FINAL RESULTS OF REDETERMINATION PURSUANT
TO COURT REMAND
Inland Steel Industries, Inc., Et Al. V. United States, and Usinor Sacilor Et Al.
Consol. Ct. No. 93-09-00567-CVD
Slip Op. 97-71 and Order (CIT June 2, 1997)
The Department of Commerce (the Department) has prepared these final remand results pursuant to the remand from the U.S. Court of International Trade (the Court) in the above-captioned case. The Department requested a remand of Final Affirmative Countervailing Duty Determination: Certain Steel Products from France, 58 FR 37304 (July 9, 1993), from the Court in order to determine whether certain Credit National export loans discovered at verification conferred a countervailable benefit on Usinor Sacilor. As explained below, the Department has recalculated both Usinor Sacilor's rate and the country-wide rate.
During the verification of Usinor Sacilor's questionnaire responses, the Department discovered that six Credit National loans that were included in the 1991 consolidation of outstanding Credit National loans were export promotion loans. Although in its final concurrence memorandum the Department stated that it would determine these loans to be specific, it overlooked these loans in its final determination and calculations. As such, the Department requested that the Court remand this matter for correction of this error. The Department stated that it would determine these loans to be specific and would determine whether to countervail these loans after examining whether the loans conferred a benefit upon Usinor Sacilor.
On June 23, 1997, the Department circulated draft remand results to the parties. On June 25, 1997, petitioners submitted comments on the draft remand results. The Department subsequently sought a one week extension, from June 30 to July 7, for filing the final remand results with the Court.
Although the Credit National export promotion loans were reported in Usinor Sacilor's responses, we do not have information on the repayment schedules for these loans. Therefore, to calculate the benefit from these loans, we multiplied the principal amounts outstanding at the time of consolidation by the difference between the long-term interest rates reported in the OECD Financial Statistics (Credit National Bank Equipment Loans) for the year the loans were originally taken out and the reported interest rate for these loans. These benchmark rates were used for all long-term loans in the investigation. We would have used the value of 1991 total export sales as the denominator for the benefit calculation, but it was not available. Instead, we divided the benefit by the total value of 1991 export sales of subject merchandise. On this basis, we calculated an estimated net subsidy of 0.01%
INTERESTED PARTY COMMENT
Petitioners argue that the Department should have calculated the benefit from the loans in question based upon the entire period of investigation (POI), calendar year 1991. According to petitioners, the Department's reduction of the benchmark and actual loan interest rates to reflect the loan consolidation on December 6, 1991, ignores the fact that, in cash flow terms, the individual loans continued to exist throughout 1991. Petitioners acknowledge that the change they are requesting will not affect the calculation of the countervailing duty rate.
We disagree with petitioners' argument regarding the cash flow effect of the individual loans. While we treat the preferential interest component of the individual loans as giving rise to a cash flow effect during the POI, we do not view Usinor Sacilor as benefitting from these preferential interest rates throughout the entirety of calendar year 1991 because the loans were consolidated and the terms of the individual loans changed on December 6, 1991, the cash flow of the consolidated loan will occur when interest payments are made on the revised loans. See section 355.48(a) and (d)(i) of Countervailing Duties, Notice of Proposed Rulemaking and Request for Public Comments, 54 FR 23,366 (May 31, 1989) (1989 Proposed Regulations). Nevertheless, petitioners' argument has led us to reconsider one aspect of our calculation, as we discuss below.
In calculating the benefit from the individual loans, we used all of the available information in the record, which included the original preferential interest rates, the date of consolidation and the outstanding principal amounts at the time of consolidation. However, because Usinor Sacilor did not report the payment schedules and payment histories for these loans, we also had to make certain assumptions in order to calculate the amount of the resulting benefits.
Because we do not know, and are unable to reconstruct, the actual payment histories for these loans, and because we know that these loans were consolidated on December 6, 1991, we had few options in attempting to measure the benefits of these loans. The most reasonable approach, in our view, is to treat these loans, for purposes of this determination, as one-year loans. For the remainder of the information that we need to calculate the benefits, we have used information in the record, namely, the original preferential interest rates for the amounts of principal outstanding at the time of consolidation.
In the draft remand results, we had treated these loans as outstanding, in effect, for slightly less than one year, i.e., from January 1 through December 5, 1991. We accordingly adjusted the benchmark and actual loan interest rates to reflect this reduced time period. Upon reflection, while we know from the record that the loans were consolidated on December 6, 1991, we do not know whether the last loan payment prior to consolidation for each of the loans was made on December 31, 1990, which we in effect had assumed, or on some earlier (or later) date. In the final remand results, because we are unable to make any more precise assumption, we have simply assumed that interest had been accruing for one year prior to consolidation, or in effect from December 6, 1990 until December 5, 1991.
We note that this slightly revised approach makes no difference in the countervailing duty rate calculated for the POI. It yields the same result as in the draft remand results and as would be reached pursuant to the change requested by petitioners.
Based on our calculation of the Credit National export promotion loans, we determine the estimated net subsidy rate for all programs to be:
Usinor Sacilor 15.13%
Country-Wide Rate 15.13%
Richard W. Moreland
Acting Assistant Secretary
for Import Administration
Date: July 7, 1997