65 FR 6166 February 8, 2000
DEPARTMENT OF COMMERCE
International Trade Administration
[C-469-004]
Final Results of Expedited Sunset Review: Stainless Steel Wire
Rod From Spain
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of final results of expedited sunset review: Stainless
steel wire rod from Spain.
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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 stainless steel wire rod from Spain (64 FR 35589) 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 the domestic interested parties, as well as
inadequate response from respondent interested parties, the Department
determined to conduct an expedited (120 day) review. As a result of
this
[[Page 6167]]
review, the Department finds that revocation 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: Eun W. Cho or Melissa G. Skinner,
Office of Policy for Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street & Constitution
Avenue N.W., Washington, D.C. 20230; telephone: (202) 482-1698 or (202)
482-1560, respectively.
EFFECTIVE DATE: February 8, 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
Imports covered by this order are shipments of stainless steel wire
rod (``SSWR'') from Spain, which includes coiled, semi-finished, hot-
rolled stainless steel products of approximately round solid cross
section, not under 0.20 inch nor over 0.74 inch in diameter, whether or
not tempered or treated or partly manufactured, from Spain. This
merchandise is currently classifiable under item numbers 7221.00.0020
and 7221.00.0040 of the Harmonized Tariff Schedule (``HTS'') of the
United States. The HTS item numbers are provided for convenience and
customs purposes. The written description remains dispositive.
History of the Order
On November 15, 1982, the Department issued a final affirmative
countervailing duty determination on certain stainless steel products
from Spain. \1\ During the investigation, the Department reviewed four
companies: Olarra, S.A. (``Olarra''), Roldan, S.A. (``Roldan''), S.A.
Echevarria (``Echevarria''), and Forjas Alavesas, S.A. (``FASA'').\2\
The Department determined that four general subsidy programs were
providing countervailable subsidies to Spanish manufacturers,
producers, and exporters of the subject merchandise. The four relevant
subsidy programs are as follows: medium- and long-term preferential
loans under the Concerted Action Program (``CAP''), Privileged Circuit
Exporter Credits program operating capital loans (``PCEC-OC''),
Privileged Circuit Exporter Credits program pre-financing loans
(``PCEC-PF''), and cash grants.\3\
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\1\ See Final Affirmative Countervailing Duty Determinations;
Certain Stainless Steel Products From Spain, 47 FR 51453 (November
15, 1982). However, this product designation was changed to
``stainless steel wire rod'' in the subsequent countervailing duty
order because the International Trade Commission determined that
only imports of SSWR from Spain are causing material injury or are
threatening material injury to a domestic industry. The
countervailing duty investigations pertaining to hot-rolled
stainless steel bars and cold-formed stainless steel bars from Spain
were terminated. See Stainless Steel Wire Rod From Spain;
Countervailing Duty Order. 48 FR 52 (January 3, 1983).
\2\ See id. The Department found that there were five known
producers and exporters of the subject merchandise to the United
States. The fifth company, La Calibradora Mechanica, S.A., was
lumped with all others because it did not respond to the
Department's inquiry. (Although Echevarria also did not provide the
Department with a response, the Department had enough information to
employ the best information otherwise available in determining the
net subsidy rate for that company.)
\3\ See id. For other subsidy programs investigated, the
Department determined that some programs fall outside the purview of
the countervailing duty law (such as, Desgravacion Fiscal a la
Exportacion (``DFE'') and Export Credit Insurance), and the others
are either not applicable to or not used by Spanish producers/
exporters of the subject merchandise (such as, some of Certain
Privileged Circuit Exporter Credits, Warehouse Construction Loans,
Regional Investment Incentive Programs, Equity Infusion, Special
Credits to Aceros de Llodio, and Research and Development
Incentives).
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Specifically, in its original investigation, the Department found
Roldan was subsidized at the rate of 1.31 percent from the CAP and 1.88
percent from PCEC-OC and PCEC-PF; hence, the net countervailable
subsidy rate for Roldan regarding the subject merchandise was 3.19
percent. Likewise, the Department found Echevarria was subsidized at
the rates of 11.48 from the CAP, 1.88 percent from PCEC-OC, and 2.07
percent from a government-directed grant. Therefore, the net
countervailable subsidy rate for Echevarria regarding the subject
merchandise was 15.43 percent. Similarly, the subsidy rates for FASA
are 0.21 and 1.88 percent for the CAP and for PCEC-OC, respectively.
Thus, the net countervailable subsidy rate for FASA regarding the
subject merchandise was 2.09 percent. As for Olarra, the Department
determined that the net countervailable subsidy rate was 0.00
percent.\4\ Finally, the all-others rate was 15.43 percent.
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\4\ Although the Department determined that Olarra was in a
court-ordered bankruptcy receivership and, therefore, any benefits
associated with pre-receivership loans have been lost (i.e.,
Olarra's net countervailable subsidy rate is zero), Olarra was not
excluded from the final determination, countervailing duty order,
and final results of subsequent administrative reviews because the
Department determined that if the financial condition of Olarra
improves, it could again qualify for and obtain the benefits under
these programs in the future.
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The Department published the countervailing duty order on SSWR from
Spain in the Federal Register on January 3, 1983.\5\ Since that time,
the Department has completed several administrative reviews.\6\ In the
first administrative review, covering the period January 1, 1986
through December 31, 1986, the Department determined that the net
countervailable subsidy for Roldan was 1.42 percent: \7\ the benefits
from PCEC-OC, PCEC-PF, and the CAP were 0.07, 1.02, and 0.33 percent ad
valorem, respectively. At the same time, however, the Department found
that two subsidy programs were terminated: PCEC-OC (effective January
1, 1986 as per Treasury Order of April 14, 1982) and PCEC-PF (effective
March 5, 1987 pursuant to Royal Decrees 321/1987 and 322/1987). Since
the net countervailable subsidy for Roldan was reduced to de minimis
(0.33 percent ad valorem) when the Department incorporated the above
terminations into consideration, it waived cash deposits for any future
shipments from Roldan, until the final results of the next
administrative review.
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\5\ Stainless Steel Wire Rod From Spain: Countervailing Duty
Order, 48 FR 52 (January 3, 1983).
\6\ See Stainless Steel Wire Rod From Spain; Final Results of
Countervailing Duty Administrative Review, 53 FR 28427 (July 28,
1988); Stainless Steel Wire Rod From Spain; Final Results of
Countervailing Duty Administrative review, 54 FR 26826 (June 26,
1989); and Stainless Steel Wire Rod From Spain; Final Results of
Countervailing Duty Administrative Review. 55 FR 349 (January 4,
1990).
\7\ See id. Roldan was the lone subject of all three
administrative reviews because the Department determined that Roland
was the only known Spanish producer/exporter of the subject
merchandise during the relevant periods of reviews.
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In its second administrative review, covering January 1, 1987
through December 31, 1987, the Department determined that Roldan
benefitted from PCEC-PF and the CAP at the rate of 0.15 and 0.27
percent ad valorem--combined rate of 0.42 percent ad valorem.\8\ In its
[[Page 6168]]
third and the latest administrative review, covering January 1, 1988
through December 31, 1988, the Department determined that the only
subsidy program that conferred a benefit to Roldan was the CAP at the
rate of 0.19 percent ad valorem.\9\ The order remains in effect for all
manufacturers and exporters of the subject merchandise.
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\8\ See footnote 6, supra. Also see Stainless Steel Wire Rod
From Spain: Preliminary Results of Countervailing Duty
Administrative Review, 54 FR 16384 (April 24, 1989). Since PCEC-PF
was terminated pursuant to Royal Decrees 321/1987 and 322/1987,
effective March 5, 1987, the Department preliminarily determined
that cash deposit of estimated countervailing duties under this
program is zero. In its final results of the administrative review,
because the combined subsidy rate was de minimis, the Department
required zero cash deposits for Roldan until the final results of
the next administrative review is published.
\9\ See footnote 6, supra.
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Background
On July 1, 1999, the Department initiated a sunset review of the
countervailing duty order on SSWR from Spain (64 FR 35588), pursuant to
section 751(c) of the Act. The Department received a Notice of Intent
to Participate on behalf of AL Tech Specialty Steel Corp., Carpenter
Technology Corp., Republic Engineered Steels, Inc., Talley Metals
Technology, Inc., and United Steelworkers of America (collectively
referred to as ``the domestic interested parties''), on July 16, 1999,
within the deadline specified in section 351.218(d)(1)(i) of the Sunset
Regulations. In their Notice of Intent to Participate, the domestic
interested parties denoted that none of them is related to a foreign
producer/exporter or is a U.S. importer of the subject merchandise, nor
are any of them importers of the subject merchandise.
We received a complete substantive response on behalf of the
domestic interested parties on August 2, 1999, within the 30-day
deadline specified in the Sunset Regulations under section
351.218(d)(3)(i). The domestic interested parties claimed interested
party status pursuant to sections 771(9)(C) and (D) of the Act, as U.S.
producers of the domestic like product and as a union representing
workers that engage in the production of the like product in the United
States. In their substantive response, the domestic interested parties
indicated that the most of them have participated in this proceeding
since its inception and that, as a group, they remain committed to a
full participation in the instant review. (See the domestic interested
parties' August 2, 1999 Substantive Response, at 4-5.) \10\ The
domestic interested parties also submitted their rebuttal comments on
August 9, 1999, within the five-day deadline in accordance with section
351.218(d)(4).
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\10\ See footnote 1, supra. AL Tech Specialty Steel Corp.,
Carpenter Technology Corp., and Republic Engineered Steels were
members of the original group which filed the petition.
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The Department received substantive responses from the Government
of the Kingdom of Spain (``KOS'') and from the European Commission
(``EC'') on July 30, 1999 and July 29, 1999, respectively.\11\ Both the
KOS and EC indicated, in their respective substantive responses, that
they are willing to participate in the instant review and that they
have in the past participated in the proceedings of the order. However,
the Department did not receive a substantive response from any foreign
producer/manufacturer, exporter, or the U.S. importer, etc., as defined
under 771(9)(A) of the Act. Thus, pursuant to section
351.218(e)(1)(ii)(A) of the Sunset Regulations, the Department
determined that respondent interested parties' substantive responses
were inadequate to warrant a full review. Consequently, pursuant to 19
CFR 351.218(e)(1)(ii)(C), the Department determined to conduct an
expedited, 120-day, review of this order.
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\11\ Although both the KOS and EC did not explicitly claim their
interested party status, they are interested parties within the
meaning of 771(9)(B) of the Act.
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In accordance with section 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). Therefore, on November 16, 1999, the Department determined that
the sunset review of the countervailing duty order on SSWR from Spain
is extraordinarily complicated and 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.\12\
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\12\ 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 time frame for issuing this
determination has been extended by two days.
Determination
In accordance with section 751(c)(1) of the Act, the Department is
conducting this review to determine whether revocation of the
countervailing duty order would be likely to lead to continuation or
recurrence of a countervailable subsidy. Section 752(b) of the Act
provides that, in making this determination, the Department 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
that is likely to affect that net countervailable subsidy. Pursuant to
section 752(b)(3) of the Act, the Department shall provide to the
International Trade Commission (``the Commission'') the net
countervailable subsidy likely to prevail if the order is revoked. In
addition, consistent with section 752(a)(6), the Department shall
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 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 Statement of Administrative Action (``SAA''), H.R. Doc. No. 103-
316, vol. 1 (1994), the House Report, H.R. Rep. No. 103-826, pt.1
(1994), and the Senate Report, S. Rep. No. 103-412 (1994), the
Department issued its Sunset Policy Bulletin providing guidance on
methodological and analytical issues, including the basis for
likelihood determinations. The Department clarified that determinations
of likelihood will be made on an order-wide basis (see section III.A.2
of the Sunset Policy Bulletin). Additionally, the Department normally
will determine that revocation of a countervailing duty order is likely
to lead to continuation or recurrence of a countervailable subsidy
where (a) a subsidy program continues, (b) a subsidy program has been
only temporarily suspended, or (c) a subsidy program has been only
partially terminated (see section III.A.3.a of the Sunset Policy
Bulletin). Exceptions to this policy are provided where a company has a
long record of not using a program (see section III.A.3.b of the
[[Page 6169]]
Sunset Policy Bulletin). Also, if the Department determines that the
fully allocated benefit stream of a countervailable subsidy is likely
to continue after the end of a sunset review, it will normally
determine that the subsidy continues to exist regardless whether the
program that gave rise to such benefit continues to exist. (See Id. at
section III.A.4.)
In addition to considering guidance on likelihood provided in the
Sunset Policy Bulletin and legislative history, 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. In the instant review, the
Department did not receive a response from any respondent
manufacturers/producers or exporters of the subject merchandise.\13\
Pursuant to section 351.218(d)(2)(iii) of the Sunset Regulations, this
constitutes a waiver of participation.
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\13\ The Department did not receive a substantive response from
Roldan, which is the only known exporter of the subject merchandise.
(See footnote 7, supra.) As noted earlier, the Department received
substantive responses from the respondent governments, the KOS and
EC.
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In their substantive response, the domestic interested parties
contend that revocation of the countervailing duty order would be
likely to lead to continued unfair subsidization by the KOS. The
domestic interested parties further contend that the KOS and its
regional governments continue to provide an array of subsidy programs
benefitting the Spanish steel industry. In support of their contention,
the domestic interested parties point to Roldan's 1990-1994 financial
statements, in which Roldan allegedly admitted receiving unspecified
subsidies. Also, the domestic interested parties state that Roldan
received subsidies from the Industrial ExpansionArea of Castilla Leon
in 1987 and 1990.\14\ In addition, the domestic interested parties
request the Department to reconsider, in the instant sunset review, the
legal method by which the KOS eliminated some of its subsidy programs
and to analyze whether the KOS is likely to reinstate such programs. In
other words, the domestic interested parties are urging the Department
to revisit its decisions in previous administrative reviews in which
the Department determined that PCEC-OC and PCEC-PF were eliminated.
(See August 2, 1999 Substantive Response of the domestic interested
parties at 14-17 and 21-23.) \15\
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\14\ The domestic interested parties' claims, however, do not go
beyond a general statement; i.e., their claims lack specifics. In
other words, other than merely arguing that other or new subsidies
are benefitting Roldan, with respect to manufacturing/exporting the
subject merchandise, the domestic interested parties did not provide
the Department with any evidence or information in support of their
claims.
\15\ The domestic interested parties acknowledge that resumption
or continuation of subsidization might not be likely if the
terminations of subsidy programs are permanent and not replaced.
(See the domestic interested parties' substantive response at 15,
footnote 5.)
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In conclusion, the domestic interested parties suggest that the
countervailing duty order has been only marginally effective because of
the existence of the other subsidy provisions \16\ and that it is
likely that the KOS and its regional governments will continue and
resume subsidizing Spanish manufacturers/exporters of the subject
merchandise. Id.
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\16\ As noted above, the domestic interested parties failed to
supply any specific facts with respect to their claim that other or
new subsidies will benefit Roldan.
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In its substantive response, the KOS indicates that the programs,
on which the countervailing duty order was determined, have expired a
long time ago: the CAP was only applicable during the period 1974-1982,
and the PCEC-OC has not been applicable since 1986. Thus, according to
the KOS, any outstanding benefit stream from 16-year-old programs would
have long been amortized. Also, the KOS insists that the countervailing
duty rates established in the original investigation were either zero
or insignificant. Last, the KOS argues that the records clearly
indicate that there is no subsidization of the product concerned. (See
July 30, 1999Response of the KOS.)
The EC emphasizes, in its substantive response, that the
countervailing duty order under consideration is very old. According to
the EC, all subsidies which were relevant in the original
investigation, have since been terminated or no longer benefit the
Spanish exporters/manufacturers of the subject merchandise. Also, the
EC contends that, because the domestic interested parties withdrew
their request for an administrative review in 1993,\17\ the domestic
interested parties acknowledged that there was no further evidence of
subsidization in Spain. In conclusion, the EC asserts that revocation
of the order is not likely to lead to continuation or recurrence of
subsidization. (See July 29, 1999 Response of the EC.)
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\17\ See Stainless Steel Wire Rod From Spain; Termination of
Countervailing Duty Administrative Review, 58 FR 39197 (July 22,
1993).
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The domestic interested parties, in their rebuttal, claim that the
KOS continues to provide significant countervailable subsidies to its
domestic steel industry. Also, the domestic interested parties argue
against the respondent interested parties' suggestion that outstanding
benefit streams have already been amortized and, therefore, that the
order should be revoked. The domestic interested parties note that
because the analytical framework applied by the Department in a sunset
review is forward-looking, the Department should not give undue
significance to the respondents' claim that subsidies provided to
Roldan have been completely allocated. (SeeAugust 9, 1999 the domestic
interested parties' Rebuttal Comments, at 1-7.)
Furthermore, the domestic interested parties note that the
countervailable subsidy rates for Roldan, Echevarria, and all others,
determined in the original investigation, are significant because the
subsidies enable the manufacturers/exporters to aggressively price the
subject merchandise in the U.S. market, where purchasers of SSWR
consider price to be a significant factor. Id.
As noted above, in the final affirmative countervailing duty
determination, the Department determined that all Spanish producers/
exporters of the subject merchandise, except one, were benefitting from
countervailable subsidies under the CAP, PCEC-OC, PCEC-PF, and cash
grants programs at levels above de minimis.\18\ In the first
administrative review, however, the Department found that PCEC-OC was
terminated pursuant to a Treasury Order of April 14, 1982, effective
January 1, 1986; that PCEC-PF was terminated as per Royal Decrees 321/
1987 and 322/1987, effective March 5, 1997; and that Roldan was not
benefitting from a cash grant.\19\ Therefore, based on the Department's
prior findings regarding the termination of PCEC-OC and PCEC-PF and
based on lack of evidence to the contrary, we determine that PCEC-OC
and PCEC-PF were eliminated and are not likely to be reinstated if the
order is revoked. In addition, the Department determines that the
domestic interested parties' claim that other or new subsidies are
benefitting Roldan is not supported by sufficient facts. Specifically,
the domestic interested parties did not provide sufficient and/or
appropriate information, evidence, or arguments to warrant
consideration of newly alleged
[[Page 6170]]
subsidy programs in this sunset review. Moreover, whether the domestic
interested parties are making subsidy allegations on products within
the purview of the instant review is unclear. Finally, the domestic
interested parties have provided no information that would cause us to
revisit the final results of our prior administrative reviews, in which
the above terminations and the non-usage of grants were found, and to
reconsider the legal method by which the KOS eliminated the above
subsidy programs.
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\18\ See footnote 1, supra.
\19\ See Stainless Steel Wire Rod From Spain; Preliminary
Results of Countervailing Duty Administrative Review, 53 FR 9789
(March 25, 1988).
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Nevertheless, despite the KOS's claim that the CAP is expired as of
1982 and the EC's contention that the subsidies countervailed in the
original investigation either were terminated or no longer benefit the
exporters of the subject merchandise, the Department found that Roldan
had an outstanding balance of long-term loans that were extended under
the CAP and that Roldan, consequently, was benefitting from the said
loan, as late as December 31, 1989, the last period considered by the
Department in an administrative review.\20\
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\20\ See Stainless Steel Wire Rod From Spain; Fnal Results of
Countervailing Duty Administrative Review, 55 FR 349 (January 4,
1990).
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Section III.A.4 of the Sunset Policy Bulletin stipulates that in
considering a subsidy for which the benefits are allocated over time,
the Department normally will determine that the countervailable subsidy
will continue to exist when the benefit stream will continue beyond the
end of the sunset review regardless of whether the program that gave
rise to the long-term benefit continues to exist. In the instant
review, Roldan or other respondent parties did not come forth with
information which would indicate whether Roldan's long-term loans under
the CAP have been fully paid off or whether Roldan is no longer
benefitting from the CAP. Hence, the Department is forced to rely on
the information contained in the latest administrative review, in which
the Department found residual benefits from the CAP still lingering
with respect to Roldan, and to determine that Roldan is still
benefitting from the eliminated subsidy, the CAP.
In conclusion, because we find that a countervailable program
currently is being used (or the benefit stream therefrom continues
beyond the end of this sunset review), and respondent interested
parties waived their right to participate in this review before the
Department, we determine that it is likely that a countervailable
subsidy will continue or recur were the order revoked.
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, 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. The Department went on to clarify that this rate may not be
the most appropriate 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 review. Additionally, where the
Department determined company-specific countervailing duty rates in the
original investigation, the Department normally will report to the
Commission company-specific rates from the original investigation or
where no company-specific rate was determined for a company, the
Department normally will provide to the Commission the country-wide or
all others rate. (See Sunset Policy Bulletin at section III.B.2.)
The domestic interested parties, citing the Sunset Policy Bulletin,
state that the Department should select, as the net countervailable
subsidy that is likely to prevail if the order is revoked, the company-
specific and all-others rates from the original investigation. (See the
domestic interested parties substantive response at 24-25.) In
contrast, the respondent interested parties assert that all the
countervailing duty rates established at the original investigation
were either zero or insignificant and that the only meaningful or
significant rate in the investigation was imposed against a particular
producer because the producer had not cooperated. Both the KOS and EC
stress that the order is 16 years old; therefore, any outstanding
benefit streams have long been amortized. Therefore, they argue the
rates likely to prevail if the order is revoked would be zero. (See the
KOS and EC's July 30, 1999 and July 29, 1999 substantive responses,
respectively.)
The Department disagrees with the domestic interested parties'
argument concerning the net countervailable subsidy rate that is likely
to prevail were the order revoked. The Department normally will choose
the rates from the investigation because such rates reflect how
companies will act without the discipline of an order in place. (See
section III.B.1 of the Sunset PolicyBulletin.) Section III.B.3 of
Sunset Policy Bulletin also provides that the Department may make an
adjustment with respect to the likely-to-prevail subsidy rate to
reflect change(s) in the programs that gave rise to the order. As the
Department noted in its administrative reviews and as the KOS indicated
in its substantive response, all subsidies pertaining to manufacturing/
exporting of the subject merchandise, except cash grants, have been
terminated.\21\ Also, the KOS stipulates in its substantive response
that the CAP was applicable only during the period 1974-1982.
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\21\ See footnote 6, supra. The Department, in its
administrative reviews, determined that PCEC-OC and PCEC-PF had been
terminated with no residual benefits. Moreover, the Department found
that the Cash Grant program was never used by Roldan during the
investigation and throughout the existence of the order.
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As a result of changes in programs since the imposition of the
countervailing duty order, we determine that selecting the net
countervailable subsidy rates, as determined in the original
investigation, is no longer appropriate. Rather, to reflect these
changes in the programs, which gave rise to the net countervailable
subsidy determination in the investigation or subsequent reviews, we
have adjusted the company-specific and all-others countervailing duty
rates from the original investigation by subtracting the subsidy rates
from programs that have been terminated and that have no existing
benefit stream. (See Memos to the File--Calculation of the Likely-to-
Prevail Rates.) As a result, the Department will report to the
Commission the rates as contained in the Final Results of Review
section of this notice.
Nature of the Subsidy
In the Sunset Policy Bulletin, the Department stated that,
consistent with section 752(a)(6) of the Act, the Department will
provide information to the Commission 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
do not specifically address this issue in their substantive response.
Among the benefits provided by the KOS's countervailable programs,
the Department determined that those provided by the PCEC-OC and PCEC-
PF were contingent upon export performance;\22\ therefore, both
programs fall within the purview of Article 3(a). Since the CAP and
government-directed
[[Page 6171]]
grants are not contingent upon exports, these programs seem to fall
outside the definition of export subsidies under Article 3(a) of the
Subsidies Agreement. However, the Department does not have enough
information to calculate or determine whether the total ad valorem
subsidization of the subject merchandise from the CAP/government-
directed grants exceeds five-percent or whether the CAP/government-
directed grants were meant to cover operating losses or to be used as
direct forgiveness of debt. Nor does the Department believe such
calculation or determination would be appropriate in the course of a
sunset review. Instead, we are providing the Commission with the
following program descriptions.
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\22\ See Stainless Steel Wire Rod From Spain: Preliminary
Results of Countervailing Duty Administrative Review, 53 FR 9789
(March 25, 1988). The maximum amount of loan a company can acquire
was expressed in terms of the percentage of the company's exports in
previous years. Also, see footnote 1.
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The CA
Under the Concerted Action Program established by Royal Decree 669/
74, the Spanish government directs banks to make long-term loans to
steel companies at below market rates. Because loans under the CAP are
provided to a specific industry at rates and terms inconsistent with
commercial consideration, the Department determined that this loan
confers a countervailable domestic subsidy.\23\
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\23\ See id.
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Government-directed grants
Although initially the disbursements were characterized as zero
interest loans, the Department found that this is an untied cash grant
meant to keep some companies in operation until a reconversion plan
could be implemented. Thus, the Department determined that the
disbursements were government-directed grants and countervailable
subsidies.\24\
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\24\ See footnote 1, supra.
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Final Results of Review
As a result of this review, the Department finds that revocation of
the countervailing duty order would be likely to lead to continuation
or recurrence of a countervailable subsidy at the rates listed below:
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\25\ See footnote 4, supra.
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Margin
Manufacturer/exporters (percent)
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Roldan, S.A................................................. 0.19
S.A. Echevarria............................................. 13.55
Forjas Alavesas, S.A........................................ 0.21
Olarra...................................................... \25\ 0.00
All others.................................................. 13.55
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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 C.F.R. 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 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 31, 2000.
Holly A. Kuga,
Acting Assistant Secretary for Import Administration.
[FR Doc. 00-2838 Filed 2-7-00; 8:45 am]
BILLING CODE 3510-DS-P