Federal Register / Vol. 62, No. 71 / Monday, April 14, 1997 / Notices 18087

company, when UES purchased the

Special Steels Business (SSB), one of

BSC’s productive units, in an arm’slength transaction. The ITA’s

determination was appealed. The ITA

subsequently requested, and was

granted, a remand in order to reconsider

its final determination. On remand, the

ITA adopted its reasoning in Certain

Steel Products From the United

Kingdom, 58 FR 37,393 (July 9, 1993), in

which it determined that part of the

price UES paid for the productive unit

purchased from BSC constituted

payment for prior subsidies. On June 7,

1994, in Inland Steel Bar Co. v. United

States, 858 F. Supp. 179 (CIT 1994)

(Inland I), the CIT overturned the ITA’s

determination that previously bestowed

subsidies passed through with a

productive unit sold in an arm’s-length

transaction to a private party.

In Inland Steel Bar Co. v. United

States, 86 F.3d 1174 (Fed. Cir. 1996)

(Inland II), the Federal Circuit reversed

and remanded Inland I, concluding that

the lower court had erred in holding

that as a matter of law a subsidy could

not pass through during an arm’s-length

transaction. The CIT subsequently

remanded the case to the ITA to make

a determination pursuant to British

Steel plc v. United States, 879 F. Supp.

1254 (CIT 1995) (British Steel I), appeals

docketed, Nos. 96–1401 to –06 (Fed. Cir.

June 21, 1996), and British Steel plc v.

United States, 924 F. Supp. 139 (CIT

1996) (British Steel II), appeals

docketed, Nos. 96–1401 to –06 (Fed. Cir.

June 21, 1996), whether the SSB was a

productive unit capable of receiving

subsidies. Pursuant to British Steel I and

British Steel II, the ITA determined that

the SSB was not a productive unit

capable of receiving subsidies. This

remand was affirmed by the CIT in

Inland Steel Bar Co. v. United States,

Slip Op. 97–18 (Feb. 10, 1997) (Inland

Steel III).

In its decision in Timken Co. v.

United States, 893 F.2d 337 (Fed. Cir.

1990), the United States Court of

Appeals for the Federal Circuit held

that, pursuant to 19 USC section

1516a(e), the Department must publish

a notice of a court decision which is not

‘‘in harmony’’ with a Department

determination, and must suspend

liquidation of entries pending a

‘‘conclusive’’ court decision. The CIT’s

opinion in Inland Steel III on February

10, 1997, constitutes a decision not in

harmony with the Department’s final

affirmative determination. Publication

of this notice fulfills the Timken

requirement.

Accordingly, the Department will

continue to suspend liquidation

pending the expiration of the period of

appeal, or, if appealed, upon a

‘‘conclusive’’ court decision. Absent an

appeal, or, if appealed, upon a

‘‘conclusive’’ court decision affirming

the CIT’s opinion, the countervailing

duty order will be revoked effective

February 20, 1997.

Dated: March 27, 1997.

Robert S. LaRussa,

Acting Assistant Secretary for Import

Administration.

[FR Doc. 97–9549 Filed 4–11–97; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

Internal Trade Administration

[C–122–404]

Live Swine From Canada; 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 7, 1996, the

Department of Commerce (the

Department ) published in the Federal

Register its preliminary results of

administrative review of the

countervailing duty order on live swine

from Canada for the period April 1,

1994 through March 31, 1995 (61

FR52426). 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, 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 14, 1997.

FOR FURTHER INFORMATION CONTACT:

Stephanie Moore or Cameron Cardozo,

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.

SUPPLEMENTARY INFORMATION

Background

Pursuant to 19 C.F.R. section

355.22(a), reviews should cover only

those producers or exporters of the

subject merchandise for which a review

was specifically requested. However, as

explained in the preliminary results, the

Department has determined that it is not

practicable to conduct a companyspecific review of this order because a

large number of producers and exporters

requested the review. Therefore,

pursuant to section 777(e)(2)(B) of the

Tariff Act of 1930, as amended, we are

conducting a review of all producers

and exporters of subject merchandise

covered by this order on the basis of

aggregate data. This review also covers

the period April 1, 1994 through March

31, 1995, and 33 programs. On May 1,

1996, we extended the deadline for the

final results of this review to no later

than 180 days from the date of

publication of the preliminary results.

See Live Swine from Canada; Extension

of Time Limit for Countervailing Duty

Administrative Review (61 FR 19261).

Since the publication of the

preliminary results on October 7, 1996

(61 FR 52426) the following events have

occurred. We invited interested parties

to comment on the preliminary results.

On November 6, 1996, case briefs were

submitted by the Government of Canada

(GOC), the Government of Quebec

(GOQ), and the Canadian Pork Council

(CPC), (respondents), and the National

Port Producers’ Council (petitioners).

On November 13, 1996, rebuttal briefs

were submitted by the petitioners and

the respondents. At the request of the

GOQ and the CPC, the Department held

a public hearing on December 11, 1996.

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

On August 29, 1996, the Final Results

of Changed Circumstances

Countervailing Duty Administrative

Review, and Partial Revocation were

published (61 FR 45402), in which we

revoked the order, in part, effective

April 1, 1991, with respect to slaughter

sows and boars and weanlings from

Canada, because this portion of the

order was no longer of interest to

domestic interested parties. As a result

the merchandise now covered by the

order and by this administrative review

is live swine except U.S. Department of

Agriculture certified purebred breeding

swine, slaughter sows and boars and

weanlings (weanlings are swine

weighing up to 27 kilograms or 59.5

pounds). The merchandise subject to the
18088 Federal Register / Vol. 62, No. 71 / Monday, April 14, 1997 / Notices

order is classifiable under the

Harmonized Tariff Schedule (HTS) item

numbers 0103.91.00 and 0103.92.00.

The HTS item numbers are provided for

convenience and Customs purposes.

The written description remains

dispositive.

Verification

As provided in section 782(i) of the

Act, we verified information submitted

in the questionnaire responses. We

followed standard verification

procedures, including meeting with

government and company officials, and

examination of relevant accounting and

original source documents. Our

verification results are outlined in the

public version of the verification report

(Verification Report), which is on file in

the Central Records Unit (Room B–009

of the Main Commerce Building).

Allocation Methodology

In the past, the Department has relied

upon information from the U.S. Internal

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

assets in determining the allocation

period for non-recurring grant benefits.

See General Issues Appendix appended

to Final Countervailing Duty

Determination; Certain Steel Products

from Austria, 58 FR 37063, 37226 (July

9, 1993). 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

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 for non-recurring subsidies

using company-specific AUL data where

reasonable and practicable. In this

proceeding, the Department

preliminarily determined that it is not

reasonable and practicable to allocate

nonrecurring grants using companyspecific AUL data because it is not

possible to apply a company-specific

AUL in an aggregate case (such as the

case at hand). We invited 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.

The GOQ submitted comments on this

issue. The GOQ agreed with the

Department that it is not feasible to

allocate nonrecurring grants using

company-specific data in aggregate

cases and that the U.S. Internal Revenue

Service tax tables are appropriate for

allocating nonrecurring grants in this

review. However, the GOQ also stated

that, in future proceedings conducted

on an aggregate basis, the Department

should seek suggestions from the parties

as to more appropriate methodologies

for calculating the allocation period.

Accordingly, in this review, the

Department is using the allocation

period assigned to each grant in prior

reviews of this order.

Calculation Methodology for

Assessment and Cash Deposit Purposes

For the review period, we calculated

the net subsidy on a country-wide basis

by first calculating the subsidy rate for

each program subject to the

administrative review. We calculate the

rate on a province by province basis. We

then weight-averaged the rate received

by each province using as the weight the

province’s share of total Canadian

exports to the United States of market

hogs. We then summed the individuals

provinces’ weighted-average rates to

determine the subsidy rate from each

program. To obtain the country-wide

rate, we then summed the subsidy rates

from all programs.

Analysis of Programs

Based upon the responses to our

questionnaires, the results of

verification, and written comments from

the interested parties, we determine the

following:

I. Programs Conferring Subsidies

A. Programs Previously Determined to

Confer Subsidies

I. Feed Freight Assistance Program: In

the preliminary results, we found that

this program conferred countervailable

subsidies on the subject merchandise.

Our review of the record and our

analysis of the comments submitted by

the interested parties, summarized

below, has led us to modify our findings

from the preliminary results for this

program. We have determined that the

proper calculation methodology with

respect to FFA benefits is the one that

the Department has used to determine

the benefit for the only other ‘‘federal’’

program, NTSP, in this review.

Therefore, we are first calculating a

benefit per kilogram of live swine

within each province eligible for FFA

assistance using each province’s total

production. Next, we are adjusting each

province’s rate per kilogram based on

each province’s share of exports to the

United States of the subject

merchandise. Finally, these individual

provincial rates are summed to obtain a

total national rate for the FFA program.

Accordingly, the net subsidy for this

program has changed from Can$0.0006

per kilogram to less than Can$0.0001

per kilogram.

2. National Tripartite Stabilization

Scheme for Hogs (NTSP): In the

preliminary results, we found that this

program conferred countervailable

subsidies on the subject merchandise.

Our review of the record and our

analysis of the comments submitted by

the interested parties, summarized

below, has led us to modify our findings

from the preliminary results for this

program. In our calculation of NTSP

benefits to hog producers, we have

excluded payments related to other

NTSP commodity plans which, in our

preliminary results, were inadvertently

cumulated with those for hogs. We have

recalculated the NTSP benefit

applicable only to hog producers during

the POR using the same methodology

described in the Preliminary Results (61

FR at 52428). Accordingly, the net

subsidy for the residual NTSP payments

and the retroactive NTSP surplus has

changed from Can$0.0172 to

Can$0.0004 per kilogram. Also, the cash

deposit for this program has been

adjusted to zero to reflect that this

program has been terminated and there

are no residual benefits. See Final

Affirmative Countervailing Duty

Determination: Certain Pasta from

Turkey, 61 FR 30366, 30370 (June 14,

1996) (Pasta from Turkey).

3. British Columbia Farm Income

Insurance Program (FIIP): 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 the interested parties,

and our review of the record has not led

us to change any findings or

calculations. Accordingly, the net

subsidy for this program of less than

Can$0.0001 per kilogram remains

unchanged from the preliminary results.

4. Saskatchewan Hog Assured Returns

Program (SHARP): In the preliminary

results, we found that this program

conferred countervailable subsidies on

the subject merchandise. Our review of

the record and our analysis of the

comments submitted by the interested

parties, summarized below, has led us

to modify our findings from the

preliminary results for this program

with regard to the cash deposit. The net

subsidy for this program of Can$0.0028

per kilogram remains unchanged from

the preliminary results. However, the

cash deposit for this program has been

adjusted to zero to reflect that this
Federal Register / Vol. 62, No. 71 / Monday, April 14, 1997 / Notices 18089

program has been terminated and there

are no residual benefits. See Pasta from

Turkey.

5 Saskatchewan Livestock Investment

Tax Credit: 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 the

interested parties, and our review of the

record has not led us to change any

findings or calculations. Accordingly,

the net subsidy for this program of

Can$0.0001 per kilogram remains

unchanged from the preliminary results.

6 Saskatchewan Livestock Facilities

Tax Credit: 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 the

interested parties, and our review of the

record has not led us to change any

findings or calculations. Accordingly,

the net subsidy for this program of

Can$0.0001 per kilogram remains

unchanged from the preliminary results.

7 Saskatchewan Interim Red Meat

Production Equalization Program: 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 the interested parties,

and our review of the record has not led

us to change any findings or

calculations. Accordingly, the net

subsidy for this program of Can$0.0011

per kilogram remains unchanged from

the preliminary results.

8. Alberta Crow Benefit Offset

Program (ACBOP): 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 the interested parties, and our

review of the record has not led us to

change any findings or calculations.

Accordingly, the net subsidy for this

program of Can$0.0010 per kilogram

remains unchanged from the

preliminary results.

9. Ontario Livestock and Poultry and

Honeybee Compensation Program: 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 the interested parties,

and our review of the record has not led

us to change any findings or

calculations. Accordingly, the net

subsidy for this program of less than

Can$0.0001 per kilogram remains

unchanged from the preliminary results.

10. Ontario Export Sales Aid Program:

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 the interested parties,

and our review of the record has not led

us to change any findings or

calculations. Accordingly, the net

subsidy for this program of Can$0.0001

per kilogram remains unchanged from

the preliminary results.

11. Ontario Bear Damage to Livestock

Compensation Program: 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 the interested parties,

and our review of the record has not led

us to change any findings or

calculations. Accordingly, the net

subsidy for this program of less than

Can$0.0001 per kilogram remains

unchanged from the preliminary results.

12. New Brunswick Livestock

Incentives Program: 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 the interested parties, and our

review of the record has not led us to

change any findings or calculations.

Accordingly, the net subsidy for this

program of less than Can$0.0001 per

kilogram remains unchanged from the

preliminary results.

13. New Brunswick Swine Industry

Financial Restructuring and

Agricultural Development Act—Swine

Assistance Program: 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 the interested parties, and our

review of the record has not led us to

change any findings or calculations.

Accordingly, the net subsidy for this

program of less than Can$0.0001 per

kilogram remains unchanged from the

preliminary results.

14. New Brunswick Swine Assistance

Policy on Boars: 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 the interested parties, and our

review of the record has not led us to

change any findings or calculations.

Accordingly, the net subsidy for this

program of less than Can$0.0001 per

kilogram remains unchanged from the

preliminary results.

B. New Programs Determined to Confer

Subsidies

1. National Transition Scheme for

Hogs: In the preliminary results, we

found that this program conferred

countervailable subsidies on the subject

merchandise. Our review of the record

and our analysis of the comments

submitted by interested parties,

summarized below, has led us to modify

part of our preliminary determination

on this program. The change concerns

the cash deposit. The net subsidy for

this program of Can$0.0042 per

kilogram remains unchanged from the

preliminary results. However, the cash

deposit for this program has been

adjusted to zero to reflect that this

program has been terminated and there

are no residual benefits. See Pasta from

Turkey.

2. Technology Innovation Program

Under the Canada/Quebec Subsidiary

Agreement on Agri-Food Development:

In the preliminary results, we found that

this program conferred countervailable

subsidies on the subject merchandise.

Our analysis of the comments submitted

by the interested parties, summarized

below, has not led us to change our

findings from the preliminary results.

Accordingly, the net subsidy for this

program of less than Can$0.0001 per

kilogram remains unchanged from the

preliminary results.

II. Programs Found Not to Confer

Subsidies

Research Program under the Canada/

Quebec Subsidiary Agreement on AgriFood Development: In the preliminary

results, we found that this program 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. Programs Found To Be Not Used

In the preliminary results, we found

that the producers and/or exporters of

the subject merchandise did not apply

for or receive benefits under the

following programs:

A. Quebec Farm Income Stabilization

Insurance Program (FISI);

B. Support for Strategic Alliances Program

under the Canada/Quebec Subsidiary

Agreement on Agri-Food Development;

C. Agricultural Products Board Program;

D. Federal Atlantic Livestock Feed Initiative;

E. Western Diversification Program;

F. Newfoundland Hog Price Support

Program;

G. Newfoundland Hog Price Stabilization

Program;

H. Newfoundland Weanling Bonus Incentive

Policy;

I. Nova Scotia Improved Sire Policy;

J. Nova Scotia Swine Herd Health Policy;

K. Ontario Swine Sales Assistance Policy;

and

L. Ontario Rabies Indemnification Program.

Our analysis of any comments

submitted by the interested parties,
18090 Federal Register / Vol. 62, No. 71 / Monday, April 14, 1997 / Notices

summarized below, has not led us to

change our findings from the

preliminary results.

IV. Programs Found To Be Terminated

In the preliminary results, we found

the following programs to be terminated

and that no residual benefits were

provided:

A. Alberta Livestock and Beeyard

Compensation Program;

B. British Columbia Special Hog Payment

Program; and

C. British Columbia Swine Herd

Improvement Program.

We received no comments on our

preliminary results and our findings

remain unchanged in these final results.

Analysis of Comments

Comment 1: The GOC and the CPC

argue that the Department erroneously

concluded that NTSP payments were

made to hog producers during the

period of review (POR). They argue that

in calculating a benefit for this program,

the Department mistakenly used the

payout figure for all NTSP plans, which

included miscellaneous posttermination adjustments under the

NTSP for the Hogs’ plan, adjustments

under the other terminated NTSP plans,

payouts under the active NTSP plans,

and all surplus distributions to

producers under all the various

terminated plans categorized as

‘‘tripartite payments’’ in the Farm Cash

Receipts (FCRs) data. They also argue

that the adjustments to the NTSP for

hogs resulted in the GOC collecting a

net of Can$41,000 from hog producers

during the POR. Therefore, they argue

that the Department should find that

there were no benefits to hog producers

under the NTSP for hogs during the

POR.

The petitioners contend that the

GOC’s supplemental questionnaire

response dated June 3, 1996 at page 3

indicates that tripartite payments that

had been held over from earlier fiscal

years had been paid to live swine

producers during the POR, and were

accounted for in the FCRs. The

petitioners also contend that the

Department’s September 23, 1996

Verification Report at page 4 states that

representatives of Agriculture Canada

explained not only that NTSP payouts

had been made, but also that some

NTSP payments remained outstanding.

Thus, the petitioners contend that the

Department verified that hog producers

received NTSP payouts during the POR

based on program activities that

occurred throughout the life of the

program. Therefore, the petitioners

contend that the record established that

hog producers received NTSP payouts

during the POR and, further, that these

payouts were substantial. Furthermore,

the petitioners contend that because the

GOC has failed to submit the NTSP

Annual Report for the review period,

which represents the official document

that presumably would outline the

nature and extent of the hog account

closeout adjustments and their effect on

NTSP payouts, the GOC’s argument is

deficient.

Department’s Position: We agree, in

part, with the GOC and the CPC, and, in

part, with the petitioners. At

verification, we reviewed the ‘‘Tripartite

Payments’’ line item in the FCRs, which

showed an aggregate figure for payments

received by producers under all NTSP

plans in each province. There was no

breakdown by commodity. Therefore,

we examined a GOC internal document

entitled ‘‘Tripartite Payments,’’ which

shows the payments to producers of all

commodities covered by an NTSP plan

in each province (Exhibit GOC–5 to the

Verification Report). We also reviewed

an internal document entitled ‘‘Surplus

Distribution—Producer,’’ which shows

the NTSP surplus distribution for all

commodities in each province (Exhibit

GOC–6 to the Verification Report). We

selected provinces from Exhibit GOC–5

and GOC–6 to trace to the FCRs, because

the totals from both of these documents

were recorded in the FCRs ‘‘Tripartite

Payments’’ line item. However, when

calculating the NTSP benefit for the

subject merchandise for the preliminary

results, we inadvertently used the total

tripartite payments listed in the FCRs.

Therefore, in these final results, we have

recalculated the NTSP benefit

applicable only to hog producers during

the POR using the same methodology

described in the Preliminary Results (61

FR at 52428). To obtain the payouts

made to hog producers during the POR,

we summed the payments listed for hog

producers in each province in Exhibit

GOC–5 to the Verification Report.

However, consistent with the

Department’s practice, we did not offset

the NTSP benefit to the hog producers

by the premiums the hog producers paid

during the POR, as argued by the

respondents. In prior administrative

reviews of Live Swine, we only

countervailed two-thirds of the

payments made to swine producers

because the federal government and the

provincial government contributed twothirds of the premiums from which

payments were made to the hog

producers. We did not countervail the

remaining one-third because it

represented the producers premiums.

Because we only countervail two-thirds

of the payments, there is no reason to

make any further adjustments to the

payments to hog producers. See, Live

Swine from Canada; Notice of

Preliminary Results of Countervailing

Duty Administrative Reviews; Initiation

and Preliminary Results of Changed

Circumstances Review and Intent to

Revoke Order in Part, 61 FR 26879,

26883 (May 29, 1996) and Live Swine

from Canada; Final Results of

Countervailing Duty Administrative

Reviews, 61 FR 52408 (October 7, 1996).

We agree with the petitioners that

payments for closing entries of the

NTSP hog plan were made during the

POR, and we have calculated the benefit

from these payments. However, we

disagree with the petitioners that the

GOC official’s comment, Verification

Report at 4, that some NTSP payments

remained outstanding necessarily means

payments to hog producers. There are

NTSP plans for other commodities,

which were still in effect, and for which

there could be payments due in the

future. However, we verified that the

plan for hogs was no longer in effect and

that there will be no payments made in

the future under that plan.

Comment 2: The CPC contends that

the Department stated in the

preliminary results that it intended to

calculate a benefit from the Feed Freight

Assistance Program (FFA) using the

same methodology applied in the sixth

review (See Live Swine from Canada;

Final Results of Countervailing Duty

Administrative Review: 59 FR 12243

(March 16, 1994), (Swine Sixth Review

Results)). However, the CPC claims that

the methodology used in the instant

review is inconsistent with that used in

Swine Sixth Review Results, and

constitutes a ministerial error. In Swine

Sixth Review Results, the Department

calculated ‘‘production in kilos’’ based

on the total production of live swine in

provinces eligible for FFA. In the

preliminary results of this review,

however, the Department calculated

‘‘production in kilos’’ for three

provinces using only the live swine

produced in the FFA eligible areas of

the three provinces: British Columbia,

Quebec, and Ontario. The CPC also

states that the same ministerial error

was made in Swine Seventh, Eighth and

Ninth Review Results, which the

Department corrected in an amended

final notice (Live Swine from Canada;

Amended Final Results of

Countervailing Duty Administrative

Reviews, 61 FR 58383; (November 14,

1996) (Amended Swine Seventh, Eighth,

and Ninth Review Results)). As a result,

the CPC contends that the Department

should also correct this alleged error in

the preliminary results of the current

review.
Federal Register / Vol. 62, No. 71 / Monday, April 14, 1997 / Notices 18091

The petitioners argue that the

Department should affirm the

calculation methodology that it used in

the preliminary results because it

correctly ‘‘ties’’ FFA receipts to the

merchandise actually benefiting from

the subsidy. In Ontario, Quebec, and

British Columbia, only certain counties,

and, therefore, only a percentage of

swine production, are eligible to receive

FFA assistance. Therefore, the

petitioners argue that the Department

should divide the amount of FFA

assistance by the total weight of live

swine produced in FFA-eligible areas

rather than by total production in each

province. According to the petitioners,

tying FFA benefits that can only be

received by a subset of producers in

certain provinces to all production in

those provinces would yield the same

absurd result as tying provincial

benefits to national production.

In rebuttal, the CPC argues that

should the Department decide to revise

its methodology, any revision must be

consistent with the Department’s

calculation of the benefit from other

‘‘national’’ programs providing varying

benefits to individual provinces,

correctly tie the benefits to eligible

production and exports. According to

the CPC, the revised methodology,

applied by the Department to all other

programs available in more than one

province, should calculate a benefit per

kilo per province, and then calculate a

weighted average rate per kilo based on

each province’s share to total exports.

These individual provincial rates

should then be added up to obtain a

total national rate. The CPC submits that

any revision to the FAA benefit

calculation should conform to this

standard methodology.

Department’s Position: In

consideration of the comments received

on this issue, we have reexamined our

FFA calculation methodology. We have

determined that the proper calculation

methodology to follow with respect to

FFA benefits is the one that the

Department has used in this review to

determine the benefit for the only other

‘‘national’’ program, NTSP. Therefore,

we first calculated a benefit per

kilogram for each province eligible for

FFA assistance using the provinces’

total production of live swine. Next, we

weighted each province’s benefit by

each province’s share of total exports of

the subject merchandise to the United

States. Finally, these weighted

provincial rates are summed to obtain

the benefit for the FFA program on live

swine.

We disagree with the petitioners

regarding the use of an adjusted

production figure in the denominator

for Ontario, Quebec, and British

Columbia. This review is conducted on

an aggregate basis. In this case we have

treated the provinces as we treat

companies in a typical case. To

calculate a country-wide rate, we

weight-average each province’s rate by

its share of exports to the United States.

To calculate the province’s rate for the

FFA program, we obtain the same result

using two different methods: (1) We can

calculate a rate for the counties

receiving FAA benefits and a rate for the

counties that received no FAA benefits,

and then derive the weighted-average

rate for the province, or (2) simply

calculate a rate for the province by using

the amount of FAA assistance in the

numerator and total swine production

in the denominator. We have adopted

the latter method to calculate the FFA

rate for each province.

Also, we addressed this same

comment in Swine Sixth Review Results

where we stated that ‘‘[a]lthough we

recognize that FAA availability is

limited to certain areas within the

participating provinces, we determine it

is not appropriate to adjust provincial

production downward. * * * We

determine that adjusting the

denominator as we did in the past

results is overstating the FAA benefit.’’

Id. at 12261. Therefore, for these final

results, we have calculated FAA

benefits as described above.

Comment 3: The GOQ argues that the

Department’s preliminary determination

to countervail a portion of the Canada/

Quebec Subsidiary Agreement on AgriFood Development (Agri-Food

Agreement) is contrary to the

Department’s administrative practice.

The GOQ claims that in the last five

administrative reviews of this order, the

Department has found the Agri-Food

Agreement, in its entirety, not

countervailable because it is a research

program in which the results are made

publicly available. The only possible

change with respect to the Agri-Food

Agreement is the expiration of the

original Agri-Food Agreement in 1991

and its replacement in 1993 with the

current Agri-Food Agreement.

According to the GOQ, this change

cannot justify the Department’s

reconsideration of the Agri-Food

Agreement in this review because the

current Agri-Food Agreement was

already in place during the ninth

administrative review when the

Department found the Agri-Food

Agreement non-countervailable. The

GOQ asserts that the Department’s longstanding policy has been not to reexamine programs previously found not

countervailable absent new information

or evidence of changed circumstances.

Because the Department found the Agrifood Agreement non-countervailable in

the ninth review and no party submitted

new information in this proceeding, the

GOQ contends that the Department

should have continued to find it not

countervailable.

The GOQ claims that, although the

Department erred in investigating the

Agri-Food Agreement after finding it

non-countervailable in all prior

administrative reviews, the record

evidence once again demonstrates that

the Agri-Food agreement is not

countervailable. Section 355.44(1) of the

1989 Proposed Regulations reflects the

Department’s long-term practice that

research and development programs,

such as the Agri-Food Agreement and

its components, are not countervailable

if the research results are made publicly

available. According to the GOQ, the

Agri-Food Agreement is a single

program and each of its components

individually meet the requirements of

section 355.44(1). Thus, the GOQ argues

that, in the final results of this review,

the Department should not find the

Agri-Food Agreement or any of its

components countervailable.

The CPC argues that the Department

preliminarily determined that the

Technology Innovation component of

the Agri-Food Agreement is

countervailable without first examining

whether the results of the research

generated by the funded projects are

generally available, and that this

analysis is not in accordance with either

U.S. law or the Department’s practice.

The CPC claims that funding for this

Agri-Food Agreement is shared 50/50 by

the federal government and the

province, and argues that in prior

reviews the Department’s analysis of

similar jointly funded agreements have

begun with a determination as to

whether the research results were made

publicly available. Only if research

results were not made available has the

Department then gone on to examine the

source of funding. The CPC contends

that this analysis is as long-standing as

the Department’s 1989 Proposed

Regulations, and as recent as the

preliminary and final results of the

seventh, eighth and ninth

administrative reviews of this order. As

a result, the CPC concludes that the

Department should analyze the AgriFood Agreement in accordance with

U.S. law and its past practice, and

should find that none of the

components of Agri-Food are

countervailable.

The petitioners contend that in an

effort to avoid the question of the

countervailability of the Technology

Innovation component of the Agri-Food
18092 Federal Register / Vol. 62, No. 71 / Monday, April 14, 1997 / Notices

Agreement, the GOQ and CPC attempt

to argue that the Department’s past

treatment of the Agri-Food Agreement,

as a whole, prevents the agency from

revisiting one particular component of

the program in the present review. The

petitioners state that the Department’s

past findings of countervailability are

limited to instances where it has

examined the Agri-Food Agreement on

an aggregate basis. However, the

Department has never found the

Technology Innovation component of

the Agri-Food Agreement, by itself, to be

not countervailable, and the

Department’s finding in the present case

does not conflict with its past treatment

of this subsidy. Also, the Department’s

prior finding of noncountervailability

was limited to the previous Agri-Food

Agreement. The petitioners allege that

this review presents the first time that

the Department has examined the

current Agri-Food Agreement at

verification. Thus, the petitioners claim

the record in this review provides the

Department with ample basis to

‘‘reinvestigate’’ the countervailability of

the new Agri-Food Agreement.

The petitioners continue that the

respondents are incorrect to argue that

the Technology Innovation program

should be considered noncountervailable because it constitutes a

research program under which research

results are made publicly available.

According to the petitioners, U.S. law

and past Department practice support

the Department’s decision to treat the

Technology Innovation component of

the Agri-Food Agreement as a regionally

specific technical assistance program

provided by the Canadian federal

government to the designated

geographic region of Quebec. In Final

Affirmative Countervailing Duty

Determination; Fresh, Chilled, and

Frozen Pork from Canada, 54 FR 30774

(July 24, 1989) (Pork Investigation), the

Department examined the separate

components of the precursor Agri-Food

program and determined that the federal

government’s contributions to the

Technology component were

countervailable because the program did

not involve research and was limited to

the region of Quebec. Consistent

application of agency practice requires

the Department to treat Technology

Innovation as a technical assistance

subsidy for production aid. According

to the petitioner, the Technology

Innovation program is designed

principally to provide production

support. Given that the Technology

Innovation program does not constitute

a research subsidy, the petitioners argue

that the Department has correctly not

examined the public availability of this

program. Only when referring to the

Agri-Food program in it entirety can the

program be characterized generally as a

‘‘research’’ program. However, the

petitioners conclude that the

Department correctly rejected this

approach and based its

countervailability finding on the theory

that the program is regionally specific.

Department’s Position: We disagree

with the GOQ and CPC. The

Department’s preliminary finding with

respect to the countervailability of the

Technology Innovation program in not

inconsistent with prior Department

practice. In fact, the Department

examined the countervailability of the

predecessor Agri-Food Agreement in the

Pork Investigation. In that case, the

Department also examined the separate

components of that agreement (Research

and Development, Technological

Innovations and New Initiatives, Soil

Conservation and Improvement) as three

separate programs and determined that

the Technological Innovations program

was countervailable because the

program did not involve research, and

the funding, provided by the federal

government, was limited to the region of

Quebec. See Pork Investigation at 30779.

In Live Swine from Canada; Preliminary

Results of Countervailing Duty

Administrative Review 55 FR 20812,

20814 (May 21, 1990) (Swine Second

and Third Review Results), we stated

again that the Agri-Food Agreement

contained three programs: Research and

Development, Technological

Innovations, and Soil Conservation, and

that the federal government’s

contributions were limited to Quebec,

and therefore countervailable. We

examined the Agri-Food Agreement

again in the fourth and seventh, eighth,

and ninth reviews (the program was not

used in the fifth and sixth review).

Although we consistently described the

Agri-Food Agreement in terms of three

programs under the same agreement, we

examined individual projects as if they

all were financed under the Research

program rather than under the other two

programs. See, e.g. Swine Seventh,

Eighth and Ninth Review Results at

26887. Our understanding was

inaccurate and does not reflect a

determination that the Agri-Food

Agreement is one program totally

related to research, as the GOQ and the

CPC suggest. Furthermore, the GOQ

submitted no information on the record

of the ninth review showing that a new

Agri-Food Agreement was in effect. It

was only during the instant review that

the Department learned that a new AgriFood Agreement was in force. The fact

that a new Agri-Food Agreement is in

force is sufficient evidence of changed

circumstances in warrant a

reexamination of our prior

determinations. Because we determined

that it was appropriate to reexamine the

Agri-Food Agreement in this review, we

are not constrained by our previous

examinations in earlier reviews.

Moreover, the Department has

discretion in determining whether to reinvestigate a program previously found

to be non-countervailable. The court of

International Trade in affirming this

discretion, stated that the Department is

‘‘entitled to draw upon its own

knowledge and expertise and facts

capable of judicial notice.’’ PPG Indus.,

Inc. v. United States, 746 F. Supp. 119,

135 (CIT 1990). As a result, we

determined that it was appropriate to

examine the countervailability of the

1993 Agri-Food Agreement. In line with

this decision, the GOQ was offered an

opportunity to claim green light or green

box status under section 771(5B) of the

Act. (See Department’s Questionnaire,

September 25, 1995, Section III.4 at

III.4–2).

We disagree with the respondents’

claim that the Agri-Food Agreement is

nothing more than a research program.

The language of the Agreement conveys

much broader goals than simply the

research and development of new

products or processes. While research

and development constitute a portion of

the activities under this Agreement, the

Agreement itself clearly denotes broader

economic development objectives. In

fact, the Agreement focuses on the agrifood industry, because ‘‘agri-food

development in Quebec continues to be

a priority in the economic and regional

development strategies of both

governments.’’ (See Canada-Quebec

Subsidiary Agreement on Agri-Food

Development, attached as Exhibit J to

the GOQ Questionnaire Response, dated

December 4, 1996, at 6.) According to

the Agreement, the objectives of the two

governments are as follows: ‘‘(A) to

intensify the economic and regional

development of Quebec and to create an

environment in which Quebec and its

regions can achieve their economic

potential..; (B) to consolidate and

improve opportunities for employment

and income..; (C) to facilitate

consultation and coordination of the

economic and regional development

policies, programs, and activities of both

governments..’’. (Id at 5–6). The purpose

of the Agreement is ‘‘to promote

cooperation and coordination of the

efforts of the governments of Canada

and Quebec with a view to

strengthening the development,
Federal Register / Vol. 62, No. 71 / Monday, April 14, 1997 / Notices 18093

competitiveness, and profitability of the

agri-food industry.’’ (Id. at 9).

As we stated in Memorandum on

Canada/Quebec Subsidiary Agreement

on Agri-Food Development, to the

Acting Assistant Secretary from CVD/

AD Team dated September 25, 1996,

which is on file in CRU (Agri-Food

Memorandum), we recognize that the

Research program is a research and

development program, and, therefore,

we applied the public availability

criterion to our analysis. However,

when we analyzed the Technology

Innovation program, we found that its

application review process, eligibility

requirements, purposes, and types of

projects funded were more typical of a

technological assistance program than of

a research and development program.

Under the Technology Innovation

program, the applications are reviewed

by the Quebec Ministry of Agriculture

(Ministere de l’Agriculture, des

Pecheries et de l’Alimentation du

Quebec (MAPAQ)), to see whether they

meet the eligibility criteria and the

objectives of the program. (See

Verification Report at 29.) Any

organization, agricultural operation, or

individual associated with agricultural

production is eligible under Testing and

Experimentation, except for consulting

firms, specialized educational

institutions or research establishments;

only groups of farms are eligible under

Testing Networks. The type of project

that can be funded deals ‘‘with the

introduction, final adjustment, or fullscale field testing of tools, specialized

equipment, new techniques and

practices, or agricultural management

tools based on proven technical

expertise’’ for the Testing and

Experimentation component; there is no

specific requirement for the Testing

Networks component. When we then

look at the project assessment criteria,

we find that ‘‘Scientific and technical

validity’’ is only one of nine criteria

used, with no particular weight given to

any one of them. (See, Canada-Quebec

Subsidiary Agreement on Agri-Food

Development—Technology Innovation

Program, attached as Exhibit L to the

GOQ Questionnaire Response, dated

December 4, 1996, at 14–15).

Furthermore, it appears unusual that

research institutions would be

specifically excluded from applying for

funds under this program, if it is as

claimed, a research and development

program. More importantly, it is not

clear in this case whether the ‘‘new

technologies’’ are newly developed

technologies or technologies that are

new to Quebec but may be widely used

in other areas.

The GOQ contends that ‘‘[t]he

Technology Innovation component of

Agri-Food provides grants for applied

research projects in which concepts

developed in laboratories are tested

under actual farming conditions.’’ There

is no evidence in the record indicating

the projects must be tied to ‘‘concepts

developed in laboratories’’ or that the

tested product, technology or process be

in the experimental stage. Instead, the

eligibility requirements seem to

accommodate products already existing

in the market and being tested for use

in Quebec. The types of projects

financed under this program seem to

support this interpretation: ‘‘Rotational

grazing versus cow-calf production,’’

‘‘Strip grazing versus dairy farming,’’

‘‘Enhancing the competitiveness of the

goat milk industry’’ or ‘‘Ventilation of

pig barn using air diffuser and low-level

exhaust.’’

Our reasoning becomes even more

clear when we compare the Technology

Innovation program with the Research

program. Under the Research program,

the Conseil des Recherches en Peche et

en Agro-Alimentaire du Quebec

(CORPAQ) reviews the applications and

administers the projects. This

committee, which includes three

university professors and a company

researcher, is the same committee that

evaluates all scientific research funded

by the government in Quebec. CORPAQ

screens a proposal for a project based on

scientific merit; for the projects that are

deemed eligible, a more detailed

description of the project is requested

which is evaluated by a second

committee made up of experts

specifically ‘‘in the fields or research

disciplines concerned.’’ The scientific

validity of the project appears to be the

only criterion for the selection of the

projects receiving the funding. Eligible

applicants are universities under all

three components of the Research

program; under the Support for

Partnership Research also private

enterprises or associations may apply.

Testing obviously represents a stage

in the research and development

process. Any new product or process

developed in a laboratory has to

undergo testing to see whether or not

the goals of the research have been

achieved. However, when testing is

isolated from the research process and

conducted for other purposes, such as to

adapt existing technologies to specific

weather conditions, it is still testing, but

it is no longer part of the research and

development process. The fact that the

Technology Innovation program does

not emphasize the scientific value of the

projects but seems to stress technical

expertise, further buttresses our

determination that this is a program

providing technological assistance to

farmers in order to speed up the

adoption of cutting-edge technologies in

Quebec.

Moreover, we verified that during the

POR, this program was funded

exclusively by the GOC. See Verification

Report at page 29. Schedule C of the

Agri-Food Agreement shows how funds

were allocated to the three programs

and clearly shows that, since its

inception, the Technological Innovation

program has been funded solely by the

federal government. As a result, because

assistance under the program is

provided by the federal government to

industries located within a designated

geographical region of Canada (i.e.,

Quebec), we determined that the federal

contributions were countervailable. See

section 771(5a)(D)(iv) of the Act and

Statement of Administrative Action

accompanying the URAA, reprinted in

H.R. Doc. No. 316, 103d Cong., 2d Sess.

932 (1994) at 262.

With respect to the Research program,

we did examine the public availability

of the results of research projects for

purposes of making a finding that the

program is not countervailable. (See

Department’s Position on Comment 4).

However, because we have determined

that the Technological Innovation

program is not a ‘‘research’’ program,

our ‘‘public availability’’ test is

inapplicable. Therefore, we continue to

find that the Technological Innovation

program of the Agri-Food Agreement

provided a countervailable subsidy to

live swine during the POR.

Comment 4: The petitioners allege

that the Department erroneously

declined to countervail benefits

received under the Research component

of the Agri-Food Agreement. The

petitioners argue that the GOQ has

failed to provide sufficient evidence to

establish that the results of research

projects will be published as required

by the 1989 Proposed Regulations. The

petitioners also state that the

respondents have not shown that the

results of the research projects must be

made public in all instances because the

program allows recipients to obtain

patent protection for the results of their

research. Citing to Final Affirmative

Countervailing Duty Determination:

Fresh and Chilled Atlantic Salmon from

Norway, 56 FR 7678, 7682 (February 25,

1991) (Norwegian Salmon), the

petitioners assert that in instances

where research projects are ongoing, the

Department has required that the results

are scheduled to be publicized.

Petitioners argue that no such evidence

exists on the record for this review. The

petitioners also argue that the
18094 Federal Register / Vol. 62, No. 71 / Monday, April 14, 1997 / Notices

Department’s failure to countervail

research grants under these

circumstances would be inconsistent

with Department practice and would

create loopholes potentially allowing

subsidizing governments to avoid

countervailability by delaying decisions

to publish the results of subsidized

research until after the three-year

allocation period has expired.

The GOC and CPC counter that the

petitioners’ argument inappropriately

assumes that the GOC would fail to

discharge its domestic and its

international obligations fully and in

good faith. The GOC cannot avoid or

delay publication of Agri-Food

Agreement research results without

violating the terms of the Agri-Food

Agreement itself. The GOC states that in

the preliminary results, the Department

found that the research results are

published ‘‘upon completion.’’ In prior

administrative reviews, the Department

similarly has found that without

exception the swine-related research

results under the Agri-Food Agreement

or its predecessor have also been made

publicly available upon completion.

Also, the CPC argues that the

Department has verified that no

researcher has ever exercised the option

to patent research results, and in so

doing to limit the extent of their

publication. According to the CPC, the

mere possibility of a future patent for

one research project is insufficient proof

that no results of research under this

program will ever be made publicly

available, citing Final Affirmative

Countervailing Duty Determinations:

Certain Steel Products from Germany,

58 FR 37315, 37321–22 (July 9, 1993)

(German Steel). Therefore, the GOC and

CPC request that the Department affirm

its determination that the Research

component of the Agri-Food Agreement

is not countervailable.

The GOQ argues that the

Department’s practice is not to

countervail an uncompleted research

project unless it is known at the time of

the determination that the project

results will not be disseminated

publicly. The GOQ continues that the

petitioners’ position is based upon pure

speculation about what might happen in

the future. In any case, leaving aside the

Department’s determination that the

Research component is a

noncountervailable research program,

the GOQ argues that the Research

component is neither regional, nor de

jure or de facto specific. As a result, the

GOQ urges the Department to reject the

petitioners’ argument and confirm that

the Research component is not

countervailable.

Department’s Position: We disagree

with the petitioners. Although there is

no schedule for publication as in

Norwegian Salmon, we explained and

documented in our Verification Report

and Agri-Food Memorandum that the

results of research projects funded

under the Basic Research program are

required by the terms of the Agri-Food

Agreement to be published in an annual

report upon completion. The Agri-Food

Agreement states that ‘‘the Government

of Canada and the Government of

Quebec agree to announce jointly all

authorized projects, as well as project

and program reports and results.’’

However, no swine-related research

projects were completed during the

POR. We find it inappropriate to

countervail these projects during the

instant review because there are no

results to determine whether they were

made publicly available. The mere

possibility of a future patent for the

results of a research project is not

sufficient evidence to justify a finding of

countervailability of an entire research

program, where there is a general

requirement that research results be

made publicly available. See, e.g.,

German Steel at 37321–22. Therefore,

we reaffirm our preliminary

determination that the Research

program did not confer countervailable

benefits on live swine during the POR.

The determination that benefits under

this program are countervailable could

only be made if the swine-related

projects were complete. It is only upon

completion that we can know whether

the results of research have been made

publicly available. See, e.g., Final

Affirmative Countervailing Duty

Determinations: Certain Steel Products

from Sweden 58 FR 37385 (July 9,

1993).

Comment 5: The GOP argues that the

Department preliminarily determined to

examine the Agri-Food Agreement as

three separate programs because it

incorrectly assumed that there are

distinct differences in the purposes,

funding, eligibility requirements, and

application and approval processes

across the three components of the AgriFood Agreement. The GOQ states that

the Agri-Food Agreement is a single

program with a single common purpose

of ‘‘strengthening the development,

competitiveness and profitability of the

agri-food industry.’’ According to the

GOQ, the agreement provides that funds

may be transferred among the various

components of the agreement.

Therefore, the GOQ claims that since

funds are fungible among the various

components of the agreement, those

components in practice have the same

funding.

The GOQ further argues that the AgriFood Agreement has a single

administration. According to the GOQ,

the budget for administration of the

agreement is provided as a single

component; there is no separate

administrative budget for each operative

component. Further, the GOQ claims

that there are common eligibility

requirements applicable to all three

components that are set forth in the

main text of the Agri-Food Agreement.

The main text of the agreement

establishes a single management

committee with ultimate authority over

project and contract approval for all

three components.

Finally, the GOQ notes that in Swine

Seventh, Eighth and Ninth Review

Results, the Department cited to the

Final Affirmative Countervailing Duty

Determination on Certain Fresh Atlantic

Groundfish from Canada 51 FR 10041,

10061 (March 24, 1986) (Groundfish) to

distinguish between ‘‘umbrella

legislation’’ and ‘‘subsidiary agreement’’

in its single program analysis of

Canada’s Farm Income Protection Act.

The GOQ claims that, in Groundfish, the

Department examined each subsidiary

agreement under Canada’s Economic

and Regional Development Agreements

(ERDA) as a single separate program.

The GOQ states that the Agri-Food

Agreement is a ‘‘subsidiary agreement’’

under the umbrella of ERDA. Therefore,

the GOQ argues that pursuant to the

rationale established in Groundfish and

ratified in Swine Seventh, Eighth and

Ninth Review Results, the Department

should examine the Agri-Food

Agreement as a single program.

The petitioners contend that the GOQ

ignores that the shared purpose of the

programs is too broad to meet the

Department’s legal standard. According

to the petitioners, the Department has

expressly rejected this type of broad

purpose as the basis for treating

independent subsidy programs as a

single program, instead requiring

commonality at the program-specific

level. Finally, the Department has

regularly examined component parts of

subsidy programs similar to the

umbrella program found in the AgriFood program on an independent basis.

See, e.g., Final Affirmative

Countervailing Duty Determination on

Pure Magnesium and Alloy Magnesium

from Canada 57 FR 30946 (1992); Final

Affirmative Countervailing Duty

Determination on Small Diameter

Circular Seamless Carbon and Alloy

Steel Standard Line and Pressure Pipe

from Italy 60 FR 31922 (1995).
Federal Register / Vol. 62, No. 71 / Monday, April 14, 1997 / Notices 18095

Department’s Position: We disagree

with the GOQ. First, the Department has

examined the components of the

predecessor Agri-Food Agreement as

separate programs in prior

determinations. (See Department’s

Position on Comment 3 above). Second,

the instant review represents the first

opportunity for the Department to

examine the new Agri-Food Agreement.

As extensively explained in the AgriFood Memorandum, in this review, we

examined the components of the AgriFood Agreement as three separate

programs because there are distinct

differences in the purposes, funding,

eligibility requirements, and application

and approval procedures across the

three components. The fact that the

three components stem from the same

agreement between federal and

provincial government does not detract

from this finding.

The GOQ claims that the Agri-Food

Agreement has a single purpose of

‘‘strengthening the development,

competitiveness and profitability of the

agri-food industry.’’ This is correct;

however, when we examine the program

areas, we find that the purpose of each

component is much more specific, as we

outlined in the Agri-Food

Memorandum: the purpose of the

Research component is to create major

leverage effects on research; the purpose

of the Technological Innovation

component is to speed up the rate of

adoption and dissemination of

technologies and production systems;

and the purpose of the Strategic

Alliance Support component is to

stimulate cooperation and strageic

alliances in the agri-food industry (see

Appendices K, L, and M of the GOQ’s

December 4, 1995 questionnaire

response).

With respect to funding, we agree that

at the agreement level, the funding is

contributed 50/50 by the two

governments. However, at the program

level, Schedule C of the Agreement

shows that the funding for the Research

program was provided by both the GOQ

and the GOC, and the funding for the

Technological Innovation and Strategic

Alliance Support components was

provided solely by the GOC.

With respect to the administration of

these programs, while it is correct that

the Agreement is administered by the

management committee, individual

‘‘management subcommittees’’ were

also established ‘‘for the purpose of

managing and administering each

program under this Agreement . . .’’

(Section 4.5(b) of the Agreement). With

respect to the application process, each

program has distinct application forms,

application processes, and evaluation

systems. As we have already indicated,

applications under the Research

program are processed by CORPAQ,

applications under the Technological

Innovation program are processed by

MAPAQ, and application for the

Strategic Alliance Support program are

processed by Agriculture Canada. As

outlined in the Agri-Food

Memorandum, each program has

different eligibility requirements. Each

application is then reviewed by the

management subcommittee for the

corresponding program for final

approval.

We also disagree with the GOQ’s

argument that, pursuant to the rationale

established in Groundfish and ratified

in Swine Seventh, Eighth, and Ninth

Review Results, the Department should

examine the Agri-Food Agreement as a

single program. In Groundfish (at

10049), the Department stated that:

‘‘ERDA subsidiary agreements establish

programs, delineate administrative

procedures and set up relative funding

committees of the federal and provincial

governments.’’ Under both the Prince

Edward Island subsidiary agreement

and the New Brunswick subsidiary

agreement, we found multiple programs.

As a result, Groundfish does not support

the GOQ’s argument for treating

subsidiary agreements as single

programs.

The countervailing duty law does not

mandate a specific standard for

determining whether government

actions under review should be treated

as a single program or several programs.

Under these circumstances, the

Department has discretion and must

base its determination on a reasonable

interpretation of the facts on the record.

The record shows that we extensively

analyzed the information submitted by

the GOQ’s, as well as our

determinations in prior cases, in

reaching our determination that we

should examine the components of the

Agri-Food Agreement as separate

programs. Consequently, we reject the

GOQ’s argument and reaffirm our

position in the preliminary results of the

instant review.

Comment 6: The GOQ states that the

Department concluded that the

Technology Innovation component of

the Agri-Food Agreement is

countervailable because it is a federal

program that is limited to a single

province and, thus, is regionally

specific. The GOQ claims, however, that

the statutory provision provides that the

determination of whether a subsidy is

regionally specific must be made in

relation to ‘‘the jurisdiction of the

authority responsible for the

subsidy * * * ’’ 19 U.S.C.

§ 1677(5A)(D)(iv). According to the

GOQ, Quebec is the authority

responsible for the Basic Research and

Technology Innovation components.

Both components are administered on a

day-to-day basis exclusively by Quebec

even though the GOC also provides

funding for the program. Quebec is

responsible for record keeping,

application for grants, and decisions

regarding which projects receive

funding. Consequently, the GOQ states

that Quebec, rather than Canada, should

be viewed as the authority responsible

for the Basic Research and Technology

Innovation components of Agri-Food.

Therefore, the GOQ argues that neither

of the program components are

regionally specific because they are

available everywhere in Quebec.

The GOQ claims that because the

Technology Innovation component is

not regionally specific, in order to

determine specificity the Department

would have to determine whether the

component is de jure or de facto

specific. The GOQ argues that the AgriFood Agreement is not de jure specific

because the agreement provides that its

benefits are available to all sectors of

Quebec’s agricultural economy,

including food production, processing,

storage and marketing. Also, the GOQ

argues that an analysis of the four

factors as set forth in section

355.43(b)(2) of the 1989 Proposed

Regulations show that the Technology

Innovation component of the Agri-Food

Agreement is neither de jure nor de

facto specific. According to the GOQ,

actual recipients are not limited in

number, live swine are not a dominant

or disproportionate user of the program,

and there is no evidence that the

authorities exercised discretion so as to

favor the live swine industry.

The petitioners state that U.S. law and

past Department practice support the

decision to treat the Technology

Innovation component of the Agri-Food

Agreement as a regionally specific

technical assistance program provided

by the Canadian federal government to

the designated geographic region of

Quebec. The petitioners contend the

Department examined the separate

components of the precursor Agri-Food

Agreement and determined that the

federal government’s contributions to

the Technology Innovation component

were countervailable because it did not

involve research and was limited to the

region of Quebec. See Pork Investigation

at 30774, 30779. Thus, the petitioners

contend that because the instant case

examines the same program, consistent

application of agency practice requires

the Department to treat the Technology

Innovation component of the Agri-Food
18096 Federal Register / Vol. 62, No. 71 / Monday, April 14, 1997 / Notices

program as a technical assistance

subsidy for production aid. Also, the

GOQ is not ultimately responsible for

administering the program. According

to the petitioners, the Department

verified that while the GOQ is

responsible for administration, the

critical issue of funding lies exclusively

within the jurisdiction of the federal

government. Therefore, it is irrelevant

whether assistance is available

everywhere in Quebec. The petitioners

state that the Department’s regional

specificity inquiry in this case has

focused correctly on the availability of

Agri-Food assistance vis-a-vis all of

Canada, not within particular provinces.

The petitioners also contend that

because the Department has based its

countervailability finding on the theory

that the Agri-Food Agreement is

regionally specific, a de facto specificity

analysis is irrelevant.

Department’s Position: We disagree

with the GOQ that the Technology

Innovation program is not specific

under section 771(5A)(D)(iv). The SAA

makes clear that this provision codifies

the Department’s regional specificity

test. It states that ‘‘ * * * subsidies

provided by a central government to

particular regions (including a province

or a state) are specific regardless of the

degree of availability or use within the

region.’’ SAA, at 932. Although the

Agri-Food Agreement states that the

GOC and the GOQ will each contribute

50 percent of the total cost of the

agreement, Schedule C of the agreement

shows the allocation of those funds to

the three programs and clearly shows

that since its inception, the Technology

Innovation program has been funded

solely by the federal government.

Because the Department found that the

assistance under this program is being

provided by the federal government to

industries located within a designated

geographical region of Canada (i.e.,

Quebec), we determine that the federal

contributions are specific under section

771(5A)(D)(iv), and therefore,

countervailable.

Contrary to the remainder of the

GOQ’s claim, section 771(5A)(D)(iv)

does not require the Department to

analyze the specificity of a subsidy in

relation to the authority responsible for

managing the subsidy program. The

statutory language explicitly refers to

‘‘the jurisdiction of the authority

providing the subsidy.’’ As discussed

above, the record evidence demonstrates

that the GOC not the GOQ provided all

funding for the Technology Innovation

program during the POR. Therefore,

consistent with the statutory language,

we have examined the specificity

language, we have examined the

specificity of the program from the

perspective of the GOC as the source of

funding. Because we determine the

program to be specific under section

771(5A)(D)(iv), there is no need to

conduct a de jure or de facto specificity

analysis.

Comment 7: The GOQ argues that the

Department should find that the

Support for Strategic Alliances

component of the Agri-Food Agreement

is not countervailable because it funds

studies with a view to developing

markets and improving competitiveness,

or developing knowledge and knowhow, which is research. The GOQ

claims that the research results under

this component are specifically

conditioned upon the applicant making

available and disseminating the results

of the projects. Therefore, the results are

publicly available. According to the

GOQ, the Department should make a

noncountervailable determination in the

instant review so as to avoid wasting

resources reinvestigating this

component in future reviews.

Department’s Position: We disagree

with the GOQ. We reviewed the Support

for Strategic Alliance projects that were

outstanding during the POR, and

verified that none were related to live

swine. Because the program was not

used during the POR, we did not

determine the countervailability of the

program. If we find in a future review

that projects related to live swine have

been approved, we will examine the

countervailability of this program.

Comment 8: The GOQ agrees with the

Department’s preliminary determination

that the Basic Research components of

the Agri-Food Agreement did not confer

countervailable benefits on live swine

during the POR. However, the GOQ

argues that, because the Department

preliminarily determined that the Basic

Research component does not provide

countervailable benefits to live swine,

the Department should not continue to

investigate this component in future

reviews. Because the Department found

that the Basic Research component was

used during the POR, the Department’s

determination not to countervail that

component is equivalent to a decision

that the Basic Research component is

not countervailable. According to the

GOQ, it is well-established policy that

the Department will not reinvestigate

programs in future reviews that did not

confer countervailable benefits in prior

reviews absent new evidence or

changed circumstances. The GOQ

argues that the Department has

abandoned this well established policy

in its preliminary results of this review

by announcing in advance that it will

continue to reinvestigate the Basic

Research component of the Agri-Food

Agreement.

The GOQ states that the reason the

Department gave for potentially

reinvestigating the program was that in

the future there might be a research

project the results of which may not be

published. However, the GOQ argues

that the Department has verified at least

twice that the results of Agri-Food

projects are always published. Should a

future research project not be published,

it would constitute a change in the

program and, according to the GOQ, it

would be petitioner’s burden to allege a

change in the program. The GOQ

contends that the Department cannot

keep a noncountervaliable program

open to investigation on the possibility

that the program might change.

Therefore, the Department should

announce that it will not reinvestigate

the program again absent substantial

allegations of a change in the program

or evidence that the results of a

completed research program benefitting

live swine were not published.

The petitioners contend that the GOQ

is wrong in suggesting that a decision

not to countervail a subsidy program in

a particular review constitutes a de facto

finding of noncountervailability. This

argument ignores the fact-based nature

of the Department’s countervailing duty

inquiry and also entirely overlooks the

fact that the Department frquently

delays making a countervailability

finding when subsidy programs are not

used. The petitioners assert that the

Department should reject the GOQ’s

attempts to preclude the Department

from considering the countervailability

of the Basic Research component.

Department’s Position: We disagree

with the GOQ. It is the Department’s

practice to continue to review those

research and development programs

where there is an indication that all

results may not be made publicly

avaiable. See e.g., Final Affirmative

Countervailing Duty Determinations:

Certain Steel Products from Sweden, 58

FR 37385 (July 9, 1993). In the case of

the predecessor Agri-Food Agreement,

we verified in the fourth and seventh

administrative reviews that research

results were made publicly available.

The instant review provided the

Department with its first opportunity to

verify whether research results are made

publicly available under the new AgriFood Agreement. However, during the

POR, none of the swine related projects

were completed; therefore, it will not be

known whether the results of the

research are publicly available until

completion of the project. Also, in the

instant case, we verified that under

Section 8 of the Research program
Federal Register / Vol. 62, No. 71 / Monday, April 14, 1997 / Notices 18097

guidelines participants have the right to

patent protection for the results of the

research, if divulging the information

will reduce the commercial value of

those results. As a result, we will

continue to examine the

countervailability of these research

grants in future reviews and upon

completion will determine whether they

are countervailable.

Comment 9: The GOQ argues that the

Department should find that the AgriFood Agreement was not used during

the POR. The GOQ claims that the AgriFood Agreement only benefits swine

produced in Quebec, and there is no

verified record evidence indicating that

swine produced in Quebec, that are

subject to the order, were exported to

the United States during the POR. All

market hogs must be sold through the

Quebec Federation of Pork Producers.

According to the GOQ, the record

shows, and the Department verified,

that no swine sold through the

Federation were exported to the United

States during the POR. U.S. import

statistics that show imports from

Quebec of 1,795 hogs include

nonsubject merchandise, such as

weanlings, sows and boars. Therefore,

the GOQ argues that the Department

should determine in its final results of

this review that the Agri-Food

Agreement was not used during the

POR.

Department’s Position: We disagree

with the GOQ. The Department did not

state that there were no exports of

subject merchandise from Quebec to the

United States during the POR. Official

import statistics, provided by the GOC,

show that Quebec exported 1,795

animals to the United States during the

POR under the HTS numbers that cover

live swine. We were unable to verify

that these imports did not include

imports of subject merchandise.

Therefore, we have included exports

from Quebec in all appropriate program

benefits calculations, except FISI (see

Department’s Position on Comment 12

below). As a result, the Department

appropriately examined the Agri-Food

Agreement during the POR.

Comment 10: The CPC argues that the

Department should adjust the cash

deposit rate to take into account the

program terminations of the NTSP, the

National Transition Scheme for Hogs

(Transition Scheme), and the

Saskatchewan Hog Assured Returns

Program (SHARP). In the case of

SHARP, the CPC states that the last date

producers received benefits under

SHARP was March 31, 1996, and the

only other possible benefit continuing

beyond that date is a minor potential

liability of $3,124 in uncashed checks.

Thus, they argue that this is a programwide change and there is no possibility

that measurable benefits of any

significance will continue, therefore, the

cash deposit rate should be adjusted.

Second, the CPC claims that the NTSP

for Hogs was terminated as of July 2,

1994, the entire NTSP surplus was

distributed in two fiscal years, 1994/95

and 1995/96, and that no residual

benefits may continue to be bestowed

under this terminated program. They

also claim that all payments were made

either in fiscal year 1994/95 or in 1995/

96 under the Transition Scheme, which

was a temporary support program.

Likewise, the CPC argues that these two

programs meet the Department’s criteria

for a program-wide change qualifying

for an adjustment in the cash deposit

rate.

The petitioners state that according to

section 355.50(d) of the Department’s

1989 Proposed Regulations, the cash

deposit rate should be adjusted if: (1)

the termination of a program constitutes

a program-wide change and (2) no

residual benefits can be bestowed under

the terminated program. The petitioners

contend that while the three programs

have been terminated, record evidence

clearly establishes that residual benefits

may be provided under these programs;

therefore, they do not meet the second

condition that is required for a cash

deposit rate adjustment.

With respect to SHARP, the

petitioners point out that the final year

in the SHARP three-year allocation

period extends beyond the current

review period, meaning that residual

benefits will continue to be distributed

to hog producers. In addition, even

though there is a current agreement to

use a three-year allocation period for

SHARP benefits, there is no guarantee

that this period will not be altered in the

future, thereby allowing residual

benefits to continue beyond the next

review period. With respect to NTSP

and the Transition Scheme, the

petitioners assert that the record also

establishes that residual benefits will

continue past the current review period.

Since the CPC acknowledged that NTSP

and Transition Scheme payments will

be made in the next review period, the

petitioners state that it would be

premature to modify the cash deposit

rate for these two programs.

Also, the petitioners argue that the

CPC incorrectly implies that since

benefits under each of the three

programs can be accounted for during

either the POR or the subsequent period

(1995–1996), the Department should

find that no residual benefits exist. The

petitioners state that there is nothing in

section 355.50 to suggest that the

Department should define residual

benefits as anything other than benefits

that will be received after an instant

proceeding. Also, according to the

petitioners, section 355.50(d) places a

much more stringent burden of proof on

respondents, requiring respondents to

prove, with a degree of certainty, that

residual benefits will not continue to be

bestowed under a particular program,

rather than to confirm all currentlyplanned future outlays.

Department’s Position: We agree with

the CPC. When a program that provides

countervailable benefits has been

terminated and all benefits have ceased

to be bestowed prior to the preliminary

results of review, the Department’s

practice is to adjust the cash deposit

rate, unless a substitute program has

been introduced. See e.g., Pasta from

Turkey at 30370. The verified record

evidence demonstrates that SHARP,

NTSP, and the Transition Scheme were

all terminated prior to the preliminary

results of this review. See Preliminary

Results at 52428–52429.

With respect to NTSP and the

Transition Scheme, the information on

the record for this review demonstrates

that all benefits were paid out from

these terminated programs during the

1994/95 and 1995/96 fiscal years. The

last day of the 1995/96 fiscal year is

March 31, 1996. We verified that the

NTSP and the Transition Scheme

programs paid out all residual benefits

prior to the publication of our October

7, 1996 Preliminary Results.

Furthermore, there is no evidence on

the record that any substitute programs

have been introduced for the NTSP and

the Transition Scheme. Accordingly,

consistent with our practice, we are

adjusting the cash deposit rates for these

programs.

With regard to SHARP, the last year

of our three-year allocation of the

SHARP deficit corresponds with the

1995/96 fiscal year. We verified that the

only potential residual benefit are a

contingent liability for uncashed checks

of $3,124. (Verification Report at page

38). As a result, we determine that the

residual benefit can be added to the

allocated SHARP deficit for the instant

review, thus leaving no residual benefits

accruing after October 7, 1996, the date

of the publication of the preliminary

results of the instant review.

The Department is satisfied that the

verified information described in the

Verification Report and contained in the

verification exhibits demonstrates that

there are no residual benefits under

these programs. All cash payments

under NTSP and the Transition Scheme

were made in 1994/95 and 1995/96.

SHARP has a potential liability which
18098 Federal Register / Vol. 62, No. 71 / Monday, April 14, 1997 / Notices

we have accounted for as discussed

above. We disagree with the petitioners’

claim that the Department should define

residual benefits as any benefits

received in the subsequent review.

Because cash deposit rates apply to

future entries, we adjust the cash

deposit rate to zero only when we are

satisfied that no residual benefits from

a terminated program will be paid out

subsequent to the issuance of the notice

which establishes the new cash deposit

rates. In this case, these conditions have

been met since the three programs were

terminated and cannot pay out residual

benefits after the issuance of the

Preliminary Results of this

administrative review. Therefore, we are

adjusting the cash deposit rate

accordingly.

Comment 11: With respect to FISI, the

GOQ argues that the Department has the

discretion to determine that a program

it has investigated is not

countervailable, even when the

Department concludes that the program

was not used during the POR. The GOQ

claims that the Department has used

that discretion in past cases where it has

determined that an investigated program

was both unused and

noncountervailable. See e.g., Certain

Refrigerator Compressors from the

Republic of Singapore: Final Results of

Countervailing Duty Administrative

Review, 61 FR 10315 (March 13, 1996)

(Singapore Compressors). The GOQ

argues that the Department should have

concluded that FISI is not used and is

not countervailable because the

Department has a complete record,

including a verification, showing that

FISI is not countervailable.

The GOQ argues that the Department

may not rely upon its decision in Swine

Sixth Review Results in order to find

FISI countervailable in this review or

continue to investigate FISI in future

reviews. The GOQ states that three

binational panels found FISI to be noncountervailable. According to the GOQ,

a binational panel decision is the

equivalent of a valid and final judgment

of a court of competent jurisdiction for

the purpose of applying the doctrine of

collateral estoppel. Since the

Department lost the issue of FISI’s

countervailability before a binational

panel, it is estopped from claiming that

FISI is countervailable in the current

review. In any case, the GOQ argues that

the facts on the record in the instant

review demonstrate that FISI is not

countervailable based on the number of

users, no dominant/disproportionate

use, no GOQ discretion in conferring

benefits, and integral linkage with Crop

Insurance.

The petitioners contend that the

GOQ’s arguments do not rest on new

factual information or evidence of

changed circumstances that would

warrant the Department’s reexamination

of the countervailability of FISI.

Furthermore, the Department rejected

the same collateral estoppel argument

made by the GOQ concerning FISI in

Swine Seventh, Eighth, and Ninth

Review Results. The petitioners also

contend that the GOQ has not offered

any arguments that are responsive to the

Department’s earlier finding that FISI

was not linked to crop insurance in

Swine Seventh, Eighth and Ninth

Review Results.

Department’s Position: We disagree

with the GOQ. The record evidence

establishes that FISI was not used

during the POR for exports of the

subject merchandise to the United

States. Therefore, we follow the

Department’s practice, which is not to

examine the countervailability of

programs that are not used during the

POR. See, e.g., Live Swine from Canada;

Final Results of Countervailing Duty

Administrative Reviews (56 FR 10410,

10411; March 12, 1991). For this reason,

all arguments advanced by the GOQ on

the non-countervailability of FISI,

including collateral estoppel, are moot.

We disagree with the GOQ’s

contention that the Department has

exercised its discretion to determine

that an investigated program was both

unused and noncountervailable in

Singapore Compressors. In Singapore

Compressors, the program referred to by

the GOQ did not provide benefits to the

subject merchandise, and we

specifically stated that ‘‘the

Department’s regulations were not

intended to require the Department to

discuss programs which do not apply to

subject merchandise.’’

Comment 12: The GOQ states that the

Verification Report does not accurately

reflect the effort made by GOQ officials

at verification to demonstrate that FISI

and Crop Insurance are integrally

linked. The GOQ contends that its

officials proved that Crop Insurance,

working together with FISI, is in fact an

income insurance program. The two

insurance systems, FISI and Crop

Insurance, are integrally linked to work

together to meet a common objective of

providing income insurance. However,

much of this information was not

reported in the Verification Report. The

GOQ requests that the Department

amend its verification report to reflect

accurately and completely what

occurred at verification in this

administrative review.

Department’s Position: We disagree

with the GOQ. The purpose of

verification is to confirm the accuracy of

the information already submitted on

the record. This practice is clearly stated

in the verification outline that the

Department provides to the interested

parties before conducting any

verifications. During verification, the

GOQ deemed it appropriate to elaborate

in great detail on generic statements

made in the response with respect to

linkage. If this information had been

provided in the GOQ’s questionnaire

responses, the Department might have

issued a supplemental questionnaire

and would have checked at verification

on the accuracy of this previously

submitted material. In this instance,

however, the argumentation and

documentation presented at verification

clearly went beyond what had been

stated and documented in the response.

Verification is not intended to be an

opportunity for respondents to argue

their position, nor is it intended to be

an opportunity for submission of new

factual information, as stated in our

verification outline.

Furthermore, in this case, the record

evidence establishes, and the

Verification Report documents, that the

FISI program was not used during the

POR for exports of the subject

merchandise to the United States.

Therefore, consistent with the

Department’s practice, we do not

examine the countervailability, and

therefore integral linkage, of programs

that are not used in the POR by

producers of the subject merchandise

(See Department’s Position on Comment

11). As a result, the issue of amending

the Verification Report is moot as FISI

was not used during the POR.

Comment 13: The petitioners contend

that the Department partially relied on

a finding that Quebec did not export

live swine during the POR as a basis for

concluding that the FISI program was

not used during the POR. However, the

petitioners state that review of the

record evidence shows that the two

Canadian Government agencies

responsible for reporting Quebec export

data have provided contradictory

responses. The GOQ identified Quebec

as a province that exported 1,795 hogs

to the United States during the POR.

Quebec, however, provided data

suggesting that no live swine were

exported to the United States during the

POR. Since the Department has been

unable to solve this discrepancy,

according to the petitioners, the record

does not support the conclusion that

Quebec did not export live swine.

Where a respondent has submitted data

that is contradictory, the Department

routinely makes assumptions about

these data that are unfavorable to
Federal Register / Vol. 62, No. 71 / Monday, April 14, 1997 / Notices 18099

respondents. The petitioners conclude

that, under these circumstances, the

Department should assume that Quebec

exported live swine to the United States

during the POR for purposes of

analyzing the FISI program.

The GOQ and the CPC argue that,

contrary to the petitioners’ assertion, the

Department’s determination was not

based upon a finding that there were no

exports of live swine from Quebec

during the POR; the determination was

based on finding that FISI could not

have benefited any live swine that might

have been exported to the United States

during the POR. The GOQ and the CPC

state that the Department verified that

all market hogs that could have

benefited from FISI payments were sold

to abattoirs in Canada. Therefore, the

Department correctly found the FISHI

could not have benefited any subject

merchandise that might have been

exported to the United States during the

POR.

Department’s Position: We disagree

with the petitioners. The Department

verified that all hogs receiving FISI

payments during the POR were

slaughtered in Canada. See Verification

Report at page 32. As such, no live

swine exported from Quebec received

FISI payments. Accordingly, we

determined that this program was not

used. However, we also verified that

there were exports of live swine from

Quebec. As such, for those programs

where assistance was provided during

the POR to all live swine in Quebec, we

properly calculated a subsidy rate for

the POR. (See Memorandum to the File

from Team A regarding the Farm

Income Stabilization Program dated

September 25, 1996, which is on file in

the CRU.)

Final Results of Review

For the period April 1, 1994 through

March 31, 1995, we determine the total

net subsidy on live swine from Canada

to be Can$0.0098 per kilogram.

The Department will instruct the U.S.

Customs Service to assess

countervailing duties of Can$0.0098 per

kilogram on shipments of live swine

from Canada exported on or after April

1, 1994 and on or before March 31,

1995.

The cash deposit is Can$0.0013 per

kilogram, which is de minimis.

Accordingly, the Department will also

instruct the U.S. Customs Service to

waive cash deposits on shipments of all

live swine from Canada entered, or

withdrawn from warehouse, for

consumption on or after the date of

publication of this notice. The cash

deposit rate is different than the

assessment rate because, as explained

above, we have taken into account

program-wide changes in calculating the

cash deposit rate (see Pasta from

Turkey).

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: April 7, 1997.

Robert S. LaRussa,

Acting Assistant Secretary for Import

Administration.

[FR Doc. 97–9551 Filed 4–11–97; 8:45 am]

BILLING CODE 3510–DS–M

DEPARTMENT OF COMMERCE

Patent and Trademark Office

Grant of Certificate of Interim

Extension of the Term of U.S. Patent

No. 4,197,297; CORLOPAM

AGENCY: Patent and Trademark Office,

Commerce.

ACTION: Notice of Term Extension.

SUMMARY: The Patent and Trademark

Office has issued a certificate under 35

U.S.C. 156(d)(5) for a one-year interim

extension of the term of U.S. Patent No.

4,197,297 that claims the active

ingredient, fenoldopam mesylate, in the

human drug product ‘‘CORLOPAM’’

and methods of use of said active

ingredient.

FOR INFORMATION CONTACT: Karin Tyson

by telephone at (703) 305–9285; by mail

marked to her attention and addressed

to the Assistant Commissioner for

Patents, Box DAC, Washington, D.C.

20231; or by fax marked to her attention

at (703) 308–6916.

SUPPLEMENTARY INFORMATION: Section

156 of Title 35, United States Code,

generally provides that the term of a

patent may be extended for a period of

up to 5 years if the patent claims a

product, or a method of making or using

a product, that has been subject to

certain defined regulatory review.

Under section 156, a patent is eligible

for term extension only if regulatory

review of the claimed product was

completed before the original patent

term expired.

On December 3, 1993, section 156 was

amended by Pub. L. 103–179 to provide

that if the owner of record of the patent

or its agent reasonably expects the

applicable regulatory review period to

extend beyond the expiration of the

patent, the owner or its agent may

submit an application to the

Commissioner of Patents and

Trademarks for an interim extension of

the patent term. If the Commissioner

determines that, except for permission

to market or use the product

commercially, the patent would be

eligible for a statutory extension of the

patent term, the Commissioner shall

issue to the applicant a certificate of

interim extension for a period of not

more than one year.

On March 21, 1997, Neurex

Corporation, an agent of SmithKline

Beecham Corporation, the owner of

record of U.S. Patent No. 4,197,297,

filed an application under 35 U.S.C.

156(d)(5) for interim extension of the

term of U.S. Patent No. 4,197,297. The

patent claims the active ingredient,

fenoldopam mesylate, in the human

drug product ‘‘CORLOPAM’’ and

methods of use of said active ingredient.

The application indicates, and the Food

and Drug Administration (FDA) has

confirmed, that the product is currently

undergoing a regulatory review under

section 505 of the Federal Food, Drug,

and Cosmetic Act (21 U.S.C. 355) before

the FDA for permission to market or use

the product commercially. The original

term of the patent expires on April 8,

1997.

Review of the application indicates

that, except for permission to market or

use the product commercially, the

subject patent would be eligible for an

extension of the patent term under 35

U.S.C. 156. Since it is apparent that the

regulatory review period may extend

beyond the date of expiration of the

patent, interim extension of the patent

term under 35 U.S.C. 156(d)(5) is

appropriate.

An interim extension under 35 U.S.C.

156(d)(5) of the term of U.S. Patent No.

4,197,297 is granted for a period of one

year from the original expiration date of

the patent.

Dated: April 7, 1997.

Bruce A. Lehman,

Assistant Secretary of Commerce and

Commissioner of Patents and Trademarks.

[FR Doc. 97–9555 Filed 4–11–97; 8:45 am]

BILLING CODE 3510–16–P