USINOR SACILOR, UNIMETAL, AND ASCOMETAL, Plaintiffs, v.
            UNITED STATES, Defendant, and INLAND STEEL BAR COMPANY,
                              Defendant-Intervenor

                       Consolidated Court No. 93-04-00230

                   UNITED STATES COURT OF INTERNATIONAL TRADE

           966 F. Supp. 1242; 1997 Ct. Intl. Trade LEXIS 70; SLIP OP.
                                     97-70

 
                             May 30, 1997, Decided

DISPOSITION:   [**1]

   Remanding the United States Department of Commerce's, International Trade
Administration, final countervailing duty determination.

COUNSEL: Weil, Gotshal & Manges (M. Jean Anderson and Gregory Husisian) for
Usinor Sacilor, Unimetal, and Ascometal, plaintiffs.

   Frank W. Hunger, Assistant Attorney General; David M. Cohen, Director,
Commercial Litigation Branch, Civil Division, United States Department of
Justice (Reginald T. Blades, Jr.); Office of Chief Counsel for Import
Administration, United States Department of Commerce (Terrence J. McCartin), of
counsel, for defendant.

   Wiley, Rein & Fielding (Charles Owen Verrill, Jr., Alan H. Price, and Peter
S. Jordan) for Inland Steel Bar Company, defendant-intervenor.

JUDGES: Richard W. Goldberg, Judge.

OPINIONBY: GOLDBERG

OPINION:   [*1242]   MEMORANDUM and OPINION

   This matter is before the Court after the United States Department of
Commerce, International Trade Administration, ("Commerce")   [*1243]   issued
its final results of redetermination on March 25, 1997 ("Second
Redetermination").

   The Second Redetermination is the third time that Commerce has issued final
results in this matter, and today's decision  [**2]   is the third time that the
Court has remanded Commerce's results. Commerce issued the Second
Redetermination pursuant to this Court's most recent remand decision, Usinor
Sacilor v. United States,     C.I.T.    , 955 F. Supp. 1481 (1997) ("Usinor
Sacilor II"). In Usinor Sacilor II, the Court remanded the case to Commerce,
directing it to determine the amount of the monetary transfers made by Usinor
Sacilor to its non-French subsidiaries, and to incorporate this amount into its
countervailing duty calculation.     C.I.T. at    , 955 F. Supp. at 1488.

   Today, the Court remands Commerce's Second Redetermination because Commerce
refused to adjust the countervailing duty to reflect these transfers. Instead,
Commerce erroneously concluded that evidence of the French government's
intent, when it provided subsidies, and its control over Usinor Sacilor
outweighs the evidence of the transfers. The Court holds that Commerce's
weighing analysis is not supported by substantial evidence. Because Commerce
failed to adjust the countervailing duty to reflect the transfers, the Court
remands the case to Commerce to adjust the countervailing duty. As part of
[**3]   today's remand, the Court also clarifies prior remand instructions to
aid Commerce when it reevaluates the evidence.

   Additional background facts underlying this case can be found in this Court's
first remand decision, Usinor Sacilor v. United States, 19 C.I.T.    , 893 F.
Supp. 1112 (1995) ("Usinor Sacilor I"). The Court exercises jurisdiction under
28 U.S.C. @ 1581(c) (1988).

   STANDARD OF REVIEW

   When reviewing an agency's factual findings, the Court must uphold the agency
if its findings are supported by substantial evidence. 19 U.S.C. @ 1516a(b) (1)
(B) (1988). "Substantial evidence is something more than a 'mere scintilla,' and
must be enough reasonably to support a conclusion." Ceramica Regiomontana, S.A.
v. United States, 10 C.I.T. 399, 405, 636 F. Supp. 961, 966 (1986) (citations
omitted), aff'd, 5 Fed. Cir. (T) 77, 810 F.2d 1137 (1987). In applying this
standard, the Court affirms agency factual determinations that are reasonable
and supported by the record when considered as a whole, even though there may be
evidence that detracts from the agency's conclusions. Atlantic Sugar, Ltd. v.
United States, 2 Fed. Cir. (T) 130, 138, 744 F.2d 1556, 1563  [**4]   (1984).

   DISCUSSION

   In its Second Redetermination, Commerce reviewed evidence establishing that
the parent company, Usinor Sacilor, transferred funds to its non-French
production operations during a period when it received countervailable subsidies
from the French government. Second Redetermination at 9-12.

   Although Commerce recognized that Usinor Sacilor made large transfers of
funds to non-French production operations, Commerce refused to adjust the
countervailing duty to reflect these transfers. Instead, it assigned "marginal
weight" to the transfers. Id. at 13. Commerce then concluded that evidence of
the transfers was outweighed by other non-economic evidence suggesting that the
French government's subsidies benefitted only French production operations. Id.
at 13-14. This non-economic evidence consists of the French government's intent
in granting subsidies and its control over Usinor Sacilor. n1 Commerce concluded
that the intent and control evidence is a better indicator of the likely effects
of subsidies than evidence of transfers. Second Redetermination at 14. Commerce
also argued that there is insufficient evidence to show that Usinor Sacilor
[**5]   actually used subsidies to fund non-French operations. Id.

- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - -

   n1 The intent and control evidence to which Commerce refers in the Second
Redetermination presumably consists of statements by French government officials
in public and in cabinet meetings, protocols between the French government and
Usinor Sacilor, and a study analyzing the restructuring of the French steel
industry. See Usinor Sacilor I, 19 C.I.T. at    , 893 F. Supp. 1112 at 1140
(describing the intent evidence Commerce has presented to this Court).

- - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - -

   [*1244]   The Court rejects Commerce's weighing analysis as a way to evade
this Court's instructions in Usinor Sacilor II to adjust the countervailing duty
to reflect all relevant evidence in the administrative record.

   Assuming, for purposes of the instant review, that the evidence in the
administrative record uniformly supports Commerce's conclusion with regard to
the French government's intent and control, the Court nevertheless holds that
the countervailing duty must be adjusted to reflect   [**6]    the transfers.
The Court also rejects Commerce's conclusion that there is no evidence showing
that Usinor Sacilor would likely use subsidies to fund non-French operations.
Second Redetermination at 14.

   Usinor Sacilor's transfers to non-French production operations are persuasive
evidence in the administrative record regarding the firm's likely uses of
subsidies. Id. at 9-12 (describing evidence of transfers contained in the
administrative record). These transfers total hundreds of millions of dollars.
Id. They constitute a definable percentage of the subsidies received by Usinor
Sacilor from the French government. Id. Significantly, they represent the only
hard financial evidence presented to this Court as to how subsidies may have
been used. The Court finds that the transfers demonstrate that a portion of the
subsidies were likely used to benefit Usinor Sacilor's non-French production.

   When Commerce refused to adjust the countervailing duty to reflect these
transfers, it calculated the countervailing duty as if no such transfers were
made. Commerce erred in this decision.

   Although Commerce showed that Usinor Sacilor's annual transfers to its
non-French production   [**7]    subsidiaries amounted to a small percentage of
the total amount of subsidies received by Usinor Sacilor each year, id. at
15-18, it did not find that these transfers are de minimis. Thus, even if these
transfers only marginally affect the countervailing duty, as Commerce contends,
they nevertheless have some effect. The present countervailing duty, therefore,
fails to reflect all significant evidence contained in the administrative
record. To this extent, the countervailing duty is inaccurate and unsupported by
substantial evidence.

   For the foregoing reasons, the Court remands this matter to Commerce to amend
the countervailing duty to reflect the evidence of the transfers from the parent
company to non-French production operations.

   The Court also takes this opportunity to clarify two aspects of its earlier
remand in Usinor Sacilor II. First, in its Second Redetermination, Commerce
incorrectly interpreted this Court's instructions in Usinor Sacilor II to mean
that it must only consider evidence contained in the plaintiffs' supplementary
briefs. See Second Redetermination at 9. The Court did not limit the scope of
evidence to be considered by Commerce on   [**8]    remand. Rather, the Court
instructed Commerce to consider all relevant economic evidence pertaining to the
likely uses of subsidies. Usinor Sacilor II,     C.I.T. at    , 955 F. Supp.
1481 at 1488. Therefore, Commerce should consider all relevant evidence in the
administrative record when conducting its redetermination regarding adjustments
to the countervailing duty.

   Second, in Usinor Sacilor II, the Court did not direct Commerce to "trace"
the subsidies to their actual end-use in the non-French subsidiaries. Rather,
the Court instructed Commerce to examine the transfers that Usinor Sacilor made
to its non-French subsidiaries. The Court determined that this evidence is
germane because it indicates the extent to which subsidies were likely used for
non-French production operations. Usinor Sacilor II,     C.I.T. at    , 955 F.
Supp. at 1489. Because no further tracking of the funds has been ordered by this
Court, the remand instruction to examine transfers from the parent to the
subsidiary does not constitute a requirement that Commerce "trace" subsidies to
their actual end-use in the subsidiary. Id.

   CONCLUSION

   Upon consideration of all of   [**9]    the parties' arguments and
submissions, the Court remands Commerce's Second Redetermination with
instructions to analyze all direct economic evidence on the likely effects of
subsidies   [*1245]   and to adjust the countervailing duty in light of this
evidence. The Court's order will be entered accordingly.

   Schedule of Consolidated Cases

1. Inland Steel Bar Company v. United States, 955 F. Supp. 1481, Court No.
93-04-00232.

2. Usinor Sacilor, Unimetal, and Ascometal v. United States, 955 F. Supp. 1481,
Court No. 93-04-00230.

   ORDER

   This action having been submitted for decision; and the Court, after due
deliberation, having rendered a decision herein; now, in conformity with said
decision, it is hereby

   ORDERED that the Final Results of Redetermination Pursuant to Court Remand
(March 25, 1995) ("Second Redetermination") of the U.S. Department of Commerce,
International Trade Administration, is remanded for reconsideration in
accordance with the Court's Memorandum and Opinion concerning the sales
denominator used in computing Usinor Sacilor's net subsidy; it is further

   ORDERED that Commerce's remand results are due to be filed within sixty (60)
days from the  [**10]   date of this ORDER. Any comments or responses by the
parties to the remand results are due on or before thirty (30) days thereafter,
and shall be limited to twenty (20) pages. Any rebuttal comments are due twenty
(20) days thereafter, and shall be limited to twenty (20) pages.