Preliminary Affirmative Countervailing Duty Determination: Grain- Oriented Electrical Steel From Italy

DEPARTMENT OF COMMERCE

[C-475-812]

Preliminary Affirmative Countervailing Duty Determination: Grain-

Oriented Electrical Steel From Italy

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: February 1, 1994.

FOR FURTHER INFORMATION CONTACT: Annika L. O'Hara or David R. Boyland,

Office of Countervailing Investigations, Import Administration, U.S.

Department of Commerce, room 3099, 14th Street and Constitution Avenue,

NW., Washington, DC 20230; telephone (202) 482-4198 and (202) 482-0588,

respectively.

PRELIMINARY DETERMINATION: The Department preliminarily determines that

benefits which constitute subsidies within the meaning of section 701

of the Tariff Act of 1930, as amended (``the Act''), are being provided

to manufacturers, producers, or exporters in Italy of grain-oriented

electrical steel. For information on the estimated net subsidies,

please see the Suspension of Liquidation section of this notice.

Case History

Since the publication of the notice of initiation in the Federal

Register (58 FR 49018, September 21, 1993), the following events have

occurred.

On September 20, 1993, we issued a questionnaire to the European

Community (``EC'') in Washington, DC, concerning petitioners'

allegations. On October 21, 1993, we received a response from the EC.

We issued deficiency questionnaires to the EC on November 1, 1993, and

January 10, 1994, and we received responses on November 19, 1993, and

January 18, 1994.

On September 23, 1993, we issued a questionnaire to the Government

of Italy (``GOI'') in Washington, DC, concerning petitioners'

allegations. The GOI indicated on September 30, 1993 that ILVA S.p.A.

(``ILVA'') was the only company in Italy producing and exporting grain-

oriented electrical steel to the United States. On October 7, 1993,

petitioners requested that the Department reconsider its decision not

to include in its investigation six subsidy programs alleged in the

petition. On October 29, 1993, the Department decided to include two of

these alleged programs. We issued a questionnaire to the GOI regarding

these two programs on October 29, 1993.

On November 3, 1993, we postponed the preliminary determination to

January 24, 1994 (58 FR 59990, November 12, 1993). On November 4, 1993,

we published in the Federal Register a notice revising the scope of

this investigation (58 FR 58838).

On November 8 and 12, 1993, we received questionnaire responses

from the GOI and ILVA. We issued deficiency questionnaires to these

parties on November 24 and December 2, 1993, and on January 10, 1994.

We received responses on December 15, 20, and 23, 1993, and on January

18 and 21, 1994. We also received certain factual information requested

by the Department from ILVA on January 12, 1994.

Scope of Investigation

This investigation concerns the following class or kind of

merchandise: Grain-oriented electrical steel (``electrical steel'')

from Italy.

The product covered by this investigation is grain-oriented silicon

electrical steel, which is a flat-rolled alloy steel product containing

by weight at least 0.6 percent of silicon, not more than 0.08 percent

of carbon, not more than 1.0 percent of aluminum, and no other element

in an amount that would give the steel the characteristics of another

alloy steel, of a thickness of no more than 0.560 millimeters, in coils

of any width, or in straight lengths which are of a width measuring at

least 10 times the thickness, as currently classifiable in the

Harmonized Tariff Schedule (``HTS'') under item numbers 7225.10.0030,

7225.30.7000, 7225.40.7000, 7225.50.8000, 7225.90.0000, 7226.10.1030,

7226.10.5015, 7226.10.5065, 7226.91.7000, 7226.91.8000, 7226.92.5000,

7226.92.7050, 7226.92.8050, 7226.99.0000, 7228.30.8050, 7228.60.6000,

and 7229.90.1000.

Although the HTS subheadings are provided for convenience and

customs purposes, our written description of the scope of this

proceeding is dispositive.

Injury Test

Because Italy is a ``country under the Agreement'' within the

meaning of section 701(b) of the Act, the U.S. International Trade

Commission (``ITC'') is required to determine whether imports of

electrical steel from Italy materially injure, or threaten material

injury to, a U.S. industry. On October 12, 1993, the ITC preliminarily

determined that there is a reasonable indication that an industry in

the United States is being materially injured or threatened with

material injury by reason of imports from Italy of the subject

merchandise (58 FR 54168, October 20, 1993).

Petitioners

The petition in this investigation was filed by Allegheny Ludlum

Corp.; Armco, Inc.; United Steelworkers of America; Butler Armco

Independent Union; and Zanesville Armco Independent Union.

Corporate History of Respondent ILVA

Prior to 1987, electrical steel in Italy was produced by Terni

S.p.A., a main operating company of Finsider. Finsider was a

government-owned holding company which controlled all state-owned steel

companies in Italy. In a restructuring of the Italian steel industry in

1982, Terni S.p.A. took over two companies, Lovere Sidermeccanica

S.p.A. (``Lovere'') and Attivita Industriali Triestine S.p.A.

(``Trieste''), from Italsider, another Finsider-owned steel producer.

Italsider has previously been found to be the recipient of

countervailable subsidies (see Final Affirmative Countervailing Duty

Determinations: Certain Steel Products from Italy (``Certain Steel'')

(58 FR 37327, July 9, 1993).

As part of a subsequent restructuring in 1987, Terni S.p.A.

transferred its assets to a new company, Terni Acciai Speciali

(``TAS'') which thereafter held all the assets for electrical steel

production in Italy. Lovere and Trieste ended up being wholly-owned

subsidiaries of TAS. In 1988, another restructuring took place in which

Finsider and its main operating companies (TAS, Italsider, and Nuova

Deltasider) entered into liquidation and a new company, ILVA S.p.A.

(``ILVA''), was formed. ILVA took over some of the assets and

liabilities of the liquidating companies. With respect to TAS, part of

its liabilities and all of its viable assets, including all the assets

associated with the production of electrical steel, were transferred to

ILVA on December 31, 1988. ILVA itself became operational on January 1,

1989. Part of TAS' remaining assets and liabilities were transferred to

ILVA on April 1, 1990. After that date, TAS no longer had any

manufacturing activities.

ILVA currently consists of several operating divisions, one of

which is a Terni division which manufactures the subject merchandise.

In addition, ILVA is the majority owner of a large number of separately

incorporated subsidiaries. The subsidiaries produce various types of

steel products and also include service centers, trading companies, an

electric power company, etc. ILVA and its subsidiaries together

constitute the ILVA Group. The ILVA Group is owned by the Instituto per

la Ricostruzione Industriale (``IRI''), a holding company wholly-owned

by the GOI.

For purposes of this investigation, we have calculated the amount

of subsidies bestowed on the subject merchandise by cumulating benefits

provided to Terni, TAS and ILVA from 1978 through 1992.

Spin-offs

ILVA's responses show that between 1990 and 1992, the company sold

``productive units,'' as defined in the General Issues Appendix, to

private buyers. (See General Issues Appendix to Final Affirmative

Countervailing Duty Determination: Certain Steel Products from Austria

(``General Issues Appendix'') (58 FR 37217, 37265-8, July 9, 1993)).

Using the pass-through methodology described in the General Issues

Appendix, we have calculated the proportion of subsidies received by

ILVA that ``left'' the company as a result of the sales of these

productive units.

ILVA has also stated that TAS sold Lovere and Trieste to private

buyers before the 1988 restructuring of Finsider into ILVA. However, we

have not done pass-through calculations for these two spun-off units.

With respect to Trieste, TAS's 1989 Annual Report indicates that the

entire capital stock of Trieste was transferred to ILVA in 1989.

Therefore, the alleged sale to a private buyer does not seem to have

taken place. Regarding Lovere, TAS sold this company to Fin.Lo S.p.A.

in 1990, according to TAS's 1990 Annual Report. However, ILVA has

failed to provide the information requested by the Department in order

to conduct its pass-through analysis.

Equityworthiness and Creditworthiness

Petitioners have alleged that Terni, TAS and ILVA were

unequityworthy in each year they received equity infusions from the GOI

and that the equity infusions were, therefore, inconsistent with

commercial considerations. Petitioners have also alleged that Terni and

ILVA were uncreditworthy in every year between 1978 and 1992.

With respect to our analysis of the companies' equityworthiness, we

noted that the companies have sustained losses from 1976 onward. ILVA

had a brief period of operating profits for 1989 through 1991, but its

return on equity during this period declined until there was a negative

return. No evidence of equity investment by private investors during

the period in question was provided in the responses. Terni and ILVA's

debt to equity ratios were relatively high; read in conjunction with

other financial indicators, such as negative rates of return on equity

and sales plus net losses for numerous years, the companies' financial

performance appears to be weak. Based on our analysis of the responses,

the Department preliminarily finds that Terni, TAS and ILVA were

unequityworthy from 1978 through 1992, except in 1979, 1983, 1988, and

1989 when no equity infusions were received. See also January 13, 1994

Memorandum to Director of Accounting.

After examining Terni and ILVA's current, quick, times interest

earned and debt to equity, the Department also preliminarily determines

that Terni, TAS and ILVA were uncreditworthy from 1978 through 1992.

For example, the companies' times interest earned ratios were anemic

for approximately 16 years, indicating a weak long-term solvency.

Furthermore, the debt to equity ratio for both Terni and ILVA were

relatively high. See also January 13, 1994 Memorandum to Director of

Accounting.

For uncreditworthy companies, Sec. 355.44(b)(6)(iv) of the

Department's Proposed Regulations (Countervailing Duties; Notice of

Proposed Rulemaking and Request for Public Comments, 54 FR 23366, May

31, 1989) directs us to use, as the benchmark interest rate, the

highest long-term interest rate plus an amount equal to 12 percent of

the prime rate. However, because the highest long-term interest rate is

not available, we have used the reference rate provided by the Bank of

Italy. We then added to this rate an amount equal to 12 percent of the

Italian prime rate. We have used the resulting interest rate for each

appropriate year as the benchmark for our long-term loan calculations,

and as the discount rate for allocating over time the benefit from

equity infusions and non-recurring grants.

Analysis of Programs

For purposes of this preliminary determination, the period for

which we are measuring subsidies (the POI) is calendar year 1992.

In determining the benefits received under the various programs

described below, we used the following calculation methodology. We

first calculated the benefit attributable to the POI for each

countervailable program, using the methodologies described in each

program section below. For those subsidies received by ILVA that were

allocated over time, we then performed the pass-through analysis

discussed in the General Issues Appendix at 37269. For each program, we

then divided the benefit attributable to ILVA by a denominator which

represented the sales of ILVA S.p.A. or the sales of the Terni division

of ILVA, depending on which company received the benefit. (The program

sections below indicate which denominator has been used for each

program.) Next, we added the benefits for all programs, including the

benefits for programs which were not allocated over time, to arrive at

ILVA's total subsidy rate. Because ILVA is the only respondent company

in this investigation, this rate equals the country-wide rate.

Consistent with our practice in preliminary determinations, when a

response to an allegation denies the existence of a program, receipt of

benefits under a program, or eligibility of a company or industry under

a program, and the Department has no persuasive evidence showing that

the response is incorrect, we accept the response for purposes of the

preliminary determination. All such responses, however, are subject to

verification. If the response cannot be supported at verification, and

the program is otherwise countervailable, the program will be

considered a subsidy in the final determination.

Based upon our analysis of the petition and the responses to our

questionnaires, we preliminarily determine the following:

I. Programs Preliminarily Determined To Be Countervailable

1. Equity Infusions

a. New Equity Capital. The GOI, through the IRI, provided new

equity capital to Terni, TAS, or ILVA in every year from 1978 through

1991, except in 1979, 1983, 1988, and 1989. Because the GOI provided no

information with respect to specificity, we are assuming as the best

information available (``BIA''), that these equity investments were

provided specifically to the steel industry. (See also Certain Steel.)

As discussed above, we have preliminarily determined that Terni,

TAS, and ILVA were unequityworthy in each year they received new equity

capital. Therefore, these provisions of equity were inconsistent with

commercial considerations and countervailable.

To calculate the benefit for the POI, we treated each of the equity

amounts as a grant and allocated the benefits over a 15-year period.

(Our treatment of equity as grants and our choice of allocation period

is discussed in the General Issues Appendix, at 37239 and 37225,

respectively.)

For equity infusions provided to Terni or TAS, we have divided the

benefit allocated to the POI by the sales of the Terni division of

ILVA. We chose this sales denominator because this division of ILVA

most closely resembles the former companies, Terni and TAS. For equity

infusions into ILVA, we used ILVA S.p.A.'s sales as our denominator, as

benefits from these investments are not tied to any division of ILVA.

On this basis, we find the estimated net subsidy from equity infusions

into Terni, TAS, and ILVA, to be 9.66 percent ad valorem for all

manufacturers, producers, and exporters in Italy of the subject

merchandise.

b. Restructuring of Finsider into ILVA. As discussed above under

the ``Corporate History'' section of this notice, the GOI liquidated

Finsider and its main operating companies in 1988 and assembled the

group's most productive assets into a new operating company, ILVA

S.p.A. At the same time, the Finsider Group had total liabilities of

10.6 trillion lire. ILVA assumed 4.3 trillion lire of this debt and the

remaining 6.3 billion was assumed by IRI. In 1990, additional assets

and liabilities of TAS went to ILVA.

In Certain Steel, we determined that the Finsider assets

transferred to ILVA were an equity infusion into ILVA and that the

portion of the debt assumed by IRI represented a debt forgiveness to

ILVA. Based on those findings in Certain Steel, petitioners in this

proceeding have alleged that the 1988 equity infusion that created ILVA

and the 1988 debt forgiveness constitute subsidies to electrical steel.

Additionally, petitioners have alleged that: (1) A 1988 forgiveness of

TAS's debt by Finsider and (2) various other forms of assistance

provided after 1988 to TAS, confer subsidies on the subject

merchandise.

We have reconsidered the Department's analysis in Certain Steel. We

note that the Department applied BIA in the final determination in that

case because we did not verify ILVA's data. Much of the BIA was taken

from the petition.

Based on our review of the information presented in this

investigation, we have preliminarily concluded that the analysis used

in Certain Steel was inconsistent with the restructuring methodology

described in Final Affirmative Countervailing Duty Determination:

Certain Steel Products from Austria (``Certain Steel from Austria'')

(58 FR 37217, July 9, 1993), Final Affirmative Countervailing Duty

Determinations: Certain Steel Products from Spain (``Certain Steel from

Spain'') (58 FR 37374, July 9, 1993) and the General Issues Appendix.

In the Austrian case, the Department examined a government-owned

operating company (``VAAG'') which was split up into numerous operating

companies. In order to effect this split-up, the assets and liabilities

of the original company were divided among the new operating companies.

The Department ruled in Certain Steel from Austria, that this

``equity infusion'' creating the new operating companies ``was merely a

redistribution of existing assets'' which, in and of itself, did not

give rise to any benefits (at 37222). Instead, the benefit that arose

through the restructuring of VAAG was the fact that losses that had

been incurred by the original company were not distributed to the new

operating companies. Because it did not receive a portion of those

losses, the Department determined that the operating company under

investigation effectively received a grant in the amount of the losses

that should have been distributed to it.

Similarly, in Certain Steel from Spain, a cold rolling mill was

transferred from one government-owned company to another (at 37379). We

did not treat the redistributed capital as an equity infusion into the

recipient company. Instead, prior subsidies allocable to the cold

rolling mill were allocated to its new owner.

We believe that the restructuring of Finsider into ILVA is

analogous to the situations in Austrian and Spanish steel cases. The

assets and a portion of the liabilities that resided in the government-

owned Terni/TAS were merely redistributed to ILVA. These assets brought

subsidies with them, i.e., the subsidies previously received by Terni/

TAS and described elsewhere in this notice, but the movement of assets

from Terni and the other former Finsider companies such as Italsider

into ILVA does not constitute a countervailable equity infusion.

This does not mean, however, that no new benefits were received by

ILVA through the 1988 restructuring and the subsequent transfer of

assets and liabilities in 1990. In Certain Steel from Austria, a

benefit arose because accumulated losses were not distributed along

with assets and liabilities. In the case of the Finsider restructuring,

and more specifically the transfer of assets from Terni/TAS to ILVA,

ILVA received its Terni division with assets in excess of liabilities.

This was despite the fact that prior to the transfer Terni/TAS's

liabilities exceeded its assets. Thus, as part of the transfer process,

Terni/TAS's balance sheet was effectively rewritten so as to change its

equity from negative 99,885,535,826 lire to positive 317,836,000,000.

It is not clear from the information provided in the petition or

the responses exactly how this change was effected. As noted above,

there was forgiveness of Terni/TAS and Finsider debt in 1988. Also,

petitioners have alleged various forms of assistance to Terni/TAS since

1988. We believe that the debt forgiveness and, perhaps, some of the

further assistance alleged by petitioners may have been the tools used

by the GOI to rewrite Terni's balance sheet. However, rather than focus

on these individual pieces of assistance, we have relied on a

comparison of what Terni looked like before the restructuring and what

it looked like after the restructuring. We believe this is the most

reasonable approach given the complicated nature and extensive number

of transactions surrounding the transfer. At verification, we will seek

to clarify the events that made up the restructuring. We will continue

to examine our approach to this issue throughout the remainder of the

investigation and will take into consideration comments submitted by

interested parties for purposes of our final determination. Given the

complexity of this situation, we invite particular comment focused on

this issue.

Based on the analysis described above, we are treating as a grant

the difference between Terni/TAS's equity position before and after the

restructuring. Because the transfer of assets and liabilities from

Terni/TAS to ILVA took place in two parts, first in 1988 and then in

1990, we have divided the total amount of the grant between these two

years. In 1988, 60 percent of TAS's assets were transferred. Therefore,

we have treated 60 percent of the grant amount as having been received

in that year. The remainder was treated as a grant received in 1990.

The benefit allocated to the POI was divided by the Terni division's

sales in the POI.

It may be argued that the amount we have countervailed overstates

the benefit to production of electrical steel because a portion of the

assets that existed in Terni/TAS prior to the restructuring continues

to reside in Terni/TAS in liquidation. Despite this, the Department

treated the entire benefit arising from the rewriting of Terni/TAS's

balance sheet as a subsidy to the Terni division of ILVA. On the other

hand, it may be argued that the production of electrical steel benefits

from alleged subsidies received by Terni/TAS after the final transfer

of assets in 1990.

We preliminarily disagree with both of these arguments. The effect

of the 1988 and 1990 transfers was to move the production activities of

Terni/TAS to ILVA. As best we can follow, TAS remained to close down

non-productive facilities and to carry on financial operations

connected with its liquidation. Consistent with the position

articulated most recently by the Department in the General Issues

Appendix, at 37269, subsidies do not remain with closed down

operations. Therefore, it is proper to assign all benefits from the

restructuring to the ongoing production operations now located in ILVA.

Similarly, because the entire production operations have transferred to

ILVA and because we believe we have captured the full amount of the

assistance needed to effect that transfer, any alleged subsidies to

what remained in TAS do not provide any benefit to the subject

merchandise.

Based on the information provided above, we preliminarily find the

estimated net subsidy from the restructuring of Finsider to ILVA to be

5.70 percent ad valorem for all manufacturers, producers and exporters

in Italy of the subject merchandise.

c. The 1987 Restructuring. As part of a 1987 restructuring, Terni

conferred its assets to TAS. For the reasons discussed under the

``Restructuring of Finsider into ILVA'' section above, we have

preliminarily determined not to treat the transfer of assets as an

equity infusion into TAS. However, we have treated as an equity

infusion capital received by TAS in 1987 that was not associated with

the asset transfer. The estimated net subsidy from this infusion is

included in the equity calculation above (see section a). Also, the

subsidies received by Terni prior to the 1987 transfer are being

allocated in full to TAS and, from 1988, to ILVA.

d. The Transfer of Lovere and Trieste to Terni in 1982. As

discussed in the ``Corporate History'' section of this notice, Lovere

and Trieste were transferred from Italsider to Terni as part of a 1982

restructuring. Petitioners included the value of the transferred assets

as part of their equity allegation for 1982.

We have preliminarily determined that this transaction is more

correctly characterized as an internal corporate restructuring that

warrants a reallocation of subsidies among government-owned units. When

Italsider received untied subsidies (e.g., equity infusions), those

subsidies benefitted all of Italsider's operations, including Lovere

and Trieste. The transfer of these two industrial plants to Terni did

nothing to alter those subsidies. (See Final Affirmative Countervailing

Duty Determination: Certain Hot Rolled Lead and Bismuth Carbon Steel

Products from the United Kingdom 58 FR 12534, January 27, 1993

(``Leaded Bar'')). Therefore, consistent with our restructuring

methodology, when Lovere and Trieste ``traveled'' to Terni, they

brought with them a portion of the subsidies which had been provided to

Italsider.

As stated in the General Issues Appendix at 37266, the Department

does not consider internal corporate restructurings that transfer or

shuffle assets among related parties to constitute a ``sale'' for

purposes of its pass-through analysis. However, when assets are

transferred internally, the Department still needs to allocate

subsidies.

We do not have sufficient information on the current record as to

the total amount of untied benefits received by Italsider prior to the

transfer of Lovere and Trieste. ILVA has, however, provided the amount

of equity infusions received by Italsider from 1978 (the beginning of

our allocation period) through 1982. Therefore, for purposes for the

preliminary determination, we have calculated the amount of subsidies

that travelled with Lovere and Trieste from Italsider to Terni based on

the equity infusions provided to Italsider.

We determined the amount of Italsider's subsidies attributable to

Lovere and Trieste by calculating the percentage of assets these two

companies represented of the total Italsider assets. We applied this

percentage to Italsider's subsidy amount to calculate the portion of

benefit Lovere and Trieste carried with them to Terni. This benefit for

the POI was divided by the total sales of the Terni division of ILVA.

On this basis, we find the estimated net subsidy from the transfer of

Lovere and Trieste to Terni to be .49 percent ad valorem for all

manufacturers, producers, and exporters in Italy of the subject

merchandise.

2. Interest-Free Loan to ILVA

Based on ILVA's 1992 Annual Report, petitioners have alleged that

the company received a 300 billion lire equity infusion in that year.

According to ILVA, this amount does not represent an equity infusion

but rather a loan.

Because the GOI has provided no information with respect to

specificity, we are assuming as BIA, that this loan was provided

specifically to ILVA. ILVA has provided no interest rate, repayment

schedule, or other terms for the loan. Therefore, we have assumed that

this was an interest-free loan. To determine the benefit, we first

calculated the interest that would have been paid during the POI on a

300 billion lire loan at the benchmark interest rate. We then divided

this amount by ILVA S.p.A's sales in the POI. On this basis, we

determine the estimated net subsidy from this program to be .65 percent

ad valorem for all manufacturers, producers, and exporters in Italy of

the subject merchandise.

3. Law 675/77 Preferential Financing

a. General Description of Law 675/77. Law 675/77 was enacted to

bring about restructuring and reconversion in the following industrial

sectors: (1) Electronic technology; (2) the manufacturing industry; (3)

the agro-food industry; (4) the chemical industry; (5) the steel

industry; (6) the pulp and paper industry; (7) the fashion sector; and

(8) the automobile and aviation sectors. Law 675/77 also sought to

promote optimal exploitation of energy resources, and ecological and

environmental recovery.

A primary goal of this legislation was to bring all government

industrial assistance programs under a single law in order to develop a

system to replace indiscriminate and random public intervention by the

GOI. Other goals were (1) to reorganize and develop the industrial

sector as a whole; (2) to increase employment in the South; and (3) to

maintain employment in depressed areas. Among other measures taken, the

Interministerial Committee for the Coordination of Industrial Policy

(``CIPI'') was created as a result of Law 675/77. CIPI approves

specific projects in each of the industrial sectors listed above.

Six main programs were provided under Law 675/77: (1) Interest

contributions on bank loans; (2) mortgage loans provided by the

Ministry of Industry at subsidized interest rates; (3) interest

contributions on funds raised by bond issues; (4) capital grants for

projects in the South; (5) personnel retraining grants; and (6) VAT

reductions on purchases of capital goods by companies in the South.

Except for personnel retraining grants, Law 675/77 went into effect

in 1977. According to ILVA, the law has since expired. The GOI has not

been specific on this point but has stated that no company has applied

for funding under Law 675/77 since 1982.

Information provided by the GOI shows that the steel industry was

the single largest recipient of benefits under Law 675/77 programs (1)

through (3), listed above. The GOI's response also indicates that the

steel industry received a disproportionate share of the benefits under

this law. Based on this information, the Department preliminarily

determines that the steel industry was a dominant user of programs

under Law 675/77 and, therefore, that benefits received by ILVA under

this law are being provided to a specific enterprise or industry or

group of enterprises or industries. (See also Certain Steel.)

b. Countervailable Assistance Under Law 675/77.

(i) Interest Contributions on Bank Loans. Italian commercial banks

provided loans at market interest rates to industries designated under

Law 675/77. However, the interest owed by the recipient companies was

offset by interest contributions from the GOI. Terni received bank

loans with interest contributions under Law 675/77 which were

outstanding in the POI.

To determine whether this assistance conferred a benefit, we

compared the effective interest rate paid on these loans to the

benchmark interest rate, discussed above. Based on this comparison, we

preliminarily determine that the financing provided under this program

is inconsistent with commercial considerations.

Because Terni knew that it would receive the interest contributions

when it obtained the loans, we consider the contributions to constitute

reductions in the interest rates charged rather than grants (see

Certain Steel at 37335).

To calculate the benefit we used our standard long-term loan

methodology as described in Sec. 355.49(c)(1) of the Proposed

Regulations. We then divided the benefit allocated to the POI by the

1992 sales made by the Terni division of ILVA. On this basis, we

determine the estimated net subsidy from this program to be .07 percent

ad valorem for all manufacturers, producers, and exporters in Italy of

the subject merchandise.

(ii) Mortgage Loans from the Ministry of Industry. Under Law 675/

77, companies could obtain low-interest mortgage loans from the

Ministry of Industry. The response indicates that Terni received two

such loans which were still outstanding in the POI.

To determine whether these loans were provided on terms

inconsistent with commercial considerations, we used the benchmark

interest rates described above. Because the interest rates paid on the

Law 675/77 loans were below the benchmark interest rates, the

Department preliminarily determines that loans provided under this

program are countervailable.

We calculated the benefit using our standard long-term loan

methodology. We then divided the benefit allocated to the POI by the

1992 sales made by the Terni division of ILVA. On this basis, we

determine the estimated net subsidy from this program to be .20 percent

ad valorem for all manufacturers, producers, and exporters in Italy of

the subject merchandise.

(iii) Interest Contributions on Loans Financed by IRI Bond Issues.

Under Law 675/77, IRI was allowed to issue bonds to finance

restructuring measures of companies within the IRI Group. The proceeds

from the sales of the bonds were then re-lent to IRI companies. The

effective interest rate on such loans was reduced by interest

contributions made by the GOI. Terni had two of these loans outstanding

during the POI. Both loans had variable interest rates.

To determine whether these loans were countervailable, the

Department used the benchmark interest rate described above. (Because

the loans in question have variable interest rates, we would have

preferred to use a variable rate benchmark. However, we lack

information to do this.) We compared the benchmark rates in the year

the loans were received to the effective rates paid by Terni in that

year and found that these loans were provided on terms inconsistent

with commercial considerations.

To determine the benefit, we first calculated the difference

between what was paid on these loans during the POI and what would have

been paid during the POI had the loans been provided on commercial

terms. We then divided the resulting difference by the 1992 sales made

by the Terni division of ILVA. On this basis, we determine the

estimated net subsidy from this program to be .48 percent ad valorem

for all manufacturers, producers, and exporters in Italy of the subject

merchandise.

4. Interest Grants for ``Indirect Debts'' Under Law 750/81

Interest grants pursuant to Law 750/81 were extended between 1981

and 1983 to IRI-owned companies undergoing reconversion. Respondents

have indicated that Law 750/81 was enacted to implement Article 12 of

Law 675/77 (see section I.3, above), but that the interest

contributions provided for under Law 750/81 were separate from those

made under Law 675/77. Article 12 of Law 675/77 outlines various rules

and budgetary considerations with regard to the extension of financial

aid to state-owned companies under Law 675/77.

Terni received 48.6 billion lire and 27.5 billion lire under this

program in 1982 and 1983, respectively. The response does not tie the

interest contributions to specific loans and the payments, therefore,

appear to have been provided to cover aggregate interest payments on

several different loans as opposed to interest payments on specific

loans.

Because interest contributions pursuant to Law 750/81 are limited

to government-owned companies in reconversion, we preliminarily find

that payments made under Law 750/81 also confer a countervailable

subsidy. We further determine that these payments are non-recurring

grants (see General Issues Appendix at 37226).

To calculate the benefit for the POI, we used our standard grant

methodology (see Sec. 355.49(b) of the Proposed Regulations) using the

discount rate described above. We divided the benefit allocated to the

POI by the 1992 sales of the Terni division of ILVA. On this basis, we

determine the estimated net subsidy from this program to be .77 percent

ad valorem for all manufacturers, producers, and exporters in Italy of

the subject merchandise.

5. Finsider Financing

The response indicates that Terni received four loans from Finsider

of which only one, provided at a variable interest rate, appears to

have been outstanding in the POI. ILVA has argued that such financing

from a parent company to a subsidiary is a normal transaction which

should not be considered to provide a countervailable benefit.

In Certain Steel from Spain (at 37383), the Department declined to

find short-term financing from the National Industrial Institute

(``INI'') to its subsidiary Ensidesa (the state-owned steel company

under investigation) to be countervailable. In that investigation, the

Department determined that there was no evidence that the financing was

a result of a program designed to benefit the steel industry. Further,

the Department found that INI was involved in a number of sectors

outside the steel industry and that INI was capable of generating funds

independently of the government.

In this investigation, however, we have found that Finsider was

previously the holding company only for state-owned steel companies.

Therefore, Finsider's only source of funds for internal lending, beyond

government contributions, was its other steel companies. Given the

financial state of Terni and Finsider's other subsidiaries (see Certain

Steel at 37328), we find no reason to believe that its companies could

generate such funds. More importantly, Finsider has been found to be

the conduit for government-provided assistance to its steel companies.

(See Certain Steel at 37329: ``The GOI made these investments by

transferring funds to the IRI Group, which either directly or through

Finsider made equity infusions into (Italsider, Nuova Italsider).''

Emphasis added.) The Department, therefore, preliminarily determines

that all internal financing provided by Finsider is limited to

Finsider-owned companies and is countervailable to the extent that such

financing was provided on terms inconsistent with commercial

considerations.

Because ILVA has provided incomplete information regarding this

loan, the Department has used BIA for the calculation of the benefit.

Specifically, ILVA did not provide the outstanding balance on this loan

in the POI. Therefore, we have assumed that the entire original loan

amount was still outstanding. Also, because ILVA has not reported the

interest rate in effect during the POI, we have used the reported

interest rate from the most recent period.

To determine whether this loan was countervailable, the Department

used the benchmark interest rate described above. (Because the loan in

question has a variable interest rate, we would have preferred to use a

variable rate benchmark. However, we lack information to do this.) We

compared the benchmark rate in the year the loan was received to the

rate paid by Terni in that year and found that this loan was provided

on terms inconsistent with commercial considerations.

We calculated the benefit for the POI as the difference between the

interest that would have been paid under a benchmark loan and the

interest that was actually paid in the POI. We then divided the benefit

by the 1992 sales made by the Terni division of ILVA. On this basis, we

determine the estimated net subsidy from this program to be .03 percent

ad valorem for all manufacturers, producers, and exporters in Italy of

the subject merchandise.

6. Exchange Rate Guarantee Program

This program, which was enacted by Law 796/76, provided exchange

rate guarantees on foreign currency loans from the European Coal and

Steel Community (``ECSC''). The recipient of a guaranteed loan would

repay the loan at an agreed upon exchange rate. In the event that the

lire depreciated against the currency in which the loan was

denominated, the loan recipient would pay up to two percent more for

the loan. Any currency fluctuations above and beyond two percent of the

fixed exchange rate would be covered by the Treasury Ministry.

This program is limited to companies receiving loans under Articles

54 and 56 of the ECSC Treaty, i.e., iron and steel companies. While all

benefits under this program were eliminated in 1991 by Law 333,

guarantees granted before the enactment of this law were still in

effect in the POI.

The GOI has stated that the premium paid only covered part of the

long-term costs of the program. While we question whether payments

under this program are properly to be considered premiums, the fact

that they are inadequate to cover the costs of operating the guarantee

program is sufficient to find that the program confers a benefit. (See

also Certain Steel) Moreover, we determine that benefits are provided

to a specific enterprise or industry or group of enterprises or

industries.

So long as the lire depreciates against the currency in which the

loan is denominated by more than the two percent maximum, the GOI makes

payments on the guaranteed loan. Because future currency fluctuations

are not known at the time the loan is taken out, no grant equivalent

can be calculated for the guaranteed loans. Therefore, we calculated

the benefit as the payments on this loan made in the POI by the

Treasury Ministry. We divided this amount by the 1992 sales of ILVA's

Terni division. On this basis, we determine the estimated net subsidy

from this program to be .08 percent ad valorem for all manufacturers,

producers, and exporters in Italy of the subject merchandise.

7. Early Retirement

Italy has had a series of laws providing for early retirement since

the late 1960s. Some older laws have been replaced by newer laws, while

other older laws are still in effect, overlapping with newer

legislation.

In 1981, the parliament passed Law 155/81 with the intention to

encourage people to retire before the normal retirement age. Pursuant

to this law, men could retire at the age of 55 and women at the age of

50. Law 155/81 covered all manufacturing industries, including steel,

that the CIPI had declared to be in a state of crisis. Government

documentation provided with the response shows that Italian workers

received benefits under Law 155/81 through 1991. No information has

been provided with respect to usage of this early retirement provision

in the POI.

Law 193/84 lowered the minimum age for early retirement

specifically for steel workers to 50 years for men and 47 years for

women. Government documentation provided with the response shows that

workers received benefits under this law through 1991. We have no

information with respect to usage of the early retirement provision

under Law 193/84 in 1992.

Law 181/89 introduced various social and other measures related to

rationalizing the government-owned steel industry. It also set

numerical targets for the number of workers who could use early

retirement. Pursuant to Law 181/89, a maximum of 8,500 steel workers

were allowed to use early retirement from 1989 through 1991. However,

the GOI has stated that this number was insufficient to solve the

problem of surplus manpower in the steel industry. Therefore, a new law

was passed in 1991 (Law 223/91) which authorized another 20,000 workers

to use early retirement. Of these 20,000 slots, 26 percent were

allocated to the government-owned steel industry while the rest were

distributed among five other industries (shipbuilding, aluminum,

refractory materials and graphite electrodes, thermo-electrical

engineering, and ``innovative industrial companies'' in highly

competitive sectors).

Law 223/91 also set minimum age limits for steel workers using the

early retirement provision under this law to 55 and 50 years for men

and women, respectively, in the private steel industry, and 50 and 47

years for men and women, respectively, in the state-owned steel

industry. Pursuant to Law 223/91, participating companies must make a

financial contribution to the early retirement plan corresponding to 30

percent of the pension. ILVA's 1992 Annual Report indicates that 3,022

employees from ILVA S.p.A. used the early retirement provisions under

Law 223/91 in the POI.

Finally, Decree Law 14, passed in January 1992, allowed another

25,000 workers to use the early retirement scheme. After having been

re-issued several times, this Decree was turned into Law 406 in October

1992. Employees in companies which have adopted a reconstruction

program approved by the Interministerial Committee for Economic

Planning (``CIPE'') are eligible to use the program. The age limits are

55 for men and 50 for women. The 25,000 slots are allocated by CIPE

among crisis-hit companies. The Department has no information on how

the slots were allocated among various crisis industries. Under Law

406/92, participating companies pay 50 percent of the pension.

The GOI has stated that early retirement is available to workers in

other sectors beyond steel, e.g., commercial workers and workers in the

cement industry. However, information provided with the GOI's response

shows that for these other industries, the provisions for early

retirement expired before the POI. Apart from the latest early

retirement provision in Law 406/92, pursuant to which a limited number

of workers in industries undergoing reconstruction are eligible for

early retirement, only eight industries (including steel) were eligible

for some form of early retirement program in the POI. These industries

were: steel, shipbuilding, aluminum, refractory materials and graphite

electrodes, thermo-electrical engineering, and ``innovative industrial

companies,'' all pursuant to Law 223/91; dock workers pursuant to Law

230; and workers in the publishing industry pursuant to Law 416.

Based on this, we preliminarily determine that early retirement

benefits are provided to a specific enterprise or industry or group of

enterprises or industries. (See also Certain Steel.)

Respondents have further stated that Italian companies have no

legal obligation to offer early retirement to their employees. However,

based on a statement made during verification by an official at a

private Italian steel company, we found in Certain Steel that although

Italian companies have no legal obligation to offer their employees

early retirement as an alternative to being laid off, social factors

such as the threat of strikes and social unrest prevent companies from

simply firing surplus workers. In addition, the GOI has stated in its

response that early retirement is used as an alternative to collective

lay-offs. Therefore, we preliminarily determine that the government is

relieving the steel companies of an obligation they would otherwise

incur. Hence, the program is countervailable.

In the General Issues Appendix to Certain Steel from Austria (at

37226), we listed early retirement programs as typically providing

recurring benefits. We have, therefore, treated benefits received by

ILVA under the early retirement program as a recurring grant.

To calculate the benefit, we have estimated the amount the company

saved by not having to pay wages to the workers who took early

retirement in 1992 by reference to ILVA's 1992 Annual Report, which

provides the total number of employees, the total labor cost, and the

number of workers who used early retirement. Had it been provided, we

would have subtracted ILVA's cost for the program from the wage bill.

(We have asked ILVA to provide this list before verification.)

We divided this benefit by the 1992 sales made by ILVA. On this

basis, we determine the estimated net subsidy from this program to be

3.54 percent ad valorem for all manufacturers, producers, and exporters

in Italy of the subject merchandise.

8. ECSC Article 56 Redeployment Aid

Pursuant to Article 56(2)(b) of the ECSC Treaty, redeployment

assistance is provided to workers affected by the restructuring of the

coal and steel industries in the ECSC member states. The assistance

consists of the following types of grants: (1) Income support grants

for workers affected by unemployment, re-employment at a lower salary

or early retirement; (2) grants to enable companies to continue paying

workers who have been laid off temporarily; (3) vocational training

grants; and (4) resettlement grants. According to the EC, Article 56

redeployment aid was disbursed to ILVA's workers in the POI for

training, early retirement, and unemployment.

The Article 56 redeployment grants, which are disbursed to the

member states, are paid from the European Commission's operational

budget for the ECSC steel program. This budget is funded by (1) levies

imposed on coal and steel producers in the member countries; (2) income

from ECSC's investments; (3) guarantee fees and fines paid to the ECSC;

and (4) interest received from companies that have obtained loans from

the ECSC.

Because the ECSC contribution under Article 56 is sourced from

producer levies, we find the ECSC portion of such payments to be not

countervailable (see Certain Steel at 37336). However, according to the

EC's response, the Commission's decision to grant readaptation aid is

contingent upon a matching contribution from the member state. We

further found that member state contributions are countervailable to

the extent that they are specific and relieve a company of an

obligation it would otherwise incur.

As with the early retirement benefits described above, the GOI has

claimed that ILVA had no obligation to provide the types of worker

assistance described under Article 56. With respect to vocational

training grants, we have no evidence to refute this claim. Therefore,

we preliminarily determine that any vocational training grants funded

by the GOI in conjunction with Article 56 are not countervailable.

However, for reasons explained under the ``Early Retirement'' section,

above, we find that ILVA was relieved of obligations with respect to

unemployment and early retirement payments. Therefore, GOI

contributions for these purposes under Article 56(2)(b) provide a

countervailable benefit to ILVA.

In the General Issues Appendix to Certain Steel, we listed early

retirement and worker assistance as programs which typically provide

recurring benefits. We have, therefore, treated the Article 56

redeployment aid as a recurring grant.

ILVA has stated that because payments under Article 56 go directly

from the GOI to the workers, the company has no records of the amount

paid to the workers under this program. The information provided by the

GOI on the amount of its contribution is not clear from the GOI

response. However, we have obtained from the EC the amount that the

ECSC paid to ILVA's workers in the POI under Article 56. As BIA, we

have assumed that the GOI's contribution was equal to the payment made

by the ECSC. (See also Certain Steel at 37336.) We divided this amount

by the 1992 sales made by ILVA S.p.A. On this basis, we determine the

estimated net subsidy from this program to be 1.27 percent ad valorem

for all manufacturers, producers, and exporters in Italy of the subject

merchandise.

9. Urban Redevelopment Financing Under Law 181/89

Urban redevelopment financing is provided to fund re-

industrialization projects and to alleviate unemployment in areas

affected by the crisis in the steel sector. With regard to the re-

industrialization projects, respondents have stated that the urban

redevelopment financing provided to ILVA did not involve or affect the

manufacture of steel, specifically not the production of the subject

merchandise.

With respect to the benefits provided to laid-off employees, the

response indicates that Law 181/89 provided early retirement measures

for steel workers.

This program provided benefits to priority areas hit by the steel

crisis. Thus, we preliminarily determine that assistance under this

program is provided on a regional basis and is, therefore, limited to a

group of industries (Certain Steel at 37332). Therefore, the Department

preliminarily determines that early retirement payments made to ILVA

under Law 181/89 provide countervailable benefits.

ILVA has not provided any amounts received under this program, nor

has ILVA indicated whether funds under this program were received in

the form of loans or grants. As BIA, the Department has used the amount

listed in ILVA's 1992 Annual Report. In the General Issues Appendix (at

37226), we listed early retirement programs as typically providing

recurring benefits. We have, therefore, treated benefits received by

ILVA under this program as a recurring grant.

To determine the benefit under this program, we divided the amount

received during the POI by ILVA's 1992 sales. On this basis, we

determine the estimated net subsidy from this program to be .11 percent

ad valorem for all manufacturers, producers, and exporters in Italy of

the subject merchandise.

10. ECSC Article 54 Loans

Under Article 54 of the 1951 ECSC Treaty, the European Commission

can provide loans directly to iron and steel companies for

modernization and the purchase of new equipment. The loans finance up

to 50 percent of an investment project. The remaining financing needs

must be met from other sources. The Article 54 loan program is financed

by loans taken by the Commission, which are then re-lent to iron and

steel companies in the member states at a slightly higher interest rate

than that at which the Commission obtained them.

ILVA had outstanding Article 54 loans in the POI. These loans,

which were originally received by Terni, were transferred to ILVA as

part of the 1988 partial transfer of Terni's assets and liabilities.

We preliminarily determine that this program is limited to the iron

and steel industry. Terni received a total of four Article 54 loans,

two of which were denominated in U.S. dollars and two in European

Currency Units (``ECU''). To determine whether the loans were provided

on terms inconsistent with commercial considerations, we used the

following benchmark interest rates. For the U.S. dollar loan obtained

in one of the years in which Terni has been found to be uncreditworthy,

we used, as a benchmark interest rate, the highest interest rate on

long-term fixed-rate U.S. dollar loans obtained in the United States,

as reported by the Federal Reserve. To this interest rate, we added a

premium equivalent to 12 percent of the U.S. prime rate in that year.

For the other U.S. dollar loan, which was obtained in a year for which

we have not made an uncreditworthiness determination, we used the

average interest rate on long-term fixed-rate U.S. dollar loans

obtained in the United States, as reported by the Federal Reserve.

We have found Terni to be uncreditworthy in both the years it

obtained the ECU loans. For these loans, we were unable to find the

highest interest rate charged on long-term fixed-rate ECU loans.

Instead, we used as the benchmark interest rate, the interest rate paid

on 5-7 year ECU-denominated bonds, as reported in an EC publication,

plus a risk premium.

Because the interest rates paid on all the Article 54 loans were

below the benchmark interest rates, the Department preliminarily

determines that loans provided under this program are countervailable.

We calculated the benefit using our standard long-term loan

methodology. We then divided the benefit allocated to the POI by the

1992 sales made by the Terni division of ILVA. On this basis, we

determine the estimated net subsidy from this program to be .09 percent

ad valorem for all manufacturers, producers, and exporters in Italy of

the subject merchandise.

II. Programs Preliminarily Determined To Be Not Countervailable

A. Government Loan Guarantees

Finsider guaranteed certain loans taken out by Terni. Terni paid

Finsider guarantee fees in the form of a one-time payment of 0.2

percent of the loan amount. According to ILVA's response, these fees

were equal to the cost of commercially provided guarantees. Therefore,

the Department preliminarily determines that the Finsider loan

guarantees were not provided on terms inconsistent with commercial

considerations and, thus, not countervailable.

B. European Social Fund (``ESF'') Grants

The ESF was established by the 1957 European Economic Community

Treaty to increase employment and help raise worker living standards.

We found in Certain Steel that the ESF receives its funds from the

EC's general budget whose main revenue sources are customs duties,

agricultural levies, value-added taxes collected by the member states,

and other member state contributions.

The member states are responsible for selecting the projects to be

funded by the EC. The EC then disburses the grants to the member states

which manage the funds and implement the projects. According to the EC,

ESF grants are available to (1) people over 25 who have been unemployed

for more than 12 months; (2) people under 25 who have reached the

minimum school-leaving age and who are seeking a job; and (3) certain

workers in rural areas and regions characterized by industrial decline

or lagging development.

The GOI has stated that the ESF grants received by Italy have been

used for vocational training. Certain regions in the South are also

eligible for private sector re-entry and retraining schemes. Since

1990, the vocational training grants have been available to unemployed

youths and long-term unemployed adults all over Italy, according to the

GOI. Before 1990, however, the GOI gave preference to certain regions

in Italy.

In Certain Steel, we found that a preference was given to the

southern region of Italy in the distribution of benefits. Therefore, we

determined that the program was specific because benefits were provided

on a regional basis (see Certain Steel, at 37335). However, based on

the EC's response in this investigation, it appears that all of the

regions in Italy have received ESF funds. Therefore, we preliminarily

determine that this program is not regionally specific and therefore,

not limited to a specific enterprise or industry, or group of

enterprises or industries. Furthermore, we note that to the extent

there is a regional preference (i.e., southern Italy) in the

distribution of ESF benefits, it has not resulted in a countervailable

benefit to the production of the subject merchandise, which is produced

in northern Italy.

C. Personnel Retraining Grants under Law 675/77

The provision for retraining grants under Law 675/77 went into

effect in 1980, but the program was terminated in 1988 due to lack of

funds, according to the response. The purpose of the program was to

retrain workers to use new manufacturing technologies in companies

undergoing reconstruction and reconversion. The GOI has stated that

Italian companies have no legal obligation to retrain their workers and

that the program, therefore, does not provide relief from such

obligations. We have no evidence to refute this claim. Therefore, we

preliminarily determine that benefits under this program are not

countervailable.

III. Programs Which Did Not Benefit the Subject Merchandise in the POI

The Department preliminarily determines that the following programs

did not benefit the subject merchandise in the POI:

A. Loans under the following programs were not outstanding in the

POI, according to the response.

1. Interest Subsidies under Law 617/81

2. Financing under Law 464/72

B. The following export loans were not used for exports to the

United States, according to the response.

Subsidized Export Financing Under Law 227/77

C. The following programs were directed to the South of Italy.

Since production of the subject merchandise takes place outside the

South, the Department preliminarily determines that countervailable

benefits under these programs were tied to products outside the scope

of this investigation.

1. Law 675/77 Capital Grants

2. Reductions of the Value Added Tax (``VAT'') under Law 675/77

3. Interest Contributions under the Sabatini Law (Law 1329/65)

4. Social Security Exemptions

5. ILOR and IRPEG Exemptions

D. Aid Under the National Research Plan

Aid under the National Research Plan is administered under Law 46/

82. In 1985, the Ministry for University, Technology and Scientific

Research assigned 19 billion lire to Terni under this plan. The purpose

of this plan involves basic research regarding the development of steel

products to be employed in the energy and chemical fields. The research

funds cover costs of personnel assigned to specific research projects

in research laboratories. According to the GOI, the research under this

plan was contracted out to Terni as the result of a competitive bidding

process.

In order to receive funds under this plan, Terni and its

subcontractors had to provide to the Ministry a report for each project

under the plan. In 1988, prior to presentation of the report, Terni

received an advance payment in the amount of 20% of the total in order

to cover its first expenses of the research program. Since that time,

Terni has submitted interim reports of its progress on the particular

projects and, therefore, has received a portion of the funds to which

it is entitled. When the work is completed, a report will be submitted

to the Ministry. At that time, the Ministry will determine whether to

approve the final disbursement to ILVA.

According to Article 11 of Law 46/82, the results of the research

under this program belong to the state and may only be assigned to a

company for valuable consideration. According to the GOI, the rights to

the results of this project have not yet been assigned. Therefore,

because ILVA currently has no rights to the research results, the

Department preliminarily finds that ILVA received no benefits under

this program.

Verification

In accordance with section 776(b) of the Act, we will verify the

information used in making our final determination.

Suspension of Liquidation

In accordance with section 703(d) of the Act, we are directing the

U.S. Customs Service to suspend liquidation of all entries of

electrical steel from Italy, 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

below. This suspension will remain in effect until further notice.

Electrical Steel

Country-Wide Ad Valorem Rate 23.14 percent

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 that it will not disclose such information, either publicly or

under an administrative protective order, without the written consent

of the Deputy Assistant Secretary for Investigations, Import

Administration.

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 355.38, we will hold a public hearing, if

requested, to afford interested parties an opportunity to comment on

this preliminary determination on Monday, March 24, 1994, at 10 a.m. at

the U.S. Department of Commerce, room 3708, 14th Street and

Constitution Avenue, NW., Washington, DC 20230. Individuals who wish to

request a hearing must submit such a request within ten days of the

publication of this notice in the Federal Register to the Assistant

Secretary for Import Administration, U.S. Department of Commerce, room

B099, 14th Street and Constitution Avenue, NW., Washington, DC 20230.

Parties should confirm by telephone the time, date, and place of the

hearing 48 hours before the scheduled time.

Requests 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. In addition,

ten copies of the business proprietary version and five copies of the

nonproprietary version of the case briefs must be submitted to the

Assistant Secretary no later than March 16, 1994. Ten copies of the

business proprietary version and five copies of the nonproprietary

version of the rebuttal briefs must be submitted to the Assistant

Secretary no later than March 23, 1994. An interested party may make an

affirmative presentation only on arguments included in that party's

case or rebuttal briefs. Written arguments should be submitted in

accordance with section 355.38 of the Commerce Department's regulations

and will be considered if received within the time limits specified

above.

This determination is published pursuant to section 703(f) of the

Act (19 U.S.C. 1671b(f)).

Dated: January 25, 1994.

Joseph A. Spetrini,

Acting Assistant Secretary for Import Administration.

[FR Doc. 94-2241 Filed 1-31-94; 8:45 am]

BILLING CODE 3510-DS-P