92-317

NOTICES

DEPARTMENT OF COMMERCE

(C-307-804)

Gray Portland Cement and Clinker From Venezuela Suspension of Investigation

Tuesday, March 17, 1992

AGENCY: International Trade Administration/Import Administration Department of
Commerce.

ACTION: Notice of suspension of countervailing duty investigation.

SUMMARY: The Department of Commerce has decided to suspend the countervailing
duty investigation involving gray portland cement and clinker from Venezuela. The basis
for the suspension is an agreement to offset or eliminate completely all benefits provided by
the Government of Venezuela which we find to constitute bounties or grants on exports of
gray portland cement and clinker to the United States.

EFFECTIVE DATE: March 17, 1992.

FOR FURTHER INFORMATION CONTACT: Robert Bolling or Wendy Frankel, Office of
Agreements Compliance, International Trade Administration, U.S. Department of
Commerce, Washington, DC 20230; telephone: (202) 377-3793.

SUPPLEMENTARY INFORMATION:

Case History

On May 21, 1991, the Ad Hoc Committee of Florida Producers of Gray Portland Cement (the
Ad Hoc Committee) filed with the Department of Commerce (the Department) a
countervailing duty petition on behalf of the United States industry producing gray
portland cement and clinker. In accordance with 19 CFR 355.12, the petitioner alleged that
manufacturers, producers or exporters of cement in Venezuela receive bounties or grants
within the meaning of section 303 of the Tariff Act of 1930, as amended (the Act), and that
these imports are materially injuring, or threaten material injury to, a regional U.S.
Industry (Florida). We initiated such an investigation on June 14, 1991 (56 FR 27498).
In past countervailing duty investigations, Venenzuela was considered to be a "country
under the Agreement" within the meaning of section 701(b)(3) of the Act. As such title VII
of the Act applied in those investigations, and the U.S. International Trade Commission
(ITC) as required to determine whether imports of the subject merchandise from
Venezuela materially injured, or threatened material injury to, a U.S. industry.
On August 31, 1990, Venezuela became a contracting party to the General Agreement on
Tariffs and Trade (GATT). Since qualification as a "country under the Agreement" under
section 701(b)(3) of the Act requires that the GATT not apply between the United States and
the country from which the subject merchandise is imported, Venezuela is no longer
eligible for treatment as a "country under the Agreement" within the meaning of section
701(b)(3) of the Act. However, because Venezuela is a GATT contracting party and the
merchandise included within the scope of this investigation is nondutiable, the petitioner is
nonetheless required to allege that, and the ITC is required to determine whether, pursuant
to section 303(a)(2) of the Act, imports of such merchandise from Venezuela materially
injure, or threaten material injury to, a U.S. industry.
Since publication of the notice of initiation (56 FR 27498; June 14, 1991) the following
events have occured. On June 20, 1991, the Department issued a questionnaire to the
Government of Venezuela (GOV) concerning petitioner's allegations. At the COV's

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request, the due dates for the questionnaire responses were extended until July 29, 1991
and August 2, 1991. On July 2, 1991, the U.S. International Trade Commission (ITC)
preliminarily determined that imports of gray portland cement and clinker from
Venezuela materially injured, or threatened material injury to, a U.S. industry.
On July 29, 1991 and August 2, 1991, we received responses from the GOV and two
companies: Cementos Caribe, C.A. (Caribe) and Venezolana de Cementos S.A.C.A.
(Vencemos). On August 5, 1991, we presented the GOV with supplemental questionnaire
and received responses from the GOV, Caribe, and Vencemos on August 9, 1991.
On August 21, 1991, we published a Preleminary Affirmative Countervailing Duty
Determination: Gray Portland Cement and Clinker from Venezuela (56 FR 41522). In our
preliminary determination we found that bounties or grants were being provided to
Venezuelan manufacturers, producers, or exporters of gray portland cement and clinker
under the following programs: The Export Bond Program and the Corporacion Venezolana
de Fomento (CVF). On September 5, 1991, the final countervailing duty determination
was aligned with that of the companion antifumping duty investigation (56 FR 43907).
Between November 11 and November 21, 1991, we conducted verification of the
information provided by the GOV and the respondents of Venezuela. On November 21,
1991, the final antidumping duty determination was postponed in accordance with section
735(a)(2) of the Act. Therefore, in accordance with section 705(a)(1) of the Act, the
Department also posponed the final countervailing duty determination on the subject
merchandise until no later than March 18, 1992 (56 FR 58680).

Standing

The Department received letters from the National Portland Cement Company, Continential
Cement Company of Florida, Inc., and Charles Redi-Mix Company opposing the petition. We
issued questionnaires to Continental Cement and National Portlant Cement Company,
inquiring about their production of cement, in order to determine whether these companies
should be considered part of the domestic industry producing cement and clinker. We did
not issue a standing questionnaire to Charles Redi-Mix because it is an importer of
Venezuelan cement. We received responses from Continental Cement and National Portland
Cement Company. It is the Department's practice to accept a petitioner's representations
that it is filing on behalf of the domestic industry unless parties account for a significant
proportion of domestic production of the like product affirmatively oppose the filing. As a
result of our analysis of the responses from Continental Cement and National Portland
Cement Company, we have determined that the opposing parties do not, in fact, represent a
significant enough proportion of the domestic industry to cause us to call into question
petitioner's standing. Therefore, we determined that the petitioner in this investigation has
standing to bring this case.
There is nothing in the statue, the legislative history, or our regulations requiring the
petitioners establish affirmatively that they have the support of a majority of the domestic
producers of the subject merchandise. This position has recently been upheld by the Court
of International Trade in NTN Bearing Corporation of America v. United States, 757 F.
Supp. 1425 (CIT 1991). In many cases, such a requirement would be so onerous as to
preclude access to import relief under the countervailing duty laws.

Products Under Investigation

The products covered by this investigation are gray portland cement and clinker. Gray
portland cement and clinker are currently classifiable under subheadings 2523.10 and
2523.29 of the Harmonized Tariff Schedule (HTS). Gray portland cement has also been
entered under HTS subheading 2523.90 as "other hydraulic cements." Gray portland
cement is a hydraulic cement and the primary component of concrete. Clinker, an
intermediate material produced when manufacturing cement, has no use other than
grinding into finished cement. Oil well cement is also included within the scope of this
investigation; microfine cement is not included within the scope of this investigation.
Although the HTS subheadings are provided for convenience and customs purposes, the
written description of the products covered under the scope of this proceeding remains
dispositive.

Suspension of Investigation

On February 11, 1992, the Department and the Government of Venezuela initialed a
proposed agreement to suspend the contervailing duty investigation on gray portland
cement and clinker from Venezuela. The Department gave parties an opportunity to
comment on the proposed suspension agreement. The petitioner and respondents
commented on one issue: whether the CVF loan program confers a countervailable benefit
upon Caribe.

Comments

The respondents note that in the preliminary determination, the Department found that the
CVF loan program confers a countervailable benefit upon Caribe, because Caribe received
the loan on terms inconsistent with commercial considerations. Citing the Department's
verfication report (January 13, 1992), the respondents argue that the Department has since
recognized that this loan was in fact an agreement settling protracted litigation between
adverse parties, and does not constitute a loan on terms inconsistent with commercial
considerations. The comments submitted by the respondents on February 24, 1992,
summarize the events surrounding the lawsuit and subsequent settlement. Therefore,
respondents maintain the loan conferred no subsidy upon Caribe. According to the
respondents, there is sufficient evidence on the record to support their claim that the
CVF-Caribe settlement agreement does not constitute a countervailable program. Thus, the
Department should amend the proposed suspension agreement by removing all mention of
the CVF program.
The petitioner concurs with the respondents' contention that the CVF-Caribe settlement did
not provide a countervailable bounty or grant and that any mention of the program should
be removed from the suspension agreement.

Department's Position

As detailed in our verification report and a decision memo (See, Memorandum from
Richard W. Moreland to Alan M. Dunn dated March 6, 1992), we have carefully reviewed the
circumstances and terms of the CVF-Caribe loan. After careful analysis of the information
provided at verification and in the comments received, we have determined that this loan
does not constitute a countervailable bounty or grant. Therefore, we have removed all
reference to this program from the agreement suspending the countervailing duty
investigation on gray portland cement and clinker from Venezuela.
We have determined that the suspension agreement will offset completely the amount of the
net bounty or grant with respect to the subject merchandise exported directly or indirectly
to the United States, that the agreement can be monitored effectively and that the
agreement is in the public interest. We find, therefore, that the

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criteria for
suspension of an investigation pursuant to section 704 of the Act have been met. The terms
and conditions of the agreement, signed March 11, 1992, are set forth in Annex 1 to this
notice.
Pursuant to section 704(f)(2)(A) of the Act, the suspension of liquidation of all entries,
entered or withdrawn from warehouse, for consumption, of gray portland cement and
clinker from Venezuela effective August 21, 1991, as directed in our notice of Preliminary
Affirmative Countervailing Duty Determination: Gray Portland Cement and Clinker from
Venezuela (56 FR 41522), is hereby terminated. Any cash deposit on entries of gray
portland cement and clinker from Venezuela pursuant to that preliminary affirmative
determination shall be refunded and any bonds shall be released.
Notwithstanding the suspension agreement, the Department will continue the investigation
if we receive a request, in accordance with section 704(g) of the Act, within 20 days after
the date of publication of this notice.
This notice is published pursuant to section 704(f)(1)(A) of the Act.
Dated: March 11, 1992.

Alan M. Dunn,

Assistant Secretary for Import Administration.

Suspension Agreement

Gray Portland Cement and Clinker from Venezuela

Pursuant to the provisions of section 704(b)(1) of the Tariff Act of 1930 (the Act) and §
355.18 of the Department of Commerce Regulations, the Department of Commerce (the
Department) and the Government of Venezuela (Venezuela) enter into the following
Suspension Agreement (the Agreement). On the basis of this agreement the Department
shall suspend its countervailing duty investigation initiated on June 14, 1991 (56 FR
27498) with respect to gray portland cement and clinker from Venezuela, subject to the
terms and provisions set forth below.

I. Scope of the Agreement

The Agreement applies to the following merchandise (the subject merchandise)
manufactured in Venezuela and exported, directly or indirectly, from Venezuela to the
United States:
Gray portland cement and clinker, which are currently classified under subheadings
2523.10 and 2523.29 of the Harmonized Tariff Schedule (HTS). Gray portland cement has
also been entered under HTS subheading 2523.90 as "other hydraulic cements." Gray
portland cement is a hydraulic cement and the primary component of concrete. Clinker, an
intermediate material produced when manufacturing cement, has no use other than
grinding into finished cement. Oil well cement is also subject to the Agreement. Microfine
cement was not included within the scope of the investigation and therefore is not subject to
the Agreement.

II. Basis of the Agreement

A. The Government of Venezuela (GOV) hereby agrees to eliminate completely the
amount of the net bounty or grant determined by the Department to exist with respect to
the subject merchandise. The elimination of the net bounty or grant shall be accomplished
for all exports of the subject merchandise made on or after June 15, 1991. The Government
of Venezuela certifies that all exports of the subject merchandise to the United States
made on or after June 15, 1991, are excluded from eligibility for the Export Bond Program,
where exporters are eligible to receive bond payments based on a percentage of the FOB
export value, and it will continue this exclusion in full force and effect.
B. The GOV recognizes that the provision of subsidies on the production or shipment of the
subject merchandise exported directly or indirectly from Venezuela to the United States
may result in termination of this Agreement and resumption of the investigation pursuant
to the provisions of section 704(i) of the Act. Subsidies are those benefits which have been
found or are likely to be found countervailable in any final U.S. countervailing duty
investigation of a Venezuelan product, in any final determination in this investigation, or in
any final review of a Venezuelan product under section 751 of the Act, including subsidies
which may apply to other products or exports to other destinations to the extent that such
subsidies cannot be segregated as applying solely to such other products or exports.
C. The GOV shall notify the Department in writing of any new benefit which is, or which
Venezuela has reason to know would be, a subsidy on shipments of the subject
merchandise exported, directly or indirectly, from Venezuela to the United States,
including subsidies which may apply to both the subject merchandise and other products or
exports to other destinations, to the extent such benefits cannot be segregated as applying
solely to such other products or exports.
D. If any program under which benefits have been received in the past, and which is
included in this Agreement, is found not to constitute a countervailable benefit under the
Act in (i) the notice of suspension of investigation, (ii) the final determination, or (iii) the
final results of any administrative review of this Agreement under section 751 of the Act in
this proceeding, then the elimination of the benefits under that program will no longer be
required.
E. The GOV agrees to comply with the notification requirements, as outlined in Section III
of this agreement, concerning any application for, or receipt of benefits under the Partial
Duty Drawback program (where a company can apply for a partial duty drawback of five
percent of the FOB export value) with respect to the subject merchandise.

III. Monitoring of the Agreement

A. The GOV agrees to supply any information and documentation (consistent with
Venezuelan law and regulations) which the Department deems necessary to demonstrate
that there is full compliance with the terms of this Agreement. The GOV also agrees to
provide copies of all such documents as the Department deems necessary in connection
with verifying full compliance with the terms of this agreement.
B. The GOV will notify the Department if its producers/exporters:
1. Transship the subject merchandise through third countries to the United States;
2. Alter their position with respect to any terms of the Agreement; or
3. Apply for, or receive, directly or indirectly, the benefits of the programs described in
Section II for the manufacture or export of gray portland cement and clinker exported,
directly or indirectly, from Venezuela to the United States.
C. The Department will request information and may perform verifications periodically
pursuant to administrative reviews conducted under section 751 of the Act, in addition to
exercising its rights under paragraphs III. A. and B., above.
D. The GOV agrees to permit such verification and data collection (consistent with
Venezuelan law and regulations) which the Department deems necessary in order to
monitor this Agreement.
E. The GOV agrees to provide quarterly certifications that it continues to be in compliance
with the terms of this Agreement. A certification will be provided within 45 days after the
end of each calendar quarter beginning with the quarter ending March 31, 1992.

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F. The GOV agrees to provide to the Department, within 45 days from the end of
each calendar quarter beginning March 31, 1992, the value and volume of exports of the
subject merchandise to the United States by the producers and exporters.
G. The GOV agrees to notify the Department if it alters its position with respect to any of the
terms of this Agreement.

IV. General Provisions

A. In entering into this Agreement, Venezuela does not admit that any of the programs
alleged or investigated constitute countervailable benefits within the meaning of the Act.
B. The provisions of section 704(i) of the Act shall apply if:
1. Venezuela withdraws from this Agreement or refuses to participate in this Agreement;
2. The Department determines that the Agreement is being or has been violated or no
longer meets the requirements of section 704 of the Act.
C. If the Department determines that the Agreement is being or has been violated, it may
terminate this Agreement and reopen the investigation or issue a countervailing duty
order as appropriate under § 355.19 of the Commerce Regulations. If reopened, the
investigation will be resumed for all producers and exporters of the subject merchandise as
if the affirmative preliminary determination were made on the date the Department
terminates this Agreement.
D. The Department will terminate this suspended investigation after review under section
751 of the Act, whenever the conditions set forth in § 355.25 of the Commerce Regulations
are satisfied.

V. Effective Date

The effective date of this Agreement is the date of its publication in the Federal Register. The
provisions of this Agreement apply to exports on or after the effective date.
Signed on this 11th day of March, 1992.
For the Government of Venezuela.

Edmond Benedetti,

Minister Conselor Embassy of Venezuela.

For the U.S. Department of Commerce.

Alan M. Dunn,

Assistant Secretary for Import Administration.

I have determined pursuant to section 704(b) of the Act that the provisions of Section B
completely eliminate the bounties or grants that the Government of Venezuela is
providing with respect to gray portland cement and clinker exported, directly or indirectly,
from Venezuela to the United States. Furthermore, I have determined that suspension of
the investigation is in the public interest, that the provisions of Section III ensure that this
Agreement can be monitored effectively, and that the agreement meets the requirements of
section 704(d) of the Act.
Signed on this 11th day of March, 1992.
For the U.S. Department of Commerce.

Alan M. Dunn,

Assistant Secretary for Import Administration.

(FR Doc. 92-6166 Filed 3-16-92; 8:45 am)

BILLING CODE 3510-DS-M