30414 Federal Register / Vol. 66, No. 109 / Wednesday, June 6, 2001 / Notices

1The exporters were Inner Mongolia Autonomous

Region Native Produce and Animal By-Products

Import and Export Corporation, Shanghai Eswell

Enterprise Co., Ltd., High Hope International Group

Jiangsu Foodstuffs Import and Export Corporation,

Kunshan Foreign Trade Corporation, Zhejiang

Native Produce and Animal By-Products Import

and Export Corporation, Henan Native Produce

Import and Export Corporation, and Anhui Native

Produce Import and Export Corporation.

aligned the final determination in that

countervailing duty investigation with

the final determination in the

companion antidumping investigation

of honey from the PRC. See Honey from

Argentina: Notice of Preliminary

Affirmative Countervailing Duty

Determination and Alignment With

Final Antidumping Duty Determination

on Honey from the People’s Republic of

China, 66 FR 14521 (March 13, 2001).

On May 11, 2001 the Department

published its preliminary

determinations in the antidumping

investigations of honey from Argentina

and the PRC. See Notice of Preliminary

Determination of Sales at Less Than

Fair Value: Honey from Argentina, 66

FR 24108 (May 11, 2001) and Notice of

Preliminary Determination of Sales at

Less Than Fair Value: Honey from the

People’s Republic of China, 66 FR 24101

(May 11, 2001). The notices stated that

the Department would issue its final

determinations no later than 75 days

after the date of issuance of the notices.

Pursuant to section 735(a)(2)(A) of the

Tariff Act of 1930, as amended (the

Tariff Act), on May 11, 2001, Asociacio ́n

de Cooperativas Argentinas (ACA), a

respondent in the Argentine

investigation, requested that the

Department postpone its final

determination to the fullest extent

permitted by the statute and the

Department’s regulations. On May 14,

2001, seven exporters of subject

merchandise from the PRC participating

in the investigation made the same

request.1 In addition, the exporters in

both investigations also consented to an

extension of the period for the

imposition of provisional measures to

the fullest extent permitted, or six

months, whichever is later. In

accordance with section 735(a)(2)(A) of

the Tariff Act and 19 CFR 351.210(b),

because (1) the preliminary

determinations were affirmative; (2) the

requesting exporters account for a

significant proportion of exports of the

subject merchandise; and (3) no

compelling reasons for denial exist, we

are granting the exporters’ request and

are postponing the final determinations

until no later than 135 days after

publication of the preliminary

determinations in the Federal Register.

Suspension of liquidation will be

extended accordingly.

This postponement is in accordance

with section 735(a)(2)(A) of the Tariff

Act, and 19 CFR 351.210(b)(2).

Dated: May 29, 2001.

Faryar Shirzad,

Assistant Secretary for Import

Administration.

[FR Doc. 01–14278 Filed 6–5–01; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

International Trade Administration

[C–475–830]

Preliminary Affirmative Countervailing

Duty Determination and Alignment of

Final Countervailing Duty

Determination With Final Antidumping

Duty Determination: Stainless Steel

Bar From Italy

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

ACTION: Preliminary determination of

countervailing duty investigation.

EFFECTIVE DATE: June 6, 2001.

FOR FURTHER INFORMATION CONTACT:

Suresh Maniam or Greg Campbell at

(202) 482–0176 and (202) 482–2239,

respectively; Import Administration,

International Trade Administration,

U.S. Department of Commerce, 14th

Street and Constitution Avenue, NW,

Washington, DC 20230.

Preliminary Determination: The

Department of Commerce (the

‘‘Department’’) preliminarily determines

that countervailable subsidies are being

provided to producers or exporters of

stainless steel bar from Italy. For

information on the estimated

countervailing duty rates, see infra

section on ‘‘Suspension of Liquidation.’’

Case History

The following events have occurred

since the publication of the notice of

initiation in the Federal Register. See

Notice of Initiation of Countervailing

Duty Investigation: Stainless Steel Bar

from Italy, 66 FR 7739 (January 25,

2001) (‘‘Initiation Notice’’).

On January 30, 2001, we issued

countervailing duty questionnaires to

the Government of Italy (‘‘GOI’’), the

European Commission (‘‘EC’’), and the

producers/exporters of the subject

merchandise. On March 8, 2001, we

published a postponement of the

preliminary determination of this

investigation until May 29, 2001. See

Stainless Steel Bar from Italy:

Postponement of Time Limit for

Preliminary Determination of

Countervailing Duty Investigation, 66 FR

13911 (March 8, 2001).

On March 9, 2001, Acciaierie Bertoli

Safau S.p.A. (‘‘ABS’’) submitted a

request to exclude certain merchandise

from the scope of this investigation. On

March 26, 2001, the petitioners

submitted an objection to this request.

See infra section on ‘‘Scope of the

Investigation: Scope Comments’’ for an

analysis of these submissions and the

Department’s resulting determination.

On March 26, 2001, we received

questionnaire responses from the GOI,

the EC, and the responding companies

(Trafileria Bedini S.r.l. (‘‘Bedini’’),

Acciaiera Foroni S.p.A. (‘‘Foroni’’),

Italfond S.p.A. (‘‘Italfond’’), Rodacciai

S.p.A. (‘‘Rodacciai’’), and Acciaierie

Valbruna S.r.l. (‘‘Valbruna’’)/Acciaierie

Bolzano S.r.l. (‘‘Bolzano’’)). We did not

receive a response to our questionnaire

from Cogne Acciai Speciali S.r.l.

(‘‘CAS’’) (see infra section on ‘‘Use of

Facts Available’’ for our treatment of

CAS in this investigation).

On April 9, 2001, and April 10, 2001,

the petitioners submitted comments

regarding the questionnaire responses

from Foroni, Valbruna, and the GOI.

We issued supplemental

questionnaires to the EC, Italfond, and

Rodacciai on April 19, 2001, and to the

GOI, Bedini, Valbruna, and Foroni on

April 20, 2001.

We received responses to the

supplemental questionnaires from the

EC on May 3, 2001, and from the GOI,

Italfond, Rodacciai, Bedini, Valbruna,

and Foroni on May 11, 2001.

We issued a second supplemental

questionnaire to Valbruna on May 14,

2001, and received a response from

Valbruna on May 16, 2001.

On May 16, 2000, the petitioners filed

comments regarding the selection of an

adverse facts available subsidy rate for

CAS and, on May 17, 2001, filed

comments regarding the supplemental

questionnaire responses by Valbruna

and the GOI.

The Applicable Statute and Regulations

Unless otherwise indicated, all

citations to the statute are references to

the provisions effective January 1, 1995,

the effective date of the amendments

made to the Tariff Act of 1930 (the

‘‘Act’’) by the Uruguay Round

Agreements Act. In addition, unless

otherwise indicated, all citations to the

Department’s regulations are to our

regulations as codified at 19 CFR Part

351 (2000).

Federal Register / Vol. 66, No. 109 / Wednesday, June 6, 2001 / Notices 30415

The Petitioners

The petition in this investigation was

filed by Carpenter Technology Corp.,

Crucible Specialty Metals, Electralloy

Corp., Empire Specialty Steel Inc.,

Slater Steels Corp., and the United

Steelworkers of America, AFL–CIO/CLC

(collectively, ‘‘the petitioners’’).

Scope of the Investigation

For purposes of this investigation, the

term ‘‘stainless steel bar’’ includes

articles of stainless steel in straight

lengths that have been either hot-rolled,

forged, turned, cold-drawn, cold-rolled

or otherwise cold-finished, or ground,

having a uniform solid cross section

along their whole length in the shape of

circles, segments of circles, ovals,

rectangles (including squares), triangles,

hexagons, octagons, or other convex

polygons. Stainless steel bar includes

cold-finished stainless steel bars that are

turned or ground in straight lengths,

whether produced from hot-rolled bar or

from straightened and cut rod or wire,

and reinforcing bars that have

indentations, ribs, grooves, or other

deformations produced during the

rolling process.

Except as specified above, the term

does not include stainless steel semifinished products, cut length flat-rolled

products (i.e., cut length rolled products

which if less than 4.75 mm in thickness

have a width measuring at least 10 times

in thickness, or if 4.75 mm or more in

thickness having a width which exceeds

150 mm and measures at least twice the

thickness), products that have been cut

from stainless steel sheet, strip or plate,

wire (i.e., cold-formed products in coils,

of any uniform solid cross section along

their whole length, which do not

conform to the definition of flat-rolled

product), and angles, shapes and

sections.

The stainless steel bar subject to this

investigation is currently classifiable

under subheadings 7222.11.00.05,

7222.11.00.50, 7222.19.00.05,

7222.19.00.50, 7222.20.00.05,

7222.20.00.45, 7222.20.00.75, and

7222.30.00.00 of the Harmonized Tariff

Schedules of the United States

(‘‘HTSUS’’).

Although the HTSUS subheadings are

provided for convenience and customs

purposes, the written description of the

merchandise under investigation is

dispositive.

Scope Comments

On March 9, 2001, ABS, an Italian

producer and exporter of stainless steel

bar, submitted a request to exclude hotrolled stainless steel bar (‘‘hot-rolled

bar’’) greater than six inches in diameter

from the scope. On March 26, 2001, the

petitioners submitted an objection to

ABS’ scope exclusion request.

ABS first argued that no U.S.

producer, to the best of its knowledge,

currently produces hot-rolled bar greater

than six inches in diameter. While U.S.

producers do manufacture stainless

steel bar greater than six inches, ABS

stated this is bar produced by forging

(‘‘forged bar’’), not by hot-rolling.

Second, according to ABS, hot-rolled

bar and forged bar possess different

physical and mechanical properties.

ABS argued that forged products have a

more ‘‘central compactness’’ and can be

used for all applications. On the other

hand, ABS claimed, hot-rolled bar

products have a more irregular structure

along the axis and are, therefore, only

suitable for the production of hollow

products. According to ABS, while

forged bar could be used in the

manufacture of hollow products as well,

the cost of forging stainless steel ingots

into large diameter stainless steel bars

would be approximately three times the

cost of hot-rolling the same ingots into

large diameter stainless steel bar. ABS

claimed the difference is due to higher

equipment productivity and lower

energy costs of a hot-rolling line

compared to a forging press. Third, ABS

asserted, hot-rolled bar and forged bar

do not compete in the same market.

ABS suggested that customers requiring

the internal physical properties

provided by forging would pay the

higher price for forged bars, while those

not needing these physical properties

would only pay for the lower priced

hot-rolled bars.

The petitioners argued that hot-rolled

bar products should not be

differentiated from forged bar products

because both hot-rolled and forged bar

can have the same essential physical

and mechanical properties. Moreover,

the petitioners claimed, both forged and

hot-rolled bar undergo the same

finishing operations, have the same enduse applications, and enter the United

States under the same tariff schedule

number. In addition, the petitioners

argued ABS did not identify the specific

‘‘internal physical characteristics’’ that

would enable the Department or the

Customs Service to distinguish between

the hot-rolled and forged products. In

the petitioners’ view, ‘‘better central

compactness’’ is too vague a distinction

for the Department to quantify the

differences. In reality, according to the

petitioners, a manufacturer can produce

a product by either forging or hot-rolling

to meet the same specifications. As a

result, the petitioners claimed the

qualities important to a customer are not

based on the production processes, but

rather the specifications to be met.

Finally, the petitioners stated that Slater

Steels Corporation, a U.S. stainless steel

producer, produces hot-rolled bar over

six inches in diameter and, accordingly,

suggested that the argument for

exclusion based on an absence of U.S.

production is unsupportable.

The scope of a proceeding is intended

to accurately reflect the product for

which the domestic industry is seeking

relief. See Preamble to the CVD

Regulations, 62 FR 27295, 27323.

(November 25, 1998) (‘‘Preamble’’). To

ensure the scope is not unintentionally

over-inclusive, the Department seeks

input from interested parties. Thus, in

the Initiation Notice, we set aside a

period to receive comments that would

help us refine the scope language to

better reflect the actual product

coverage intended by the domestic

industry.

ABS has suggested that hot-rolled bar

greater than 6 inches in diameter is not

produced in the United States, has

different physical properties from forged

bar, and does not compete with forged

bar. The petitioners have stated that the

U.S. industry does, in fact, produce hotrolled bar in this size, that no difference

exists between hot-rolled and forged

bar, and that hot-rolled and forged bar

do compete with each other. Because

the petitioners intended for this product

to be included in the scope, we have

determined that the scope language is

not overly-inclusive with regard to this

product. As a result, we have not

modified the scope of this investigation

because the current scope language

includes hot-rolled bar, as intended by

the petitioners.

Injury Test

Because Italy is a ‘‘Subsidies

Agreement Country’’ within the

meaning of section 701(b) of the Act, the

U.S. International Trade Commission

(‘‘ITC’’) is required to determine

whether imports of the subject

merchandise from Italy materially

injure, or threaten material injury to, a

U.S. industry. On February 23, 2001, the

ITC published its preliminary

determination finding that there is a

reasonable indication of material injury

or threat of material injury to an

industry in the United States by reason

of imports of stainless steel bar from

Italy. See Stainless Steel Bar from

France, Germany, Italy, Korea, Taiwan,

and the United Kingdom, 66 FR 11314

(February 23, 2001).

Alignment With Final Antidumping

Duty Determination

On May 9, 2001, the petitioners

submitted a letter requesting alignment

30416 Federal Register / Vol. 66, No. 109 / Wednesday, June 6, 2001 / Notices

1Final Affirmative Countervailing Duty

Determination: Certain Steel Products from Austria,

58 FR 37217, 37225 (July 9, 1993).

of the final determination in this

investigation with the final

determination in the companion

antidumping duty investigation (see

Notice of Initiation of Antidumping

Duty Investigations: Stainless Steel Bar

from France, Germany, Italy, Korea,

Taiwan, and the United Kingdom, 66 FR

7620 (January 24, 2001)). The

companion antidumping duty

investigation and this countervailing

duty investigation were initiated on the

same date and have the same scope.

Therefore, in accordance with section

705(a)(1) of the Act, we are aligning the

final determination in this investigation

with the final determination in the

antidumping duty investigation of

stainless steel bar from Italy.

In accordance with section 703(d) of

the Act, the suspension of liquidation

resulting from this preliminary

affirmative countervailing duty

determination will remain in effect no

longer than four months.

Period of Investigation

The period of investigation (‘‘POI’’)

for which we are measuring subsidies is

the calendar year 2000.

Changes in Ownership

On February 2, 2000, the U.S. Court

of Appeals for the Federal Circuit

(‘‘CAFC’’) in Delverde Srl v. United

States, 202 F.3d 1360, 1365 (Fed. Cir.

2000), reh’g en banc denied (June 20,

2000) (‘‘Delverde III’’), rejected the

Department’s change-in-ownership

methodology as explained in the

General Issues Appendix.1 The CAFC

held that ‘‘the Tariff Act, as amended,

does not allow Commerce to presume

conclusively that the subsidies granted

to the former owner of Delverde’s

corporate assets automatically ‘passed

through’ to Delverde following the sale.

Rather, the Tariff Act requires that

Commerce make such a determination

by examining the particular facts and

circumstances of the sale and

determining whether Delverde directly

or indirectly received both a financial

contribution and benefit from the

government.’’ Delverde III, 202 F.3d at

1364.

Pursuant to the CAFC finding, the

Department developed a new change-inownership methodology, first

announced in a remand determination

on December 4, 2000, following the

CAFC’s decision in Delverde III, and

also applied in Grain-Oriented Electrical

Steel from Italy; Final Results of

Countervailing Duty Administrative

Review, 66 FR 2885 (January 12, 2001).

Likewise, we have applied this new

methodology in analyzing the changes

in ownership in this preliminary

determination.

The first step under this new

methodology is to determine whether

the legal person (entity) to which the

subsidies were given is, in fact, distinct

from the legal person that produced the

subject merchandise exported to the

United States. If we determine the two

persons are distinct, we then analyze

whether a subsidy has been provided to

the purchasing entity as a result of the

change-in-ownership transaction. If we

find, however, that the original subsidy

recipient and the current producer/

exporter are the same person, then that

person benefits from the original

subsidies, and its exports are subject to

countervailing duties to offset those

subsidies. In other words, we will

determine that a ‘‘financial

contribution’’ and a ‘‘benefit’’ have been

received by the ‘‘person’’ under

investigation. Assuming that the

original subsidy has not been fully

amortized under the Department’s

normal allocation methodology as of the

POI, the Department would then

continue to countervail the remaining

benefits of that subsidy.

In making the ‘‘person’’

determination, where appropriate and

applicable, we analyze factors such as

(1) continuity of general business

operations, including whether the

successor holds itself out as the

continuation of the previous enterprise,

as may be indicated, for example, by use

of the same name, (2) continuity of

production facilities, (3) continuity of

assets and liabilities, and (4) retention of

personnel. No single factor will

necessarily provide a dispositive

indication of any change in the entity

under analysis. Instead, the Department

will generally consider the post-sale

person to be the same person as the presale person if, based on the totality of

the factors considered, we determine the

entity in question can be considered a

continuous business entity because it

was operated in substantially the same

manner before and after the change in

ownership.

We have preliminarily determined

that CAS and Valbruna are the only

respondents with changes in ownership

requiring this analysis because no other

respondent (or its predecessor) received

subsidies prior to a change in ownership

that were not fully expensed or

allocated prior to the POI. Our findings

with regard to the relevant changes in

ownership are as follows.

CAS

As noted infra in the ‘‘Use of Facts

Available’’ section, CAS withheld

requested information regarding its

changes in ownership. Consequently,

the Department is unable to determine,

inter alia, whether CAS and its pre-sale

predecessors constitute a continuous

business entity. Consistent with section

776(b) of the Act, we have made an

adverse inference in selecting from the

facts available with respect to CAS.

Specifically, we find that CAS and its

predecessors are continuing business

entity for the purposes of a subsidy

benefit analysis. Accordingly, we

preliminarily determine that certain

subsidies provided to the predecessor

companies continue to benefit the

privatized CAS.

Valbruna

We have not made a finding for the

purposes of this preliminary

determination as to whether pre-sale

Bolzano and pre-sale Valbruna are

distinct persons from the respondent

Valbruna. We note the potential POI

benefits for any pre-sale subsidies to

Bolzano (e.g., Bolzano Law 25/81) are

insignificant, amounting to 0.11 percent.

Assuming arguendo that these pre-sale

subsidies continued to benefit Valbruna

in the POI, the preliminary ad valorem

rate (reflecting, in full, any POI benefits

of pre-sale subsidies) for Valbruna

would be de minimis. Therefore,

application of the change in ownership

methodology is not relevant in this

investigation.

However, should we obtain any

information subsequent to this

preliminary determination indicating

the final ad valorem rate for Valbruna

should be above de minimis, we will

give all parties sufficient opportunity to

comment on whether and how

Bolzano’s 1995 sale affects the POI

benefit to Valbruna of any pre-sale

subsidies.

Use of Facts Available

Sections 776(a)(2)(A) and (B) of the

Act require the use of facts available

when an interested party withholds

information requested by the

Department, or when an interested party

fails to provide the information required

in a timely manner and in the format

requested. In selecting from among facts

available, section 776(b) of the Act

provides that the Department may use

an inference adverse to the interests of

a party if it determines that a party has

failed to cooperate to the best of its

ability.

In this investigation, we are presented

with an unusual situation. CAS, a

Federal Register / Vol. 66, No. 109 / Wednesday, June 6, 2001 / Notices 30417

company that was selected to respond to

our CVD questionnaire, declined to do

so. However, in their responses to our

questionnaires, the GOI and EC reported

much of the information regarding the

assistance provided to CAS. Also,

because CAS was investigated in Wire

Rod, the record of that proceeding is a

source of additional information about

CAS and the programs from which CAS

benefitted.

Although CAS failed to cooperate to

the best of its ability in refusing to

respond to our questionnaire, we cannot

ignore the information reported to us by

the GOI and EC about subsidies given to

CAS. Therefore, for those programs

where information provided by the GOI

or EC permits calculation of the subsidy

to CAS, we have relied upon that

information.

With respect to information from Wire

Rod, several programs investigated in

that proceeding are also being

investigated in this case. If a program

was found to be specific, to have

constituted a financial contribution, or

to have conferred a benefit in Wire Rod,

and no new information to the contrary

has been provided in this investigation,

we have adopted the finding reached in

Wire Rod. While this information from

Wire Rod regarding CAS may be

characterized as ‘‘facts available,’’ we

have not drawn an adverse inference in

the application of this information.

In addition to the subsidy amounts, it

is also necessary to have information on

the value of CAS’ sales in order to

calculate the ad valorem benefit of the

subsidy and, where necessary, to

perform the 0.5 percent expense test

described in 19 CFR 351.524(b)(2). We

obtained CAS’ total sales revenue

amounts for the years 1997–1999 from

a public Dunn & Bradstreet report.

Because a total sales value for the POI

(2000) is not available, we averaged

sales revenues for the years 1997–1999,

and used this amount to represent POI

sales. Sales over the three-year period

from 1997–1999 were relatively

constant.

Where the value of CAS’ exports

during the POI was required, we derived

this amount using a ratio of CAS’ export

sales to total sales provided in the Dunn

& Bradstreet report ((see Memorandum

to the File, ‘‘Miscellaneous Information

used for the Calculations,’’ dated May

29, 2001 at Attachment 1

(‘‘Miscellaneous Information Memo’’)).

In those instances where the available

information does not provide a basis for

calculating the subsidy to CAS, we have

drawn an adverse inference due to CAS’

failure to cooperate to the best of its

ability in this investigation. Because no

information has been provided

regarding the issue of whether CAS was

the same entity before and after

privatization, we have treated CAS as

the same entity, with the result that

CAS’ full share of ILVA’s subsidies have

been attributed to CAS (see infra section

on Programs Preliminarily Determined

to Be Countervailable: CompanySpecific Subsidies Conferred by the

Government of Italy). In another

instance, we did not have information

on the actual amount of waste disposal

offset payments received by CAS during

the POI (see infra section on Programs

Preliminarily Determined to Be

Countervailable: Company-Specific

Subsidies Conferred by the Regional

Government of Valle D’Aosta).

Therefore, we have used the maximum

amount calculated by the granting

regional government.

When employing an adverse

inference, the statute indicates the

Department may rely upon information

derived from, inter alia, the petition. In

doing so, however, the Department

should ‘‘to the extent practicable’’

corroborate the information from

independent sources reasonably at its

disposal. See Statement of

Administrative Action accompanying

H.R. 5110 (H.R. Doc. No. 103–316)

(1994), at 870 regarding use of

‘‘secondary’’ information. In this case,

we have reviewed information on the

CAS website (www.cogne.com/en/

history.html) regarding the change in

ownership of the company. While the

company has undergone some

restructuring in recent years, there is no

indication that CAS is not the same

entity before and after its privatization

in 1994. Therefore, we preliminarily

determine that the information supplied

by the petitioners regarding CAS’

change of ownership has probative

value, and that we may appropriately

rely upon it.

Subsidies Valuation Information

Allocation Period

Under 19 CFR section 351.524(b) of

our regulations, non-recurring subsidies

are allocated over a period

corresponding to the average useful life

(AUL) of the renewable physical assets

used to produce the subject

merchandise. 19 CFR section

351.524(d)(2) creates a rebuttable

presumption that the AUL will be taken

from the U.S. Internal Revenue Service’s

1977 Class Life Asset Depreciation

Range System (the ‘‘IRS Tables’’). For

stainless steel bar, the IRS Tables

prescribe an AUL of 15 years.

We have used the 15-year allocation

period for all respondents, with the

following exceptions.

Subsidies to CAS and Valbruna That

Were Countervailed in Wire Rod

Certain subsidies to CAS and

Valbruna were countervailed in Wire

Rod. At the time of Wire Rod, it was our

practice to calculate company-specific

AULs. For both CAS and Valbruna, the

calculated AUL was 12 years. As a

matter of practice, where a subsidy has

been allocated over a particular period,

we will continue to use the same

allocation period for that subsidy from

proceeding to proceeding. See, e.g.,

Final Affirmative Countervailing Duty

Determination: Stainless Steel Sheet

and Strip from France, 64 FR 30774,

30778 (June 8, 1999); see also Final

Affirmative Countervailing Duty

Determination: Certain Cut-to-Length

Carbon-Quality Steel Plate from France,

64 FR 73277, 73280 (December 29,

1999). Therefore, for those subsidies to

CAS and Valbruna that were allocated

over a 12-year period in Wire Rod, we

have continued to use the 12-year

allocation period calculated in that

proceeding. However, for the final

determination, we will consider

whether this earlier established practice

is consistent with our current

regulations. For subsidies to these

companies that were not countervailed

in Wire Rod, we have used the 15-year

allocation period from the IRS Tables.

(See further discussion infra of

Valbruna).

Foroni

For this investigation, Foroni

calculated its company-specific AUL.

This AUL differs significantly from the

15-year AUL in the IRS Tables. Further,

Foroni claims its calculation is an

estimate of its actual useful life of assets

and excludes any effects from the

application of accelerated depreciation,

special charges, and/or asset

revaluations over the relevant years.

Therefore, for purposes of this

preliminary determination, we find

Foroni to have rebutted the presumption

in favor of the IRS Tables, according to

19 CFR section 351.524(d)(2), and we

have allocated non-recurring subsidies

to this company over its companyspecific AUL.

Valbruna

Valbruna/Bolzano also calculated its

company-specific AUL. However, this

company-specific AUL does not differ

significantly from the period in the IRS

Tables. Therefore, we have allocated all

subsidies received by Valbruna/

Bolzano, except those countervailed in

Wire Rod, over 15 years.

For non-recurring subsidies to all

respondents, we have applied the ‘‘0.5

30418 Federal Register / Vol. 66, No. 109 / Wednesday, June 6, 2001 / Notices

2Since publication of the CVD Regulations,

Moody’s Investors Service no longer reports default

rates for the Caa to C-rated category of companies.

Therefore, for the calculation of uncreditworthy

interest rates, we will continue to rely on the

default rates as reported in Moody Investor

Service’s publication as of February 1998.

percent expense test’’ described in 19

CFR section 351.524(b)(2) of our

regulations. Under this test, we compare

the amount of subsidies approved under

a given program in a particular year to

sales (total or export, as appropriate) in

that year. If the amount of subsidies is

less than 0.5 percent of sales, the

benefits are allocated to the year of

receipt rather than being allocated over

the AUL period.

Benchmarks for Loans and Discount

Rates

Pursuant to 19 CFR section 351.505(a)

and section 351.524(c)(3)(i), the

Department will use as long-term loan

benchmarks and discount rates the

actual cost of long-term borrowing by

the company, when available. For the

reasons discussed infra, we have not

accepted actual borrowing rates as

reported by respondents. Instead,

pursuant to 19 CFR section

351.505(a)(3)(ii), we have calculated the

average cost of long-term fixed-rate

loans in Italy. Consistent with previous

cases, we relied on the Italian Interbank

Rate (‘‘ABI’’) as the basis for the longterm benchmark rate. See, e.g., Wire

Rod, 64 FR at 40476–77; Final

Affirmative Countervailing Duty

Determination: Stainless Steel Plate in

Coils From Italy, 64 FR 15508, 15511

(March 31, 1999) (‘‘Plate in Coils’’);

Final Affirmative Countervailing Duty

Determination: Stainless Steel Sheet

and Strip in Coils From Italy, 64 FR

30624, 30627 (June 8, 1999) (‘‘Sheet and

Strip’’); Final Affirmative

Countervailing Duty Determination:

Certain Cut-to-Length Carbon Quality

Steel Plate From Italy, 64 FR 73244,

73248 (December 29, 1999) (‘‘CTL

Carbon Plate’’).

We added two amounts to this rate.

First, an upward adjustment is

necessary because the ABI rate

represents a long-term interest rate to

banks’ most preferred customers with

established low-risk credit histories. For

other customers, banks will typically

add a spread ranging from 0.55 percent

to 4 percent, to the ABI rate depending

on the company’s financial health. To

reflect this, we have added the average

of this spread, 2.28 percent, to the ABI

rate. Second, an additional amount is

needed to reflect the expenses

associated with long-term lending

activities. See CTL Carbon Plate, 64 FR

at 73248; Plate in Coils, 64 at 15511;

Sheet and Strip, 64 at 30627.

Specifically, we found these expenses

amounted to 8.5 percent of the interest

charged and have added this amount to

our benchmark. Id.

Rodacciai provided the ABI rate as its

cost of long-term capital in the years it

received certain subsidies. However,

because Rodacciai provided no evidence

the company was actually able to

receive loans at the ABI rate, we have

preliminarily allocated non-recurring

benefits and calculated long-term loan

benefits using the rate described above.

At verification, time permitting, we

intend to verify whether Rodacciai was

actually able to obtain long-term

financing at the ABI rate.

Valbruna has asked the Department to

use as its long-term benchmark rate, the

interest rate it pays on three-month

loans which it rolls over at the end of

every quarter. Valbruna suggests that

large Italian companies prefer loans

with this three-month EURIBOR rate

rather than with ABI prime rates

because they allow the company to

borrow money in Italian lire or Euros at

an effective rate below the ABI prime

rate. The interest rate on these loans is

equal to the three-month EURIBOR rate

plus a small spread in the favor of the

lending bank.

We have not used these rates as our

long-term benchmark for Valbruna for

the preliminary determination. First, we

believe the three-month EURIBOR rate

should be viewed as a short-term

interest rate. Second, the fact that these

quarterly loans are rolled over every

quarter, and Valbruna treats these loans

as long-term loans for its own purpose

is not a sufficient reason to treat these

loans as a substitute for an actual longterm loan. Rates on long-term loans and

short-term loans may differ

significantly. For instance, the rate on a

long-term loan may be higher to

adequately compensate the lender for

the additional risk of default associated

with lending money for a longer period

of time. The quarterly loans received by

Valbruna, while effectively resulting in

a long-term loan for Valbruna, are, in

reality, a series of short-term loans in

which the risk of default can be

regularly assessed. Presumably, at the

end of every quarter and depending

upon, inter alia, the risk of default at

that time, the rate could be adjusted to

account for increased or decreased risk

or the loan could be canceled due to

unacceptable risk. Consequently, we

have preliminarily rejected the use of

Valbruna’s interest rate on these

quarterly loans as an appropriate longterm benchmark and have, instead,

allocated non-recurring subsidies and

calculated long-term loan benefits by

using the rate described supra.

Nevertheless, at verification, as time

permits, we will examine the loan

provisions of Valbruna’s quarterly loans

and, more generally, the use of an

EURIBOR rate as a substitute for the ABI

rate.

For the years in which CAS/ILVA was

uncreditworthy (see infra section on

‘‘Creditworthiness’’), we calculated

discount rates for uncreditworthy

companies in accordance with 19 CFR

section 351.524(c)(3)(ii). To construct

these benchmark rates, we used the

formula described in section 19 CFR

section 351.505(a)(3)(iii), which requires

values for the probability of default by

uncreditworthy and creditworthy

companies. For the probability of

default by an uncreditworthy company,

we relied on the average cumulative

default rate reported for the Caa to Crated category of companies as

published in Moody’s Investors Service,

‘‘Historical Default Rates of Corporate

Bond Issuers, 1920–1997,’’ (February

1998). For the probability of default by

a creditworthy company we used the

average cumulative default rates

reported for the Aaa to Baa-rated

categories of companies as reported in

this study.2 See Miscellaneous

Information Memo at Attachment 3.

In certain instances for CAS and

Bedini, we needed short-term interest

rates for Italian lire denominated loans.

However, neither of these companies

provided company-specific short-term

rates. Therefore, as a benchmark, we

relied on the average, short-term interest

rate in Italy as reported in the

International Financial Statistics (see

Miscellaneous Information Memo at

Attachment 6).

Certain loans received by CAS were

variable-interest rate loans denominated

in currencies other than in Italian lire.

Similar to Wire Rod, we were unable to

find long-term rates denominated in the

appropriate currency in Italy. Nor were

we able to find comparable long-term,

variable-interest rates on such loans.

Therefore, as in Wire Rod, for these

loans we used the average yield-tomaturity on long-term bond rates in the

country of the currency, as reported in

the International Financial Statistics

(see Miscellaneous Information Memo at

Attachment 6).

Equityworthiness

In the case of a government equity

infusion, the Department measures the

benefit by examining the investment

decision against the usual investment

practice of a private investor. 19 CFR

section 351.507(a)(1). Specifically, the

Department will compare the purchase

price paid by the government to prices

Federal Register / Vol. 66, No. 109 / Wednesday, June 6, 2001 / Notices 30419

paid for new shares by private investors,

if such prices exist. 19 CFR section

351.507(a)(2). If actual private investor

prices are unavailable, the Department

will determine the equityworthiness of

a company at the time of the equity

infusion. 19 CFR section 351.507(a)(3).

Moreover, unless a company provides

new information leading us to

reconsider a previous finding of

unequityworthiness, once a

determination of unequityworthiness

has been made for certain years, the

Department’s practice is to continue to

find that company unequityworthy for

those same years in subsequent cases.

See, e.g., Final Affirmative

Countervailing Duty Determinations:

Certain Steel Products from Brazil, 58

FR 37295, 37297 (July 9, 1993) (‘‘Certain

Steel from Brazil’’).

In Wire Rod, ILVA and its

predecessors were found to be

unequityworthy from 1985 through

1988, and from 1991 through 1992. 64

FR at 40477. No new information has

been presented in this investigation to

warrant a reconsideration of this

finding. Therefore, based on this

previous finding of unequityworthiness,

in this investigation, we continue to

find ILVA and its predecessors

unequityworthy from 1985 through

1988, and from 1991 through 1992. CAS

did not receive any equity infusions

directly during these years and, thus, we

do not need to make a decision as to its

equityworthiness at this time.

Creditworthiness

The examination of creditworthiness

is an attempt to determine if the

company in question could obtain longterm financing from conventional

commercial sources. 19 CFR section

351.505(a)(4). Moreover, unless a

company provides new information

leading us to reconsider a previous

finding of uncreditworthiness, once a

determination of uncreditworthiness

has been made for certain years, the

Department’s practice is to continue to

find that company uncreditworthy in

those same years in subsequent cases.

See, e.g., Id.; Certain Steel from Brazil,

58 FR at 37297.

In Wire Rod, ILVA and its

predecessors were found to be

uncreditworthy from 1982 through

1993. 64 FR at 40477. No new

information has been presented in this

investigation to warrant a

reconsideration of this finding.

Therefore, based on this previous

finding of uncreditworthiness, in this

investigation, we continue to find ILVA

and its predecessors uncreditworthy

from 1982 through 1993. Thus, any

benefits received by CAS or its

predecessors in these years have been

determined using rates for

uncreditworthy companies.

Also, in the Initiation Notice, the

Department stated it would examine

Falck’s creditworthiness in 1993–1994

and Bolzano’s creditworthiness in

1995–1996, if it was discovered that

these companies received equity

infusions, loans or loan guarantees in

these years. Based on the responses,

neither Falck nor Bolzano was approved

for any loans or allocable subsidies

during these years. Therefore, we have

not examined these allegations of

uncreditworthiness for these years.

I. Programs Preliminarily Determined

to Be Countervailable

Government of Italy Programs

1. Capacity Reduction Payments Under

Article 2 of Law 193/1984

Article 2 of Law 193/1984 (‘‘Article

2’’) provided payments to companies in

the private steel sector to achieve

capacity reductions consistent with an

agreement by the European Coal and

Steel Community (‘‘ECSC’’).

Valbruna and Bolzano (then owned by

Falck) received funds under this

program. However, the benefits were

allocated over the 12-year AUL

established in Wire Rod and,

consequently, the benefit stream lapsed

prior to the POI. Similarly, Foroni

reported receiving Article 2 grants, but

the benefits from these grants would

have been fully allocated prior to the

POI. Therefore, no benefit accrued to

Foroni in the POI. Only Rodacciai

reported benefitting from Article 2

grants during the POI.

In Wire Rod, we found Law 193/1983

to be specific and to provide a financial

contribution that conferred a

countervailable benefit. 64 FR at 40479.

No information has been presented in

this investigation to warrant a

reconsideration of this finding.

To calculate the subsidy rate, we

allocated the grants received by

Rodacciai over the AUL and then

divided the benefit attributable to the

POI by Rodacciai’s total sales during the

POI. Accordingly, we preliminarily

determine that a countervailable benefit

of 0.02 percent ad valorem exists for

Rodacciai.

2. Law 451/94 Early Retirement Benefits

Passed in 1994, Law 451/94 enabled

workforce reductions in the Italian steel

industry by allowing workers to retire

early. The law authorized early

retirement for men at least fifty years of

age and women at least forty-seven

years of age, and who met certain

minimum social security contribution

requirements. Benefits were applied for

between 1994 to 1996 and, upon early

retirement, workers received benefits

until their normal ages of retirement, for

a maximum of ten years. When workers

reached their normal ages of retirement,

the company’s planned retirement

benefits would begin and Law 451/94

benefits would end.

In our previous investigations, we

found assistance under Law 451/94 to

be specific and to provide a financial

contribution that conferred a

countervailable benefit. Id. No

information has been presented in this

investigation to warrant a

reconsideration of this finding.

In this investigation, pursuant to 19

CFR section 351.513(c) and consistent

with previous determinations, we have

treated benefits received under Law

451/94 as recurring grants to be

expensed in the year of receipt.

Moreover, consistent with our previous

determinations, we treated one-half of

the government payments as benefitting

the respondent. See, e.g., Plate in Coils,

64 FR at 15515; Sheet and Strip, 64 FR

at 30629; CTL Carbon Plate, 64 FR at

73253. See also Preamble, 63 FR at

65380.

Only Valbruna and Italfond reported

that some of their employees retired

early under this program. However, both

companies also reported that several

employees had reached their normal

retirement age prior to the POI.

Therefore, these employees are no

longer receiving early retirement

benefits under Law 451/94 and are

instead receiving their normal

retirement benefits from the respondent.

To calculate a subsidy rate, we first

deducted these employees from the total

number of employees who were

approved to receive benefits during the

application period, 1994 to 1996. The

resulting number (i.e., the number of

employees who retired early and

continued to receive Law 451/94

benefits in the POI), categorized by

employee type (i.e., blue collar, white

collar, and senior executive), was

multiplied by their respective average

salary during the POI. Because the GOI

made payments to these workers

equaling eighty percent of their salary,

we find forty percent of this amount

benefitted the respondent. We then

divided this benefit by each recipient

respondent’s respective total sales

during the POI. Accordingly, we

preliminarily determine that a

countervailable benefit of 0.13 percent

ad valorem exists for Valbruna and 0.18

percent ad valorem exists for Italfond.

30420 Federal Register / Vol. 66, No. 109 / Wednesday, June 6, 2001 / Notices

3. Law 10/91

Under Law 10/91, the GOI provides

funds for the development of energy

conserving technology. Law 10/91

authorized grants based on applications

submitted in 1991 and 1992. The GOI

reported that CAS was the only

respondent receiving benefits under this

program during the POI.

In Plate in Coils, the Department

found the aid provided under this

program constituted a financial

contribution and provided a benefit in

the amount of the grants received. 63 FR

at 15514. The Department also

determined Law 10/91 to be de facto

specific within the meaning of section

771(5A)(D)(iii) of the Act because ILVA

(of which CAS was a part of at the time),

received a disproportionate share of the

benefits. Id. Thus, Law 10/91 was found

to be countervailable. Id. No

information has been presented in this

investigation to warrant a

reconsideration of these findings.

Because each grant under this

program required separate approval, we

find the benefits under this program to

be non-recurring. To calculate the

subsidy rate, we allocated the grants

received by CAS over a 15-year AUL,

and divided the benefit attributable to

the POI by CAS’ sales during the POI.

Accordingly, we preliminarily

determine that a countervailable benefit

of 0.15 percent ad valorem exists for

CAS.

4. Law 549/95

Law 549/95 provided tax relief on

fifty percent of reinvested profits to all

companies, except banks and insurance

companies, located in areas specified in

EEC Regulation No. 2052/88 for the tax

year 1996. The amount of profit that

could be excluded was limited to the

amount of investment exceeding the

average amount of investments carried

out during the five previous tax years.

Qualified investments under Law 549/

95 included investments in new plants,

the extension and modernization of

existing establishments, and the

purchase of new capital goods,

including capital goods acquired

through leasing contracts.

The EC has required that benefits

received by certain companies under

Law 549/95 be repaid. Steel companies,

in particular, were required to repay

their benefits because Law 549/95 was

found not compatible with Article 4 of

the ECSC Treaty, (Commission Decision

on State Aid Granted by Italy by Way of

Tax Relief under Law No 549/95, OJ L

47/6 (February 23,1999)). Pursuant to

the EC decision, on February 26, 2001,

the GOI issued a Notice of

Ascertainment requiring repayment of

funds disbursed under this program.

However, the GOI reported that neither

Bedini nor CAS has yet paid back these

benefits. Furthermore, the GOI reported

that, on April 24, 2001, CAS filed an

appeal to the Notice of Ascertainment.

Because the GOI has forgone or not

collected revenue otherwise due, we

find that the exemptions provided by

Law 549/95 constitute financial

contributions within the meaning of

section 771(5)(D)(ii) of the Act. Even if

the companies must repay these tax

savings in the future, the GOI is forgoing

revenue because it is essentially

financing, from the time of their receipt

and at zero interest, the tax benefits to

be repaid. Also, because Law 549/95

benefits are available only to companies

located within certain areas, we

preliminarily find that these funds are

specific under section 771(5A)(D)(iv) of

the Act.

To determine the benefit to CAS and

Bedini under this program, we have

recognized the EC has ordered

repayment and the GOI has taken steps

to recover the amounts (GOI, Ministry of

Finance Circular n. 218/E (September

15, 1998)). Consequently, we are

treating the tax these companies owe as

short-term, zero-interest-rate loans,

being rolled over each year until

repayment. This is consistent with our

previous findings where the EC has

ordered repayments and, in compliance,

the GOI has instituted procedures to

recover payments. See Certain Steel

Products from Germany; Final

Affirmative Countervailing Duty

Determinations, 58 FR at 37316–19 (July

9, 1993). Thus, a benefit to CAS and

Bedini exists to the extent the amount

paid on these government ‘‘loans’’ is

less than the amount the firms would

pay on a comparable commercial loan.

19 CFR section 351.505(a).

We used the short-term interest rate

described in the section on ‘‘Subsidies

Valuation Information: Benchmarks for

Loans and Discount Rates’’ to determine

what the respondents would have paid

on a comparable commercial loan. This

benefit was then divided by the

respondents’ total sales during the POI.

Accordingly, we preliminarily

determine that a countervailable benefit

of 0.01 percent ad valorem exists for

Bedini and 0.14 percent ad valorem

exists for CAS.

Government of Bolzano Subsidies

5. Province of Bolzano Law 25/81,

Articles 13 Through 15

Articles 13 through 15 of Law 25/81

(‘‘Articles 13 through 15’’) are general

aid measures providing grants to

companies with limited investments in

technical fixed assets and targeting

technological investment,

environmental investment, or

restructuring projects. In Wire Rod, we

found that ‘‘Article 13 through 15

establish different eligibility

requirements, different application

procedures, different levels of available

aid, and different types of aid (grants

and loans) than assistance provided

under other Articles of Law 25/81.’’ 64

FR at 40486. Therefore, we considered

assistance provided under Articles 13

through 15 separately from other

assistance provided under Law 25/81.

In Wire Rod, we found Articles 13

through 15 to be specific and to provide

a financial contribution that conferred a

countervailable benefit. Id. No

information has been presented in this

investigation to warrant a

reconsideration of this finding.

On July 17, 1996, the EC issued a

decision, C(96) 2064, finding the aid

granted under Law 25/81 to be illegal

and ordering recovery of any amounts

disbursed. This decision, however,

‘‘grandfathered’’ any aid approved prior

to January 1, 1986 (i.e., aid approved

prior to this date did not have to be

repaid). Bolzano received two grants

under this program prior to January 1,

1986, which were grandfathered, and

two loans and two grants after January

1, 1986, which were not grandfathered.

All of these grants and loans were

previously investigated in Wire Rod. Id.

at 40485–46.

Regarding the two grants and two

loans received after January 1, 1986,

Falck (the prior owner of Bolzano)

agreed to indemnify Valbruna for any

negative consequences resulting from

the EC investigation. To carry out its

obligation, Falck repaid the funds, but

decided to appeal the EC decision

requiring repayment. In December 1999,

subsequent to Wire Rod, the EC rejected

Falck’s appeal. Falck filed a second

appeal of the EC decision to the

European Court of Justice (‘‘ECJ’’) on

March 2, 2000. According to Valbruna,

this is the last possibility of appeal for

Falck. Valbruna further claims the

possibility of success in this second

appeal is highly unlikely because an

appeal to the ECJ requires a showing

that the judgement by the lower court,

the Court of First Impression (‘‘CFI’’),

contained an error of law. In fact,

Valbruna claims no appeal concerning

state aids to the steel sector has ever

been successful since the formation of

the CFI in 1989.

In Wire Rod, the Department

countervailed the benefits received

under this program because Falck was

still in the process of appealing the EC

Federal Register / Vol. 66, No. 109 / Wednesday, June 6, 2001 / Notices 30421

decision during the POI in that case,

and it was unclear at the time whether

Falck would be successful. Id. However,

we stated in Wire Rod that we would

reconsider this issue once a final

judgement had been rendered in the

appeal taking place at the time. Id. For

purposes of this investigation, we

preliminarily determine that the facts

have changed sufficiently from Wire

Rod to allow us to conclude that the

assistance provided to Bolzano after

January 1, 1986, should not be

countervailed. The funds have already

been repaid by Falck and Falck lost the

appeal pending during Wire Rod. Given

the diminished prospects for Falck to

recover the amount it has repaid, we

preliminarily determine that there is no

benefit to Bolzano or Valbruna from the

grants and loans received under this

program after January 1, 1986. If Falck

does prevail in its second appeal and

the monies it has repaid are refunded,

it would be appropriate at that time to

consider whether a benefit exits.

Regarding the two grandfathered

grants received before January 1, 1986,

these grants were disbursed to Bolzano

in semi-annual installments until

December 1992 for one grant and June

1990 for the other. Consistent with Wire

Rod, because these grants required

separate approvals, we are treating them

as non-recurring benefits. Id. Also,

because grants received under this

program were allocated over a 12-year

AUL in Wire Rod, we have continued to

use the 12-year AUL period.

To determine the subsidy rate, we

divided the amounts allocated to the

POI by Valbruna’s total sales during the

POI. Accordingly, we preliminarily

determine that a countervailable benefit

of 0.11 percent ad valorem exists for

Valbruna.

Regional Government of Valle D’Aosta

Subsidy Programs

6. Valle D’Aosta Regional Law 12/87

Law 12/87 of the Autonomous Region

of Valle d’Aosta (‘‘Regional

Government’’) provides grants for the

promotion of commercial activities of

local firms in other regions of Italy and

abroad. Support is provided to

companies for participation in shows,

fairs, and exhibitions in Italy and

abroad, and for participation in

commercial delegations abroad.

Companies apply for funding for up to

thirty percent of the costs of

promotional activities in Italy (up to ten

million lire) and forty percent of the

costs of promotional activities abroad

(up to fifteen million lire).

In Wire Rod, we found Law 12/87

provides a financial contribution within

the meaning of section 751(5)(D)(1) of

the Act. Id. at 40483. We also

determined this program constitutes an

export subsidy because, although the

program is available for promotional

activities both within and outside Italy,

we found the grants were only given for

export-related promotion activities. Id.

The Regional Government did not

submit any information indicating that

the nature of the grants received by CAS

in the POI has changed since Wire Rod.

Therefore, we continue to find this

program provides a countervailable

benefit.

In Wire Rod, we found these grants to

be non-recurring because they are

exceptional and require separate

government applications and approval.

Id. However, the grants examined in

that investigation (i.e., those disbursed

prior to and during the POI) were

expensed in the year of receipt.

Therefore, we are not including those

grants in our calculation.

Similarly, all grants received since

Wire Rod have been less than 0.5

percent test of CAS’’ export sales in

their respective years of approval.

Therefore, the benefits were expensed in

their respective year of receipt. For the

amount approved and received in the

POI, we divided the benefit by CAS’’

export sales in the POI. Accordingly, we

preliminarily determine that a

countervailable benefit of 0.01 percent

ad valorem exists for CAS.

European Union Subsidies

7. ECSC Article 54 Loans

ECSC Article 54 Loans (‘‘Article 54’’)

were made to steel undertakings to carry

out the investment programs established

under the ECSC Treaty. These loans

finance the purchase of new equipment

modernization, and are made at interest

rates slightly higher than the rates

obtained by the EC. The loans cannot

exceed fifty percent of the underlying

eligible investment.

In Wire Rod, we found Article 54

loans to be specific and to provide a

financial contribution that conferred a

countervailable benefit. Id. at 40486. No

information has been presented in this

investigation to warrant a

reconsideration of this finding.

Valbruna, Bolzano, and CAS received

Article 54 loans. However, Valbruna’s

and Bolzano’s loans were repaid prior to

the POI. Thus, they received no benefit

during the POI. However, according to

the EC response, CAS did have Article

54 loans outstanding during the POI. As

facts available, we are using the

information provided by the EC to

calculate a subsidy rate for CAS. These

loans were variable-interest-rate loans

and certain of these loans were

denominated in currencies other than

the Italian lire.

To calculate a subsidy rate, we first

compared the cost of the benchmark

financing for each loan to the financing

CAS received under this program and

found the loans provided a financial

contribution with the meaning of

section 771(5)(D)(ii) of the Act. We then

calculated the difference during the POI

between the interest actually paid and

the interest that would have been due

on the benchmark loan. Finally, we

divided this benefit by CAS’’ total sales

during the POI. Accordingly, we

preliminarily determine that a

countervailable benefit of 0.26 percent

ad valorem exists for CAS.

8. European Social Fund

The European Social Fund (‘‘ESF’’),

one of the Structural Funds operated by

the EC, was established in 1957 to

improve workers’ employment

opportunities and to raise their living

standards. The main purpose of the ESF

is to make employing workers easier

and to increase the geographical and

occupational mobility of workers within

the European Union (‘‘EU’’). It

accomplishes this by providing support

for vocational training, employment,

and self-employment.

Like the other EC Structural Funds,

ESF seeks to achieve six different

objectives explicitly identified in the

EC’s framework regulations for

Structural Funds: Objective 1 is to

promote development and structural

adjustment in underdeveloped regions;

Objective 2 is to assist areas in

industrial decline; Objective 3 is to

combat long-term unemployment and to

create jobs for young people, and people

excluded from the labor market;

Objective 4 is to assist workers adapting

to industrial changes and changes in

production systems; Objective 5 is to

promote rural development; and

Objective 6 is to aid sparsely populated

areas in northern Europe.

The EU Member States are

responsible for the identification of

projects to receive ESF financing and

their subsequent implementation. The

Member States must also contribute to

the financing of the projects. In general,

the maximum benefit provided by ESF

is 50 percent of the total cost of projects

geared toward Objectives 2, 3, 4, and 5b,

and 75 percent of the project’s total cost

for Objective 1 projects. For Objective 4

programs implemented in Italy,

generally 45 percent of the funding is

provided by the EC and 35 percent by

the GOI (under the auspices of the

Rotation Fund). Companies usually

receive 50 percent of the aid up-front

30422 Federal Register / Vol. 66, No. 109 / Wednesday, June 6, 2001 / Notices

and the remainder upon satisfactory

completion of the training program.

According to the questionnaire

responses, the following respondents

received or benefitted from ESF grants:

CAS, Valbruna, Rodacciai and Bedini.

We find these grants to constitute a

financial contribution within the

meaning of section 771(5)(D)(i) of the

Act.

All of these grants were given for

Objective 4 projects involving worker

assistance in the form of employee

training. The Department considers

worker assistance programs to provide a

benefit to a company when the company

is relieved of a contractual or legal

obligation it would otherwise have

incurred. 19 CFR section 357.513(a).

Generally, only limited information was

provided in the questionnaire responses

about the purpose of these grants.

However, one respondent, Bedini,

reported that its ESF grants were used

to train its employees in the ‘‘technical

and scientific aspects of steel

production, * * * the sales and

distribution of steel products, * * * and

the general activities of the company,

i.e., technical personnel were trained

about the technical aspects of

production.’’ Bedini’s May 14, 2001

supplemental response at S–7.

Moreover, in general, the respondents

provided insufficient information

regarding the nature and extent of their

normal vocational training programs

and job-skills enhancement practices (i.e.,

the sorts of training and skills

enhancement normally taking place in

the absence of ESF assistance).

We intend to examine this issue more

closely at verification, time permitting.

However, because companies normally

incur the costs of training to enhance

the job-related skills of their own

employees, and because the limited

record information suggests that these

ESF training programs were related to

the operations of the respondents, in

lieu of more detailed information to the

contrary we preliminarily determine

these ESF grants have relieved the

recipient respondents of obligations that

they otherwise would have incurred.

Accordingly, we determine the ESF

grants received by CAS, Valbruna,

Rodacciai and Bedini provided a benefit

under section 771(5)(E) of the Act to

each recipient in the amount of the

respective grant.

Regarding the specificity of benefits

under this program, neither the EC nor

the GOI has provided us with detailed

industry and regional distribution

information on Objective 4 grants in

Italy, despite our explicit request for

such information in the questionnaires

and supplemental questionnaires.

Therefore, we find it appropriate to

apply an adverse inference and

conclude that these grants are specific

under section 771(5A) of the Act.

Based on the foregoing, we find the

ESF grants to CAS, Valbruna, Rodacciai

and Bedini to be countervailable

subsidies.

The Department normally considers

the benefits from worker-training

programs to be recurring. 19 CFR

section 351.524(c)(1). However, we

found in Wire Rod, that ESF grants

relate to specific, individual projects

and we treated them as non-recurring

grants because each grant required

separate government approval. 64 FR at

40488; 19 CFR section 351.524(c)(2)(ii).

In this investigation, because the

amount of ESF funding approved for

each recipient was less than 0.5 percent

of the recipient’s sales, we have

expensed all reported ESF grants

received in the year of receipt for all

recipient respondents. Because Bedini

did not receive any ESF grants in the

POI, we found the program not used for

Bedini. For the remaining recipients, we

divided the amount of ESF grants

received by each recipient in the POI by

that recipient’s total POI sales.

Accordingly, we preliminarily

determine that the following ad valorem

rates exist for CAS, Valbruna, and

Rodacciai, respectively: 0.11 percent,

0.01 percent, and 0.05 percent.

Company-Specific Subsidies Conferred

by the Government of Italy

9. Restructuring Subsidies Provided to

the Italian Steel Industry Attributable to

CAS

A. Equity Infusions to Finsider and

ILVA

Because CAS did not respond to our

questionnaire in this investigation, we

relied on information from the GOI and

Wire Rod to determine the amount of

equity infusions benefitting CAS during

the POI. Both the GOI and Wire Rod

indicated the GOI provided equity

infusions to Finsider up to 1988 and to

ILVA in 1991–1992. However, because

we allocated these benefits over a 12-

year AUL in Wire Rod, the benefits

provided to Finsider have been fully

accounted for prior to the POI. Thus, we

preliminarily find only the equity

infusions made to ILVA in 1991–1992

continue to benefit CAS during the POI.

As in Wire Rod, we find the GOI’s

equity infusions in ILVA were specific

and provided a financial contribution

which conferred a benefit upon CAS.

Under our new change-in-ownership

methodology (see supra section on

‘‘Changes in Ownership’’) and, as facts

available, we find CAS to be the same

entity as its predecessor (see supra

section on ‘‘Use of Facts Available’’).

Accordingly, the equity infusion

received by the predecessor entity

continues to fully benefit CAS.

To calculate CAS’ share of these

infusions in the larger company, ILVA,

we divided the value of CAS’ assets in

1991 and 1992 by the total value of

ILVA’s assets in 1991 and 1992,

respectively. These ratios were then

applied to the 1991 and 1992 equity

infusion received by ILVA to determine

the amount ultimately attributable to

CAS.

Consistent with Wire Rod, the equity

subsidies were allocated over a 12-year

AUL to determine the benefit during the

POI. In addition, because ILVA was

uncreditworthy at the time it received

the equity infusion, this allocation was

made using a discount rate for

uncreditworthy companies (see supra

section on ‘‘Subsidies Valuation

Information: Benchmarks for Loans and

Discount Rates.’’) We then divided the

benefit in the POI by CAS’ total sales

during the POI. Accordingly, we

preliminarily determine that a

countervailable benefit of 0.61 percent

ad valorem exists for CAS.

B. Pre-Privatization Assistance and Debt

Forgiveness

In Wire Rod, we determined the

following:

Cogne S.p.A. acquired the shares of Robles

S.r.l. and changed the company’s name to

[CAS], in 1992. * * *

At the end of 1992, Cogne S.p.A.

transferred most of the productive assets of

the Aosta facility to CAS through the capital

contribution procedure under Italian law.

Under this procedure, Cogne S.p.A. had

assets (and liabilities) assessed under the

oversight of the Italian Court and contributed

them to CAS in exchange for shares in CAS

worth exactly the net value of the

contribution. CAS officials explained that

pursuant to the capital contribution, CAS

received the liabilities associated with the

production process, while Cogne S.p.A.

retained the other liabilities which were

mostly long-term. From that point, CAS

became the operating company and Cogne

S.p.A. entered into liquidation. * * *

As of December 31, 1993, ILVA S.p.A.

issued a guarantee on behalf of Cogne S.p.A.

for the uncovered liabilities of the firm, and

the anticipated costs of the liquidation

process, for 380 billion lire. * * *

ILVA [was then divided] into three

companies: ILVA Laminati Piani, Acciai

Speciali Terni, and ILVA in Liquidazione.

* * * ILVA in Liquidazione, retained

responsibility for all of the ILVA entities

which could not be sold to private parties.

* * * The estimated costs of the liquidation,

10 trillion lire, covered all of the ILVA

companies including the subsidiaries. The

costs associated with the liquidation of

Federal Register / Vol. 66, No. 109 / Wednesday, June 6, 2001 / Notices 30423

Cogne S.p.A. were included in that total.

***

64 FR at 40478–40479 (citations

omitted).

Because CAS did not respond to our

questionnaire in this investigation, we

relied on information from the GOI and

Wire Rod to determine the amount of

pre-privatization assistance and debt

forgiveness benefitting CAS during the

POI.

As in Wire Rod, we continue to find

the GOI, in making available this preprivatization assistance and debt

forgiveness, provided a financial

contribution which was specific and

conferred a benefit upon CAS in the

amount of Cogne S.p.A’s total liabilities

and losses assumed by ILVA. Following

the methodology used in Wire Rod to

calculate the subsidy rate, we used a

discount rate for uncreditworthy

companies, as described supra in the

section on ‘‘Subsidies Valuation

Information: Benchmarks for Loans and

Discount Rates,’’ to allocate the benefits

over a 12-year AUL. We then divided

the benefit attributable to the POI by

CAS’’ total sales during the POI.

Accordingly, we preliminarily

determine that a countervailable benefit

of 10.12 percent ad valorem exists for

CAS.

Company Specific Subsidies Conferred

by the Provincial Government of

Bolzano

10. Province of Bolzano Assistance

A. Lease of Bolzano Industrial Site to

Valbruna

Falck sold Bolzano to Valbruna in

1995. Concurrent with the change in

ownership, Falck and Bolzano sold

Bolzano’s industrial site to the Province

of Bolzano (‘‘Province’’). The Province

paid for the property in full. At the same

time, Valbruna negotiated with the

Province to lease the Bolzano industrial

site and, on July 31, 1995, signed a

thirty-year lease. During the first two

years of the lease, Valbruna paid rent by

absorbing environmental remediation

and initial extraordinary maintenance

costs.

Although the Province provided some

information on the market for industrial

property, apparently very little

industrial property is available in the

Province. Valbruna and the Province

provided some information on leases

between the Province and other private

parties; however, the amount of

property covered by these leases is

much smaller than that covered by the

Valbruna lease and, therefore,

inappropriate for comparison purposes.

In any event, we do not find these leases

to represent a market-determined

negotiation between private parties

because the rents are set by law at 4.0

percent per annum of each property’s

net purchase price.

Consistent with Wire Rod, we

determine that the Province has

provided a financial contribution with

the meaning of section 771(5)(d)(3). We

further determine that the Province’s

provision of this lease is specific

because it is limited to Valbruna.

In determining the existence and

amount of the benefit, we have

compared the average annual return on

industrial leased property in Italy

during the POI to the rent paid by

Valbruna during the POI. This

comparison indicates that Valbruna

received a benefit in the amount of the

difference.

Valbruna has suggested we account

for the extraordinary maintenance

expenses it incurred during the POI. We

preliminarily decline to do so. Although

the Italian Civil Code obliges a landlord

to pay for extraordinary maintenance,

such as environmental remediation, this

obligation may be passed to the lessee.

Evidence on the record in Wire Rod

indicated long-term leases, such as the

one negotiated between Valbruna and

the Province, often require the lessee to

take responsibility for extraordinary

maintenance. Id. at 40481. We

specifically found the extraordinary

maintenance costs would have been

assigned to the lessee by a commercial

landlord. Id. at 40484. Therefore,

consistent with Wire Rod, we find the

average rate of return on commercial

leases remains an appropriate

benchmark, without any adjustments for

such costs. However, we will examine

this issue further at verification, time

permitting.

To calculate the subsidy to Valbruna

during the POI, we divided the benefit

(i.e., the difference between the average

rate of return on leased commercial

property in Italy during the POI and the

actual rent paid by Valbruna during the

POI) by Valbruna’s total sales during the

POI. Accordingly, we preliminarily

determine that a countervailable benefit

of 0.15 percent ad valorem exists for

Valbruna.

B. Environmental and Research and

Development Assistance to Bolzano

Under Law 25/81

Valbruna reported receiving two

grants under Law 25/81 for the

adaptation of existing facilities to new

environmental requirements

(‘‘environmental grants’’). As discussed

supra, we found assistance provided

under Article 13 through 15 of Law 25/

81 to be countervailable in Wire Rod.

Environmental grants were not

investigated in Wire Rod and it is not

clear which Article of Law 25/81

authorizes these environmental grants.

For the preliminary determination, we

have treated the environmental grants as

being distinct from Articles 13 through

15 grants.

Although we received general

information on the maximum amount of

benefits green-lighted by the EU, the

Province provided insufficient

information regarding the specificity

(particularly, de facto specificity) of the

environmental grants. Lacking this

information, we are drawing an adverse

inference and, as facts available, we

preliminarily determine the

environmental grants are specific within

the meaning of section 771(5A)(D)(iii) of

the Act.

The two grants received by Valbruna

under this program were approved in

1998. To calculate the benefit during the

POI, we allocated these grants over

Valbruna’s AUL and divided the benefit

attributable to the POI by Valbruna’s

total sales during the POI. Accordingly,

we preliminarily determine that a

countervailable benefit of 0.20 percent

ad valorem exists for Valbruna.

Company-Specific Subsidies Conferred

by the Regional Government of Valle

D’Aosta

11. Valle D’Aosta Regional Assistance

Associated With the Sale of CAS

In Wire Rod, we found the following

fact pattern:

[W]hen CAS was privatized, the land and

buildings were sold to the Autonomous

Region of Valle d’Aosta which now leases

back the facility to the new owners of CAS.

The framework for this triangular transaction

among ILVA, CAS, and the Region was

established through the protocols of

agreement signed November 19, 1993. The

Region * * * agreed to (1) purchase the land,

including the hydroelectric facilities owned

by ILVA Centrali Elettriche S.p.A. (ICE)

* * *, (3) to cover the costs of environmental

reclamation on the land * * *, and (4) to

supply electricity directly to CAS from the

ICE plants. In exchange, ILVA agreed to

transfer CAS to a private party by December

31, 1993, with a restructuring fund. The

purchaser of CAS’s shares agreed to (1)

vacate and abandon areas of the property not

used in production activity; and, (2) to

guarantee positions for 800 employees after

the privatization.

Id. FR at 40480.

A. Lease of Cogne Industrial Site

In Wire Rod, we determined the

following facts regarding the lease of the

Cogne industrial site:

After the purchase of the land and

buildings, Struttura Valle d’Aosta S.r.l.

(Structure), a company wholly-owned by the

Region, assumed the lease that had been

30424 Federal Register / Vol. 66, No. 109 / Wednesday, June 6, 2001 / Notices

between Cogne S.p.A. and CAS for the use

of the site until a new lease could be

negotiated. In 1996, Structure and CAS

entered into a thirty-year lease for the facility

which produces subject merchandise. The

new lease implements the commitments set

forth in the protocols of agreement: the

facility is leased to CAS; CAS undertakes all

maintenance on the facility (including

extraordinary maintenance); and CAS

commits to vacate approximately 50 percent

of the property in favor of the Region. The

lease was also designed to provide for the

stable employment of 800 employees at the

facility. * * *

The record evidence indicates that the

average rate of return on leased commercial

property in Italy is 5.7 percent. * * * As an

average, this rate reflects different terms,

lengths, and locations of lease contracts

throughout Italy. * * *

In applying the 5.7 percent rate, we have

determined that no adjustments to this rate

are warranted for either depreciation or

extraordinary maintenance payments. * * *

Id. FR at 40481 (citations omitted).

Consistent with Wire Rod, we determine

that the Regional Government has

provided a financial contribution within

the meaning of section 771(5)(d)(iii). We

further determine that the Regional

Government’s provision of this lease is

specific because it is limited to CAS.

In determining the existence and

amount of the benefit, we have

compared the average annual return on

industrial leased property in Italy

during the POI to the rent paid by CAS

during the POI. This comparison

indicates that CAS received a benefit in

the amount of the difference.

To calculate the subsidy to CAS

during the POI, we divided the benefit

(i.e., the difference between the average

rate of return on leased commercial

property in Italy during the POI and the

actual rent paid by CAS during the POI)

by CAS’ total sales during the POI.

Accordingly, we preliminarily

determine that a countervailable benefit

of 0.19 percent ad valorem exists for

CAS.

B. Waste Plant

In Wire Rod, we determined this

program did not exist because, at the

time, construction of the waste plant

had not yet begun. Id. at 40482. We

stated, however, we would continue to

review this program in the future to

determine if waste disposal services

were being provided for less than

adequate remuneration. Id.

In the original protocol agreement

between the Regional Government and

the purchaser of CAS, the Regional

Government stated it would construct,

under its own responsibility and at its

own expense, a waste disposal area

suitable for receiving and processing

waste. Construction of the waste plant

was reportedly begun on November 15,

1995, with completion expected on May

13, 2001. Therefore, during the POI the

waste plant was still under

construction.

On October 11, 1999, the Regional

Government enacted Decision 3502,

‘‘Payment to Cogne Acciai Speciali of

the Higher Costs Incurred For Disposal

In Waste Treatment Plants Of Its

Steelworks Waste Until Such Time That

The Pontey Waste Disposal Plant

Becomes Available,’’ as part of Regional

Law 4 dealing with the Cogne industrial

site. Under this Decision and beginning

in September 1999, the Regional

Government has been making payments

to CAS to offset costs incurred in

removing CAS’’ waste to facilities

located outside the region.

We preliminarily determine that the

payments to CAS are a financial

contribution within the meaning of

771(5)(D)(i) of the Act and that the

benefit is the amount of the grant. No

information exists on the record

indicating that any other companies

have received similar payments.

Accordingly, we find these payments to

be specific within the meaning of

section 771(5A)(D) of the Act. Based on

the foregoing, we find these benefits to

constitute a countervailable subsidy.

The Regional Government calculated

the cost to transport CAS’ waste outside

the region at twenty-six lire per

kilogram of waste and estimated a

maximum waste production of

50,000,000 kilograms per year.

Therefore, the maximum amount of the

grant would not exceed 1,300,000,000

lire. Because we have no information

regarding the actual amount that CAS

received during the POI, we have based

our calculations, as facts available, on

the estimated, maximum yearly

payment.

For purposes of this preliminary

determination, we are treating these

payments as recurring subsidies. We

have done this because these payments

are being made in lieu of a service that

the Regional Government obligated

itself to provide and, hence, the

payments are like the recurring

subsidies described in 19 CFR section

351.524(c)(1).

To calculate the subsidy to CAS, we

divided the maximum payment to CAS

by CAS’ total sales during the POI.

Accordingly, we preliminarily

determine that a countervailable benefit

of 0.35 percent ad valorem exists for

CAS.

C. Loans to CAS To Transfer Its Property

In Wire Rod, we determined that the

Regional Government agreed to finance

the cost of transferring CAS’ property off

the portion of the site not subject to the

lease. Id.

In this investigation, the GOI

confirmed that CAS received three

separate loans under this program to

transfer its property. In Wire Rod, we

found these loans to be specific and to

provide a financial contribution that

conferred a countervailable benefit. Id.

No information has been presented in

this investigation to warrant a

reconsideration of this finding. In this

investigation, we calculated the benefit

in the same manner as in Wire Rod, i.e.,

as the difference between the interest

that CAS would have paid on a

comparable commercial loan and the

amount actually paid.

In addition to the preferential interest

rate, CAS was relieved of making certain

payments on those loans during the POI.

Because of severe flooding in the region

during October 2000, the Regional

Government passed Decision 44 in

January of 2001. Decision 44 cancelled

the interest CAS had due in November

2000, and deferred the principal portion

of the November 2000 payment for two

to three payment periods. According to

the Regional Government, Decision 44

applied to companies that suffered

damage to property or equipment

covered by ‘‘easy-term’’ loans obtained

through the Region’s rotating funds

(including Regional Law 37, the law

under which CAS received its loans).

However, the Regional Government did

not provide information to substantiate

its claim regarding the availability of

Decision 44 benefits to a wide range of

companies or its use by multiple and

various companies. Thus, as facts

available, we find the interest

cancellation and principal deferral to be

de facto specific, and to constitute a

financial contribution under section

771(5A) and 771(5)(D) of the Act,

respectively.

To calculate the subsidy to CAS for

the May 2000 payment, which was

made on time, we divided the difference

between the interest due on the

benchmark loan by the interest actually

paid by CAS by CAS’ total sales during

the POI.

Regarding the cancellation of the

interest payment, we consider this to be

debt forgiveness and, as such, a benefit

exists at the time of forgiveness equal to

the amount of interest the government

has forgiven. 19 CFR section 351.508(a).

This benefit is treated as a non-recurring

subsidy and allocated over the

company’s AUL. 19 CFR section

351.508(c). However, because this

amount is less than 0.5 percent of CAS’

sales during the POI, we expensed the

full amount of the benefit in the POI.

Federal Register / Vol. 66, No. 109 / Wednesday, June 6, 2001 / Notices 30425

3 In the Initiation Notice, we referred to this

program as ‘‘Law 394/81 Export Marketing Grants’’.

However, Valbruna and the GOI have indicated that

only loans, not grants, are provided under this law.

We calculated the subsidy rate by

dividing the benefit by CAS’ total sales

during the POI.

Regarding the deferral of principal

payments, because CAS will have to

repay these funds eventually, we

consider this a short-term, zero-interest

loan for the duration of the deferral. To

calculate a subsidy rate, we used the

short-term interest rate (see supra

section on ‘‘Subsidies Valuation

Information: Benchmarks for Loans and

Discount Rates’’) in determining the

difference between what would have

been paid on a comparable commercial

loan and what was actually paid. We

then divided this amount by CAS’s total

sales during the POI.

Accordingly, for the May 2000 loan

payment, the cancellation of the

November 2000 interest payment, and

the deferral of the November 2000

principal payment, we preliminarily

determine that a countervailable benefit

of 0.64 percent ad valorem exists for

CAS.

II. Programs Preliminarily Determined

To Be Not Countervailable

Company Specific Subsidies Conferred

by the Provincial Government of

Bolzano

1. Environmental and Research and

Development Assistance to Bolzano

Under Law 44/92

Law 44/92 is aimed at promoting

technological innovation and research

and development within the Province.

Article 3 of Law 44/92 allows for the

provision of loans at reduced rates. In

1999, Valbruna received a long-term,

fixed-rate, low-interest loan under this

program in order to finance a research

and development program on ultraclean stainless steels and alloys.

Section 771(5A)(D) of the Act requires

domestic subsidies be specific in law or

in fact in order to be countervailable.

Eligibility for Law 44/92 does not

appear to be (1) contingent in law or fact

on export performance, (2) contingent

on the use of domestic rather than

imported goods, or (3) a domestic

subsidy within the definition of section

771(5A)(D) of the Act. Instead, we find

the record evidence in this investigation

indicates that loans under Law 44/92

were widely and evenly distributed

with no one sector or enterprise

receiving a disproportionate amount. As

a result, we preliminarily determine the

loan received by Valbruna under Law

44/92 is not specific within the meaning

of Section 771(5A) of the Act and, thus,

not countervailable.

IV. Programs Preliminarily Determined

To Be Not Used

Based on the information provided in

the responses, we determine no

responding companies applied for or

received benefits under the following

programs during the POI:

Government of Italy Programs

1. Capacity Reduction Payments Under

Articles 3 and 4 of Law 193/1984

While several respondents received

interest payment grants under Article 3,

for all of these respondents, either the

grant was not greater than 0.5 percent of

the respective company’s total sales or

the underlying loans over which we

would allocate the grant were fully

repaid prior to the POI. Falck is the only

company reported as having received

funds under Article 4. However, these

benefits to Falck were fully allocated in

Wire Rod prior to the POI. Accordingly,

no respondent benefitted from Article 3

or 4 benefitted during the POI.

2. Law 796/76 Exchange Rate

Guarantees

3. Article 33 of Law 227/77, Export

Credit Financing Under Law 227/77,

and Decree Law 143/98

4. Grants under Laws 46/82 and 706/85

5. Law 181/89 and Law 120/89

Law 181 was implemented to ease the

impact of employment reductions in the

steel crisis areas of Naples, Taranto,

Terni, and Genoa. The law targeted four

activities: (1) Promotion of investment

in reindustrialization, (2) promotion of

employment, (3) promotion of worker

retraining, and (4) early retirement.

Rodacciai is the only company that

reported receiving benefits under this

program. Arguing it was the workers

themselves that directly received any

benefits from this program, and not the

company, Rodacciai did not report the

amount of benefits provided under this

program. However, Rodacciai did

report, to the best its knowledge, that its

workers received benefits under this

program in 1996.

We have previously found this

program provides a countervailable

benefit. Preliminary Affirmative

Countervailing Duty Determination:

Grain-Oriented Electrical Steel From

Italy 59 FR 4682, 4688 (February 1,

1994) (‘‘GOES Prelim’’).

Although Rodacciai did not provide

specific information regarding the

amount of benefits received under this

program, Rodacciai did state its workers

received benefits in 1996. Because we

find Law 181, consistent with the GOES

Prelim, to provide recurring benefits,

any benefits actually received would

have been expensed fully in the year of

receipt, 1996. Therefore, while we

preliminarily find no benefits were

received in the POI, we intend to

examine this issue further at verification

to determine, inter alia, whether any

benefits were actually received during

the POI.

Finally, we note Law 181 is the

enactment by the Italian Parliament of

Decree Law 120. Once enacted into a

Law, a Decree Law no longer exists.

Therefore, Decree Law 120 no longer

exists.

6. Law 488/922, Legislative Decree 96/

93 and Circolare 38522

7. Law 341/95 and Circolare 50175/95

8. Law 675/77

A. Interest Grants on Bank Loans

B. Mortgage Loans

C. Interest Contribution on IRI Loans

D. Personnel Retraining Aid

9. Law 394/81 Export Marketing Loans 3

Law 394/81 provides low-interest rate

loans to finance up to 85 percent of the

cost of investment projects by Italian

companies seeking to develop or

increase a presence in markets outside

of the EU. According to the

questionnaire responses of the

respondents and the GOI, Valbruna is

the only respondent that received funds

under this law. According to Valbruna,

it received a loan under this program

during the POI to create a distribution

subsidiary in Mexico. Further,

according to Valbruna, this subsidiary

will distribute merchandise only in the

Mexican market and not for sales to the

United States. Therefore, consistent

with our approach when investigating a

similar export marketing program in

Final Affirmative Countervailing Duty

Determination: Certain Pasta from Italy,

61 FR 30288, 30293 (June 14, 1996)

(regarding ‘‘Export Marketing Grants

Under Law 304/90’’), we preliminarily

determine any benefit from this program

to be tied to Valbruna’s Mexican sales

and, accordingly, find that this program

did not benefit Valbruna’s POI sales of

subject merchandise to the United

States.

10. Law 481/94 (and Precursors) Grants

for Reduced Production

11. Law 489/94

Valbruna initially reported receiving

benefits under Law 549/95. However, in

supplemental responses, Valbruna and

the GOI indicated these benefits were

30426 Federal Register / Vol. 66, No. 109 / Wednesday, June 6, 2001 / Notices

actually received under Law 489/94.

According to Valbruna, Law 489/94 was

generally available to all businesses in

Italy and provided tax relief on fifty

percent of the amount a company’s 1995

investments in tangible fixed assets

exceeded the average investment of the

previous five years. Unlike Law 549/95,

no evidence exists on the record of this

investigation indicating relief provided

under Law 489/94 will be repaid.

Assuming arguendo this program is

countervailable, an exemption or

remission of a direct tax is considered

as ‘‘having been received on the date on

which the recipient firm would

otherwise have had to pay the taxes

associated with the exemption or

remission. Normally, this date will be

the date on which the firm filed its tax

return.’’ 19 CFR section 351.509(b).

Because the tax return reflecting any

benefit under Law 489/94 was filed

prior to the POI and, hence, any benefit

would be attributed to Valbruna prior to

the POI, we have not analyzed this

program further.

Regional Government of Valle D’Aosta

Subsidy Programs

12. Valle D’Aosta Regional Law 64/92

In Wire Rod, benefits received under

this program were found to be less than

0.5 percent of CAS’’ sales during the

POI, the year of approval and, thus,

were expensed in the year of receipt. 64

FR at 40483. According to the Regional

Government of Aosta, CAS received no

new amounts under this programs since

the POI covered by Wire Rod.

European Union Subsidies

12. ECSC Article 56 Conversion Loans,

Interest Rebates, and Restructuring

Grants

13. European Regional Development

Fund

14. Commission Decision 88/588 and

Resider II.

Company Specific Subsidies Conferred

by the Government of Bolzano

15. Province of Bolzano Assistance:

Lease Exemption Under Valbruna/

Bolzano Lease

In Wire Rod, benefits received under

this program were found to be less than

0.5 percent of CAS’’ sales during the

POI, the year of approval and, thus,

were expensed in the year of receipt. 64

FR at 40485. No new amounts were

reported to have been received since the

POI in Wire Rod under this program.

Company Specific Subsidies Conferred

by the Regional Government of Valle

D’Aosta

16. Valle D’Aosta Regional Assistance

Associated With the Sale of CAS:

Provision of Electricity

As part of the original protocols in

which the Regional Government

purchased the Cogne industrial site, the

operator of ILVA’s hydroelectric plants,

ILVA Centrali Elettrische S.p.A. (‘‘ICE’’)

(now known as Compagnia Valdostana

delle Acque S.p.A. (‘‘Valdostana’’)) was

acquired. Using Valdostana, the

Regional Government planned to supply

electricity directly to CAS through a

consortium (‘‘Consorzio’’) (CAS would

be a member of the Consorzio through

its planned purchase of shares in

Valdostana).

In Wire Rod, we stated the law at that

time did not permit CAS to purchase

electricity from entities other than

ENEL, the state-owned electric

company. 64 FR at 40482. We also

stated, however, should the law change,

we would reexamine the

countervailability of this program. Id.

Because the Regional Government has

reported in this investigation that CAS

decided not to acquire shares in

Valdostana and does not purchase

electricity from the Consorzio, we

preliminarily find this program not

used.

Verification

In accordance with section 782(i)(1) of

the Act, we will verify the information

submitted by the respondents prior to

making our final determination.

Suspension of Liquidation

In accordance with section

703(d)(1)(A)(i) of the Act, we calculated

an individual rate for each manufacturer

of the subject merchandise. We

preliminarily determine the total

estimated net countervailable subsidy

rates to be:

Producer/exporter

Net subsidy

rate

(percent)

Cogne Acciai Speciali S.r.l. ...... 12.59

Acciaierie Valbruna S.r.l./

Acciaierie Bolzano S.r.l. ........ 0.60

Acciaiera Foroni S.p.A. ............. 0.00

Trafileria Bedini S.r.l. ................ 0.01

Italfond S.p.A. ........................... 0.18

Rodacciai S.p.A. ....................... 0.07

All Others .................................. 12.59

In accordance with sections

777A(e)(2)(B) and 705(c)(5)(A), we have

set the ‘‘all others’’ rate as CAS’’ rate,

because the rates for all other

investigated companies are either zero

or de minimis. We note that although

portions of CAS’’ rate were based on

adverse facts available, we based the

majority of our calculations on

information provided by the GOI and EC

in this investigation.

In accordance with section 703(d) of

the Act, we are directing the U.S.

Customs Service to suspend liquidation

of all entries of stainless steel bar from

Italy for CAS and for any noninvestigated exporters which are

entered, or withdrawn from warehouse,

for consumption on or after the date of

the publication of this notice in the

Federal Register, and to require a cash

deposit or bond for such entries of the

merchandise in the amounts indicated

above. This suspension will remain in

effect until further notice. Liquidation of

entries from Valbruna, Foroni, Bedini,

Italfond, and Rodacciai will not be

suspended at this time because we have

preliminarily determined their rates to

be either zero or de minimis.

ITC Notification

In accordance with section 703(f) of

the Act, we will notify the ITC of our

determination. In addition, we are

making available to the ITC all

nonprivileged and nonproprietary

information relating to this

investigation. We will allow the ITC

access to all privileged and business

proprietary information in our files,

provided the ITC confirms it will not

disclose such information, either

publicly or under an administrative

protective order, without the written

consent of the Assistant Secretary for

Import Administration.

In accordance with section 705(b)(2)

of the Act, if our final determination is

affirmative, the ITC will make its final

determination within 45 days after the

Department makes its final

determination.

Public Comment

In accordance with 19 CFR section

351.310, we will hold a public hearing,

if requested, to afford interested parties

an opportunity to comment on this

preliminary determination. The hearing

is tentatively scheduled to be held 57

days from the date of publication of this

preliminary determination, at the U.S.

Department of Commerce, 14th Street

and Constitution Avenue N.W.,

Washington, DC 20230. Individuals who

wish to request a hearing must submit

a written request within 30 days of the

publication of this notice in the Federal

Register to the Assistant Secretary for

Import Administration, U.S. Department

of Commerce, Room 1870, 14th Street

and Constitution Avenue, NW.,

Washington, D.C. 20230. Requests for a

Federal Register / Vol. 66, No. 109 / Wednesday, June 6, 2001 / Notices 30427

public hearing should contain: (1) The

party’s name, address, and telephone

number; (2) the number of participants;

(3) the reason for attending; and (4) a list

of the issues to be discussed. An

interested party may make an

affirmative presentation only on

arguments included in that party’s case

brief and may make a rebuttal

presentation only on arguments

included in that party’s rebuttal brief.

Parties should confirm by telephone the

time, date, and place of the hearing 48

hours before the scheduled time.

In addition, six copies of the business

proprietary version and six copies of the

nonproprietary version of the case briefs

must be submitted to the Assistant

Secretary no later than 50 days from the

publication of this notice. As part of the

case brief, parties are encouraged to

provide a summary of the arguments not

to exceed five pages and a table of

statutes, regulations, and cases cited.

Six copies of the business proprietary

version and six copies of the

nonproprietary version of the rebuttal

briefs must be submitted to the

Assistant Secretary no later than 5 days

after the filing of case briefs. Written

arguments should be submitted in

accordance with 19 CFR section 351.309

and will be considered if received

within the time limits specified above.

This determination is published

pursuant to sections 703(f) and 777(i) of

the Act.

Dated: May 29, 2001.

Faryar Shirzad,

Assistant Secretary for Import

Administration.

[FR Doc. 01–14133 Filed 6–5–01; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric

Administration (NOAA)

Science Advisory Board

AGENCY: Office of Oceanic and

Atmospheric Research, NOAA, DOC.

ACTION: Notice of Open Meeting.

SUMMARY: The Science Advisory Board

(SAB) was established by a Decision

Memorandum dated September 25,

1997, and is the only Federal Advisory

Committee with responsibility to advise

the Under Secretary of Commerce for

Oceans and Atmosphere on long- and

short-range strategies for research,

education, and application of science to

resource management. SAB activities

and advice provide necessary input to

ensure that National Oceanic and

Atmospheric Administration (NOAA)

science programs are of the highest

quality and provide optimal support to

resource management.

TIME AND DATE: The meeting will be held

Tuesday, June 26, 2001, from 1 p.m. to

5 p.m.; Wednesday, June 27, 2001, from

8 a.m. to 5 p.m.; and Thursday, June 28,

from 8 a.m. to 12:30 p.m.

ADDRESSES: The meeting on Tuesday,

June 26 will be held at the National

Marine Fisheries Service Laboratory,

110 Shaffer Road, Santa Cruz, CA. On

Wednesday, June 27, and Thursday,

June 28, the meeting will be held at the

West Coast Santa Cruz Hotel, 175 West

Cliff Drive, Santa Cruz, CA.

STATUS: The meeting will be open to

public participation with four 15-

minute time periods set aside for

questions or direct verbal comments

from the public on agenda items and

two 30-minute periods for public

statements on any NOAA-related

subject. The SAB expects that public

statements presented at its meetings will

not be repetitive of previously

submitted verbal or written statements.

In general, each individual or group

making a verbal presentation will be

limited to a total time of five (5)

minutes. Written comments (at least 35

copies) should be received in the SAB

Executive Director’s Office by June 18,

2001, in order to provide sufficient time

for SAB review. Written comments

received by the SAB Executive Director

after June 18 will be distributed to the

SAB, but many not be reviewed prior to

the meeting date. Approximately thirty

(30) sets will be available for the public

including five (5) seats reserved for the

media. Seats will be available on a firstcome, first-served basis.

Matters to be Considered: The

meeting will include the following

topics: (1) Fisheries science in the

NOAA line offices and their programs,

(2) The role of academia and other

partners in fisheries science, (3)

Impediments to effective NMFS

management and science practices, (4)

Briefings on outcomes of NOAA

Constituents Workshop, (5) Review of

Department of Commerce’s Aquaculture

Guidelines, (6) Review and discussion

of the Report of the Panel on Strategies

for Climate Monitoring, (7) Public Input

Sessions with SAB discussion, and (8)

SAB Sub-Committee and Working

Group Reports.

FOR FURTHER INFORMATION CONTACT: Dr.

Michael Uhart, Executive Director,

Science Advisory Board, NOAA, Rm.

10600, 1315 East-West Highway, Silver

Spring, Maryland 20910. (Phone: 301–

713–9121, E-mail:

Michael.Uhart@noaa.gov); or visit the

NOAA SAB website at http://

www.sab.noaa.gov.

Dated: June 1, 2001.

Louisa Koch,

Deputy Assistant Administrator, Office of

Oceanic and Atmospheric Research.

[FR Doc. 01–14265 Filed 6–5–01; 8:45 am]

BILLING CODE 3510–KD–M

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric

Administration

[I.D. 053101G]

Marine Mammals; File No. 756–1630

AGENCY: National Marine Fisheries

Service (NMFS), National Oceanic and

Atmospheric Administration (NOAA),

Commerce.

ACTION: Receipt of application.

SUMMARY: Notice is hereby given that

Dan Tapster, BBC Natural History Unit,

Broadcasting House, Whiteladies Road,

Bristol, BS8 2LR, United Kingdom, has

applied in due form for a permit to take

bottlenose dolphins (Tursiops

truncatus) for purposes of commercial/

educational photography.

DATES: Written or telefaxed comments

must be received on or before July 6,

2001.

ADDRESSES: The application and related

documents are available for review

upon written request or by appointment

in the following office(s):

Permits and Documentation Division,

Office of Protected Resources, NMFS,

1315 East-West Highway, Room 13705,

Silver Spring, MD 20910; phone (301)

713–2289; fax (301) 713–0376; and

Southeast Region, NMFS, 9721

Executive Center Drive North, St.

Petersburg, FL 33702-2432; phone (727)

570–5301; fax (727) 570–5320.

FOR FURTHER INFORMATION CONTACT:

Lynne Barre or Jill Lewandowski, (301)

713–2289.

SUPPLEMENTARY INFORMATION: The

subject permit is requested under the

authority of the Marine Mammal

Protection Act of 1972, as amended

(MMPA; 16 U.S.C. 1361 et seq.) and the

Regulations Governing the Taking and

Importing of Marine Mammals (50 CFR

part 216). Section 104 (c)(6) of the

MMPA provides for photography

permits for educational or commercial

purposes involving non-endangered and

non-threatened marine mammals in the

wild. NMFS is currently working on

proposed regulations to implement this

provision. However, in the meantime,

NMFS has received and is processing

this request as a ‘‘pilot’’ application for