAS during the POI. This
comparison indicates that CAS received a benefit in the amount of the
difference.
To calculate the subsidy to CAS during the POI, we divided the
benefit (i.e., the difference between the average rate of return on
leased commercial property in Italy during the POI and the actual rent
paid by CAS during the POI) by CAS' total sales during the POI.
Accordingly, we preliminarily determine that a countervailable benefit
of 0.19 percent ad valorem exists for CAS.
B. Waste Plant
In Wire Rod, we determined this program did not exist because, at
the time, construction of the waste plant had not yet begun. Id. at
40482. We stated, however, we would continue to review this program in
the future to determine if waste disposal services were being provided
for less than adequate remuneration. Id.
In the original protocol agreement between the Regional Government
and the purchaser of CAS, the Regional Government stated it would
construct, under its own responsibility and at its own expense, a waste
disposal area suitable for receiving and processing waste. Construction
of the waste plant was reportedly begun on November 15, 1995, with
completion expected on May 13, 2001. Therefore, during the POI the
waste plant was still under construction.
On October 11, 1999, the Regional Government enacted Decision 3502,
``Payment to Cogne Acciai Speciali of the Higher Costs Incurred For
Disposal In Waste Treatment Plants Of Its Steelworks Waste Until Such
Time That The Pontey Waste Disposal Plant Becomes Available,'' as part
of Regional Law 4 dealing with the Cogne industrial site. Under this
Decision and beginning in September 1999, the Regional Government has
been making payments to CAS to offset costs incurred in removing CAS''
waste to facilities located outside the region.
We preliminarily determine that the payments to CAS are a financial
contribution within the meaning of 771(5)(D)(i) of the Act and that the
benefit is the amount of the grant. No information exists on the record
indicating that any other companies have received similar payments.
Accordingly, we find these payments to be specific within the meaning
of section 771(5A)(D) of the Act. Based on the foregoing, we find these
benefits to constitute a countervailable subsidy.
The Regional Government calculated the cost to transport CAS' waste
outside the region at twenty-six lire per kilogram of waste and
estimated a maximum waste production of 50,000,000 kilograms per year.
Therefore, the maximum amount of the grant would not exceed
1,300,000,000 lire. Because we have no information regarding the actual
amount that CAS received during the POI, we have based our
calculations, as facts available, on the estimated, maximum yearly
payment.
For purposes of this preliminary determination, we are treating
these payments as recurring subsidies. We have done this because these
payments are being made in lieu of a service that the Regional
Government obligated itself to provide and, hence, the payments are
like the recurring subsidies described in 19 CFR section 351.524(c)(1).
To calculate the subsidy to CAS, we divided the maximum payment to
CAS by CAS' total sales during the POI. Accordingly, we preliminarily
determine that a countervailable benefit of 0.35 percent ad valorem
exists for CAS.
C. Loans to CAS To Transfer Its Property
In Wire Rod, we determined that the Regional Government agreed to
finance the cost of transferring CAS' property off the portion of the
site not subject to the lease. Id.
In this investigation, the GOI confirmed that CAS received three
separate loans under this program to transfer its property. In Wire
Rod, we found these loans to be specific and to provide a financial
contribution that conferred a countervailable benefit. Id. No
information has been presented in this investigation to warrant a
reconsideration of this finding. In this investigation, we calculated
the benefit in the same manner as in Wire Rod, i.e., as the difference
between the interest that CAS would have paid on a comparable
commercial loan and the amount actually paid.
In addition to the preferential interest rate, CAS was relieved of
making certain payments on those loans during the POI. Because of
severe flooding in the region during October 2000, the Regional
Government passed Decision 44 in January of 2001. Decision 44 cancelled
the interest CAS had due in November 2000, and deferred the principal
portion of the November 2000 payment for two to three payment periods.
According to the Regional Government, Decision 44 applied to companies
that suffered damage to property or equipment covered by ``easy-term''
loans obtained through the Region's rotating funds (including Regional
Law 37, the law under which CAS received its loans). However, the
Regional Government did not provide information to substantiate its
claim regarding the availability of Decision 44 benefits to a wide
range of companies or its use by multiple and various companies. Thus,
as facts available, we find the interest cancellation and principal
deferral to be de facto specific, and to constitute a financial
contribution under section 771(5A) and 771(5)(D) of the Act,
respectively.
To calculate the subsidy to CAS for the May 2000 payment, which was
made on time, we divided the difference between the interest due on the
benchmark loan by the interest actually paid by CAS by CAS' total sales
during the POI.
Regarding the cancellation of the interest payment, we consider
this to be debt forgiveness and, as such, a benefit exists at the time
of forgiveness equal to the amount of interest the government has
forgiven. 19 CFR section 351.508(a). This benefit is treated as a non-
recurring subsidy and allocated over the company's AUL. 19 CFR section
351.508(c). However, because this amount is less than 0.5 percent of
CAS' sales during the POI, we expensed the full amount of the benefit
in the POI.
[[Page 30425]]
We calculated the subsidy rate by dividing the benefit by CAS' total
sales during the POI.
Regarding the deferral of principal payments, because CAS will have
to repay these funds eventually, we consider this a short-term, zero-
interest loan for the duration of the deferral. To calculate a subsidy
rate, we used the short-term interest rate (see supra section on
``Subsidies Valuation Information: Benchmarks for Loans and Discount
Rates'') in determining the difference between what would have been
paid on a comparable commercial loan and what was actually paid. We
then divided this amount by CAS's total sales during the POI.
Accordingly, for the May 2000 loan payment, the cancellation of the
November 2000 interest payment, and the deferral of the November 2000
principal payment, we preliminarily determine that a countervailable
benefit of 0.64 percent ad valorem exists for CAS.
II. Programs Preliminarily Determined To Be Not Countervailable
Company Specific Subsidies Conferred by the Provincial Government of
Bolzano
1. Environmental and Research and Development Assistance to Bolzano
Under Law 44/92
Law 44/92 is aimed at promoting technological innovation and
research and development within the Province. Article 3 of Law 44/92
allows for the provision of loans at reduced rates. In 1999, Valbruna
received a long-term, fixed-rate, low-interest loan under this program
in order to finance a research and development program on ultra-clean
stainless steels and alloys.
Section 771(5A)(D) of the Act requires domestic subsidies be
specific in law or in fact in order to be countervailable. Eligibility
for Law 44/92 does not appear to be (1) contingent in law or fact on
export performance, (2) contingent on the use of domestic rather than
imported goods, or (3) a domestic subsidy within the definition of
section 771(5A)(D) of the Act. Instead, we find the record evidence in
this investigation indicates that loans under Law 44/92 were widely and
evenly distributed with no one sector or enterprise receiving a
disproportionate amount. As a result, we preliminarily determine the
loan received by Valbruna under Law 44/92 is not specific within the
meaning of Section 771(5A) of the Act and, thus, not countervailable.
IV. Programs Preliminarily Determined To Be Not Used
Based on the information provided in the responses, we determine no
responding companies applied for or received benefits under the
following programs during the POI:
Government of Italy Programs
1. Capacity Reduction Payments Under Articles 3 and 4 of Law 193/1984
While several respondents received interest payment grants under
Article 3, for all of these respondents, either the grant was not
greater than 0.5 percent of the respective company's total sales or the
underlying loans over which we would allocate the grant were fully
repaid prior to the POI. Falck is the only company reported as having
received funds under Article 4. However, these benefits to Falck were
fully allocated in Wire Rod prior to the POI. Accordingly, no
respondent benefitted from Article 3 or 4 benefitted during the POI.
2. Law 796/76 Exchange Rate Guarantees
3. Article 33 of Law 227/77, Export Credit Financing Under Law 227/77,
and Decree Law 143/98
4. Grants under Laws 46/82 and 706/85
5. Law 181/89 and Law 120/89
Law 181 was implemented to ease the impact of employment reductions
in the steel crisis areas of Naples, Taranto, Terni, and Genoa. The law
targeted four activities: (1) Promotion of investment in
reindustrialization, (2) promotion of employment, (3) promotion of
worker retraining, and (4) early retirement. Rodacciai is the only
company that reported receiving benefits under this program. Arguing it
was the workers themselves that directly received any benefits from
this program, and not the company, Rodacciai did not report the amount
of benefits provided under this program. However, Rodacciai did report,
to the best its knowledge, that its workers received benefits under
this program in 1996.
We have previously found this program provides a countervailable
benefit. Preliminary Affirmative Countervailing Duty Determination:
Grain-Oriented Electrical Steel From Italy 59 FR 4682, 4688 (February
1, 1994) (``GOES Prelim'').
Although Rodacciai did not provide specific information regarding
the amount of benefits received under this program, Rodacciai did state
its workers received benefits in 1996. Because we find Law 181,
consistent with the GOES Prelim, to provide recurring benefits, any
benefits actually received would have been expensed fully in the year
of receipt, 1996. Therefore, while we preliminarily find no benefits
were received in the POI, we intend to examine this issue further at
verification to determine, inter alia, whether any benefits were
actually received during the POI.
Finally, we note Law 181 is the enactment by the Italian Parliament
of Decree Law 120. Once enacted into a Law, a Decree Law no longer
exists. Therefore, Decree Law 120 no longer exists.
6. Law 488/922, Legislative Decree 96/93 and Circolare 38522
7. Law 341/95 and Circolare 50175/95
8. Law 675/77
A. Interest Grants on Bank Loans
B. Mortgage Loans
C. Interest Contribution on IRI Loans
D. Personnel Retraining Aid
9. Law 394/81 Export Marketing Loans \3\
---------------------------------------------------------------------------
\3\ In the Initiation Notice, we referred to this program as
``Law 394/81 Export Marketing Grants''. However, Valbruna and the
GOI have indicated that only loans, not grants, are provided under
this law.
---------------------------------------------------------------------------
Law 394/81 provides low-interest rate loans to finance up to 85
percent of the cost of investment projects by Italian companies seeking
to develop or increase a presence in markets outside of the EU.
According to the questionnaire responses of the respondents and the
GOI, Valbruna is the only respondent that received funds under this
law. According to Valbruna, it received a loan under this program
during the POI to create a distribution subsidiary in Mexico. Further,
according to Valbruna, this subsidiary will distribute merchandise only
in the Mexican market and not for sales to the United States.
Therefore, consistent with our approach when investigating a similar
export marketing program in Final Affirmative Countervailing Duty
Determination: Certain Pasta from Italy, 61 FR 30288, 30293 (June 14,
1996) (regarding ``Export Marketing Grants Under Law 304/90''), we
preliminarily determine any benefit from this program to be tied to
Valbruna's Mexican sales and, accordingly, find that this program did
not benefit Valbruna's POI sales of subject merchandise to the United
States.
10. Law 481/94 (and Precursors) Grants for Reduced Production
11. Law 489/94
Valbruna initially reported receiving benefits under Law 549/95.
However, in supplemental responses, Valbruna and the GOI indicated
these benefits were
[[Page 30426]]
actually received under Law 489/94. According to Valbruna, Law 489/94
was generally available to all businesses in Italy and provided tax
relief on fifty percent of the amount a company's 1995 investments in
tangible fixed assets exceeded the average investment of the previous
five years. Unlike Law 549/95, no evidence exists on the record of this
investigation indicating relief provided under Law 489/94 will be
repaid.
Assuming arguendo this program is countervailable, an exemption or
remission of a direct tax is considered as ``having been received on
the date on which the recipient firm would otherwise have had to pay
the taxes associated with the exemption or remission. Normally, this
date will be the date on which the firm filed its tax return.'' 19 CFR
section 351.509(b).
Because the tax return reflecting any benefit under Law 489/94 was
filed prior to the POI and, hence, any benefit would be attributed to
Valbruna prior to the POI, we have not analyzed this program further.
Regional Government of Valle D'Aosta Subsidy Programs
12. Valle D'Aosta Regional Law 64/92
In Wire Rod, benefits received under this program were found to be
less than 0.5 percent of CAS'' sales during the POI, the year of
approval and, thus, were expensed in the year of receipt. 64 FR at
40483. According to the Regional Government of Aosta, CAS received no
new amounts under this programs since the POI covered by Wire Rod.
European Union Subsidies
12. ECSC Article 56 Conversion Loans, Interest Rebates, and
Restructuring Grants
13. European Regional Development Fund
14. Commission Decision 88/588 and Resider II.
Company Specific Subsidies Conferred by the Government of Bolzano
15. Province of Bolzano Assistance: Lease Exemption Under Valbruna/
Bolzano Lease
In Wire Rod, benefits received under this program were found to be
less than 0.5 percent of CAS'' sales during the POI, the year of
approval and, thus, were expensed in the year of receipt. 64 FR at
40485. No new amounts were reported to have been received since the POI
in Wire Rod under this program.
Company Specific Subsidies Conferred by the Regional Government of
Valle D'Aosta
16. Valle D'Aosta Regional Assistance Associated With the Sale of CAS:
Provision of Electricity
As part of the original protocols in which the Regional Government
purchased the Cogne industrial site, the operator of ILVA's
hydroelectric plants, ILVA Centrali Elettrische S.p.A. (``ICE'') (now
known as Compagnia Valdostana delle Acque S.p.A. (``Valdostana'')) was
acquired. Using Valdostana, the Regional Government planned to supply
electricity directly to CAS through a consortium (``Consorzio'') (CAS
would be a member of the Consorzio through its planned purchase of
shares in Valdostana).
In Wire Rod, we stated the law at that time did not permit CAS to
purchase electricity from entities other than ENEL, the state-owned
electric company. 64 FR at 40482. We also stated, however, should the
law change, we would reexamine the countervailability of this program.
Id.
Because the Regional Government has reported in this investigation
that CAS decided not to acquire shares in Valdostana and does not
purchase electricity from the Consorzio, we preliminarily find this
program not used.
Verification
In accordance with section 782(i)(1) of the Act, we will verify the
information submitted by the respondents prior to making our final
determination.
Suspension of Liquidation
In accordance with section 703(d)(1)(A)(i) of the Act, we
calculated an individual rate for each manufacturer of the subject
merchandise. We preliminarily determine the total estimated net
countervailable subsidy rates to be:
------------------------------------------------------------------------
Net subsidy
Producer/exporter rate
(percent)
------------------------------------------------------------------------
Cogne Acciai Speciali S.r.l................................ 12.59
Acciaierie Valbruna S.r.l./Acciaierie Bolzano S.r.l........ 0.60
Acciaiera Foroni S.p.A..................................... 0.00
Trafileria Bedini S.r.l.................................... 0.01
Italfond S.p.A............................................. 0.18
Rodacciai S.p.A............................................ 0.07
All Others................................................. 12.59
------------------------------------------------------------------------
In accordance with sections 777A(e)(2)(B) and 705(c)(5)(A), we have
set the ``all others'' rate as CAS'' rate, because the rates for all
other investigated companies are either zero or de minimis. We note
that although portions of CAS'' rate were based on adverse facts
available, we based the majority of our calculations on information
provided by the GOI and EC in this investigation.
In accordance with section 703(d) of the Act, we are directing the
U.S. Customs Service to suspend liquidation of all entries of stainless
steel bar from Italy for CAS and for any non-investigated exporters
which are entered, or withdrawn from warehouse, for consumption on or
after the date of the publication of this notice in the Federal
Register, and to require a cash deposit or bond for such entries of the
merchandise in the amounts indicated above. This suspension will remain
in effect until further notice. Liquidation of entries from Valbruna,
Foroni, Bedini, Italfond, and Rodacciai will not be suspended at this
time because we have preliminarily determined their rates to be either
zero or de minimis.
ITC Notification
In accordance with section 703(f) of the Act, we will notify the
ITC of our determination. In addition, we are making available to the
ITC all nonprivileged and nonproprietary information relating to this
investigation. We will allow the ITC access to all privileged and
business proprietary information in our files, provided the ITC
confirms it will not disclose such information, either publicly or
under an administrative protective order, without the written consent
of the Assistant Secretary for Import Administration.
In accordance with section 705(b)(2) of the Act, if our final
determination is affirmative, the ITC will make its final determination
within 45 days after the Department makes its final determination.
Public Comment
In accordance with 19 CFR section 351.310, we will hold a public
hearing, if requested, to afford interested parties an opportunity to
comment on this preliminary determination. The hearing is tentatively
scheduled to be held 57 days from the date of publication of this
preliminary determination, at the U.S. Department of Commerce, 14th
Street and Constitution Avenue N.W., Washington, DC 20230. Individuals
who wish to request a hearing must submit a written request within 30
days of the publication of this notice in the Federal Register to the
Assistant Secretary for Import Administration, U.S. Department of
Commerce, Room 1870, 14th Street and Constitution Avenue, NW.,
Washington, D.C. 20230. Requests for a
[[Page 30427]]
public hearing 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. An interested
party may make an affirmative presentation only on arguments included
in that party's case brief and may make a rebuttal presentation only on
arguments included in that party's rebuttal brief. Parties should
confirm by telephone the time, date, and place of the hearing 48 hours
before the scheduled time.
In addition, six copies of the business proprietary version and six
copies of the nonproprietary version of the case briefs must be
submitted to the Assistant Secretary no later than 50 days from the
publication of this notice. As part of the case brief, parties are
encouraged to provide a summary of the arguments not to exceed five
pages and a table of statutes, regulations, and cases cited. Six copies
of the business proprietary version and six copies of the
nonproprietary version of the rebuttal briefs must be submitted to the
Assistant Secretary no later than 5 days after the filing of case
briefs. Written arguments should be submitted in accordance with 19 CFR
section 351.309 and will be considered if received within the time
limits specified above.
This determination is published pursuant to sections 703(f) and
777(i) of the Act.
Dated: May 29, 2001.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 01-14133 Filed 6-5-01; 8:45 am]
BILLING CODE 3510-DS-P