Initiation of Countervailing Duty Investigation: Steel Wire Rod From Germany

DEPARTMENT OF COMMERCE

[C-428-819]

Initiation of Countervailing Duty Investigation: Steel Wire Rod

From Germany

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: March 14, 1994.

FOR FURTHER INFORMATION CONTACT: Gary Bettger (202) 482-2239 or

Jennifer Yeske (202) 482-0189, Office of Countervailing Investigations,

Import Administration, room 3099, U.S. Department of Commerce,

Washington, DC 20230.

The Petition

On February 14, 1994, we received a petition from by Connecticut

Steel Corp., Georgetown Steel Corp., North Star Steel Texas, Inc., Co-

Steel Raritan Co., Keystone Consolidated Industries and Northwestern

Steel & Wire Co. (``Petitioners'') on behalf of the United States steel

wire rod industry. In accordance with 19 CFR 355.12, petitioners allege

that manufacturers, producers, or exporters of steel wire rod in

Germany receive subsidies within the meaning of section 701 of the

Tariff Act of 1930, as amended (the Act).

Injury Test

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

meaning of section 701(b) of the Act, title VII of the Act applies to

this investigation. Accordingly, the U.S. International Trade

Commission (ITC) must determine whether imports of the subject

merchandise from Germany are materially injuring, or threatening

material injury to, a U.S. industry.

Standing

Petitioners have stated that they are interested parties, as

defined in section 771(9)(C) of the Act, and that they have filed the

petition on behalf of the U.S. industry producing steel wire rod. If

any interested party, as described under paragraphs (C), (D), (E), or

(F) of section 771(9) of the Act, wishes to register support for, or

opposition to, this petition, such party should file a written

notification with the Assistant Secretary for Import Administration, in

accordance with 19 CFR 355.31.

Exclusion Requests

Under the Department's regulations, any producer or reseller

seeking exclusion from a potential countervailing duty order must

submit its request for exclusion within 30 days of the date of

publication of this notice. The procedures and requirements regarding

the filing of such requests are contained in 19 CFR 355.14.

Scope of Investigation

The products covered by this investigation are hot-rolled carbon

steel and alloy steel wire rod, in coils, of approximately round cross

section, between 0.20 and 0.75 inches in solid cross-sectional

diameter. The following products are excluded from the scope of this

investigation:

Steel wire rod 5.5 mm or less in diameter, with tensile

strength greater than or equal to 1040 MPa, and the following chemical

content, by weight: carbon greater than or equal to 0.79%, aluminum

less than or equal to 0.005%, phosphorus plus sulfur less than or equal

to 0.040%, and nitrogen less than or equal to 0.006%;

Free-machining steel containing, by weight, 0.03% or more

of lead, 0.05% or more of bismuth, 0.08% or more of sulfur, more than

0.4% of phosphorus, more than 0.05% of selenium, and/or more than 0.01%

of tellurium;

Stainless steel rods, tool steel rods, ball bearing steel

rods, and deformed reinforcing bars; and

Wire rod 7.9 to 18 mm in diameter, containing 0.48 to

0.73% carbon by weight, and having partial decarbonization and seams no

more than 0.75 mm in depth.

The products under investigation are currently classifiable under

subheadings 7213.31.3000, 7213.31.6000, 7213.39.0030, 7213.39.0090,

7213.41.3000, 7213.41.6000, 7213.49.0030, 7213.49.0090, 7213.50.0020,

7213.50.0040, 7213.50.0080, 7227.20.0000, and 7227.90.6050 of the

Harmonized Tariff Schedule of the United States (HTSUS). Although the

HTSUS subheadings are provided for convenience and customs purposes,

our written description of the scope of this investigation remains

dispositive.

Allegations of Subsidies

Section 702(b) of the Act requires the Department to initiate a

countervailing duty proceeding whenever an interested party files a

petition, on behalf of an industry, that (1) alleges the elements

necessary for the imposition of a duty under section 701(a), and (2) is

accompanied by information reasonably available to the petitioner

supporting the allegations.

Initiation of Investigation

The Department has examined the petition on steel wire rod from

Germany and found that it complies with the requirements of section

702(b) of the Act. Therefore, in accordance with section 702 of the

Act, we are initiating a countervailing duty investigation to determine

whether manufacturers, producers or exporters of steel wire rod receive

countervailable subsidies. The following programs are included in our

investigation.

1. ``Ruckzahlungsverpflichten'' (RZVs)

2. Government Assumption of Debt

3. Debt Forgiveness by Private Banks

4. Worker Assistance under the European Coal and Steel Community's

Article 56(2)(b).

We are not including the following program which was alleged to be

benefiting producers of the subject merchandise in Germany.

The Government of Saarland's Capital Contribution to DHS of DM 145.1

Million

Petitioners alleged that a DM 145.1 million payment by the

Government of Saarland (GOS) constitutes a countervailable equity

infusion. Petitioners base this allegation on their claim that the

shares which the GOS received in exchange for this payment had a value

of only DM 82.5 million, DM 62.5 million less than what the GOS paid.

The question of whether this transaction constitutes a

countervailable equity infusion was addressed in Certain Hot Rolled

Lead and Bismuth Carbon Steel Products From Germany (58 FR 6233,

January 27, 1993). The Department determined that the funds were

provided on terms consistent with commercial considerations because at

the same time that the GOS invested, two private investors also

invested in DHS on the same terms. Petitioners have provided no new

information in this petition indicating that this determination was

incorrect. Therefore, the Department does not intend to re-investigate

whether the investment was consistent with commercial considerations.

ITC Notification

Pursuant to section 702(d) of the Act, we have notified the ITC of

this initiation.

Preliminary Determinations By the ITC

The ITC will determine by March 31, 1994, whether there is a

reasonable indication that a United States industry is being materially

injured, or threatened with material injury, by reason of steel wire

rod imports from Germany. If the ITC makes a negative determination, we

will terminate this proceeding; otherwise, the investigation will

proceed according to statutory and regulatory time limits.

This notice is published pursuant to 702(c)(2) of the Act and 19

CFR 355.13(b).

Dated: March 4, 1994.

Joseph A. Spetrini,

Acting Assistant Secretary for Import Administration.

[FR Doc. 94-5883 Filed 3-11-94; 8:45 am]

BILLING CODE 3510-DS-P