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.

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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\
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    \1\ See Extension of Time Limit for Final Results of Five-Year 
Reviews, 64 FR 62167 (November 16, 1999).
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    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.
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    \2\ See 19 CFR 351.218(d)(2)(iv).
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    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\
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    \3\ See 19 CFR 351.218(d)(2)(iv).
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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\
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    \4\ See section III.B.3 of the Sunset Policy Bulletin
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    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)
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All Producers/Exporters from Norway..................               2.27
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    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