65 FR 5854 February 7, 2000 DEPARTMENT OF COMMERCE International Trade Administration [C-403-802] Final Results of Expedited Sunset Review: Fresh and Chilled Atlantic Salmon From Norway AGENCY: Import Administration, International Trade Administration, Department of Commerce. ACTION: Notice of Final Results of Expedited Sunset Review: Fresh and Chilled Atlantic Salmon from Norway. ----------------------------------------------------------------------- SUMMARY: On July 1, 1999, the Department of Commerce (``the Department'') initiated a sunset review of the countervailing duty order on fresh and chilled Atlantic salmon from Norway (64 FR 35588) pursuant to section 751(c) of the Tariff Act of 1930, as amended (``the Act''). On the basis of a notice of intent to participate and adequate substantive comments filed on behalf of domestic interested parties, as well as inadequate response (in this case, no response) from respondent interested parties, the Department determined to conduct an expedited (120 day) review. As a result of this review, the Department finds that termination of the countervailing duty order would be likely to lead to continuation or recurrence of a countervailable subsidy. The net countervailable subsidy and the nature of the subsidy are identified in the Final Results of Review section of this notice. FOR FURTHER INFORMATION CONTACT: Kathryn B. McCormick or Melissa G. Skinner, Office of Policy for Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street & Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482- 1930 or (202) 482-1560, respectively. [[Page 5855]] EFFECTIVE DATE: February 7, 2000. Statute and Regulations This review was conducted pursuant to sections 751(c) and 752 of the Act. The Department's procedures for the conduct of sunset reviews are set forth in Procedures for Conducting Five-year (``Sunset'') Reviews of Antidumping and Countervailing Duty Orders, 63 FR 13516 (March 20, 1998) (``Sunset Regulations''), and in 19 CFR Part 351 (1999) in general. Guidance on methodological or analytical issues relevant to the Department's conduct of sunset reviews is set forth in the Department's Policy Bulletin 98:3--Policies Regarding the Conduct of Five-year (``Sunset'') Reviews of Antidumping and Countervailing Duty Orders; Policy Bulletin, 63 FR 18871 (April 16, 1998) (``Sunset Policy Bulletin''). Scope The product covered by the countervailing duty order is the species Atlantic salmon (Salmon Salar) marketed as specified herein; the order excludes all other species of salmon: Danube salmon, Chinook (also called ``king'' or ``quinnat''), Coho (``silver''), Sockeye (``redfish'' or ``blueback''), Humpback (``pink'') and Chum (``dog''). Atlantic salmon is a whole or nearly-whole fish, typically (but not necessarily) marketed gutted, and cleaned, with the head on. The subject merchandise is typically packed in fresh-water ice (``chilled''). Excluded from the subject merchandise are fillets, steaks and other cuts of Atlantic salmon. Also excluded are frozen, canned, smoked or otherwise processed Atlantic salmon. Atlantic salmon was classifiable under item number 110.2045 of the Tariff Schedules of the United States Annotated (``TSUSA''). Prior to January 1, 1990, Atlantic salmon was provided for under item numbers 0302.0060.8 and 0302.12.0065.3 of the Harmonized Tariff Schedule of the United States (``HTSUS'') (56 FR 7678, February 25, 1991). Currently, it is provided for under HTSUS item number 0302.12.00.02.09. The subheadings above are provided for convenience and customs purposes. The written description remains dispositive. There have been no scope rulings for the subject order. History of the Order On February 25, 1991, the Department issued a final determination in the countervailing duty investigation, covering the period September 1, 1989, through February 28, 1990. The following six programs were found to confer countervailable subsidies on Norwegian producers/ exporters of subject merchandise: (1) Regional Development Fund Loans and Grants; (2) National Fishery Bank of Norway Loans; (3) Regional Capital Tax Incentive; (4) Reduced Payroll Taxes; (5) Advance Depreciation of Business Assets; and (6) Government Bank of Agricultural Grants. The Department found a net subsidy of 2.27 percent ad valorem for all Norwegian producers/exporters of subject merchandise. There have been no administrative reviews of this countervailing duty order. Background On July 1, 1999, the Department initiated a sunset review of the countervailing duty order on fresh and chilled Atlantic salmon from Norway (64 FR 35588), pursuant to section 751(c) of the Act. The Department received a Notice of Intent to Participate on behalf of domestic interested parties within the deadline (July 15, 1998) specified in Sec. 351.218(d)(1)(i) of the Sunset Regulations. Subsequently, we received a complete substantive response to the notice of initiation on August 2, 1999, on behalf of the Coalition for Fair Atlantic Salmon Trade (``FAST'') and the following individual members of FAST: Atlantic Salmon of Maine, Connors Aquaculture, Inc., DE Salmon, Inc., Island Aquaculture Corp., Maine Aqua Foods, Inc., Maine Coast Nordic, Inc., Treats Island Fisheries, and Trumpet Island Salmon Farm, Inc. (collectively, ``domestic interested parties''). As U.S. producers of the subject merchandise and a business association whose members are U.S. producers of the subject merchandise, the domestic interested parties claim interested-party status under sections 771(9)(C) and (F) of the Act. Without a substantive response from respondent interested parties, the Department, pursuant to 19 CFR 351.218 (e)(1)(ii)(C), determined to conduct an expedited (120-day) review of this order. In accordance with 751(c)(5)(C)(v) of the Act, the Department may treat a review as extraordinarily complicated if it is a review of a transition order (i.e., an order in effect on January 1, 1995). On October 18, 1999, the Department determined the sunset review of the countervailing duty order on fresh and chilled Atlantic salmon from Norway to be extraordinarily complicated, and, therefore, we extended the time limit for completion of the final results of this review until not later than January 27, 2000, in accordance with section 751(c)(5)(B) of the Act.\1\ --------------------------------------------------------------------------- \1\ See Extension of Time Limit for Final Results of Five-Year Reviews, 64 FR 62167 (November 16, 1999). --------------------------------------------------------------------------- Although the deadline for this determination was originally January 27, 2000, due to the Federal Government shutdown on January 25 and 26, 2000, resulting from inclement weather, the timeframe for issuing this determination has been extended by one day. Determination In accordance with section 751(c)(1) of the Act, the Department is conducting this review to determine whether termination of the countervailing duty order would be likely to lead to continuation or recurrence of a countervailable subsidy. Section 752(b) of the Act provides that, in making this determination, the Department shall consider the net countervailable subsidy determined in the investigation and subsequent reviews, and whether any change in the program which gave rise to the net countervailable subsidy has occurred and is likely to affect that net countervailable subsidy. Pursuant to section 752(b)(3) of the Act, the Department shall provide to the Commission the net countervailable subsidy likely to prevail if the order is revoked. In addition, consistent with section 752(a)(6), the Department shall provide to the Commission information concerning the nature of the subsidy and whether it is a subsidy described in Article 3 or Article 6.1 of the 1994 WTO Agreement on Subsidies and Countervailing Measures (``Subsidies Agreement''). The Department's determinations concerning continuation or recurrence of a countervailable subsidy, the net countervailable subsidy likely to prevail if the order is revoked, and nature of the subsidy are discussed below. In addition, the domestic interested parties' comments with respect to each of these issues are addressed within the respective sections. Continuation or Recurrence of a Countervailable Subsidy Drawing on the guidance provided in the legislative history accompanying the Uruguay Round Agreements Act (``URAA''), specifically the SAA, H.R. Doc. No. 103-316, vol. 1 (1994), the House Report, H.R. Rep. No. 103-826, pt.1 (1994), and the Senate Report, S. Rep. No. 103- 412 (1994), the Department issued its Sunset Policy Bulletin providing guidance on methodological and analytical issues, [[Page 5856]] including the basis for likelihood determinations. The Department clarified that determinations of likelihood will be made on an order- wide basis (see section III.A.2 of the Sunset Policy Bulletin). Additionally, the Department normally will determine that revocation of a countervailing duty order is likely to lead to continuation or recurrence of a countervailable subsidy where (a) a subsidy program continues, (b) a subsidy program has been only temporarily suspended, or (c) a subsidy program has been only partially terminated (see section III.A.3.a of the Sunset Policy Bulletin). Exceptions to this policy are provided where a company has a long record of not using a program (see section III.A.3.b of the Sunset Policy Bulletin). In addition to considering the guidance on likelihood cited above, section 751(c)(4)(B) of the Act provides that the Department shall determine that revocation of an order is likely to lead to continuation or recurrence of a countervailable subsidy where a respondent interested party waives its participation in the sunset review. Pursuant to the SAA, at 881, in a sunset review of a countervailing duty order, when the foreign government has waived participation, the Department shall conclude that revocation of the order would be likely to lead to a continuation or recurrence of a countervailable subsidy for all respondent interested parties.\2\ In the instant review, the Department did not receive a response from the foreign government or any other respondent interested party. Pursuant to 351.218(d)(2)(iii) of the Sunset Regulations, this constitutes a waiver of participation. --------------------------------------------------------------------------- \2\ See 19 CFR 351.218(d)(2)(iv). --------------------------------------------------------------------------- The domestic interested parties argue that revocation of the countervailing duty order on fresh and chilled Atlantic salmon from Norway likely result in continued unfair subsidization by the Government of Norway, as well as material injury to the U.S. industry. They assert that, because there have been no administrative reviews of the countervailing duty order and the Department has not examined the programs further, the Government of Norway presumably continues to subsidize producers/exporters of subject merchandise. The domestic interested parties also note that the European Commission, in a 1996 countervailing duty investigation, determined that the Government of Norway conferred countervailing subsidies amounting to 3.84 percent ad valorem on producers/exporters of fresh Atlantic salmon (see August 2, 1999, Substantive Response of domestic interested parties at 21). The domestic interested parties note that the European Commission's findings, which investigated subsidies provided to Norwegian salmon farmers between July 1, 1995 and July 31, 1996, demonstrate that the Government of Norway has continued to subsidize its domestic salmon farming industry and the amount of these subsidies has increased since the Department's 1991 final affirmative determination. Id. The Department agrees with the domestic interested parties that because there have been no administrative reviews of this order and no evidence has been submitted to the Department demonstrating the termination of the countervailable programs, it is reasonable to assume that these programs continue to exist and are utilized. Moreover, section 751(c)(4)(B) of the Act provides that the Department shall determine that revocation of an order is likely to lead to continuation or recurrence of a countervailable subsidy where the foreign government and/or a respondent interested party waives its participation in the sunset review. Therefore, because we assume countervailable programs continue to exist, the foreign government and other respondent interested parties have waived participation in the review, and absent any argument to the contrary, the Department concludes that revocation of the order would be likely to lead to a continuation or recurrence of a countervailable subsidy for all respondent interested parties.\3\ --------------------------------------------------------------------------- \3\ See 19 CFR 351.218(d)(2)(iv). --------------------------------------------------------------------------- Net Countervailable Subsidy In the Sunset Policy Bulletin, the Department stated that, consistent with the SAA and House Report, the Department normally will select a rate from the investigation as the net countervailable subsidy likely to prevail if the order is revoked, because that is the only calculated rate that reflects the behavior of exporters and foreign governments without the discipline of an order or suspension agreement in place. However, this rate may not be the most appropriate rate if, for example, the rate was derived from subsidy programs which were found in subsequent reviews to be terminated, there has been a program- wide change, or the rate ignores a program found to be countervailable in a subsequent administrative review.\4\ --------------------------------------------------------------------------- \4\ See section III.B.3 of the Sunset Policy Bulletin --------------------------------------------------------------------------- The domestic interested parties, citing the SAA, note that the Administration intends that Commerce normally will select the rate from the investigation, because that is the only calculated rate that reflects the behavior or exporters and foreign governments without the discipline of an order in place (see August 2, 1999 Substantive Response of domestic interested parties at 25). The domestic interested parties argue that the Department should determine that the net countervailable subsidy likely to prevail is 2.27 percent, the rate set forth in the original investigation. The Department agrees with the domestic interested parties. The rate determined in the original investigation was 2.27 percent for all imports of fresh and chilled Atlantic salmon from Norway. As noted above, there have been no administrative reviews of the order. Absent administrative review, the Department has never found that substantive changes have been made to the programs found to be countervailable. Furthermore, there are no other U.S. countervailable duty proceedings involving Norway. Therefore, since there is no evidence that changes have been made to any of the Norwegian subsidy programs, and absent any argument and evidence to the contrary, the Department determines that a net countervailable subsidy of 2.27 percent would be likely to prevail if the order were revoked. This rate is the rate for all producers and exporters of subject merchandise from Norway. Nature of the Subsidy In the Sunset Policy Bulletin, the Department states that, consistent with section 752(a)(6) of the Act, the Department will provide to the Commission information concerning the nature of the subsidy, and whether the subsidy is a subsidy described in Article 3 or Article 6.1 of the Subsidies Agreement. The domestic interested parties did not address this issue in their substantive response of August 2, 1999. The following programs, although not falling within the definition of an export subsidy under Article 3.1(a) of the Subsidies Agreement, could be found to be inconsistent with Article 6 if the net countervailable subsidy exceeds five percent, as measured in accordance with Annex IV of the Subsidies Agreement. The Department, however, has no information with which to make such a calculation, nor do we believe it appropriate to attempt such a calculation in the course of a sunset review. Rather, we are providing the Commission with the following program descriptions. Regional Development Fund Loans and Grants (RDF). The RDF provides [[Page 5857]] loan guarantees, long-term loans, and investment and business development grants to producers and exporters located only in specified regions of Norway to strengthen the economic base and to increase employment in regions with low levels of economic activity. National Fishery Bank of Norway Loans (NFB). The NFB provided loans for the financing of fish farms from 1974 through 1987, including long- term loans for investment in production equipment and buildings. Regional Capital Tax Incentive. The aim of the Regional Capital Tax Incentive is to encourage investment in regions of Norway with a weak industrial base and considerable unemployment. Funds set aside by the taxpayer under this program are deducted from taxable income (at a maximum amount of 15 percent), and must then be invested in capital assets for the use in the taxpayer's own business. Reduced Payroll Taxes. This program aims at encouraging employment of persons living in underdeveloped regions of Norway. Under the National Insurance Act, employers are liable for the payment of payroll taxes which are based on a percentage of the wages paid in the course of a year. However, since 1975, the amount of contributions have been geographically differentiated depending on the municipality in which the employee resides. Advance Depreciation of Business Assets. This program encourages investment in less-developed areas of Norway by allowing companies located in selected districts of the country to claim a higher rate of depreciation in the year in which capital assets are acquired. Eligible companies, depending on their location, are allowed to take a first- year deduction of either 25 or 40 percent. After this initial deduction, the producer is then allowed to take the standard deduction on the remainder of the depreciable value of the asset. Government Bank of Agriculture. The Bank administers the Norwegian Fund of Development in Agriculture which was established to create supplemental income and employment for farmers. The Bank provides both long-term loans and interest-free loans and grants to all agricultural producers throughout Norway, however, there are maximum levels of assistance which differ by region. Final Results of Review As a result of this review, the Department finds that revocation of the countervailing duty order would likely lead to continuation or recurrence of a countervailable subsidy at the rate listed below: ------------------------------------------------------------------------ Net countervailable Producer/exporter subsidy (percent) ------------------------------------------------------------------------ All Producers/Exporters from Norway.................. 2.27 ------------------------------------------------------------------------ This notice serves as the only reminder to parties subject to administrative protective order (``APO'') of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305 of the Department's regulations. Timely notification of return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation. This five-year (``sunset'') review and notice are in accordance with sections 751(c), 752, and 777(i)(1) of the Act. Dated: January 28, 2000. Holly A. Kuga, Acting Assistant Secretary for Import Administration. [FR Doc. 00-2592 Filed 2-3-00; 8:45 am] BILLING CODE 3510-DS-P