Federal Register / Vol. 62, No. 56 / Monday, March 24, 1997 / Notices 13863

countervailing duties cannot be

reassessed for that period.

DOC Position: We agree with

respondents.

Final Results of Review

For the period December 6, 1991

through December 31, 1992, we

determine the net subsidy to be 9.86

percent ad valorem for Norsk Hydro

Canada Inc. and all other companies

except Timminco Limited, which has

been excluded from these orders. This

rate corrects the rate of 9.87 found in the

Preliminary Results which arose from a

rounding error.

The Department will instruct the U.S.

Customs Service to assess the following

countervailing duties on entries during

the periods December 6, 1991 to April

3, 1992 and September 1, 1992 to

December 31, 1992:

Manufacturer/exporter Rate

(percent)

Norsk Hydro Canada Inc. and

All Other Companies Except

Timminco Limited (which is

excluded from these orders) 9.86

The Department will also instruct the

U.S. Customs Service to collect a cash

deposit of estimated countervailing

duties of 9.86 percent of the f.o.b.

invoice price on all shipments of the

subject merchandise from Norsk Hydro

Canada Inc. and all other companies

except Timminco Limited (which was

excluded from the order during the

original investigation), entered, or

withdrawn from warehouse, for

consumption on or after the date of

publication of the final results of these

reviews.

This notice serves as a 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 355.34(d). Timely written

notification of return/destruction of

APO materials 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 administrative review and notice

are in accordance with section 751(a)(1)

of the Act (19 U.S.C. 1675(a)(1)) and 19

CFR 355.22.

Dated: March 12, 1997.

Robert S. LaRussa,

Acting Assistant Secretary for Import

Administration.

[FR Doc. 97–7358 Filed 3–21–97; 8:45 am]

BILLING CODE 3510–DS–P

[C–122–815]

Pure Magnesium and Alloy Magnesium

From Canada; Preliminary Results of

Countervailing Duty Administrative

Reviews

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

ACTION: Notice of preliminary results of

countervailing duty administrative

reviews.

SUMMARY: The Department of Commerce

(the Department) is conducting

administrative reviews of the

countervailing duty orders on pure and

alloy magnesium from Canada for the

period January 1, 1993 through

December 31, 1993. We have completed

these reviews and preliminarily

determine the net subsidy to be 7.13

percent ad valorem for subject

merchandise for Norsk Hydro Canada,

Inc. (NHCI) and all other producers/

exporters from Canada except exports

from Timminco Limited, which

company has been excluded from these

orders. If the final results of these

reviews remain the same as these

preliminary results, the Department will

instruct the U.S. Customs Service to

assess countervailing duties as indicated

above.

EFFECTIVE DATE: March 24, 1997.

FOR FURTHER INFORMATION CONTACT:

Sally Hastings or Cynthia Thirumalai,

AD/CVD Enforcement, Group 1, Office

1, Import Administration, International

Trade Administration, U.S. Department

of Commerce, 14th Street and

Constitution Avenue, NW., Washington,

DC 20230; telephone: (202) 482–3464 or

482–4087, respectively.

Background

On August 31, 1992, the Department

published in the Federal Register (57

FR 39392) the countervailing duty

orders on pure and alloy magnesium

from Canada. The Department

published a notice of ‘‘Opportunity to

Request an Administrative Review’’ (59

FR 39543) of the countervailing duty

orders on August 3, 1994. We received

timely requests for review from

petitioner, Magnesium Corporation of

America (Magcorp) and respondent,

NHCI. The Department initiated the

administrative reviews, for the period

January 1, 1993 through December 31,

1993, on September 16, 1994 (59 FR

47609).

The Department issued a

questionnaire to the Government of

Canada (GOC) on September 7, 1994. On

October 24, 1994, we received

questionnaire responses from NHCI, the

GOC and the Government of Que ́bec

(GOQ). The Department issued

supplemental questionnaires to the

GOQ on October 11, 1996 and NHCI on

November 5, 1996. We received

supplemental responses from the GOQ

on October 28, 1996 and NHCI on

November 18, 1996.

On October 18, 1994, petitioner

requested that the Department reexamine whether the amended electric

power contract between NHCI and

Hydro Que ́bec is countervailable. On

April 28, 1995, the Department declined

to reinvestigate the amended electric

power contract.

Applicable Statute and Regulations

The Department is conducting these

administrative reviews in accordance

with section 751(a) of the Tariff Act of

1930, as amended (the Act). Unless

otherwise indicated, all citations to the

statute and to the Department’s

regulations are in reference to the

provisions as they existed on December

31, 1994. However, references to the

Department’s Countervailing Duties;

Notice of Proposed Rulemaking and

Request for Public Comments, 54 FR

23366 (May 31, 1989) (Proposed

Regulations), are provided solely for

further explanation of the Department’s

countervailing duty practice. Although

the Department has withdrawn the

particular rulemaking proceeding

pursuant to which the Proposed

Regulations were issued, the subject

matter of these regulations is being

considered in connection with an

ongoing rulemaking proceeding which,

among other things, is intended to

conform the Department’s regulations to

the Uruguay Round Agreements Act.

See 60 FR 80 (January 3, 1995).

Scope of the Reviews

The products covered by these orders

are pure and alloy magnesium from

Canada. Pure magnesium contains at

least 99.8 percent magnesium by weight

and is sold in various slab and ingot

forms and sizes. Magnesium alloys

contain less than 99.8 percent

magnesium by weight, with magnesium

being the largest metallic element in the

alloy by weight, and are sold in various

ingot and billet forms and sizes.

Secondary and granular magnesium are

not included. Pure and alloy magnesium

are currently provided for in

subheadings 8104.11.0000 and

8104.19.0000, respectively, of the

Harmonized Tariff Schedule (HTS).

Although the HTS subheadings are

provided for convenience and Customs

purposes, our written descriptions of

the scopes of these proceedings are

dispositive.
13864 Federal Register / Vol. 62, No. 56 / Monday, March 24, 1997 / Notices

Period of Review

The period of review (POR) is January

1, 1993 through December 31, 1993. The

reviews cover one producer/exporter of

subject merchandise, NHCI, and the

following programs: Exemption from

Payment of Water Bills, Article 7 Grants

from the Que ́bec Industrial

Development Corporation (SDI), St.

Lawrence River Environmental

Technology Development Program,

Program for Export Market

Development, Export Development

Corporation, Canada-Que ́bec Subsidiary

Agreement on the Economic

Development of the Regions of Que ́bec,

Opportunities to Stimulate Technology

Programs, Development Assistance

Program, Industrial Feasibility Study

Assistance Program, Export Promotion

Assistance Program, Creation of

Scientific Jobs in Industries, Business

Investment Assistance Program,

Business Financing Program, Research

and Innovation Activities Program,

Export Assistance Program, Energy

Technologies Development Program,

Financial Assistance Program for

Research, Formation and for the

Improvement of the Recycling Industry,

and Transportation Research and

Development Assistance Program.

Analysis of Programs

I. Programs Conferring Subsidies

A. Exemption From Payment of Water

Bills

Pursuant to a December 15, 1988

agreement between NHCI and La Socie ́te ́

du Parc Industriel et Portuaire de

Be ́cancour (Industrial Park), NHCI is

exempt from payment of its water bills.

Except for the taxes associated with its

bills, NHCI does not pay the invoiced

amounts of its water bills.

In the Final Affirmative

Countervailing Duty Determinations:

Pure Magnesium and Alloy Magnesium

from Canada (Magnesium from

Canada), 57 FR 30946, 30948 (July 13,

1992), the Department determined that

the exemption received by NHCI was

limited to a specific enterprise or

industry, or group of enterprises or

industries, because no other company

receives such an exemption. In this

review, neither the GOQ nor NHCI

provided new information which would

warrant reconsideration of this

determination.

We preliminarily determine the

countervailable benefit to be the amount

NHCI would have paid absent the

exemption. To calculate the benefit

under this program, we divided the

amount NHCI would have paid for

water during the POR by NHCI’s total

POR sales of Canadian-manufactured

products. On this basis, we

preliminarily determine that the net

subsidy provided by this program is

0.97 percent ad valorem.

B. Article 7 Grants From the Que ́bec

Industrial Development Corporation

The Que ́bec Industrial Development

Corporation (SDI) administers

development programs on behalf of the

GOQ. SDI provides assistance under

Article 7 of the SDI Act in the form of

loans, loan guarantees, grants,

assumptions of costs associated with

loans, and equity investments. This

assistance involves projects capable of

having a major impact upon the

economy of Que ́bec. Article 7 assistance

greater than 2.5 million dollars must be

approved by the Council of Ministers,

and assistance over 5 million dollars

becomes a separate budget item under

Article 7. Assistance provided in such

amounts must be of ‘‘special economic

importance and value to the province.’’

(See Magnesium from Canada, 57 FR

30946, 30949 (July 13, 1992).)

In 1988, NHCI was awarded a grant

under Article 7 to cover a large

percentage of the cost of certain

environmental protection equipment. In

Magnesium from Canada, we

determined that NHCI received a

disproportionately large share of

assistance under Article 7. On this basis,

we determined that the Article 7 grant

was limited to a specific enterprise or

industry, or group of enterprises or

industries. In these reviews, neither the

GOQ nor NHCI provided new

information which would warrant

reconsideration of this determination.

The issue presented by this case is

whether the Article 7 assistance

received by NHCI should be treated as

an interest rebate or as a grant. If it is

treated as an interest rebate, then under

the methodology adopted by the

Department in the 1993 steel cases, the

benefit of the Article 7 assistance would

be countervailed according to our loan

methodology (Final Affirmative

Countervailing Duty Determinations:

Certain Steel Products from Belgium

(Belgium Steel), 58 FR 37273, 37276

(July 9, 1993)). However, if treated as a

grant, the benefits would be allocated

over a period corresponding to the life

of the company’s assets.

In the 1993 steel cases (see, e.g.,

Belgium Steel), we examined a

particular type of subsidy, interest

rebates, and determined which of our

valuation methodologies was most

appropriate. The possible choices were

between the grant and loan

methodologies. Where the company had

knowledge prior to taking the loan out

that it would receive an interest rebate,

we decided that the loan methodology

was most appropriate because there is

virtually no difference between the

government offering a loan at 5 percent

interest (which would be countervailed

according to the loan methodology) and

offering to rebate half of the interest

paid on a 10 percent loan from a

commercial bank each time the

company makes an interest payment.

Hence, we were seeking the closest

methodological fit for different types of

interest rebates.

However, the interest rebate

methodology described in the 1993 steel

cases was never intended to dictate that

the Department should apply the loan

methodology in every situation. The

appropriate methodology depends on

the nature of the subsidy. For example,

assume that the government told a

company that it would make all interest

payments on all construction loans the

company took out during the next year

up to $6 million. This type of ‘‘interest

rebate’’ operates essentially like a $6

million grant restricted to a specific

purpose. Whether the purpose is to pay

interest expenses or buy a piece of

equipment does not change the nature

of the subsidy. In contrast, the interest

rebate methodology is appropriate for

the type of interest rebate programs

investigated in the 1993 steel cases, i.e.,

partial interest rebates paid over a

period of years on particular long-term

loans.

As we did in the 1993 steel cases, the

Department in these reviews is seeking

the most appropriate methodology for

the Article 7 assistance. We erred in our

Preliminary Results of First

Countervailing Duty Administrative

Reviews: Pure Magnesium and Alloy

Magnesium from Canada, 61 FR 11186

(March 19, 1996), in stating that the

primary purpose of the Article 7

assistance was to underwrite the

purchase of environmental equipment.

However, it cannot be disputed that the

environmental equipment played a

crucial role in the agreement between

SDI and NHCI. Most importantly, the

aggregate amount of assistance to be

provided was determined by reference

to the cost of environmental equipment

to be purchased. In this respect, the

Article 7 assistance is like a grant for

capital equipment.

Further, the assistance provided by

SDI is distinguishable from the interest

rebates addressed in the 1993 steel cases

in that the interest payments in the steel

cases rebated a portion of the interest

paid on particular long-term loans.

Here, although the disbursement of the

Article 7 assistance was contingent,

inter alia, on NHCI making interest
Federal Register / Vol. 62, No. 56 / Monday, March 24, 1997 / Notices 13865

payments, the disbursements were not

tied to the amount borrowed, the

number of loans taken out or the interest

rates charged on those loans. Instead,

the disbursements were tied to NHCI

meeting specific investment targets and

generally to NHCI having incurred

interest costs on borrowing related to

the construction of its facility.

Therefore, while we recognize that

NHCI had to borrow and pay interest in

order to receive individual

disbursements of Article 7 assistance,

we do not agree that this fact is

dispositive of whether the interest

rebate methodology used in the 1993

steel cases is appropriate. We believe

this program more closely resembles the

scenario described above where the

government agrees to pay all interest

incurred on construction loans taken

out by a company over the next year up

to a specified amount. Because, in this

case, the amount of assistance is

calculated by reference to capital

equipment purchases (something

extraneous to the interest on the loan)

and the reimbursements do not relate to

particular loans, we determine that the

Article 7 assistance should be treated as

a grant.

The Department has in past cases

classified subsidies according to their

characteristics. For example, in the

General Issues Appendix (GIA) attached

to the Final Affirmative Countervailing

Duty Determination: Certain Steel

Products from Austria, 58 FR 37217,

37254 (July 9, 1993), we developed a

hierarchy for determining whether socalled ‘‘hybrid instruments’’ should be

countervailed according to our loan,

grant or equity methodologies. In short,

we were asking whether the details of

particular government ‘‘contributions’’

made them more like a loan, a grant or

an equity infusion. Similarly, when a

company receives a grant, we look to the

nature of the grant to determine whether

the grant should be treated as recurring

or non-recurring. In these reviews, we

have undertaken the same type of

analysis, i.e., determining an

appropriate calculation methodology

based on the nature of the subsidy in

question. As with hybrid instruments

and recurring/non-recurring grants, it is

appropriate to determine which

methodology is most appropriate based

on the specific facts of the Article 7

assistance. Although the Article 7

assistance exhibits characteristics of

both an interest rebate and a grant,

based on an overview of the contract

under which the assistance was

provided, we determine that the weight

of the evidence in this case supports our

treatment of the Article 7 assistance as

a grant.

For the reasons set forth in

Magnesium from Canada, we

preliminarily determine that the grant

provided under Article 7 was nonrecurring because it represented a onetime provision of funds. (See 57 FR

30946, 30949 (July 13, 1992)).

We calculated the benefit from the

grant received by NHCI using the

company’s cost of long-term, fixed-rate

debt as the discount rate and our

declining balance methodology,

consistent with § 355.49 of the Proposed

Regulations. We divided that portion of

the benefit allocated to the POR by

NHCI’s total sales of Canadianmanufactured products. (See the

Allocation Methodology section below

regarding the selection of the allocation

period.) We preliminarily determine the

net subsidy to be 6.16 percent ad

valorem for NHCI.

II. Programs Preliminarily Found Not To

Be Used

We examined the following programs

and preliminarily find that NHCI did

not apply for or receive benefits under

the following programs during the POR:

St. Lawrence River Environmental

Technology Development Program,

Program for Export Market

Development, the Export Development

Corporation, Canada-Que ́bec Subsidiary

Agreement on the Economic

Development of the Regions of Que ́bec,

Opportunities to Stimulate Technology

Programs, Development Assistance

Program, Industrial Feasibility Study

Assistance Program, Export Promotion

Assistance Program, Creation of

Scientific Jobs in Industries, Business

Investment Assistance Program,

Business Financing Program, Research

and Innovation Activities Program,

Export Assistance Program, Energy

Technologies Development Program,

Financial Assistance Program for

Research Formation and for the

Improvement of the Recycling Industry,

and Transportation Research and

Development Assistance Program.

Allocation Methodology

In the past, the Department has relied

upon information from the U.S. Internal

Revenue Service on the industryspecific average useful life of assets in

determining the allocation period for

non-recurring grant benefits. (See GIA at

37226.) However, in British Steel plc. v.

United States, 879 F. Supp. 1254 (CIT

1995) (British Steel), the U.S. Court of

International Trade (the Court) ruled

against this allocation methodology. In

accordance with the Court’s remand

order, the Department calculated a

company-specific allocation period for

non-recurring subsidies based on the

average useful life (AUL) of nonrenewable physical assets. This remand

determination was affirmed by the Court

on June 4, 1996 (British Steel, 929 F.

Supp. 426, 439 (CIT 1996)).

The Department has decided to

acquiesce to the Court’s decision and, as

such, we intend in all future cases to

determine the allocation period for nonrecurring subsidies using companyspecific AUL data where reasonable and

practicable. Specifically, the

Department has preliminarily

determined that it is reasonable and

practicable to allocate all new nonrecurring subsidies (i.e., subsidies that

have not yet been assigned an allocation

period) based on a company-specific

AUL. However, if a subsidy has already

been countervailed based on an

allocation period established in an

earlier segment of the proceeding, it

does not appear reasonable or

practicable to reallocate that subsidy

over a different period of time. In other

words, since the countervailing duty

rate in earlier segments of the

proceeding was calculated based on a

certain allocation period and resulting

benefit stream, redefining the allocation

period in later segments of the

proceeding would entail taking the

original grant amount and creating an

entirely new benefit stream for that

grant. Such a practice may lead to an

increase or decrease in the amount

countervailed and, thus, would result in

the possibility of over-countervailing or

under-countervailing the actual benefit.

The Department has preliminarily

determined that a more reasonable and

accurate approach is to continue using

the allocation period first assigned to

the subsidy. We invite the parties to

comment on the selection of this

methodology and provide any other

reasonable and practicable approaches

for complying with the Court’s ruling.

In the current reviews, there are no

new non-recurring grant subsidies. The

non-recurring grant under review was

provided prior to the POR; the

allocation period for the grant was

established during prior segments of

these proceedings. Therefore, for

purposes of these preliminary results,

the Department is using the original

allocation period assigned to the grant.

Preliminary Results of Review

We preliminarily determine the net

subsidy for the period January 1, 1993

through December 31, 1993, to be 7.13

percent ad valorem.

If the final results of these reviews

remain the same as these preliminary

results, the Department intends to

instruct the U.S. Customs Service to

assess countervailing duties of 7.13
13866 Federal Register / Vol. 62, No. 56 / Monday, March 24, 1997 / Notices

1See Algoma Steel Corp., Ltd. v. United States,

688 F. Supp. 639, 642–44 (CIT 1988); High

Information Content Flat Panel Displays and

Display Glass Therefor from Japan: Final

Determination; Rescission of Investigation and

Partial Dismissal of Petition, 56 FR 32376, 32380–

81 (July 16, 1991).

percent of the f.o.b. invoice price on all

shipments of subject merchandise from

Canada, except from Timminco Limited

(which was excluded from the order in

the original investigation).

The Department also intends to

instruct the U.S. Customs Service to

collect a cash deposit of estimated

countervailing duties of 7.13 percent of

the f.o.b. invoice price on all shipments

of the subject merchandise from Canada,

except from Timminco Limited (which

was excluded from the order during the

original investigation), entered, or

withdrawn from warehouse, for

consumption on or after the date of

publication of the final results of these

reviews.

Parties to these proceedings may

request disclosure of the calculation

methodology and interested parties may

request a hearing not later than 10 days

after the date of publication of this

notice. Interested parties may submit

written arguments in case briefs on

these preliminary results within 30 days

of the date of publication. Rebuttal

briefs, limited to arguments raised in

case briefs, may be submitted seven

days after the time limit for filing the

case brief. Parties who submit argument

in these proceedings are requested to

submit with the argument (1) a

statement of the issue, and (2) a brief

summary of the argument. Any hearing,

if requested, will be held seven days

after the scheduled date for submission

of rebuttal briefs. Copies of case briefs

and rebuttal briefs must be served on

interested parties in accordance with 19

CFR 355.38 (e).

Representatives of parties to the

proceedings may request disclosure of

proprietary information under

administrative protective order no later

than 10 days after the representative’s

client or employer becomes a party to

the proceedings, but in no event later

than the date the case briefs, under 19

CFR 355.38(c), are due. The Department

will publish the final results of these

administrative reviews, including the

results of its analysis of issues raised in

any case or rebuttal briefs or at a

hearing.

These administrative reviews and

notice are in accordance with section

751(a)(1) of the Act (19 U.S.C.

1675(a)(1)) and 19 CFR 355.22.

Dated: March 12, 1997.

Robert S. LaRussa,

Acting Assistant Secretary for Import

Administration.

[FR Doc. 97–7359 Filed 3–21–97; 8:45 am]

BILLING CODE 3510–DS–P

[C–428–823, C–274–803, C–122–827, and

C–307–814]

Notice of Initiation of Countervailing

Duty Investigations: Steel Wire Rod

from Germany, Trinidad and Tobago,

Canada and Venezuela

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: March 24, 1997.

FOR FURTHER INFORMATION CONTACT: Roy

A. Malmrose (Germany), Vince Kane

(Trinidad and Tobago), Robert Bolling

(Canada) and Chris Cassel (Venezuela),

Import Administration, U.S. Department

of Commerce, Room 3099, 14th Street

and Constitution Avenue, NW.,

Washington, DC 20230; telephone (202)

482–5414, 482–2815, 482–1386 and

482–4847, respectively.

Initiation of Investigations

The Applicable Statute

Unless otherwise indicated, all

citations to the statute are references to

the provisions of the Tariff Act of 1930,

as amended by the Uruguay Round

Agreements Act effective January 1,

1995 (the Act).

The Petition

On February 26, 1997, the Department

of Commerce (the Department) received

a petition filed in proper form by

Connecticut Steel Corp., Co-Steel

Raritan, GS Industries, Inc., Keystone

Steel & Wire Co., North Star Steel Texas,

Inc. and Northwestern Steel and Wire

Co. (the petitioners), six U.S. producers

of wire rod. Supplements to the

petitions were filed on March 4, 10, 11,

12, 13, 14, 17, and 18, 1997.

In accordance with section 701(a) of

the Act, petitioners allege that

manufacturers, producers, or exporters

of the subject merchandise in Germany,

Trinidad and Tobago, Canada and

Venezuela receive countervailable

subsidies.

The petitioners state that they have

standing to file the petition because they

are interested parties, as defined under

section 771(9)(C) of the Act.

Determination of Industry Support for

the Petition

Section 702(b)(1)of the Act requires

that a petition be filed on behalf of the

domestic industry. Section 702(c)(4)(A)

of the Act provides that a petition meets

this requirement if the domestic

producers or workers who support the

petition account for: (1) at least 25

percent of the total production of the

domestic like product; and (2) more

than 50 percent of the production of the

domestic like product produced by that

portion of the industry expressing

support for, or opposition to, the

petition.

Section 771(4)(A) of the Act defines

the ‘‘industry’’ as the producers of a

domestic like product. Thus, to

determine whether the petition has the

requisite industry support, the statute

directs the Department to look to

producers and workers who account for

production of the domestic like product.

The International Trade Commission

(ITC), which is responsible for

determining whether ‘‘the domestic

industry’’ has been injured, must also

determine what constitutes a domestic

like product in order to define the

industry. However, while both the

Department and the ITC must apply the

same statutory definition of domestic

like product, they do so for different

purposes and pursuant to separate and

distinct authority. In addition, the

Department’s determination is subject to

limitations of time and information.

Although this may result in different

definitions of the like product, such

differences do not render the decision of

either agency contrary to the law.1

Section 771(10) of the Act defines

domestic like product as ‘‘a product that

is like, or in the absence of like, most

similar in characteristics and uses with,

the article subject to an investigation

under this title.’’ Thus, the reference

point from which the like product

analysis begins is ‘‘the article subject to

an investigation,’’ i.e., the class or kind

of merchandise to be investigated,

which normally will be the scope as

defined in the petition.

The petition refers to the single

domestic like product defined in the

‘‘Scope of Investigation’’ section, above.

The Department has no basis on the

record to find the petition’s definition of

the domestic like product clearly

inaccurate. In this regard, we have

found no basis on which to reject

petitioners’ representations that there

are clear dividing lines, in terms of

characteristics or uses, between the

product under investigation on the one

hand and, on the other hand, other

carbon and alloy coiled steel products.

The Department has, therefore, adopted

the like product definition set forth in

the petition. In this case, petitioners

established industry support

representing approximately 75 percent

of the production of the domestic like

product.