[Federal Register Volume 61, Number 85 (Wednesday, May 1, 1996)]
[Notices]
[Pages 19259-19261]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10827]



-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE
International Trade Administration
[C-791-001]


Ferrochrome From South Africa; Preliminary Results of 
Countervailing Duty Administrative Review

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

ACTION: Notice of Preliminary Results of Countervailing Duty 
Administrative Review.

-----------------------------------------------------------------------

SUMMARY: The countervailing duty order on ferrochrome from South Africa 
was revoked effective January 1, 1995, pursuant to section 753 of the 
Tariff Act of 1930, as amended by the Uruguay Round Agreements Act (the 
Act) (60 FR 40568). The Department of Commerce (the Department) is 
conducting an administrative review of this order to determine the 
appropriate assessment rate for entries made during the last review 
period prior to the revocation of the order (January 1, 1994, through 
December 31, 1994). We preliminarily determine the net subsidy to be de 
minimis or zero for all companies for the period January 1, 1994 
through December 31, 1994 (see ``Preliminary Results of Review'' 
section). If the final results of this review remain the same as these 
preliminary results, the Department intends to instruct the U.S. 
Customs Service to liquidate, without regard to countervailing duties, 
shipments of the subject merchandise from all companies exported on or 
after January 1, 1994 and entered on or before December 31, 1994. 
Because this order has been revoked, the Department will not issue 
further instructions with respect to cash deposits of estimated 
countervailing duties.

EFFECTIVE DATE: May 1, 1996.

FOR FURTHER INFORMATION CONTACT: Melanie Brown or Dana Mermelstein, 
Office of Countervailing Compliance, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, N.W., Washington, D.C. 20230; 
telephone: (202) 482-2786.

SUPPLEMENTARY INFORMATION:

Background

    On April 9, 1981, the Department published in the Federal Register 
(46 FR 21155) the countervailing duty order on ferrochrome from South 
Africa. On March 7, 1995, the Department published a notice of 
``Opportunity to Request an Administrative Review'' (60 FR 12540 ) of 
this countervailing duty order. We received a timely request for review 
from Chrome Resources (Pty) Ltd. (Chrome Resources), Consolidated 
Metallurgical Industries Limited (CMI), Feralloys Limited (Feralloys), 
and Samancor Limited (Samancor), South African manufacturers/exporters 
of ferrochrome to the United States. In accordance with section 355.22 
of the Department's Interim Regulations, this review covers only those 
producers or exporters of the subject merchandise for which a review 
was specifically requested (see Antidumping and Countervailing Duties: 
Interim Regulations; Request for Comments, 60 FR 25130 (May 11, 1995) 
(Interim Regulations). Therefore, this review covers the following 
companies: Chrome Resources, CMI, Feralloys, and Samancor.
    On November 22, 1995, we extended the period for completion of the 
preliminary and final results pursuant to section 751(a)(3) of the 
Tariff Act of 1930, as amended. See Extension of the Time Limit for 
Certain Countervailing Duty Administrative Reviews, 60 FR 55699. As 
explained in the memoranda from the Assistant Secretary for Import 
Administration dated November 22, 1995, and January 11, 1996, all 
deadlines were further extended to take into account the partial 
shutdowns of the Federal Government from November 15 through November 
21, 1995, and

[[Page 19260]]

December 15, 1995, through January 6, 1996. Therefore, the deadline for 
these preliminary results is no later than April 30, 1996, and the 
deadline for the final results of this review is no later than October 
28, 1996.

Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the statute are 
references to the provisions of the Act. The Department is conducting 
this administrative review in accordance with section 751(a) of the 
Act. References to the Countervailing Duties; Notice of Proposed 
Rulemaking and Request for Public Comments, 54 FR 23366 (May 31, 1989) 
(Proposed Regulations), are provided solely for further explanation of 
the Department's countervailing duty practice. Although the Department 
has withdrawn the particular rulemaking proceeding pursuant to which 
the Proposed Regulations were issued, the subject matter of these 
regulations is being considered in connection with an ongoing 
rulemaking proceeding which, among other things, is intended to conform 
the Department's regulations to the Uruguay Round Agreements Act 
(URAA). See 60 FR 80 (January 3, 1995).

Scope of the Review

    Imported products covered by this review are South African 
ferrochrome, which is currently classifiable under items 7202.41.00, 
7202.49.10 and 7202.49.50 of the Harmonized Tariff Schedule (HTS). The 
HTS item numbers are provided for convenience and Customs purposes. The 
written description remains dispositive.

Analysis of Programs

I. Program Previously Determined To Confer Subsidies

Regional Industrial Development Incentives
    The Government of South Africa offered several incentives to 
companies located in geographically remote areas, designated as 
industrial development points. We determined in our previous review of 
this order that, as regional subsidies, these incentives constitute 
countervailable subsidies within the meaning of the Act. See 
Preliminary Results of Countervailing Duty Administrative Review; 
Ferrochrome from South Africa, 56 FR 12170 (March 22, 1991) 
(Ferrochrome Preliminary Results); Final Results of Countervailing Duty 
Administrative Review; Ferrochrome from South Africa, 56 FR 33254 (July 
19, 1991) (Ferrochrome Final Results). No new information or evidence 
of changed circumstances has been submitted in this proceeding to 
warrant reconsideration of this finding.
    A. Subsidy on Housing for Key Personnel: The Regional Industrial 
Development Authorities subsidize housing for key personnel at 
industrial development points for a maximum of 20 years on new mortgage 
loans and the outstanding principal of existing loans. The government 
subsidizes the interest paid at a rate of 4.25 percent, allowing the 
company to pay interest at the interest rate charged by the largest 
building society minus 4.25 percent. There is a proviso that the 
recipient company must pay interest at the rate of at least six 
percent; the Regional Industrial Development Authorities pay the 
interest differential monthly. Chrome Resources and Samancor reported 
having worker housing loans with the Industrial Development Corporation 
which were subsidized by the Regional Industrial Development 
Authorities.
    Chrome Resources reported the amount of the government's payments 
toward the interest accrued on the housing loans during the review 
period. Consistent with Ferrochrome Preliminary Results, we treated 
this amount as an annually recurring grant, and calculated Chrome 
Resources' benefit by dividing this amount by Chrome Resources' total 
sales during this period.
    Rather than reporting the government's payments on its behalf, 
Samancor reported the loan information. Thus, in accordance with the 
Proposed Regulations (sections 355.49(d)(1) and 355.44(b)(5)) we 
calculated the interest differential, using as our benchmark the 
Official Building Society Rate, as reported in the questionnaire 
response. Because the amount of interest actually paid during the 
review period was less than the interest which would have been paid at 
the benchmark rate, we calculated the difference, and divided this 
amount by the company's total sales during the review period. On these 
bases, we preliminarily determine the net subsidy from this program to 
be 0.01 percent ad valorem for Chrome Resources and 0.001 percent ad 
valorem for Samancor.
    B. Labor Incentive: This incentive is offered as an annual cash 
grant for seven years to approved regional development industries. The 
incentive is calculated on the basis of the number of employees 
directly involved in the manufacturing process at the industrial 
development point, and is granted as a percentage of the average 
salary/wage per employee. Chrome Resources received an incentive under 
this program. In Ferrochrome Preliminary Results, we determined that 
this incentive is an annually recurring grant (56 FR at 12171). As 
such, we expense the benefit in the year of receipt, consistent with 
our practice as described the General Issues Appendix appended to the 
Final Countervailing Duty Determination; Certain Steel Products from 
Austria (58 FR 37217, 37226 (July 9, 1993)) (General Issues Appendix) 
and section 355.48(a) of the Proposed Regulations. To calculate the 
benefit resulting from this program, we divided the amount of the grant 
received during the review period by the company's total sales during 
the same period. On this basis, we preliminarily determine the net 
subsidy from this program to be 0.08 percent ad valorem for Chrome 
Resources.
    C. Interest Concession: An interest concession is paid quarterly as 
a cash grant to approved industries at industrial development points, 
for a period of ten years, on 100 percent of the company's investment 
on land and buildings (excluding residential accommodations), and on 50 
percent of their investment in other assets. The value of the grant is 
based on the interest cost as reflected in the company's financial 
statements and is calculated on the basis of a pre-determined market-
related interest rate. Chrome Resources received benefits under this 
program. In Ferrochrome Preliminary Results (56 FR at 12171), we 
determined that this grant is recurring. Thus, to calculate the benefit 
attributable to this program, we divided the amount of the grant 
received during the review period by the company's total sales during 
the review period. See the General Issues Appendix (58 FR at 37226); 
see also Proposed Regulations (54 FR 23384). On this basis, we 
preliminarily determine the net subsidy from this program to be 0.11 
percent ad valorem for Chrome Resources.

II. Programs Preliminarily Determined To Be Not Used

    We examined the following programs and preliminarily find that the 
producers and/or exporters of the subject merchandise did not apply for 
or receive benefits under these programs during the period of review.

A. Export Incentive Program
B. General Export Incentive Scheme
C. Industrial Development Corporation Export Loans
D. Preferential Rail Rates
E. Beneficiation Allowance/Electricity Rebate
F. Government Loan Guarantees

Preliminary Results of Review

    For the period January 1, 1994 through December 31, 1994, we

[[Page 19261]]

preliminarily determine the net subsidies to be as follows:

------------------------------------------------------------------------
                                                                  Rate  
                    Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
Chrome Resources (Pty) Ltd...................................     00.20 
Consolidated Metallurgical Industries Limited................     00.00 
Feralloys Limited............................................     00.00 
Samancor Limited.............................................     00.001
------------------------------------------------------------------------

    In accordance with the Act, any rate less than 0.5 percent ad 
valorem in an administrative review is de minimis.
    The URAA replaced the general rule in favor of a country-wide rate 
with a general rule in favor of individual rates for investigated and 
reviewed companies. The procedures for countervailing duty cases are 
now essentially the same as those in antidumping cases, except as 
provided for in section 777(e)(2)(B) of the Act. Requests for 
administrative reviews must now specify the companies to be reviewed. 
See 19 CFR Sec. 355.22(a). The requested review will normally cover 
only those companies specifically named. Pursuant to 19 CFR 
Sec. 355.22(g), for all companies for which a review was not requested, 
duties must be assessed at the cash deposit rate previously ordered. 
Accordingly, for the period January 1 through December 31, 1994, the 
assessment rates applicable to all non-reviewed companies covered by 
this order are the cash deposit rates in effect at the time of entry.
    If the final results of this review remain the same as these 
preliminary results, the Department intends to instruct the U.S. 
Customs Service to liquidate, without regard to countervailing duties, 
shipments of the subject merchandise from Chrome Resources (Pty) Ltd., 
Consolidated Metallurgical Industries Limited, Feralloys Limited, and 
Samancor Limited exported on or after January 1, 1994 and entered on or 
before December 31, 1994.
    This countervailing duty order was subject to section 753 of the 
Act. See Countervailing Duty Order; Opportunity to Request a Section 
753 Injury Investigation, 60 FR 27,963 (May 26, 1995). Because no 
domestic interested parties exercised their right under section 753(a) 
of the Act to request an injury investigation, the International Trade 
Commission made a negative injury determination with respect to this 
order, pursuant to section 753(b)(4) of the Act. As a result, the 
Department revoked this countervailing duty order, effective January 1, 
1995, pursuant to section 753(b)(3)(B) of the Act. Revocation of 
Countervailing Duty Orders, 60 FR 40568 (August 9, 1995). Accordingly, 
the Department will not issue further instructions with respect to cash 
deposits of estimated countervailing duties.

Public Comment

    Parties to the proceeding may request disclosure of the calculation 
methodology and interested parties may request a hearing not later than 
10 days after the date of publication of this notice. Interested 
parties may submit written arguments in case briefs on these 
preliminary results within 30 days of the date of publication. Rebuttal 
briefs, limited to arguments raised in case briefs, may be submitted 
seven days after the time limit for filing the case brief. Parties who 
submit argument in this proceeding are requested to submit with the 
argument (1) a statement of the issue and (2) a brief summary of the 
argument. Any hearing, if requested, will be held seven days after the 
scheduled date for submission of rebuttal briefs. Copies of case briefs 
and rebuttal briefs must be served on interested parties in accordance 
with section 355.38 of the Department's Interim Regulations.
    Representatives of parties to the proceeding may request disclosure 
of proprietary information under administrative protective order no 
later than 10 days after the representative's client or employer 
becomes a party to the proceeding, but in no event later than the date 
the case briefs, under 19 CFR Sec. 355.38, are due. The Department will 
publish the final results of this administrative review including the 
results of its analysis of issues raised in any case or rebuttal brief 
or at a hearing. This administrative review and notice are in 
accordance with section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)).

    Dated: April 25, 1996.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 96-10827 Filed 4-30-96; 8:45 am]
BILLING CODE 3510-DS-P