Federal Register / Vol. 65, No. 26 / Tuesday, February 8, 2000 / Notices 6163

1See Industrial Phosphoric Acid from Israel:

Final Results and Partial Recission of

Countervailing Duty Administrative Review, 64 FR

49460 (September 12, 1999).

2See October 8,1999, ‘‘WTO Interim Panel Finds

Against U.S. CVD Rules on Privatization,’’ 17 Inside

U.S. Trade No. 140 at 4.

rolled and corrosion-resistant carbon

steel flat products from the Republic of

Korea covering the period January 1,

1998, through December 31, 1998.

This notice is published in

accordance with 19 CFR 351.213(d)(4).

Dated: January 27, 2000.

Holly A. Kuga,

Acting Deputy Assistant Secretary for Import

Administration.

[FR Doc. 00–2842 Filed 2–7–00; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

International Trade Administration

[C–508–605]

Final Results of Full Sunset Review:

Industrial Phosphoric Acid From Israel

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

ACTION: Notice of final results of full

sunset review: Industrial phosphoric

acid from Israel.

SUMMARY: On September 27, 1999, the

Department of Commerce (‘‘the

Department’’) published in the Federal

Register (64 FR 51954) the preliminary

results of the full sunset review of the

countervailing duty order on industrial

phosphoric acid from Israel pursuant to

section 751(c) of the Tariff Act of 1930,

as amended (‘‘the Act’’). We provided

interested parties an opportunity to

comment on our preliminary results and

received comments filed on behalf of

domestic and respondent interested

parties. 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.

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 & Constitution, N.W.,

Washington, D.C. 20230; telephone:

(202) 482–1930 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 Fiveyear (‘‘Sunset’’) Reviews of

Antidumping and Countervailing Duty

Orders; Policy Bulletin, 63 FR 18871

(April 16, 1998) (‘‘Sunset Policy

Bulletin’’).

Scope

This order covers shipments of

industrial phosphoric acid (‘‘IPA’’) from

Israel. According to the final results of

the Department’s most recent

administrative review, the merchandise

subject to this order is currently

classifiable under item number

2809.20.00 of the Harmonized Tariff

Schedule of the United States

(‘‘HTSUS’’). 1 Although the HTSUS

subheading is provided for convenience

and customs purposes, the written

description remains dispositive.

Background

On September 27, 1999, the

Department published in the Federal

Register the Preliminary Results of Full

Sunset Review: Industrial Phosphoric

Acid from Israel (64 FR 51954). In our

preliminary results, we found that

revocation of the order would be likely

to lead to continuation or recurrence of

a countervailable subsidy. Further, we

found the net countervailable subsidy

likely to prevail if the order were

revoked to be 10.93 percent for Haifa

Chemicals Ltd. (‘‘Haifa’’) and 5.97

percent for ‘‘all others.’’ On November 16, 1999, we received

a case brief on behalf of Albright and

Wilson Americas Inc., FMC

Corporation, and Solutia Inc.

(collectively, ‘‘domestic interested

parties’’), within the deadline specified

in 19 CFR 351.309(c)(1)(i). We also

received a case brief on behalf of the

Government of Israel (‘‘GOI’’) and

Rotem Amfert Negev Ltd. (‘‘Rotem’’)

(collectively, ‘‘respondent interested

parties’’). On November 23, 1999,

within the deadline specified in 19 CFR

351.309(d), the Department received

rebuttal comments from domestic and

respondent interested parties. We have

addressed the comments below.

Although the deadline for this

determination was originally January

25, 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

three days.

Comments

Comment 1

The domestic interested parties assert

that the Department correctly concluded

in its preliminary results that revocation

of the order would likely lead to

continuation or recurrence of a

countervailable subsidy, and further,

that this conclusion is appropriate for

the final results in light of the results in

the recently completed eleventh

administrative review (see November

16, 1999, Case Brief of domestic

interested parties at 5).

The respondent interested parties

argue that, because of a recent WTO

interim panel determination that

privatization extinguishes prior nonrecurring subsidies, 2 and because the

Department has verified in the last

several reviews the GOI’s intention to

fully privatize Rotem, the Department

should reconsider its preliminary

results and find that revocation of the

order on Rotem will not lead to

continuation of their benefits from

subsidies (see November 16, 1999, Case

Brief of respondent interested parties at

2). They claim that, whereas the

privatization of Rotem was 68.48

percent complete as of the last

administrative review, today, it is

approximately 98 percent complete. Id.

Therefore, the Department’s calculation

of the countervailing duty applicable to

Rotem, which assumes that most prior,

non-recurring subsidies are passed

through to the new owners, is contrary

to the WTO dispute panel

determination. Id.

In rebuttal, the domestic interested

parties argue that the WTO finding

noted by respondent interested parties

is neither relevant nor binding, and

there is no reason why the Department

should alter its reasoning as a result of

an unadopted interim panel report with

no legal status in U.S. domestic

proceedings (see November 23, 1999,

Rebuttal of Case Brief of domestic

interested parties at 2). Further, they

argue that the report apparently

concludes that the United States should

not assume, in an administrative review,

that the sale of a company to private

bidders automatically terminates the

subsidies the company received when it

was government-owned, and that the

United States should recalculate anew

6164 Federal Register / Vol. 65, No. 26 / Tuesday, February 8, 2000 / Notices

any countervailable subsidies received

after privatization. Id. at 3. Therefore,

the domestic interested parties assert

that were the interim report adopted, its

relevance to a sunset review would be

unclear, and the Department still would

be free to conclude, in a sunset review,

that subsidization would be likely to

continue or recur.

Department’s Position

We disagree with the respondent

interested parties that the WTO interim

panel finding requires the Department

to alter its approach to privatization in

the instant case and revise its

preliminary determination of likelihood.

The domestic interested parties are

correct in noting that, because the final

panel report has not been adopted by

the Dispute Settlement Body, the United

States has no obligation with respect to

the report. As the report has not been

adopted, it is premature to consider

what obligations, if any, the panel report

may impose on the United States. Even if it were not premature for the

Department to reconsider our approach

to privatization in light of the panel

report, and it were otherwise

appropriate to do so, 19 U.S.C.

§ 3533(g)(1) provides that a regulation or

practice may not be amended,

rescinded, or otherwise modified in the

implementation of such report unless

and until very specific statutorily

mandated actions have been fulfilled

and the appropriate congressional

committees have been consulted. Thus,

we continue to determine that a portion

of subsidies bestowed on a governmentowned company prior to privatization

continues to benefit the production of

the privatized company.

Comment 2

The domestic interested parties agree

with the Department’s method of

adjusting the original net subsidies to

reflect new and terminated programs,

and increased usage of a program.

Further, they agree with the rates

selected by the Department to report to

the Commission for Rotem and Haifa

(see November 16, 1999, Case Brief of

domestic interested parties at 6–7). Respondent interested parties assert

that, should the Department maintain its

position that subsidization will

continue, then it must revise the

magnitude of the margin in the

preliminary results to reflect the

Department’s findings in the most

recent review. The respondent

interested parties reassert that the

Department’s methodology with respect

to privatization of previously subsidized

companies is contrary to the WTO

dispute panel determination holding

that the Department is in violation of

the WTO Subsidies Agreement (see

November 16, 1999, Case Brief of

respondent interested parties at 2).

Thus, they argue, the Department

should adjust its calculation of the

countervailing duty for Rotem. Id.

Respondent interested parties add that

should the Department find that it can

take into account only the level of

privatization as of the most recently

completed administrative review, then

the Department should still recalculate

the rate using the privatization level of

68.48 percent to reflect that review.

Therefore, the Department should report

to the Commission a rate of 1.88 percent

for Rotem (5.97–(0.6848*5.97 = 1.88%).

Id. at 3.

Accordingly, the Department should

adjust the Encouragement of Capital

Investments Law (‘‘ECIL’’) Grants

benefits from 5.58 percent to the 5.43

percent from the most recent review. Id

at 3. Further, the subsidy of 0.11 percent

from the Environmental Grants Program

was expensed entirely by the

Department in the 1996 review and was

found not to be used in the 1997 review;

therefore, the Department should not

include the program in its calculations.

Finally, the Department should find no

benefit from Long-Term Industrial

Development (‘‘LTID’’) Loans because,

as verified in the original investigation,

all loans were terminated in 1985 and

any loan taken in 1985 would be fully

repaid ten years later, in 1995. Thus, no

benefits from this program were found

in the results of the 1996 review.

In summary, the respondent

interested parties assert that the

calculation of the likely level of

subsidization for Rotem should exclude

two programs, Environmental Grants

Program and LTID Loans, and reduce

the subsidy from ECIL Grants benefits

from 5.58 percent to 5.43 percent. Thus,

according to respondent interested

parties, the Department should adjust its

calculations to include: (1) 5.43 percent

from the ECIL Grants; (2) 0.18 percent

from the Infrastructure Grant Program;

and (3) 0.04 percent from the

Encouragement of Research and

Development Law (‘‘EIRD’’) Grants, for

a net subsidy of 5.65 percent. In rebuttal, the domestic interested

parties reassert that the Department’s

calculation of the net countervailable

subsidy for Rotem reflects the

Department’s standard methodology of

presuming that the rate calculated in the

original investigation is the best

indicator of the behavior of exporters

and foreign governments without the

discipline of the order in place (see

November 23, 1999, Rebuttal Brief of

domestic interested parties at 4).

Further, the domestic interested parties

reassert that the Department’s

adjustments to the original subsidy rate

fall well within the Department’s

discretion. Id.

Department’s Position

The Department agrees, in part, with

the respondent interested parties’

argument. We agree that, in the original

investigation, the Department found the

LTID Loans program was terminated in

1985. The Department, nonetheless,

included an estimated subsidy from the

program on the basis that loans taken

prior to termination of the program

would continue to provide

countervailable benefits. Loans taken in

1985 would not be fully repaid until ten

years later; after 1995, there would be

no benefits conferred by this program.

In the 1996 review, the GOI stated that

the LTID Loan program was terminated

in 1985 and had not been reinstated.

Accordingly, in the 1996 review and all

subsequent reviews, the Department

found the program ‘‘not used’’ and that

Rotem did not hold any outstanding

loans from this program. We disagree with the respondent

interested parties’ argument that we

should eliminate the benefits from the

Environmental Grants Program from our

calculation of the net subsidy. The

Department has not found the program

terminated in any administrative

reviews. Without such Department

determination, consistent with the

Sunset Policy Bulletin, we find that this

program continues to exist and may

provide benefits in the future.

Therefore, we will continue to include

a benefit in our calculation of the rate

to report to the Commission. We disagree with the respondent

interested parties’ assertion that we

erred in selecting a benefit from the

1996 administrative review of 5.58

percent for the ECIL Grant program on

the basis that the 1997 administrative

review (with the rate of 5.43 percent)

reflects the results of the Department’s

most recent review. While the final

results of our 1997 administrative

review, which was issued after the

deadline for submitting comments for

our preliminary results, were not

addressed by interested parties in prepreliminary comments, we do not agree

that our policy is to select the benefit

rates from the most recently completed

review. Rather, as noted in section

III.B.3(d) of the Sunset Policy Bulletin,

where the Department has conducted an

administrative review of an order and

determined to increase the net

countervailable subsidy rate for any

reason, the Department may adjust the

net countervailable subsidy rate

determined in the original investigation

to reflect the increase in the rate. In our

preliminary results we stated that

Federal Register / Vol. 65, No. 26 / Tuesday, February 8, 2000 / Notices 6165

because, over the life of the order, there

has been a consistent pattern of

increased usage of the grants provided

by this program, we determined that the

rate for this program from the original

investigation should be adjusted to

reflect this increased usage. While the

reduction in the rate from the 1996 to

1997 administrative review reflects a

decrease in the benefits from the

previously bestowed grants, it does not

necessarily reflect the behavior of the

exporters and foreign government

without the discipline of the order. The

ECIL Grant program continues to exist

and grants continue to be available.

Therefore, we continue to determine

that the history of increased usage of

this program makes it appropriate that

the Department select a more recently

calculated rate that reflects the

increased usage of this program.

Therefore, we will continue to add the

benefit as determined in the 1996

administrative review to determine the

net countervailable subsidy likely to

prevail.

Therefore, the Department will not

include benefits from LTID Loans in the

net countervailable subsidy. With

respect to the ECIL Grants, the

Department will continue to use the rate

of 5.58 percent from the preliminary

results for Haifa and ‘‘all others.’’

Comment 3

The respondent interested parties

argue that the Department should not

report a higher rate for Haifa than the

rate it will report for Rotem.

Specifically, the rate for the LTID Loans

program should be 0.00 percent instead

of 5.02 percent because, as noted above,

the LTID Loans program was terminated

in 1985, and any residual benefits from

the program ended in 1995, after all tenyear loans were repaid (see November

16, 1999 Case Brief of the respondent

interested parties at 7). Further, the

respondent interested parties note that

the Department has used Rotem’s rates

for all other programs to determine

Haifa’s overall rate. Therefore, should

the Department disagree with a rate of

zero for the LTID Loans, then the rate

for this program for Haifa should still be

no greater than 0.06 percent, Rotem’s

rate for this program. Id. at 7.

In rebuttal, the domestic interested

parties contend that the Department has

no information indicating that Haifa did

not obtain LTID Loans or that it has not

received residual benefits from such

loans in later years (see November 23,

1999, Rebuttal Brief of domestic

interested parties at 6). Thus, there is no

basis for a downward adjustment to

Haifa’s net countervailable subsidy.

Additionally, they reassert that the

original rate is the most accurate

predictor of Haifa’s actions were the

order revoked and the Department

should not recalculate this rate for its

final results. Id. at 7.

Department’s Position

The Department agrees with the

respondent interested parties. As noted

above, we determined in the original

investigation that the program was

terminated in 1985, but that benefits

from loans granted under the LTID

Loans program would be conferred

through 1995. Further, we found the

program to be not used in the

administrative reviews since 1996.

Therefore, we will not include the

benefits from this terminated program in

our calculation of the net subsidy likely

to prevail. With respect to the

respondent interested parties assertion

that the Department has used Rotem’s

rates for all other programs to determine

Haifa’s overall rate, two programs, the

Infrastructure Grant Program and the

Environmental Grant Program, were not

included in the original investigation.

The third program, EIRD Grants

conferred the same benefits on Haifa

and ‘‘all others’’ in the final

determination. Therefore, the

Department, in each instance, has used

the only available rates to determine

Haifa’s net subsidy.

Comment 4

The domestic interested parties agree

with the Department’s description of the

information it intends to provide to the

Commission with respect to the nature

of the subsidies found and their

categorization (whether the subsidy is a

subsidy described in Article 3 or 6.1)

under the WTO Subsidies Agreement

(see November 16, 1999, Case Brief of

domestic interested parties at 9).

Specifically, they agree that the Bank of

Israel Export Loans would fall under

Article 3 of the Subsidies Agreement.

Further, domestic interested parties

assert that the remaining subsidies are

actionable subsidies under Article 5 of

the Subsidies Agreement, which defines

an actionable subsidy as one that is

‘‘specific’’ within the meaning of

Articles 1 and 2 of the Agreement, and

causes adverse effects to the interests of

other WTO members. Id. at 9. Finally,

the domestic interested parties note

that, of the eleven administrative

reviews of the order, a net

countervailing subsidy exceeding five

percent was found in all but one (the

1992 review). Id. at 11. Accordingly, it

is reasonable to assume that these

programs continue to exist and are

utilized, and that the Department is

justified in reporting to the Commission

that these subsidies constitute ‘‘serious

prejudice’’ to the interests of the United

States under Article 6.1 of the Subsidies

Agreement.

In their rebuttal brief, respondent

interested parties agree with the

Department’s approach of providing the

6166 Federal Register / Vol. 65, No. 26 / Tuesday, February 8, 2000 / Notices

Commission with ‘‘descriptions’’ of the

nature of the subsidy (see November 23,

1999, Rebuttal Brief of the respondent

interested parties at 2). However, with

respect to the Bank of Israel Export

Loans, they assert that, because the

Department found in the original

investigation that the loans were no

longer at preferential rates, the

program’s consistency with the

Subsidies Agreement is irrelevant. Id. at

3.

With respect to the other programs,

respondent interested parties contend

that, even as measured by the

Department’s methodology, the other

programs will not exceed the five

percent threshold of Article 6 of the

Subsidies Agreement in future reviews.

First, of the six subsidies mentioned in

the Preliminary Results other than the

Bank of Israel Export Loans, three are

not relevant: The LTID Loans and the

Exchange Rate Risk Insurance Scheme

(‘‘ERIS’’) have been terminated, and the

Environmental Grant Program was used

only one time and provides no residual

benefits. Id. All the other programs

combined i.e., the ECIL Grants, EIRD

Grants, and Infrastructure Grant

Program will not exceed five percent in

the future. Id. at 3–4. This is because

ECIL and infrastructure grants are

diminishing, both as a result of their

allocation over time and as a result of

the fact that any new grants have been

minimal. Additionally, further

privatization of Rotem, from about 31

percent government ownership to about

two percent, will significantly reduce

the residual subsidization from prior

grants. Id. at 4.

Department’s Position

The Department agrees with the

respondent interested parties’ assertion

that descriptions of the Bank of Israel

Export Loans, LTID Loans, and ERIS

should not be included in the nature of

the subsidy section because these

programs were found to be terminated.

However, as noted above, the

Department has not found the

Environmental Grant Program to be

terminated. Therefore, we will revise

the descriptions of the nature of the

subsidies from these programs. Additionally, as we noted in our

preliminary results, we do not have

information with which to calculate the

net countervailable subsidy in

accordance with Annex IV of the

Subsidies Agreement, nor do we believe

it appropriate to attempt such a

calculation in the course of a sunset

review.

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. Although the programs conferring

benefits do not fall within the definition

of an export subsidy under Article 3.1(a)

of the Subsidies Agreement, they 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. The Encouragement of Capital

Investments Law (ECIL) Grants. In the

1987 original investigation, the

Department found that Negev

Phosphates, Ltd. (‘‘Negev’’) and Haifa

Chemicals, Ltd. received

countervailable subsidies from this

program, the benefits of which depend

on the geographic location of the

eligible enterprises. ECIL Grants were

found to confer subsidies in each

subsequent administrative review. Encouragement of Research and

Development Law (‘‘EIRD’’) Grants.

Israeli manufacturers, producers or

exporters of IPA may benefit from

research and development grants under

this program. With the exception of the

1988, 1989 and 1991 administrative

reviews, the Department found the EIRD

Law Grants to be countervailable in

each yearly review since the issuance of

the order.

Infrastructure Grant Program. In the

administrative review of the 1996

period, the Department found that this

program enables the GOI to establish

new industrial areas by partially

reimbursing companies for their costs of

developing the infrastructure in certain

geographical zones. Environmental Grant Program.

Additionally, in the 1996 administrative

review, the Department found that the

GOI administers this countervailable

subsidy program to provide financial

assistance for the adaptation of existing

industrial facilities to new

environmental requirements.

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

for the reasons set forth in the final

results of review. As discussed more

fully above, we will adjust our

calculations of the net subsidy to reflect

the termination of the LTID Loans

program on the rates listed below:

Manufacturer/Exporter Margin (Percent)

Haifa, Ltd. ................................. 5.91

All Others .................................. 5.91

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 material 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,

Assistant Secretary for Import

Administration.

[FR Doc. 00–2852 Filed 2–7–00; 8:45 am]

BILLING CODE 3510–DS–P

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.

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