[Federal Register Volume 62, Number 66 (Monday, April 7, 1997)]
[Notices]
[Pages 16549-16551]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-8842]


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DEPARTMENT OF COMMERCE

International Trade Administration
[C-401-401]


Certain Carbon Steel Products from Sweden; Final Results of 
Countervailing Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

ACTION: Notice of final results of countervailing duty administrative 
review.

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SUMMARY: On December 3, 1996, the Department of Commerce (``the 
Department'') published in the Federal Register its preliminary results 
of administrative review of the countervailing duty order on Certain 
Carbon Steel Products from Sweden for the period January 1, 1994 
through December 31, 1994 (61 FR 64062; December 3, 1996). The 
Department has now completed this administrative review in accordance 
with section 751(a) of the Tariff Act of 1930, as amended. For 
information on the net subsidy for the reviewed company, and for all 
non-reviewed companies, please see the Final Results of Review section 
of this notice. We will instruct the U.S. Customs Service to assess 
countervailing duties as detailed in the Final Results of Review 
section of this notice.

EFFECTIVE DATE: April 7, 1997.

FOR FURTHER INFORMATION CONTACT: Gayle Longest or Lorenza Olivas, 
Office of CVD/AD Enforcement VI, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202) 
482-2786.

SUPPLEMENTARY INFORMATION:

Background

    Pursuant to 19 C.F.R. 355.22(a), this review covers only those 
producers or exporters of the subject merchandise for which a review 
was specifically requested. Accordingly, this review covers SSAB 
Svenskt Stal AB (``SSAB''), the sole known producer/exporter of the 
subject merchandise during the review period. This review also covers 
the period January 1, 1994 through December 31, 1994, and 10 programs.
    We published the preliminary results on December 3, 1996 (61 FR 
64062). We invited interested parties to comment on the preliminary 
results. We received no comments from any of the parties.

Applicable Statute

    Unless otherwise indicated, all citations to the statute are 
references to the provisions of the Tariff Act of 1930, as amended by 
the Uruguay Round Agreements Act (``URAA'') effective January 1, 1995 
(``the Act''). The Department is conducting this administrative review 
in accordance with section 751(a) of the Act.

Scope of the Review

    Imports covered by this review are shipments of certain carbon 
steel products from Sweden. These products include cold-rolled carbon 
steel, flat-rolled products, whether or not corrugated, or crimped: 
whether or not pickled, not cut, not pressed and not stamped to non-
rectangular shape; not coated or pleated with metal and not clad; over 
12 inches in width and of any thickness; whether or not in coils. 
During the review period, such merchandise was classifiable under the 
Harmonized Tariff Schedule (HTS) item numbers 7209.11.0000, 
7209.12.0000, 7209.13.0000, 7209.21.0000, 7209.22.0000, 7209.23.0000, 
7209.24.5000, 7209.31.0000, 7209.32.0000, 7209.33.0000, 7209.34.0000, 
7209.41.0000, 7209.43.0000, 7209.44.0000, 7209.90.0000, 7211.30.5000, 
7211.41.7000 and 7211.49.5000. The HTS item numbers are provided for 
convenience and customs purposes. The written description remains 
dispositive.

Allocation Methodology

    In the past, the Department has relied upon information from the 
U.S. Internal Revenue Service on the industry-specific average useful 
life (``AUL'') of assets in determining the allocation period for 
nonrecurring grant benefits. See General Issues Appendix appended to 
Final Countervailing Duty Determination; Certain Steel Products from 
Austria, 58 FR 37217, 37226 (July 9, 1993) (``General Issues 
Appendix''). However, in British Steel plc. v. United States, 879 F. 
Supp. 1254 (CIT 1995) (``British Steel''), the U.S. Court of 
International Trade (``the Court'') ruled against this allocation 
methodology. In accordance with the Court's remand order, the 
Department calculated a company-specific allocation period for 
nonrecurring subsidies based on the AUL of non-renewable physical 
assets. This remand determination was affirmed by the Court on June 4, 
1996. British Steel, 929 F. Supp. 426, 439 (CIT 1996).
    The Department has decided to acquiesce to the Court's decision 
and, as such, we intend to determine the allocation period for 
nonrecurring subsidies using company-specific AUL data where reasonable 
and practicable. In the preliminary results (61 FR 64062), the 
Department preliminarily determined that it is reasonable and 
practicable to allocate all new nonrecurring subsidies (i.e., subsidies 
that have not yet been assigned an allocation period) based on a 
company-specific AUL. However, if a subsidy has already been 
countervailed based on an allocation period established in an earlier 
segment of the proceeding, it does not appear reasonable or

[[Page 16550]]

practicable to reallocate that subsidy over a different period of time. 
In other words, since the countervailing duty rate in earlier segments 
of the proceeding was calculated based on a certain allocation period 
and resulting benefit stream, redefining the allocation period in later 
segments of the proceeding would entail taking the original grant 
amount and creating an entirely new benefit stream for that grant. Such 
a practice may lead to an increase or decrease in the total amount 
countervailed and, thus, would result in the possibility of over-
countervailing or under-countervailing the actual benefit. The 
Department preliminarily determined that a more reasonable and accurate 
approach is to continue using the allocation period first assigned to 
the subsidy. We invited the parties to comment on the selection of this 
methodology and to provide any other reasonable and practicable 
approaches for complying with the Court's ruling. We received no 
comments on this issue.
    In the current review, there are no new subsidies. All of the 
nonrecurring subsidies currently under review were provided prior to 
the period of review (``POR''); allocation periods for these grants 
were established during prior segments of this proceeding. Therefore, 
for purposes of these final results, the Department is using the 
original allocation period assigned to each nonrecurring subsidy.

Privatization and Sale of Productive Units

    SSAB is the only company that produces and exports the subject 
merchandise from Sweden. SSAB has sold several productive units and the 
company was partially privatized twice, in 1987 and in 1989. During the 
review period, SSAB was completely privatized.
    In Final Affirmative Countervailing Duty Determinations: Certain 
Steel Products from Sweden, 58 FR 37385 (July 9, 1993) (``Final 
Determination''), the Department found that SSAB had received 
countervailable subsidies prior to the sale of the productive units and 
the two partial privatizations. Further, the Department found that a 
private party purchasing all or part of a government-owned company can 
repay prior subsidies on behalf of the company as part or all of the 
sales price (see General Issues Appendix, 58 FR at 37262 (July 9, 
1993)). Therefore, to the extent that a portion of the sales price paid 
for a privatized company can be reasonably attributed to prior 
subsidies, that portion of those subsidies will be extinguished.
    To calculate a rate for the subsidies that were allocated to the 
spin-offs, i.e., productive units that were sold, we first determined 
the amount of the subsidies attributable to each productive unit by 
dividing the asset value of that productive unit by the total asset 
value of SSAB in the year of the spin-off. We then applied this ratio 
to the net present value (``NPV''), in the year of the spin-off, of the 
future benefit streams from all of SSAB's prior subsidies allocable to 
the POR. The future benefit streams at the time of the sale of each 
productive unit reflect the Department's allocation over time of prior 
subsidies to SSAB in accordance with the declining balance methodology 
(see e.g., Final Affirmative Countervailing Duty Determination: Fresh 
Chilled Atlantic Salmon from Norway, 56 FR 7678; 7679 (February 25, 
1991)), and reflect also the prior spin-offs of SSAB productive units.
    We next estimated the portion of the purchase price which 
represents repayment of prior subsidies by determining the portion of 
SSAB's net worth that was accounted for by subsidies. To do that, we 
divided the face value of the allocable subsidies received by SSAB in 
each year from fiscal year 1979 through fiscal year 1993 by SSAB's net 
worth in the same year. We calculated a simple average of these ratios, 
which was then multiplied by the purchase price of the productive unit. 
Thus, we determined the amount of the purchase price which represents 
repayment of prior subsidies. This amount was subtracted from the 
subsidies attributed to the productive unit at the time of sale to 
arrive at the amount of subsidies allocated to the productive unit 
being spun-off.
    To calculate the subsidies remaining with SSAB after privatization, 
we performed the following calculations. We first calculated the NPV of 
the future benefit stream of the subsidies at the time of the sale of 
the shares taking into account the spin-offs. Next, we estimated the 
portion of the purchase price which represents repayment of prior 
subsidies in accordance with the methodology described in the 
``Privatization'' section of the General Issues Appendix at 37259. This 
amount was then subtracted from the amount of the NPV eligible for 
repayment, and the result was divided by the NPV to calculate the ratio 
representing the amount of subsidies remaining with SSAB.
    To calculate the benefit provided to SSAB in the POR, where 
appropriate, we multiplied the benefit calculated for 1994, adjusted 
for sales of productive units, by the ratio representing the amount of 
subsidies remaining with SSAB after privatization. We then divided the 
results by the company's total sales in 1994.

Analysis of Programs

    Based upon our analysis of the information on the record, we 
determine the following:

I. Programs Previously Determined to Confer Subsidies

    We did not receive any comments on the following programs from the 
interested parties; however, our review of the record uncovered a 
clerical error in our preliminary calculations. In our calculation of 
the subsidies remaining with SSAB after its privatization, we 
inadvertently took the face value of the subsidies in calculating the 
future benefit stream from the nonrecurring subsidies at the time of 
the sale. Instead, we should have calculated their net present value, 
which is the methodology set forth in the General Issues Appendix, to 
determine the amount of subsidies remaining with SSAB and the amount of 
subsidies repaid at the time of the sale. Accordingly, for these final 
results, we have adjusted our calculations to reflect the net present 
value of the remaining stream of benefits from the nonrecurring 
subsidies. The corrected rates are listed below.
1. Equity Infusions
    In the preliminary results, we found that this program conferred 
countervailable subsidies on the subject merchandise. We did not 
receive any comments on this program from interested parties; however, 
due to the clerical error explained above, the net subsidy for this 
program has changed from 0.53 percent ad valorem to 0.51 percent ad 
valorem for SSAB.
2. Structural Loans
    In the preliminary results, we found that this program conferred 
countervailable subsidies on the subject merchandise. We did not 
receive any comments on this program from interested parties; however, 
due to the clerical error explained above, the net subsidy for this 
program has changed from 0.27 percent ad valorem to 0.26 percent ad 
valorem for SSAB.
3. Forgiven Reconstruction Loans
    In the preliminary results, we found that this program conferred 
countervailable subsidies on the subject merchandise. We did not 
receive any comments on this program from interested parties; however, 
due to the clerical error explained above, the net subsidy for this 
program has changed

[[Page 16551]]

from 1.18 percent ad valorem to 1.14 percent ad valorem for SSAB.

II. Programs Found Not to Confer Subsidies

    A. Research & Development (R&D) Loans and Grants.
    B. Fund for Industry and New Business R&D.
    In the preliminary results, we found these programs did not confer 
subsidies during the POR. We did not receive any comments on these 
programs from the interested parties, and our review of the record has 
not led us to change our findings from the preliminary results.

III. Programs Found To Be Not Used

    In the preliminary results, we found that the producer/exporter of 
the subject merchandise did not apply for or receive benefits under the 
following programs:
    A. Regional Development Grants.
    B. Transportation Grants.
    C. Location-of Industry Loans.
    We did not receive any comments on these programs from the 
interested parties, and our review of the record has not led us to 
change our findings from the preliminary results.

IV. Program Found To Be Terminated

    In the preliminary results, we found the following program to be 
terminated and that no residual benefits were being provided:
    Mining Exploration Grants.
    We did not receive any comments on this program from the interested 
parties, and our review of the record has not led us to change our 
findings from the preliminary results.

Final Results of Review

    In accordance with 19 CFR 355.22(c)(7)(ii), we calculated an 
individual subsidy rate for each producer/exporter subject to this 
administrative review. As a result of correcting the clerical errors in 
the preliminary results, we determine the net subsidy for SSAB to be 
1.91 percent ad valorem for the period January 1, 1994 through December 
31, 1994.
    We will instruct the U.S. Customs Service (``Customs'') to assess 
countervailing duties as indicated above. The Department will also 
instruct Customs to collect cash deposits of estimated countervailing 
duties in the percentages detailed above of the f.o.b. invoice price on 
all shipments of the subject merchandise from the reviewed company, 
entered or withdrawn from warehouse, for consumption on or after the 
date of publication of the final results of this administrative review.
    Because the URAA replaced the general rule in favor of a country-
wide rate with a general rule in favor of individual rates for 
investigated and reviewed companies, the procedures for establishing 
countervailing duty rates, including those for non-reviewed companies, 
are now essentially the same as those in antidumping cases, except as 
provided for in section 777A(e)(2)(B) of the Act. The requested review 
will normally cover only those companies specifically named. See 19 CFR 
355.22(a). Pursuant to 19 CFR 355.22(g), for all companies for which a 
review was not requested, duties must be assessed at the cash deposit 
rate, and cash deposits must continue to be collected at the rate 
previously ordered. As such, the countervailing duty cash deposit rate 
applicable to a company can no longer change, except pursuant to a 
request for a review of that company. See Federal-Mogul Corporation and 
The Torrington Company v. United States, 822 F.Supp. 782 (CIT 1993) and 
Floral Trade Council v. United States, 822 F.Supp. 766 (CIT 1993) 
(interpreting 19 CFR 353.22(e), the antidumping regulation on automatic 
assessment, which is identical to 19 CFR 355.22(g), the countervailing 
duty regulation on automatic assessment). Therefore, the cash deposit 
rates for all companies except SSAB will be unchanged by the results of 
this review.
    We will instruct Customs to continue to collect cash deposits for 
non-reviewed companies at the most recent company-specific or country-
wide rate applicable to the company. Accordingly, the cash deposit 
rates that will be applied to non-reviewed companies covered by this 
order are those established in the most recently completed 
administrative proceeding conducted pursuant to the statutory 
provisions that were in effect prior to the URAA amendment. See Certain 
Carbon Steel Products from Sweden; Final Results of Countervailing Duty 
Administrative Review, 61 FR 5378 (February 12, 1996). These rates 
shall apply to all non-reviewed companies until a review of a company 
assigned these rates is requested. In addition, for the period January 
1, 1994 through December 31, 1994, the assessment rates applicable to 
all non-reviewed companies covered by this order are the cash deposit 
rates in effect at the time of entry.
    This notice serves as a reminder to parties subject to 
administrative protective order (APO) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 C.F.R. 355.34(d). Timely written notification 
of return/destruction of APO materials or conversion to judicial 
protective order is hereby requested. Failure to comply with the 
regulations and the terms of an APO is a sanctionable violation.
    This administrative review and notice are in accordance with 
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 C.F.R. 
355.22(c)(8).

    Dated: March 28, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-8842 Filed 4-4-97; 8:45 am]
BILLING CODE 3510-DS-P