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COMMISSION RECOMMENDATION No 2129/83/ECSC

of 27 July 1983

imposing a definitive countervailing duty on imports of certain steel plates originating in Brazil and suspending the application of this duty

THE COMMISSION OF THE EUROPEAN

COMMUNITIES,

Having regard to the Treaty establishing the European Coal and Steel Community,

Having regard to Commission recommendation No 3018/79/ECSC of 21 December 1979 on protection against dumped or subsidized imports from countries not members of the European Coal and Steel Community (1), as last amended by recommendation No 3025/82/ECSC (2), and in particular Article 12 thereof,

After consultations within the Advisory Committtee as provided for under the above recommendation,

Whereas in May 1982 the Commission received a complaint, lodged by the European Confederation of Iron and Steel Industries (Eurofer) on behalf of almost all Community producers of sheets and plates, of iron or steel, not further worked than hot-rolled, of a thickness of 3 mm or more;

Whereas, since the complaint provided sufficient evidence of subsidies being paid on the production or export of like products originating in Brazil and of material injury resulting therefrom, the Commission accordingly announced, by a notice published in the Official Journal of the European Communities (3), the initiation of a proceeding concerning imports of certain sheets and plates, of iron or steel, originating in Brazil and commenced an investigation of the matter at Community level;

Whereas the Commission officially so advised the exporters and importers known to be concerned, as well as the representatives of the exporting country and the complainants;

Whereas the Commission gave the Brazilian Government and the parties directly concerned the opportunity to make known their views in writing and to be heard orally; whereas some exporters and the Brazilian Government have taken this opportunity;

Whereas, since the Brazilian authorities objected to a verification of the subsidies being paid to the three Brazilian exporters concerned, Cosipa, CSN and Usiminas, the Commission had to make its findings on the basis of the facts available and primarily based the determination of the subsidies involved on the evidence obtained during the preceding countervailing investigation concerning steel sheets originating in Brazil, the production and exports of which are covered by the same subsidy programmes as the production and exports of the steel plates under consideration;

Whereas the Commission chose 1 August 1981 to 31 July 1982 as the reference period for its investigation of subsidization;

Whereas the Commission determined that the Brazilian exports under consideration have benefited from subsidies with regard to the IPI export credit premium, preferential working capital financing under resolution 674 and the CDI investment programme;

Whereas the IPI export credit premium and the supply of preferential working capital under resolution 674 are contingent on export performance while the benefits of the CDI programme are available irrespective of exports;

Whereas the IPI export credit premium is paid to the Brazilian steel exporters on exportation of steel plates; whereas the rate of the premium has been 15 % of an adjusted fob value of the exported goods until 30 March 1982 and has subsequently been reduced to 11 %; whereas, following announcements made by the Brazilian Government it will be maintained at this level until 30 April 1985; whereas there is no verified information available to the Commission concerning the exact amounts to be deducted from the nominal fob prices for the purpose of the calculation of the IPI premium; whereas, under these circumstances, the effect of this programme is determined to be 11 % of the fob export price;

Whereas, with regard to preferential working capital financing made available by the Central Bank of Brazil under resolution 674, all three companies have benefited from the provision of such working capital at a rate of 40 % per annum; whereas, at the same time,

the comparable commercial rate available to them was 68 % while the Treasury bill rate (ORTN), which is equivalent to the cost of short-term money to the Brazilian Government, was even higher; whereas it is appropriate, therefore, to calculate the subsidy effect of this programme during the investigation period by subtracting the amount of the interest payable on the preferential loans during that period from the amount of interest which would have been payable had the loans been granted at the normal commercial rate and to allocate the difference to the total fob value of exports made during the investigation period; whereas, however, no verified information is available to the Commission concerning the total amount of outstanding loans during June and July 1982 or the total fob value of exports during the investigation period; whereas under these circumstances it is appropriate to determine the subsidy effect on the basis of the evidence obtained in the preceding investigation concerning steel sheets originating in Brazil which covered the period 1 June 1981 to 31 May 1982; whereas the subsidy effect thus determined is 1,38 % for Cosipa, 3,56 % for CSN and 0,29 % for Usiminas;

Whereas the CDI investment programme, under certain circumstances, grants duty-free treatment and an exemption from IPI tax on imported machinery; whereas the total amount of import duty and IPI tax saved by Cosipa and Usiminas since 1971, when they first benefited from this programme, has been allocated over a period of 15 years which is the usual depreciation period for capital goods in Brazil; whereas, as has been verified by the Commission in the preceding investigation, the amounts thus obtained correspond to 0,44 % of Cosipa's and 0,16 % of Usiminas' total domestic and export fob sales value in 1981; whereas CSN only disclosed those savings under the CDI programme which accrued in 1981, but has admitted benefiting from this programme prior to that time; whereas the Commission considered it appropriate, therefore, to allocate the entire 1981 amount to the fob value of all sales made in that year; whereas the subsidy effect thus calculated for CSN is 2,88 %;

Whereas the aggregate effect of the export subsidies determined to have been granted was 12,71 %, equivalent to 34,53 ECU per tonne while the CDI investment programme had an aggregate effect of 0,59 %, equivalent to 1,60 ECU per tonne;

Whereas, in the context of its anti-dumping investigation concerning imports of like products originating in Brazil, the Commission has determined that imports of hot-rolled steel plates, of a thickness of 3 mm or more, originating in Brazil have been causing material injury to a Community industry; whereas the facts and considerations which led the Commission to this conclusion are set out in Commission recommendation No 1230/83/ECSC imposing a definitive anti-dumping duty on imports of certain sheets and plates, of iron or steel, originating in Brazil (1); whereas, based on the same facts and considerations, the Commission now determines that subsidized imports of hot-rolled steel plates, of a thickness of 3 mm or more, originating in Brazil have caused material injury to the Community industry concerned;

Whereas, in the serious conditions experienced by the Community steel industry, the interests of the Community call for the imposition of a definitive countervailing duty; whereas, having regard to the injury caused, it is appropriate that the amount of the duty should be equal to the cumulative effect to the subsidies on the export prices;

Whereas, under Community law, no product is to be subject to both anti-dumping and countervailing duties for the purpose of dealing with one and the same situation arising from dumping or from subsidization, that is the sale of products for export at a price lower than the comparable price paid or payable for the like product when sold on the domestic market;

Whereas, under these circumstances, it is appropriate to suspend the application of the countervailing duty to the extent that it offsets the effect of the export subsidies; whereas, having regard to the extent of protection afforded to the Community industry by the anti-dumping duty already in force, it is also appropriate for the time being to suspend the countervailing duty to the extent that it offsets the effects of the CDI programme,

MAKES THE FOLLOWING RECOMMENDATION:

Article 1

1. A definitive countervailing duty is hereby imposed on sheets and plates, of iron or steel, not further worked than hot-rolled, of a thickness of 3 mm or more, falling within subheading 73.13 B I ex a) of the Common Customs Tariff and corresponding to NIMEXE codes 73.13-17, 19, 21 and 23, originating in Brazil.

2. The amount of the duty shall be 36,14 ECU per 1 000 kilograms net.

3. The provisions in force concerning customs duties shall apply for the application of the duty.

Article 2

The application of the countervailing duty imposed by Article 1 is hereby suspended.

Article 3

This recommendation shall enter into force on the day following its publication in the Official Journal of the European Communities.

Done at Brussels, 27 July 1983.

For the Commission

Wilhelm HAFERKAMP

Vice-President

(1) OJ No L 339, 31. 12. 1979, p. 15.

(2) OJ No L 317, 13. 11. 1982, p. 17.

(3) OJ No C 197, 31. 7. 1982, p. 3.

(1) OJ No L 131, 20. 5. 1983, p. 13.