Slip Op. 02-32 

UNITED STATES COURT OF INTERNATIONAL TRADE

BEFORE: RICHARD W. GOLDBERG, SENIOR JUDGE

ILVA LAMIERE E TUBI S.R.L. 

and ILVA S.P.A.,

Plaintiffs,

v.

UNITED STATES and THE UNITED Court No. 00-03-00127

STATES DEPARTMENT OF 

COMMERCE,

Defendants,

and

BETHLEHEM STEEL CORPORATION and

UNITED STATES STEEL CORPORATION,

Defendant-Intervenors.

[Plaintiff’s Motion for Judgment Upon an Agency Record granted in

part and remanded.]

 Dated: March 29, 2002

Hunton & Williams (William Silverman and Richard P. Ferrin) for

plaintiffs ILVA Lamiere e Tubi S.r.l. and ILVA S.p.A.

Stuart E. Schiffer, Acting Assistant Attorney General, David M.

Cohen, Director, Michael S. Dufault, Trial Attorney, Commercial

Litigation Branch, Civil Division, U.S. Department of Justice;

Office of the Chief Counsel for Import Administration, United

States Department of Commerce (John F. Koeppen), of counsel, for

defendant.

Dewey Ballantine LLP (John A. Ragosta, John R. Magnus, and Hui

Yu) for defendant-intervenors Bethlehem Steel Corporation and

United States Steel Corporation.

Collier Shannon Scott, PLLC (Paul C. Rosenthal, Kathleen W.

Cannon, Lynn D. Maloney, and Eric R. McClafferty) for amici

curiae Allegheny Ludlum Corporation, AK Steel Corporation, J&L
Court No. 00-03-00127 Page 2

1 Plaintiffs also challenge the Department’s decision to

impose countervailing duties on pre-privatization early

retirement benefits under Law 451/94. This Court will not

address that issue until the Department redetermines the issue of

privatization in this remand order.

Specialty Steel, Inc., Lukens, Inc., North American Stainless,

Butler Armco Independent Union, Zanesville Armco Independent

Union, and the United Steelworkers of America, AFL-CIO/CLC.

MEMORANDUM OPINION AND ORDER

GOLDBERG, Senior Judge: At issue in this case is the method

employed by the U.S. Department of Commerce (the “Department”) to

calculate subsidies in countervailing duty investigations of

newly privatized companies. This case is before the Court

pursuant to Plaintiffs’ USCIT R. 56.2 Motion for Judgment Upon an

Agency Record. Plaintiffs challenge the Department’s Final

Results of Redetermination Pursuant to Court Remand: ILVA Lamiere

e Tubi S.p.A. v. United States, Court No. 00-03-00127 (December

28, 2000) (“Redetermination”), which modified the Department’s

decision in Final Affirmative Countervailing Duty Determination:

Certain Cut-to-Length Carbon-Quality Steel Plate From Italy, 64

Fed. Reg. 73,244 (Dec. 29, 1999) (“Determination”), and Notice of

Countervailing Duty Orders: Certain Cut-to-Length Carbon-Quality

Steel Plate From France, India, Indonesia, Italy and the Republic

of Korea, 65 Fed. Reg. 6587 (February 10, 2000).1 This Court

issued a remand order on August 30, 2000, instructing the

Department to determine the applicability of the Federal

Circuit’s opinion in Delverde SrL v. United States, 202 F.3d 1360
Court No. 00-03-00127 Page 3

(Fed. Cir. 2000), reh’g denied, Ct. No. 99-1186 (June 20, 2000)

(“Delverde III”), to the Determination. Two recent Court of

International Trade opinions are directly on point, Allegheny

Ludlum Corp. v. United States, 26 CIT __, 182 F. Supp. 2d 1357

(2002) (“Allegheny”), and GTS Industries S.A. v. United States,

26 CIT __, 182 F. Supp. 2d 1369 (2002) (“GTS”). This Court finds

the reasoning of Allegheny and GTS persuasive, and therefore

remands the Redetermination to the Department for redetermination

consistent with this Opinion. This Court exercises jurisdiction

pursuant to 28 U.S.C. § 1581(c) (1994). 

I. Standard of Review

This Court reviews the Redetermination to determine if it is

supported by substantial evidence on the record or otherwise in

accordance with law. See 19 U.S.C. § 1516a(b)(1)(B) (1994). To

determine if the Department’s interpretation of the statute is in

accordance with law this Court “must determine whether Congress’s

purpose and intent on the question at issue is judicially

ascertainable.” Timex V.I. v. United States, 157 F.3d 879, 881

(Fed. Cir. 1998). The expressed will or intent of Congress on a

specific issue is dispositive. See Japan Whaling Ass’n v. Am.

Cetacean Soc’y, 478 U.S. 221, 233-237 (1986). 

II. Summary of the Facts

Since this Court is only considering whether the Department

erred as a matter of law in its Redetermination, this Court will
Court No. 00-03-00127 Page 4

only briefly recount the relevant facts as stated in the

Redetermination. According to the Department, ILVA S.p.A.

(“ILVA”), an Italian steel manufacturer, was privatized in 1995

through a sale of shares to a consortium. Redetermination at 15. 

The Department concluded that pre-sale ILVA was subsidized by the

Italian government through debt forgiveness, equity infusions,

and corporate restructuring from 1984 to 1994, except in 1987. 

Defendant’s Memorandum in Opposition to Plaintiff’s Motion for

Judgment Upon the Agency Record at 10. The pre-sale and postsale ILVA’s were both engaged in carbon steel plate operations. 

Redetermination at 17. The Department concluded that the presale and post-sale ILVA’s were the same “person,” and thus the

post-sale ILVA received a financial contribution and benefit from

subsidies given to pre-sale ILVA.

III. Discussion

Under 19 U.S.C. § 1677(5) of the Tariff Act, a subsidy

occurs where an authority “provides a financial contribution 

. . . to a person and a benefit is thereby conferred,” either

directly or indirectly. 19 U.S.C. § 1677(5) (1994). Section

1677(5)(F) is the specific provision addressing subsidies when a

change in ownership has occurred: 

A change in ownership of all or part of a foreign

enterprise or the productive assets of a foreign

enterprise does not by itself require a determination

by an administering authority that a past

countervailable subsidy received by the enterprise no

longer continues to be countervailable, even if the
Court No. 00-03-00127 Page 5

change of ownership is accomplished through an arm’s

length transaction. 

19 U.S.C. § 1677(5)(F). The Federal Circuit in Delverde III

determined that Congress’s intent under these portions of the

Tariff Act was for the Department to “examin[e] the particular

facts and circumstances of the sale and determin[e] whether [the

purchaser] directly or indirectly received both a financial

contribution and benefit from the government.” 202 F.3d at 1364. 

Therefore, under Delverde III, the statute’s meaning is clear and

“[w]e need only determine whether Commerce’s methodology is in

accordance with the statute.” Id. at 1367.

In light of Delverde III, the Department’s Redetermination

established a two-part test to determine if the post-sale firm

received a financial contribution and benefit from the subsidy

given to the pre-sale firm. The first part of the test

determines whether the pre-sale firm is the same person as the

post-sale firm. See Redetermination at 6-7. If they are the

same person, then the post-sale firm received a financial

contribution and benefit from the subsidy given the pre-sale

firm, and the subsidies are countervailable. See id. If they

are not the same person, then the second part of the test looks

at the facts and circumstances of the sale to determine whether

the post-sale firm received a financial contribution and benefit

from the subsidy granted to the pre-sale firm. See id.
Court No. 00-03-00127 Page 6

As in Allegheny and GTS, this Court finds that the

methodology of the Department’s two-part test is inconsistent

with the intent of Congress under the Tariff Act. See 182 F.

Supp. 2d 1357; 182 F. Supp. 2d 1369. Instead of examining the

facts and circumstances of the sale, the Department ignores the

sale entirely and conducts a novel analysis of the “person”

before and after the sale. See Redetermination at 13; see also

Allegheny, 182 F. Supp. 2d at 1365-66; GTS, 182 F. Supp. 2d at

1377-78. The Department summarily concludes that if the

“original subsidy recipient and the current producer/exporter are

considered to be the same person, that person benefits from the

original subsidies, and its exports are subject to countervailing

duties to offset those subsidies.” Redetermination at 7

(emphasis added). 

The Department’s “person” test fails to take into account

the facts and circumstances of the sale: 

[T]he Department will generally consider the post-sale

entity to be the same person as the pre-sale entity if,

based on the totality of the factors considered, we

determine that the entity sold in the change-inownership transaction can be considered a continuous

business entity because it was operated in

substantially the same manner before and after the

change in ownership. 

Redetermination at 12-13. Under the Department’s “person”

analysis, it is likely that nearly every sale would result in the

same post-sale person as the pre-sale person. See Allegheny, 182

F. Supp. 2d at 1367; GTS, 182 F. Supp. 2d at 1379; Acciai
Court No. 00-03-00127 Page 7

Speciali Terni S.p.A. v. United States, 26 CIT __, 2002 WL

342659, Slip-Op. 02-10 at N.10 (February 1, 2002). Thus, the

Department continues to use what is essentially the per se test

that a change in ownership never extinguishes prior subsidies,

which was prohibited in Delverde III, and avoids the Court’s

mandate to consider the facts and circumstances of the sale. See

Allegheny, 182 F. Supp. 2d at 1367; GTS, 182 F. Supp. 2d at 1379.

On remand, the Department’s methodology shall “examin[e] the

particular facts and circumstances of the sale and determin[e]

whether [plaintiffs] directly or indirectly received both a

financial contribution and benefit from the government.” 

Delverde III, 202 F.3d at 1364. This means that Commerce “must

look at the facts and circumstances of the TRANSACTION, to

determine if the PURCHASER received a subsidy, directly or

indirectly, for which it did not PAY ADEQUATE COMPENSATION.” 

Allegheny, 182 F. Supp. 2d at 1367 (capitals in original); GTS,

182 F. Supp. 2d at 1378.
Court No. 00-03-00127 Page 8

IV. Conclusion

Therefore, the Court finds that the Final Results of

Redetermination Pursuant to Court Remand: ILVA Lamiere e Tubi

S.p.A. v. United States, Court No. 00-03-00127 (December 28,

2000), are not in accordance with law, and remands to the

Department of Commerce for review and action consistent with this

opinion. 

SO ORDERED.

 

 Senior Judge Richard W. Goldberg

Date: March 29, 2002

 New York, New York