[Federal Register Volume 66, Number 90 (Wednesday, May 9, 2001)]
[Notices]
[Pages 23669-23672]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-11729]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-122-815]


Pure Magnesium and Alloy Magnesium from Canada: Preliminary 
Results of Countervailing Duty Administrative Reviews

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

ACTION: Notice of preliminary results of countervailing duty 
administrative reviews.

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SUMMARY: The Department of Commerce is conducting administrative 
reviews of the countervailing duty orders on pure magnesium and alloy 
magnesium from Canada for the period January 1 through December 31, 
1999. We have preliminarily determined that certain producers/exporters 
have received net subsidies during the period of review. If the final 
results remain the same as these preliminary results, we will instruct 
the Customs Service to assess countervailing duties as detailed in the 
Preliminary Results of Reviews section

[[Page 23670]]

of this notice. Interested Parties are invited to comment on these 
preliminary results (see the Public Comment section of this notice).

EFFECTIVE DATE: May 9, 2001.

FOR FURTHER INFORMATION CONTACT: Sally Hastings or Craig Matney, AD/CVD 
Enforcement, Group I, Office 1, Import Administration, U.S. Department 
of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 
20230; telephone: (202) 482-3464 or (202) 482-1778, respectively.

Case History

    On August 31, 1992, the Department of Commerce (``the Department'') 
published in the Federal Register the countervailing duty orders on 
pure magnesium and alloy magnesium from Canada (57 FR 39392). On August 
16, 2000, the Department published a notice of ``Opportunity to Request 
Administrative Review'' of these countervailing duty orders (65 FR 
49962). We received a timely request for review from Norsk Hydro Canada 
Inc. (``NHCI''). We initiated these reviews, covering calendar year 
1999, on October 2, 2000 (65 FR 58733). In accordance with 19 CFR 
351.213(b), these reviews cover NHCI, the only producer or exporter of 
the subject merchandise for which a review was specifically requested. 
These reviews cover 16 subsidy programs.
    On December 5, 2000, we issued countervailing duty questionnaires 
to NHCI, the Government of Quebec (``GOQ''), and the Government of 
Canada (``GOC''). We received questionnaire responses from the GOC on 
January 10, 2001, and from NHCI and the GOQ on January 11, 2001.

Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the statute are 
references to the provisions of section 751(a) of the Tariff Act of 
1930, as amended by the Uruguay Round Agreements Act (``URAA''), 
effective January 1, 1995 (``the Act''). Unless otherwise indicated, 
all citations to the Department's regulations are to 19 CFR Part 351 
(2001).

Scope of the Reviews

    The products covered by these reviews are shipments of pure and 
alloy magnesium from Canada. Pure magnesium contains at least 99.8 
percent magnesium by weight and is sold in various slab and ingot forms 
and sizes. Magnesium alloys contain less than 99.8 percent magnesium by 
weight with magnesium being the largest metallic element in the alloy 
by weight, and are sold in various ingot and billet forms and sizes.
    The pure and alloy magnesium subject to review is currently 
classifiable under items 8104.11.0000 and 8104.19.0000, respectively, 
of the Harmonized Tariff Schedule of the United States (``HTSUS''). 
Although the HTSUS subheadings are provided for convenience and customs 
purposes, the written descriptions of the merchandise subject to the 
orders are dispositive.
    Secondary and granular magnesium are not included in the scope of 
these orders. Our reasons for excluding granular magnesium are 
summarized in Preliminary Determination of Sales at Less Than Fair 
Value: Pure and Alloy Magnesium From Canada, 57 FR 6094 (February 20, 
1992).

Period of Review

    The period of review (``POR'') for which we are measuring subsidies 
is from January 1 through December 31, 1999.

Subsidies Valuation Information

    Discount rate: As noted below, the Department preliminarily finds 
that NHCI benefitted from one countervailable subsidy program during 
the POR: Article 7 grants from the Quebec Industrial Development 
Corporation. As in the investigations and previous administrative 
reviews of this case, we have used the company's cost of long-term, 
fixed-rate debt in the year in which this grant was approved as the 
discount rate for purposes of calculating the benefit pertaining to the 
POR.
    Allocation period: In the investigations and previous 
administrative reviews of this case, the Department used, as the 
allocation period for non-recurring subsidies, the average useful life 
(``AUL'') of renewable physical assets in the magnesium industry as 
recorded in the Internal Revenue Service's 1977 Class Life Asset 
Depreciation Range System (``the IRS tables''), i.e., 14 years. 
Pursuant to section 351.524(d)(2) of the countervailing duty 
regulations, the Department will use the AUL in the IRS tables as the 
allocation period unless a party can show that the IRS tables do not 
reasonably reflect the company-specific AUL or the country-wide AUL for 
the industry. If a party can show that either of these time periods 
differs from the AUL in the IRS tables by one year or more, the 
Department will use the company-specific AUL or the country-wide AUL 
for the industry as the allocation period.
    Neither NHCI nor the petitioner has contested using the AUL 
reported for the magnesium industry in the IRS tables. We are, 
therefore, continuing to allocate non-recurring benefits over 14 years.

Analysis of Programs

I. Program Preliminarily Determined to Confer Countervailable 
Subsidies

A. Article 7 Grant from the Quebec Industrial Development Corporation 
(``SDI'')

    SDI (Societe de Developpement Industriel du Quebec) administers 
development programs on behalf of the GOQ. SDI provides assistance 
under Article 7 of the SDI Act in the form of loans, loan guarantees, 
grants, assumptions of costs associated with loans, and equity 
investments. This assistance involves projects capable of having a 
major impact upon the economy of Quebec. Article 7 assistance greater 
than 2.5 million dollars must be approved by the Council of Ministers 
and assistance over 5 million dollars becomes a separate budget item 
under Article 7. Assistance provided in such amounts must be of 
``special economic importance and value to the province.'' (See Final 
Affirmative Countervailing Duty Determinations: Pure Magnesium and 
Alloy Magnesium from Canada, 57 FR 30946, 30948 (July 13, 1992) 
(``Magnesium Investigation'').)
    In 1988, NHCI was awarded a grant under Article 7 to cover a large 
percentage of the cost of certain environmental protection equipment. 
In the Magnesium Investigation, the Department determined that NHCI 
received a disproportionately large share of assistance under Article 
7. On this basis, we determined that the Article 7 grant was limited to 
a specific enterprise or industry, or group of enterprises or 
industries, and, therefore, countervailable. In these reviews, neither 
the GOQ nor NHCI has provided new information which would warrant 
reconsideration of this determination.
    In the Magnesium Investigation, the Department found that the 
Article 7 assistance received by NHCI constituted a non-recurring grant 
because it represented a one-time provision of funds. In the 
Preliminary Results of First Countervailing Duty Administrative 
Reviews: Pure Magnesium and Alloy Magnesium From Canada, 61 FR 11186, 
11187 (March 19, 1996), we found this determination to be consistent 
with the principles enunciated in the Allocation section of the General 
Issues Appendix ( ``GIA'' ) appended to the Final Countervailing Duty 
Determination; Certain Steel Products from Austria, 58 FR 37225, 37226 
(July 9, 1993). In the current review, no new information has

[[Page 23671]]

been placed on the record that would cause us to depart from this 
treatment. Therefore, in accordance with section 351.524(b)(2) of our 
regulations, we have continued to allocate the benefit of this grant 
over time. We used our standard grant methodology as described in 
section 351.524(d) of the regulations to calculate the countervailable 
subsidy. We divided the benefit attributable to the POR by NHCI's total 
sales of Canadian-manufactured products in the POR. On this basis, we 
preliminarily determine the countervailable subsidy from the Article 7 
SDI grant to be 1.21 percent ad valorem for NHCI.

II. Programs Preliminarily Determined To Be Not Used

    We examined the following programs and preliminarily determine that 
NHCI did not apply for or receive benefits under these programs during 
the POR:
    <bullet> St. Lawrence River Environment Technology Development 
Program
    <bullet> Program for Export Market Development
    <bullet> The Export Development Corporation
    <bullet> Canada-Quebec Subsidiary Agreement on the Economic 
Development of the Regions of Quebec
    <bullet> Opportunities to Stimulate Technology Programs
    <bullet> Development Assistance Program
    <bullet> Industrial Feasibility Study Assistance Program
    <bullet> Export Promotion Assistance Program
    <bullet> Creation of Scientific Jobs in Industries
    <bullet> Business Investment Assistance Program
    <bullet> Business Financing Program
    <bullet> Research and Innovation Activities Program
    <bullet> Export Assistance Program
    <bullet> Energy Technologies Development Program
    <bullet> Transportation Research and Development Assistance Program

III. Program From Which NHCI No Longer Receives a Countervailable 
Benefit

    <bullet> Exemption from Payment of Water Bills
    In the administrative reviews covering calendar year 1997 the 
Department found that NHCI's benefits from this program had been 
exhausted and NHCI's participation in this program had ended. We also 
found that no residual benefits were being provided or received and no 
substitute program had been implemented. In our final results, we 
stated that we, therefore, did not intend to continue to examine this 
program in the future (see Pure Magnesium and Alloy Magnesium from 
Canada: Final Results of Countervailing Duty Administrative Reviews, 64 
FR 48805, 48806 (September 8, 1999)). Consistent with this 
determination and in the absence of any new allegation, we did not 
examine this program in these reviews.

Preliminary Results of Reviews

    In accordance with 19 CFR 351.221(b)(4)(i), we calculated a subsidy 
rate for NHCI, the sole producer/exporter subject to these 
administrative reviews. For the period January 1 through December 31, 
1999, we preliminarily determine the net subsidy rate for NHCI to be 
1.21 percent ad valorem. We will disclose our calculations to the 
interested parties upon request pursuant to section 351.224(b) of the 
regulations.
    If the final results of these reviews remain the same as these 
preliminary results, the Department intends to instruct the Customs 
Service (``Customs'') to assess countervailing duties at the net 
subsidy rate. The Department also intends to instruct Customs to 
collect cash deposits of estimated countervailing duties at the rate of 
1.21 percent on the f.o.b. value of all shipments of the subject 
merchandise from NHCI entered, or withdrawn from warehouse, for 
consumption on or after the date of publication of the final results of 
these administrative reviews.
    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 reviews 
will normally cover only those companies specifically named. See 19 CFR 
351.213(b)(2). Pursuant to 19 CFR 351.212(c), 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 predecessor to 
19 CFR 351.212(c)). Therefore, the cash deposit rates for all companies 
except the company covered by these reviews, will be unchanged by the 
results of these reviews.
    We will instruct Customs to continue to collect cash deposits for 
non-reviewed companies, (except Timminco Limited which was excluded 
from the orders during the investigations) at the most recent company-
specific or country-wide rate applicable to the company. Accordingly, 
the cash deposit rate that will be applied to non-reviewed companies 
covered by these orders is that established in Pure and Alloy Magnesium 
From Canada; Final Results of the Second (1993) Countervailing Duty 
Administrative Reviews, 62 FR 48607 (September 16, 1997) or the 
company-specific rate published in the most recent final results of an 
administrative review in which a company participated. 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 through December 31, 1999, the assessment rates applicable to all 
non-reviewed companies covered by these orders are the cash deposit 
rates in effect at the time of entry, except for Timminco Limited which 
was excluded from the orders in the original investigations.

Public Comment

    Interested parties may request a hearing within 30 days of the date 
of publication of this notice. Any hearing, if requested, will be held 
two days after the scheduled date for submission of rebuttal briefs 
(see below). Interested parties may submit written arguments in case 
briefs within 30 days of the date of publication of this notice. 
Rebuttal briefs, limited to issues raised in case briefs, may be filed 
no later than five days after the date of filing the case briefs. 
Parties who submit briefs in these proceedings should provide a summary 
of the arguments not to exceed five pages and a table of statutes, 
regulations, and cases cited. Copies of case briefs and rebuttal briefs 
must be served on interested parties in accordance with 19 CFR 
351.303(f).
    Representatives of parties to the proceeding may request disclosure 
of proprietary information under administrative protective order no 
later than 10 days after the representative's client or employer 
becomes a party to the proceeding, but in no event later than the date 
the case briefs, under 19 CFR 351.309(c)(1)(ii), are due.

[[Page 23672]]

    The Department will publish a notice of the final results of these 
administrative reviews within 120 days from the publication of these 
preliminary results.
    These preliminary results are published pursuant to sections 703(f) 
and 777(i) of the Act. Effective January 20, 2001, Bernard T. Carreau 
is fulfilling the duties of the Assistant Secretary for Import 
Administration.

    Dated: May 2, 2001.
Bernard T. Carreau,
Deputy Assistant Secretary Import Administration.
[FR Doc. 01-11729 Filed 5-8-01; 8:45 am]
BILLING CODE 3510-DS-P