Federal Register / Vol. 62, No. 66 / Monday, April 7, 1997 / Notices 16551

from 1.18 percent ad valorem to 1.14

percent ad valorem for SSAB.

II. Programs Found Not to Confer

Subsidies

A. Research & Development (R&D)

Loans and Grants.

B. Fund for Industry and New

Business R&D.

In the preliminary results, we found

these programs did not confer subsidies

during the POR. We did not receive any

comments on these programs from the

interested parties, and our review of the

record has not led us to change our

findings from the preliminary results.

III. Programs Found To Be Not Used

In the preliminary results, we found

that the producer/exporter of the subject

merchandise did not apply for or

receive benefits under the following

programs:

A. Regional Development Grants.

B. Transportation Grants.

C. Location-of Industry Loans.

We did not receive any comments on

these programs from the interested

parties, and our review of the record has

not led us to change our findings from

the preliminary results.

IV. Program Found To Be Terminated

In the preliminary results, we found

the following program to be terminated

and that no residual benefits were being

provided:

Mining Exploration Grants.

We did not receive any comments on

this program from the interested parties,

and our review of the record has not led

us to change our findings from the

preliminary results.

Final Results of Review

In accordance with 19 CFR

355.22(c)(7)(ii), we calculated an

individual subsidy rate for each

producer/exporter subject to this

administrative review. As a result of

correcting the clerical errors in the

preliminary results, we determine the

net subsidy for SSAB to be 1.91 percent

ad valorem for the period January 1,

1994 through December 31, 1994.

We will instruct the U.S. Customs

Service (‘‘Customs’’) to assess

countervailing duties as indicated

above. The Department will also

instruct Customs to collect cash

deposits of estimated countervailing

duties in the percentages detailed above

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

shipments of the subject merchandise

from the reviewed company, entered or

withdrawn from warehouse, for

consumption on or after the date of

publication of the final results of this

administrative review.

Because the URAA replaced the

general rule in favor of a country-wide

rate with a general rule in favor of

individual rates for investigated and

reviewed companies, the procedures for

establishing countervailing duty rates,

including those for non-reviewed

companies, are now essentially the same

as those in antidumping cases, except as

provided for in section 777A(e)(2)(B) of

the Act. The requested review will

normally cover only those companies

specifically named. See 19 CFR

355.22(a). Pursuant to 19 CFR 355.22(g),

for all companies for which a review

was not requested, duties must be

assessed at the cash deposit rate, and

cash deposits must continue to be

collected at the rate previously ordered.

As such, the countervailing duty cash

deposit rate applicable to a company

can no longer change, except pursuant

to a request for a review of that

company. See Federal-Mogul

Corporation and The Torrington

Company v. United States, 822 F.Supp.

782 (CIT 1993) and Floral Trade Council

v. United States, 822 F.Supp. 766 (CIT

1993) (interpreting 19 CFR 353.22(e),

the antidumping regulation on

automatic assessment, which is

identical to 19 CFR 355.22(g), the

countervailing duty regulation on

automatic assessment). Therefore, the

cash deposit rates for all companies

except SSAB will be unchanged by the

results of this review.

We will instruct Customs to continue

to collect cash deposits for nonreviewed companies at the most recent

company-specific or country-wide rate

applicable to the company. Accordingly,

the cash deposit rates that will be

applied to non-reviewed companies

covered by this order are those

established in the most recently

completed administrative proceeding

conducted pursuant to the statutory

provisions that were in effect prior to

the URAA amendment. See Certain

Carbon Steel Products from Sweden;

Final Results of Countervailing Duty

Administrative Review, 61 FR 5378

(February 12, 1996). These rates shall

apply to all non-reviewed companies

until a review of a company assigned

these rates is requested. In addition, for

the period January 1, 1994 through

December 31, 1994, the assessment rates

applicable to all non-reviewed

companies covered by this order are the

cash deposit rates in effect at the time

of entry.

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 C.F.R. 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

C.F.R. 355.22(c)(8).

Dated: March 28, 1997.

Robert S. LaRussa,

Acting Assistant Secretary for Import

Administration.

[FR Doc. 97–8842 Filed 4–4–97; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

International Trade Administration

[C–401–804]

Certain Cut-to-Length Carbon Steel

Plate from Sweden; Final Results of

Countervailing Duty Administrative

Review

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

ACTION: Notice of final results of

countervailing duty administrative

review.

SUMMARY: On October 3, 1996, the

Department of Commerce (‘‘the

Department’’) published in the Federal

Register its preliminary results of

administrative review of the

countervailing duty order on certain

cut-to-length carbon steel plate from

Sweden for the period January 1, 1994

through December 31, 1994 (61 FR

51683). The Department has now

completed this administrative review in

accordance with section 751(a) of the

Tariff Act of 1930, as amended. For

information on the net subsidy for the

reviewed company, and for all nonreviewed companies, please see the

Final Results of Review section of this

notice. We will instruct the U.S.

Customs Service to assess

countervailing duties as detailed in the

Final Results of Review section of this

notice.

EFFECTIVE DATE: April 7, 1997.

FOR FURTHER INFORMATION CONTACT:

Gayle Longest or Lorenza Olivas, Office

of CVD/AD Enforcement VI, Import

Administration, International Trade

Administration, U.S. Department of

Commerce, 14th Street and Constitution

Avenue, N.W., Washington, D.C. 20230;

telephone: (202) 482–2786.
16552 Federal Register / Vol. 62, No. 66 / Monday, April 7, 1997 / Notices

SUPPLEMENTARY INFORMATION:

Background

Pursuant to 19 C.F.R. 355.22(a), this

review covers only those producers or

exporters of the subject merchandise for

which a review was specifically

requested. Accordingly, this review

covers SSAB Svenskt Stal AB (‘‘SSAB’’),

the sole known producer/exporter of the

subject merchandise during the review

period. This review also covers the

period January 1, 1994 through

December 31, 1994, and 10 programs.

On May 29, 1996, the Department

extended the time limit for the

preliminary and final results of this

administrative review (61 FR 26878).

The time for completion of the final

results of this review was extended from

a 120-day period to not later than a 180-

day period.

Since the publication of the

preliminary results on October 3, 1996

(61 FR 51683), the following events

have occurred. We invited interested

parties to comment on the preliminary

results. On November 4, 1996, a case

brief was submitted by the petitioners.

On November 8, 1996, a rebuttal brief

was submitted by SSAB, the

respondent.

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 (‘‘URAA’’) effective

January 1, 1995 (‘‘the Act’’). The

Department is conducting this

administrative review in accordance

with section 751(a) of the Act.

Scope of the Review

Imports covered by this review are

shipments of certain cut-to-length

carbon steel plate from Sweden. These

products include hot-rolled carbon steel

universal mill plates (i.e., flat-rolled

products rolled on four faces or in a

closed box pass, of a width exceeding

150 millimeters but not exceeding 1,250

millimeters and of a thickness of not

less than 4 millimeters, not in coils and

without pattern in relief), of rectangular

shape, neither clad, plated nor coated

with metal, whether or not painted,

varnished, or coated with plastics or

other nonmetallic substances, 4.75

millimeter or more in thickness and of

a width which exceeds 150 millimeters

and measures at least twice the

thickness. During the review period,

such merchandise was classifiable

under the Harmonized Tariff Schedule

(HTS) item numbers 7208.31.0000,

7208.32.0000, 7208.33.1000,

7208.33.5000, 7208.41.0000,

7208.42.0000, 7208.43.0000,

7208.90.0000, 7210.70.3000,

7210.90.9000, 7211.11.0000,

7211.12.0000, 7211.21.0000,

7211.22.0045, 7211.90.0000,

7212.40.1000, 7212.40.5000 and

7212.50.5000. Included in this order are

flat-rolled products of non-rectangular

cross-section where cross-section is

achieved subsequent to the rolling

process (i.e., products which have been

‘‘worked after rolling’’)—for example,

products which have been beveled or

rounded at the edges. Excluded from

this order is grade X–70 plate. The HTS

item numbers are provided for

convenience and customs purposes. The

written description remains dispositive.

Allocation Methodology

In the past, the Department has relied

upon information from the U.S. Internal

Revenue Service on the industryspecific average useful life (‘‘AUL’’) of

assets in determining the allocation

period for nonrecurring grant benefits.

See General Issues Appendix appended

to Final Countervailing Duty

Determination; Certain Steel Products

from Austria, 58 FR 37217, 37226 (July

9, 1993) (General Issues Appendix).

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

nonrecurring subsidies based on the

AUL of non-renewable 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 to determine the

allocation period for nonrecurring

subsidies using company-specific AUL

data where reasonable and practicable.

In the preliminary results (61 FR 51683),

the Department preliminarily

determined that it is reasonable and

practicable to allocate 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 total

amount countervailed and, thus, would

result in the possibility of overcountervailing or under-countervailing

the actual benefit. The Department

preliminarily determined that a more

reasonable and accurate approach is to

continue using the allocation period

first assigned to the subsidy. We invited

the parties to comment on the selection

of this methodology and to provide any

other reasonable and practicable

approaches for complying with the

Court’s ruling. We received no

comments on this issue.

In the current review, there are no

new subsidies. All of the nonrecurring

subsidies currently under review were

provided prior to the period of review

(POR); allocation periods for these

grants were established during prior

segments of this proceeding. Therefore,

for purposes of these final results, the

Department is using the original

allocation period assigned to each

nonrecurring subsidy.

Privatization and Sale of Productive

Units

SSAB has sold several productive

units and the company was partially

privatized twice, in 1987 and in 1989.

During the review period, SSAB was

completely privatized.

In Final Affirmative Countervailing

Duty Determinations: Certain Steel

Products from Sweden, 58 FR 37385

(July 9, 1993) (‘‘Final Determination’’),

the Department found that SSAB had

received countervailable subsidies prior

to the sale of the productive units and

the two partial privatizations. Further,

the Department found that a private

party purchasing all or part of a

government-owned company can repay

prior subsidies on behalf of the

company as part or all of the sales price

(see General Issues Appendix, 58 FR at

37262 (July 9, 1993)). Therefore, to the

extent that a portion of the sales price

paid for a privatized company can be

reasonably attributed to prior subsidies,

that portion of those subsidies will be

extinguished.

To calculate a rate for the subsidies

that were allocated to the spin-offs, (i.e.,

productive units that were sold), we

first determined the amount of the

subsidies attributable to each productive

unit by dividing the asset value of that

productive unit by the total asset value

of SSAB in the year of the spin-off. We

then applied this ratio to the net present

value (‘‘NPV’’), in the year of the spin-
Federal Register / Vol. 62, No. 66 / Monday, April 7, 1997 / Notices 16553

off, of the future benefit streams from all

of SSAB’s prior subsidies allocable to

the POR. The future benefit streams at

the time of the sale of each productive

unit reflect the Department’s allocation

over time of prior subsidies to SSAB in

accordance with the declining balance

methodology (see e.g., Final Affirmative

Countervailing Duty Determination;

Fresh and Chilled Salmon from Norway,

56 FR 7678; 7679 (February 25, 1991)),

and reflect also the prior spin-offs of

SSAB productive units.

We next estimated the portion of the

purchase price which represents

repayment of prior subsidies by

determining the portion of SSAB’s net

worth that was accounted for by

subsidies. To do that, we divided the

face value of the allocable subsidies

received by SSAB in each year from

fiscal year 1979 through fiscal year 1993

by SSAB’s net worth in the same year.

We calculated a simple average of these

ratios, which was then multiplied by the

purchase price of the productive unit.

Thus, we determined the amount of the

purchase price which represents

repayment of prior subsidies. This

amount was subtracted from the

subsidies attributed to the productive

unit at the time of sale to arrive at the

amount of subsidies allocated to the

productive unit being spun-off.

To calculate the subsidies remaining

with SSAB after privatization, we

performed the following calculations.

We first calculated the NPV of the future

benefit stream of the subsidies at the

time of the sale of the shares taking into

account the spin-offs. Next, we

estimated the portion of the purchase

price which represents repayment of

prior subsidies in accordance with the

methodology described in the

‘‘Privatization’’ section of the General

Issues Appendix (58 FR at 37259). This

amount was then subtracted from the

amount of the NPV eligible for

repayment, and the result was divided

by the NPV to calculate the ratio

representing the amount of subsidies

remaining with SSAB.

To calculate the benefit provided to

SSAB in the POR, where appropriate,

we multiplied the benefit calculated for

1994, adjusted for sales of productive

units, by the ratio representing the

amount of subsidies remaining with

SSAB after privatization. We then

divided the results by the company’s

total sales in 1994.

Analysis of Programs

Based upon the responses to our

questionnaire and written comments

from the interested parties we determine

the following:

I. Programs Previously Determined to

Confer Subsidies

We did not receive any comments on

the following programs from the

interested parties; however, our review

of the record uncovered a clerical error

in our preliminary calculations. In our

calculation of the subsidies remaining

with SSAB after its privatization, we

inadvertently calculated the future

benefit stream from the nonrecurring

subsidies at the time of the sale at their

face value without calculating their net

present value. As stated above, in order

to determine the amount of subsidies

remaining with SSAB and the amount of

subsidies repaid, we must calculate the

net present value of the remaining

stream of benefits of the nonrecurring

subsidies at the time of the sale.

Accordingly, for these final results, we

have adjusted our calculations to reflect

the net present value at the time of the

sale of the remaining stream of benefits

from the nonrecurring subsidies listed

below.

1. Equity Infusions

In the preliminary results, we found

that this program conferred

countervailable subsidies on the subject

merchandise. We did not receive any

comments on this program from

interested parties; however, due to the

clerical error explained above, the net

subsidy for this program has changed

from 0.53 percent ad valorem to 0.51

percent ad valorem for SSAB.

2. Structural Loans

In the preliminary results, we found

that this program conferred

countervailable subsidies on the subject

merchandise. We did not receive any

comments on this program from

interested parties; however, due to the

clerical error explained above, the net

subsidy for this program has changed

from 0.27 percent ad valorem to 0.26

percent ad valorem for SSAB.

3. Forgiven Reconstruction Loans

In the preliminary results, we found

that this program conferred

countervailable subsidies on the subject

merchandise. We did not receive any

comments on this program from

interested parties; however, due to the

clerical error explained above, the net

subsidy for this program has changed

from 1.18 percent ad valorem to 1.14

percent ad valorem for SSAB.

II. Programs Found Not to Confer

Subsidies

A. Research & Development (R&D)

Loans and Grants.

B. Fund for Industry and New

Business R&D.

In the preliminary results, we found

these programs did not confer subsidies

during the POR. Our analysis of the

comments submitted by the interested

parties, summarized below, has not led

us to change our findings from the

preliminary results.

III. Program Found to be Not Used

In the preliminary results, we found

that the producer/exporter of the subject

merchandise did not apply for or

receive benefits under the following

programs:

A. Regional Development Grants.

B. Transportation Grants.

C. Location-of Industry Loans.

Our analysis of the comments

submitted by the interested parties,

summarized below, has not led us to

change our findings from the

preliminary results.

IV. Program Found to be Terminated

In the preliminary results, we found

the following program to be terminated

and that no residual benefits were being

provided:

Mining Exploration Grants

Our analysis of the comments

submitted by the interested parties,

summarized below, has not led us to

change our findings from the

preliminary results.

Analysis of Comments

Comment: Petitioners argue that the

Department’s privatization methodology

is contrary to economic reality, and is

inconsistent with the countervailing

duty statute. Petitioners claim that the

Department’s determination that

privatization ‘‘repays’’ a portion of the

subsidies received before privatization

is contrary to economic reality because

resources provided to SSAB by the

Government of Sweden (GOS) still

remain with the company after

privatization. According to petitioners,

these resources, which ‘‘represented a

flow of resources into SSAB that the

market would not have provided,’’

continue to benefit the subject

merchandise. No resources were

transferred from SSAB back to the GOS.

Furthermore, petitioners argue that the

Department’s privatization methodology

is contrary to the countervailing duty

statute because 19 U.S.C. 1671(a)

requires that subsidies bestowed upon

the production, manufacture, or

exportation of merchandise imported

into the United States be countervailed.

Petitioners maintain that the subsidies

received by SSAB continue to benefit

the production of the subject

merchandise after privatization. Thus,
16554 Federal Register / Vol. 62, No. 66 / Monday, April 7, 1997 / Notices

these subsidies continue to be fully

countervailable.

The respondent claims in its rebuttal

that the same arguments against the

Department’s privatization methodology

were raised by the petitioners in the first

administrative review. Respondents

argue that petitioners have provided no

new arguments that would warrant the

Department to reconsider its

privatization methodology. Therefore,

the Department should continue to

apply its privatization methodology in

the final results of this administrative

review.

Department’s Position: Petitioners’

claim that the Department’s

privatization methodology is contrary to

economic reality and inconsistent with

the countervailing duty statute is

erroneous. On the contrary, the

application of this methodology is well

within the Department’s discretion. The

countervailing duty law instructs

Commerce to identify, measure and

allocate subsidies. The law is intended

to provide remedial relief in the form of

countervailing duties. See, e.g.,

Chaparral Steel Co. v. United States,

901 F. 2d 1097, 1103–1104 (Fed. Cir.

1990). As we explained in the General

Issues Appendix, the Department

interprets the law as allowing for the

repayment or reallocation of prior

subsidies. See also, Certain Hot-Rolled

Lead and Bismuth Carbon Steel

Products From the United Kingdom;

Final Results of Countervailing Duty

Administrative Review, 61 FR 58377;

58381 (November 14, 1996). In the

context of the sale of a governmentowned company, the Department found

that a portion of the price paid for a

privatized company can go toward a

partial repayment of prior subsidies.

General Issues Appendix, 58 at 37262–

37263.

The General Issues Appendix is not

inconsistent with the URAA with regard

to this issue. The URAA purposely

leaves discretion to the Department. It

provides the Department with the

flexibility to determine both whether,

and to what extent, a change in

ownership affects the countervailability

of past subsidies. See, e.g., section

771(5)(F) of the Act and Final

Affirmative Countervailing Duty

Determination: Certain Pasta from Italy,

61 FR at 30298. This clearly was

Congress’ intent when it stated that

‘‘[t]he Commerce Department should

continue to have the discretion to

determine whether, and to what extent

(if any), actions such as the

‘privatization’ of a government-owned

company actually serve to eliminate

such subsidies.’’ S. Rep. No. 412, 103d

Cong., 2nd Sess. 92 (1994) (emphasis

added).

Accordingly, as in the preliminary

results, we continue to find that because

SSAB was a subsidized governmentowned company, a portion of the price

paid for the privatized company

represents partial repayment of

subsidies which were received prior to

privatization. See, Final Affirmative

Countervailing Duty Determinations:

Certain Steel Products from Sweden (58

FR 37385, July 9, 1993).

Final Results of Review

In accordance with 19 CRF

355.22(c)(7)(ii), we calculated a subsidy

rate for the producer/exporter subject to

this administrative review. As a result of

correcting the clerical errors in the

preliminary results, we determine the

net subsidy for SSAB to be 1.91 percent

ad valorem for the period January 1,

1994 through December 31, 1994.

We will instruct the U.S. Customs

Service (‘‘Customs’’) to assess

countervailing duties as indicated

above. The Department will also

instruct Customs to collect cash

deposits of estimated countervailing

duties in the percentages detailed above

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

shipments of the subject merchandise

from the reviewed company, entered or

withdrawn form warehouse, for

consumption on or after the date of

publication of the final results of this

administrative review.

Because the URAA replaced the

general rule in favor of a country-wide

rate with a general rule in favor of

individual rates for investigated and

reviewed companies, the procedures for

establishing countervailing duty rates,

including those for non-reviewed

companies, are now essentially the same

as those in antidumping cases, except as

provided for in section 777A(e)(2)(B) of

the Act. The requested review will

normally cover only those companies

specifically named. See 19 C.F.R.

355.22(a). Pursuant to 19 C.F.R.

355.22(g), for all companies for which a

review was not requested, duties must

be assessed at the cash deposit rate, and

cash deposits must continue to be

collected at the rate previously ordered.

As such, the countervailing duty cash

deposit rate applicable to a company

can no longer change, except pursuant

to a request for a review of that

company. See Federal-Mogul

Corporation and The Torrington

Company v. United States, 822 F.Supp.

782 (CIT 1993) and Floral Trade Council

v. United States, 822 F.Supp. 766 (CIT

1993) (interpreting 19 C.F.R. 353.22(e),

the antidumping regulation on

automatic assessment, which is

identical to 19 C.F.R. 355.22(g), the

countervailing duty regulation on

automatic assessment. Therefore, the

cash deposit rates for all companies

except SSAB will be unchanged by the

results of this review.

We will instruct Customs to continue

to collect cash deposits for nonreviewed companies at the most recent

company-specific or country-wide rate

applicable to the company. Accordingly,

the cash deposit rates that will be

applied to non-reviewed companies

covered by this order are those

established in the most recently

completed administrative proceeding

conducted pursuant to the statutory

provisions that were in effect prior to

the URAA amendments. See Certain

Cut-to-Length Carbon Steel Plate from

Sweden; Final Results of Countervailing

Duty Administrative Review, 61 FR

5381 (February 12, 1996). These rates

shall apply to all non-reviewed

companies until a review of a company

assigned these rates is requested. In

addition, for the period January 1, 1994

through December 31, 1994, the

assessment rates applicable to all nonreviewed companies covered by this

order are the cash deposit rates in effect

at the time of entry.

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 C.F.R. 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(c)(8).

Dated: March 28, 1997.

Robert S. LaRussa

Acting Assistant Secretary for Import

Administration.

[FR Doc. 97–8843 Filed 4–4–97; 8:45 am]

BILLING CODE 3510–DS–P