MEXICO
SUBSIDY PROGRAMS AIMED AT INDUSTRIAL SECTORS
Last Changes Made June 2006
Effective February 15, 2000, Import Administration began publishing "Decision Memos" to reduce the size of antidumping and countervailing duty Federal Register notices. In cases in which a Memo was published, you will find a link to the memo listed below.
In addition, in the following programs, in instances below in which a proceeding was a Sunset Review, you will see the letters SR after the product name.
COUNTERVAILABLE SUBSIDY PROGRAMS
The subsidy programs listed below have been investigated by the Department and have been found to be "countervailable" in the cases listed and during the periods reviewed based on the criteria established in the Tariff and Trade Act of 1930, as amended. Please refer to this Act for further detail of the criteria applied. In addition, you may click on the cases listed below the subsidy program title for a full explanation of the Department's analysis in those cases.
1988 and 1990 Debt Restructuring
Certain Steel Products (1991) 57 FR 57820 (12/7/92-prelim); 58 FR 37357 (7/9/93-final)
Cut-to-Length Carbon Steel Plate (SR) (Expedited Review-no prelim); 71 FR 32521 (6/6/06-final); Final Memo
Cut-to-Length Carbon Steel Plate (SR) (Expedited Review-no prelim); 65 FR 18067 (4/6/00-final); Final Memo
Cut-to-Length Carbon Steel Plate (2001) 68 FR 52895 (9/8/03-prelim); 69 FR 1972 (1/13/04-final); Final Memo
Cut-to-Length Carbon Steel Plate (1998) 65 FR 54232 (9/7/00-prelim); 66 FR 14549 (3/13/01-final); Final Memo
Cut-to-Length Carbon Steel Plate (1997) 64 FR 48796 (9/8/99-prelim); 65 FR 13368 (3/13/00-final); Final Memo
In 1987, the Government of Mexico (GOM) negotiated an agreement with foreign creditors to restructure the debt of AHMSA and several other Mexican para-statal companies. Under the agreement, the para-statal companies remained indebted to the foreign banks. The GOM again negotiated debt restructuring agreements in 1988 and 1990. Under these agreements, the GOM purchased AHMSA's debt from AHMSA's foreign creditors in exchange for GOM debt. The GOM thereby became the creditor for loans included in these agreements. We found that the debt restructuring was countervailable because it was specific to AHMSA and it was provided on terms inconsistent with commercial considerations.
1991 Equity Infusion in Connection with the Debt to Equity Swap of PROCARSA
Cut-to-Length Carbon Steel Plate (1997) 64 FR 48796 (9/8/99-prelim); 65 FR 13368 (3/13/00-final); Final Memo
In 1991, AHMSA received shares in PROCARSA in lieu of an accounts receivable payment that PROCARSA owed in approximately the same amount. The PROCARSA shareholdings were included as part of the "unnecessary assets" that the company transferred to the Government of Mexico as payment for the pre-privatization lay-off financing. As with the rest of the "unnecessary assets," we determined that the countervailable benefit arose from AHMSA's use of the shares to repay the pre-privatization lay-off financing.
Committed Investment
Cut-to-Length Carbon Steel Plate (SR) (Expedited Review-no prelim); 71 FR 32521 (6/6/06-final); Final Memo
Cut-to-Length Carbon Steel Plate (2001) 68 FR 52895 (9/8/03-prelim); 69 FR 1972 (1/13/04-final); Final Memo
Cut-to-Length Carbon Steel Plate (1998) 65 FR 54232 (9/7/00-prelim); 66 FR 14549 (3/13/01-final); Final Memo
Cut-to-Length Carbon Steel Plate (1997) 64 FR 48796 (9/8/99-prelim); 65 FR 13368 (3/13/00-final); Final Memo
In the 1991 privatization, in addition to paying a certain amount in cash and assuming a portion of AHMSA's debt, GAN committed to investing another large sum of money in AHMSA. We determined that the transaction involved only the sale of AHMSA, and, as such, was specific under section 771(5A)(D) of the Act. Therefore, we determined this program to be countervailable.
Government of Mexico Assumption and Deferrals of AHMSA's Foreign Debt Payments
Certain Steel Products (1991) 57 FR 57916 (12/7/92-prelim); 58 FR 37356 (7/9/93-final)
Cut-to-Length Carbon Steel Plate (SR) (Expedited Review-no prelim); 71 FR 32521 (6/6/06-final); Final Memo
Cut-to-Length Carbon Steel Plate (SR) (Expedited Review-no prelim); 65 FR 18067 (4/6/00-final); Final Memo
Cut-to-Length Carbon Steel Plate (2001) 68 FR 52895 (9/8/03-prelim); 69 FR 1972 (1/13/04-final); Final Memo not countervailable
Cut-to-Length Carbon Steel Plate (1998) 65 FR 54232 (9/7/00-prelim); 66 FR 14549 (3/13/01-final); Final Memo
Cut-to-Length Carbon Steel Plate (1997) 64 FR 48796 (9/8/99-prelim); 65 FR 13368 (3/13/00-final); Final Memo
In February 1986, the Government of Mexico (GOM) negotiated an agreement with AHMSA, a government-owned steel company, through which the GOM assumed a portion of AHMSA's debt. One part of the debt was recorded as a reduction in the company's accumulated past losses. For a second part, shares of stock were issued; a third part was held for future capital increases for which new stock was issued to the GOM in 1987. We considered the portion for which no stock was issued to constitute a grant and be countervailable. For the portions for which stock was issued, we determined that they were countervailable because AHMSA was unequityworthy in 1986.
Government of Mexico Equity Infusions
Certain Steel Products (1991) 57 FR 57916 (12/7/92-prelim); 58 FR 37356 (7/9/93-final)
Cut-to-Length Carbon Steel Plate (SR) (Expedited Review-no prelim); 71 FR 32521 (6/6/06-final); Final Memo
Cut-to-Length Carbon Steel Plate (SR) (Expedited Review-no prelim); 65 FR 18067 (4/6/00-final); Final Memo
Cut-to-Length Carbon Steel Plate (2001) 68 FR 52895 (9/8/03-prelim); 69 FR 1972 (1/13/04-final); Final Memo
Cut-to-Length Carbon Steel Plate (1998) 65 FR 54232 (9/7/00-prelim); 66 FR 14549 (3/13/01-final); Final Memo
Cut-to-Length Carbon Steel Plate (1997) 64 FR 48796 (9/8/99-prelim); 65 FR 13368 (3/13/00-final); Final Memo
The Government of Mexico made equity infusions in AHMSA, a government-owned steel company, in 1977, each year from 1979 through 1987, 1990, and 1991. Shares of common stock were issued for all these infusions and such infusions were made annually as part of the Government's budgetary process as per the Federal Law on State Companies. We found AHMSA to be unequityworthy in each year from 1979 through 1987, and in 1990 and 1991. We also found that the equity infusions in these years were inconsistent with commercial considerations. Because these equity infusions were specific and inconsistent with commercial considerations, we found them to be countervailable.
IMIS Research and Development
Certain Steel Products (1991) 57 FR 57819 (12/7/92-prelim); 58 FR 37360 (7/9/93-final)
Cut-to-Length Carbon Steel Plate (SR) (Expedited Review-no prelim); 71 FR 32521 (6/6/06-final); Final Memo
Cut-to-Length Carbon Steel Plate (SR) (Expedited Review-no prelim); 65 FR 18067 (4/6/00-final); Final Memo
Cut-to-Length Carbon Steel Plate (2001) 68 FR 52895 (9/8/03-prelim); 69 FR 1972 (1/13/04-final); Final Memo
Cut-to-Length Carbon Steel Plate (1998) 65 FR 54232 (9/7/00-prelim); 66 FR 14549 (3/13/01-final); Final Memo
Cut-to-Length Carbon Steel Plate (1997) 64 FR 48796 (9/8/99-prelim); 65 FR 13368 (3/13/00-final); Final Memo
The Mexican Iron and Steel Institute (IMIS), a government-owned research and development organization, performs independent and joint venture research within the iron and steel industry. We verified that IMIS's research arrangements with AHMSA fall into two categories: Joint venture activities and non-joint venture activities. The results of IMIS's joint venture activities are the property of the joint venture participants. The results of the non-joint venture activities are available for a fee to any company that requests it. Because IMIS's research assistance is provided only to the iron and steel industry and the petroleum industry, we determine that it is limited to a specific group of industries. However, in keeping with past practice, we find those IMIS projects, products, processes and services that we verified to be publicly available (i.e., the non-joint venture activities) to be non- countervailable. With respect to the joint venture activities, we determine that the assistance provided is countervailable because the results of the joint venture projects are not publicly available.
Loans From the Mexican Trust for Non-Metallic Minerals
Lime (1983) 49 FR 25658 (6/22/84-prelim); 49 FR 35674 (9/11/84-final)
We found that the Mexican Trust for Non-Metallic Minerals provided loans to a limited and specific industry at interest rates lower than those for comparable commercially available loans. Therefore, we determined that this program conferred a countervailable benefit.
Pre-Privatization Lay-off Financing
Certain Steel Products (1991) 57 FR 57820 (12/7/92-prelim); 58 FR 37358 (7/9/93-final)
Cut-to-Length Carbon Steel Plate (SR) (Expedited Review-no prelim); 71 FR 32521 (6/6/06-final); Final Memo
Cut-to-Length Carbon Steel Plate (SR) (Expedited Review-no prelim); 65 FR 18067 (4/6/00-final); Final Memo
Cut-to-Length Carbon Steel Plate (2001) 68 FR 52895 (9/8/03-prelim); 69 FR 1972 (1/13/04-final); Final Memo
Cut-to-Length Carbon Steel Plate (1998) 65 FR 54232 (9/7/00-prelim); 66 FR 14549 (3/13/01-final); Final Memo
Cut-to-Length Carbon Steel Plate (1997) 64 FR 48796 (9/8/99-prelim); 65 FR 13368 (3/13/00-final); Final Memo
The Government of Mexico made a large peso loan to cover the severance costs made in 1991 of lay-offs at AHMSA, a government-owned steel company. The layoffs occurred prior to privatization and were the result of the GOM's efforts to make the sale of AHMSA more attractive to potential buyers Officials explained that this loan was to be repaid in full, and it was entered in AHMSA's accounts as a liability. However, we verified that the loan did not accrue interest after September 30, 1991, at which time its value was frozen. Moreover, the loan does not have to be repaid in cash.
SUBSIDY PROGRAMS FOUND TO BE NOT COUNTERVAILABLE
The subsidy programs listed below have been investigated by the Department and have been found to be "not countervailable" in the cases listed and during the periods reviewed based on the criteria established in the Tariff and Trade Act of 1930, as amended. Please refer to this Act for further detail of the criteria applied. In addition, you may click on the cases listed under the subsidy program title for a full explanation of the Department's analysis in each case where the subsidy program has been examined.
Certain Equity Infusions
Lime (1983) 49 FR 25658 (6/22/84-prelim); 49 FR 35675 (9/11/84-final)
Both NAFINSA and the Commission de Fomento Minero, a publicly-owned lending institution, purchased stock in Mexicana de Cobre. Private companies made purchases of the company's stock at comparable terms on approximately the same dates. We determined that this government equity investment did not confer a bounty or grant because the government investment was on the same terms and conditions as private investments.
Funds Established with Relationship to Agriculture (FIRA)
Certain Fresh Cut Flowers (1982/83) 49 FR 4023 (2/1/84-prelim); 49 FR 15008 (4/16/84-final)
The Funds Established with Relationship to Agriculture (FIRA) is a series of trusts administered by the Bank of Mexico. The main objective of FIRA is to develop Mexico's agricultural sector. To meet this objective, FIRA provides short- and long-term financing, loan guarantees, and technical support to firms involved in agriculture production. FIRA does not confer an export bounty or grant because we found that it did not operate to, and was not intended to, stimulate export over domestic sales. Furthermore, it was not offered contingent upon export performance.
Grants to the University of Floriculture
Certain Fresh Cut Flowers (1982/83) 49 FR 4024 (2/1/84-prelim); 49 FR 15008 (4/16/84-final)
We investigated whether the University of Floriculture received grants to provide services to the flower industry by conducting research and development on its behalf and by providing it with manpower training. We determined that while there is no University of Floriculutre, the State University of Morelos does offer a degree in ornamental horticulture. Since it is a public university offering degree programs in a wide variety of fields, its services are not targeted to a specific enterprise or industry. Therefore, this program was found to be not countervailable.
Provision of Land to Sonocal
Lime (1983) 49 FR 25657 (6/22/84-prelim); 49 FR 35676 (9/11/84-final)
Sonocal received land free of charge from the Mining Development Commission, but the Commission had received the land at no cost from private parties. Based on this, we determined that the provision of this land at no cost was not inconsistent with commercial considerations and, therefore, did not confer a bounty or grant.
Waiver of Foreign Lender Tax
Lime (1983) 49 FR 25657 (6/22/84-prelim); 49 FR 35676 (9/11/84-final)
Foreign loans to Mexicana de Cobre were subject to an exemption of the Mexican interest tax paid by foreign lenders. This exemption is provided for under an agreement with the Mexican Department of the Treasury. As a result of this exemption, the company could receive a countervailable benefit in the form of reduced rates of interest on foreign loans. Most of Mexicana de Cobre's foreign loans, however, were provided specifically for operations other than lime. Its other foreign loans were provided at rates above the benchmark for long-term dollar borrowings. Therefore, we determined that this program did not confer a bounty or grant on Mexicana de Cobre.
Value-Added Tax Rate Reduction
Lime (1983) 49 FR 25657 (6/22/84-prelim); 49 FR 35676 (9/11/84-final)
We found that lime producers in border areas received a countervailable benefit from a reduction in the rate of value-added tax (VAT) that they paid on purchases in such areas. However, we also found that under the value-added tax system, these reductions do not result in any benefit to lime producers. Only the final consumers of the goods pay VAT, not producers or suppliers. The companies only act as collection agents for the government. We found that since lime producers are reimbursed for the amount of tax they pay and have no liability for the VAT, the border reductions do not confer a bounty or grant.
Preferential Pricing of Natural Gas and CBFS
Carbon Black (1986) 56 FR 4044 (2/1/91-prelim); 56 FR 11543 (3/19/91-final)
Carbon Black (1983/84/85) 53 FR 15089 (4/27/88-prelim); 55 FR 51746 (12/17/90-final)
Carbon Black (1983) 51 FR 13271 (4/18/86-prelim); 51 FR 30386 (8/26/86-final)
We determined that producers of carbon black feedstock (CBFS) that purchase natural gas from PEMEX, the Mexican state-owned petroleum company, did not receive countervailable benefits. Because the low domestic prices of natural gas were not contingent on export performance and did not stimulate export sales over domestic sales, we found that this program did not constitute an export subsidy. We found that there was no domestic subsidy because all industrial users of CBFS and natural gas in Mexico could obtain those goods from PEMEX at nondiscriminatory prices.
Lease of Government Land
Unprocessed Float Glass (1986) 53 FR 53046 (12/30/88-prelim); 55 FR 5870 (2/20/90-final)
The Ministry of Property and Industrial Development has leased a small strip of land to Vidrio
Plano since March 1, 1965. The leased land is actually an easement obtained by Vidrio Plano in
order to gain access to the company's property from a public road. The easement is a fee paid in
exchange for the right to use government land. We considered the levy of an easement fee to be a
normal government function that is in no way connected to the promotion of exports or the
development of specific enterprises or industries. Therefore, we determined that no benefit was received from this program.
Provision of Loans and Funds to Cover Operating Losses from Vitro S.A. to Its Subsidiaries
Automotive Glass (1983) 49 FR 43985 (10/1/84-prelim); 50 FR 1909 (1/14/85-final)
Vitro Flex and Crinamex received loans and the provision of funds to cover operating losses from Vitro, S.A., a parent company. We determined that the transfer of funds within a commercial enterprise, absent government direction, was not countervailable.
Subsidized Glass Inputs
Automotive Glass (1983) 49 FR 43985 (10/1/84-prelim); 50 FR 1908 (1/14/85-final)
Producers of raw materials used in float glass received preferential loans from the Mexican Trust for Non-Metallic minerals. We found that the prices paid by automotive glass producers for Mexican supplied float glass were not less than prices that would otherwise be paid for the input in an armslength transaction. Therefore, we conclude that no benefit has been bestowed on Mexican producers of fabricated automotive glass through their purchase of Mexican-produced float glass.
Alleged Assumption of AHMSA's Debt
Cut-to-Length Carbon Steel Plate (1998) 65 FR 54232 (9/7/00-prelim); 66 FR 14549 (3/13/01-final); Final Memo
As part of its purchase agreement with the Government, GAN agreed to ensure that AHMSA's existing debts were repaid. We determined that after the sale, AHMSA's debts remained on the books. Therefore, there was no countervailable benefit from this program.
Corporacion Mexicana de Investigacion en Materiales, S.A. de C.V. (COMIMSA)
Cut-to-Length Carbon Steel Plate (1997) 64 FR 48796 (9/8/99-prelim); 65 FR 13368 (3/13/00-final); Final Memo
Although IMIS was terminated in 1991, its equity was used to establish COMIMSA, an organization charged with continuing certain activities of IMIS. COMIMSA's activities are comprised of manufacturing parts and providing services such as environmental engineering, structural integrity, lubricants, computers and software, project engineering and laboratory analysis and testing. COMIMSA acts as a supplier to AHMSA for specific services and products for which COMIMSA had obtained IMIS' patent rights. The purchase prices paid to COMIMSA are not countervailable.
Equity Infusions
Bars and Shapes (1983) 49 FR 24160 (6/12/84-prelim); 49 FR 32890 (8/17/84-final)
Certain Carbon Steel Products (1983) 49 FR 5145 (2/10/84-prelim) no final - petition withdrawn
No program description given.
Waiver of Taxes on AHMSA Purchase of Fudadora de Monterrey, S.A. de C.V. (FMSA)
Cut-to-Length Carbon Steel Plate (1997) 64 FR 48796 (9/8/99-prelim); 65 FR 13368 (3/13/00-final); Final Memo
A portion of the assets of FMSA was sold together with AHMSA. The FMSA assets purchased along with AHMSA were not subject to sales and title taxes. This event occurred outside the period of investigation; therefore, this program is moot.
Accelerated Depreciation for the Textile Industry
Textile Mill Products (1983) 50 FR 306 (1/3/85-prelim); 50 FR 10826 (3/18/85-final)
The textile industry in Mexico is allowed to depreciate its machinery and equipment at a rate of 11 percent per annum. We determined that this was not an accelerated rate but merely the depreciation rate set by Mexican Income Tax Law for the textile industry. Therefore, we determined that this program does not confer a bounty or grant. In addition, the Government of Mexico amended its Income Tax Law in 1982 to provide for accelerated depreciation of new machinery and equipment acquired between August 1, 1983 and December 31, 1983, at the rate of up to 50 percent. While the amendment stated that the rate was available to all industries in priority zones, the law defined "priority zone" as including all territories and industries in Mexico. Because this program was not limited to a specific enterprise or industry, we determined that it does not confer a bounty or grant.
SUBSIDY PROGRAMS DETERMINED NOT TO EXIST
The following subsidy programs were alleged by the petitioning industries and were investigated by the Department. However, during the investigation we found no evidence that such programs actually existed. If you click on the cases listed under the subsidy program title, you will be linked to each case in which the subsidy program was referenced. It is possible that, while the program named did not exist, a similar program having a different name actually was investigated. If this is the case, you will find that program listed elsewhere in this library.
NAFINA/Coahuila State Government Supplier Relief
Cut-to-Length Carbon Steel Plate (2001) 68 FR 52895 (9/8/03-prelim); 69 FR 1972 (1/13/04-final); Final Memo
It was alleged that the state-run Nacional Financiera (NAFIN) and the Coahuila State Government (CGS) developed a rescue scheme in 1999 to address the
lack of payment of AHMSA's debts to local suppliers. We determined that this program did not exist.
SUBSIDY PROGRAMS THAT HAVE BEEN TERMINATED
The subsidy programs listed below have been investigated by the Department and have been found to have been terminated based on the criteria established in the Tariff and Trade Act of 1930, as amended. Please refer to this Act for further detail of the criteria applied. In addition, you may click on the cases listed below the subsidy program title for a full explanation of the Department's analysis in each of these cases.
No programs listed.
SUBSIDY PROGRAMS THAT HAVE NOT BEEN USED
When potential subsidy programs are investigated and found not to be used by the companies being investigated, the Department makes no determination as to their countervailability. If you click on the cases listed under the subsidy program title, you will be linked to each case in which the subsidy program was referenced.
Discounts on Lead Purchases Through the Boletin Price Mechanism
Litharge, Red Lead and Lead Stabilizers (1983) 50 FR 36913 (9/10/85-prelim); 51 FR 6451 (2/24/86-final)
No program description given.
Discounts and Rebates on Energy Used by the Float Glass Industry
Unprocessed Float Glass (1983) 48 FR 56096 (12/19/83-prelim); 49 FR 23098 (6/4/84-final)
Under certain conditions, the NDP allows 30 percent discounts on the cost of energy or basic
petrochemical products to firms located in Priority Zone 1A. The NDP allows companies in
Priority Zone 1B that develop new industrial plants to receive a 30 percent discount on two of the
following: electric power, natural gas, fuel oil or basic petrochemical products. We determined
that the float glass companies were not located in priority zones and that they did not receive
energy at preferential prices.
Preferential Prices on Natural Gas Used by the Float Glass Industry
Unprocessed Float Glass (1983) 48 FR 56095 (12/19/83-prelim); 49 FR 23098 (6/4/84-final)
We verified that the float glass industry paid the published price for natural gas which was available to all industries.
Banobras Line of Credit
Certain Steel Products (1991) 57 FR 57820 (12/7/92-prelim); 58 FR 37361 (7/9/93-final)
No program description given.
Subsidized Inputs
Bars and Shapes (1983) 49 FR 24160 (6/12/84-prelim); 49 FR 32890 (8/17/84-final)
Oil Country Tubular Goods (1983) 49 FR 35844 (9/12/84-prelim); 49 FR 47057 (11/30/84-final)
No program description given.