Amended Final Affirmative Countervailing Duty Determinations; Certain Carbon Steel Products From Belgium

DEPARTMENT OF COMMERCE

International Trade Administration

[C-423-806]

Amended Final Affirmative Countervailing Duty Determinations;

Certain Carbon Steel Products From Belgium

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

SUMMARY: The appeal of the court decision in Geneva Steel et al. v.

United States, 937 F. Supp. 946 (CIT 1996) (Geneva II) has been

dismissed. Geneva Steel et al. v. United States, Appeal No. 97-1123

(Fed. Cir., Feb. 27, 1997). On April 18, 1997, the U.S. Court of

International Trade (CIT) vacated that part of its decision in Geneva

II which pertained to Sidmar, N.V. (Sidmar). Therefore, Commerce is

amending its final affirmative determinations in the countervailing

duty investigations of certain steel products from Belgium in

accordance with Geneva II, subject to the order of vacatur.

FOR FURTHER INFORMATION CONTACT:

Vincent Kane at (202) 482-2815, Office of Antidumping/Countervailing

Duty Enforcement, Import Administration, International Trade

Administration, U.S. Department of Commerce, Washington, D.C., 20230,

or Duane Layton at (202) 482-5285, Office of the Chief Counsel for

Import Administration, U.S. Department of Commerce.

EFFECTIVE DATE: July 15, 1997.

SUPPLEMENTARY INFORMATION:

Background

In Geneva II, the CIT affirmed Commerce's redetermination on remand

of the final affirmative determinations in the countervailing duty

investigations of certain steel products from Belgium (58 FR 37273,

July 9, 1993, as amended by 58 FR 43749, August 17, 1993). In that

redetermination, Commerce addressed six issues, which had been remanded

to it by the court in Geneva Steel et al. v. United States, 914 F.

Supp. 563 (CIT 1996) (Geneva I).

The first issue concerned an interest rate reduction on a loan

received by Forge de Clabecq (Clabecq). In the final determinations,

Commerce calculated a benefit for the favorable interest rate on the

loan but failed to take into account an interest rate reduction. In the

redetermination, Commerce recalculated the subsidy rate for Clabecq to

take into account the interest rate reduction on the loan.

The second issue concerned Commerce's calculation of the benefit

realized by Clabecq in converting debt to equity. Commerce's normal

practice in calculating the benefit from debt-to-equity conversions is

to select a benchmark price for the equity on the date on which the

equity is issued. In the final determinations, contrary to its normal

practice, Commerce calculated the benefit based on the date of the

agreement to convert debt to equity. In the redetermination on remand,

Commerce recalculated the benefit based on the date of issuance of the

equity.

The third issue concerned Commerce's decision in the final

determinations to use the price of Cockerill Sambre's (Cockerill's) and

Clabecq's publicly traded common shares as a benchmark in determining

whether, and to what extent, the companies benefited from selling parts

beneficiaries (PBs) to the Government of Belgium (GOB). In the final

determinations, Commerce gave no explanation for its selection of the

common shares of these companies as the next most similar publicly

traded shares to the PBs. In the remand determination, Commerce

demonstrated from evidence on the record that the publicly traded

shares were the next most similar publicly traded shares.

The fourth issue concerned whether Sidmar's conversion of

convertible debentures (OCPCs) to PBs was on terms consistent with

commercial considerations. In the final determinations, Commerce did

not view Sidmar to be unequityworthy and, therefore, did not consider

whether the company's conversion of OCPCs to PBs was on terms

inconsistent with commercial considerations. In Aimcor, Alabama

Silicon, Inc. v. United States, 871 F. Supp. 447, 454 (CIT 1994) and in

Geneva I, 914 F. Supp. at 582, the CIT held that investment in a

company may be on terms inconsistent with commercial considerations,

despite the fact that the company is not unequityworthy. Therefore, the

court instructed Commerce to determine

[[Page 37881]]

whether Sidmar's conversion of OCPCs to PBs was on terms inconsistent

with commercial considerations.

In its redetermination on remand, Commerce determined that the

conversion was on terms inconsistent with commercial considerations. In

making this redetermination, Commerce compared the price paid by the

GOB for the PBs to the value of a non-publicly traded common share of

Sidmar's stock, as reported by an independent accounting firm. Before

comparing the value of a common share with the price paid by the GOB

for PBs, Commerce compared the principal characteristics of Sidmar's

common shares and PBs. In comparing the price of Sidmar's PBs to the

value of its common stock, Commerce made adjustments for differences in

voting rights, dividend rights, and transferability. On this basis

Commerce found Sidmar's conversion to be inconsistent with commercial

considerations.

We note that in the final determinations, Commerce found the

conversion of Clabecq's and Cockerill's OCPCs to PBs to be

countervailable, based on a comparison of the prices of the PBs to the

market prices of these companies' publicly traded shares. However,

Commerce made no adjustment in the final determinations for the

inferior characteristics of these companies' PBs (i.e., inferior voting

rights, dividend rights, and transferability). In the redetermination

on remand, Commerce adjusted for these characteristics, as it did for

the conversion of Sidmar's OCPCs to PBs.

The fifth issue concerned the early redemption of Sidmar's

preferred shares. In the final determinations, Commerce found that

Sidmar, to redeem its preferred shares early, paid in 1991 an amount

equal to the net present value of the amount it would have paid had it

redeemed the shares in 2004, the original redemption date. For this

reason, Commerce concluded that the redemption was not inconsistent

with commercial considerations. In its remand order, the CIT directed

Commerce to explicate the record evidence, which the agency reviewed,

in determining that the redemption of the preferred shares was not on

terms inconsistent with commercial considerations. In its

redetermination on remand, Commerce detailed in full the particulars of

this redemption and demonstrated from evidence on the record that early

redemption was requested by the GOB for budgetary reasons and that the

GOB agreed to accept payment of the net present value of the shares

rather than face an uncertain outcome in 2004.

The sixth issue concerned Commerce's determination that the GOB's

funding of additional allowance benefits under the Steel Collective

Labor Convention bestowed a recurring benefit based on the criteria

outlined in the allocation section of the General Issues Appendix (58

FR 37225, July 9, 1993). The CIT found that Commerce failed to provide

an explanation and evidence to support the agency's finding that the

additional allowance benefits were recurring. In its redetermination on

remand, Commerce demonstrated from evidence on the record that steel

firms automatically qualified for benefits from prepensioning,

including reimbursements from the GOB for additional allowance

payments, and that these benefits were received over a long period of

time. Therefore, Commerce concluded that the benefits were recurring.

On October 3, 1996, Commerce published notice of the court decision

in Geneva II (61 FR 51682). In that notice the agency stated that it

must continue to suspend liquidation until a ``conclusive'' decision in

this action is reached. Because the appeal filed by Sidmar challenging

the court decision in Geneva II has been dismissed and the opportunity

for further appeals has expired, the Department is amending the rates

calculated in the final determination and order, subject to the order

of vacatur entered by the CIT on April 18, 1997. The new rates are as

follows:

Certain Hot-Rolled Carbon Steel Flat Products

Country-Wide Rate--0.68 percent

Cockerill--23.15 percent

Certain Cold-Rolled Carbon Steel Flat Products

Country-Wide Rate--0.58 percent

Cockerill--23.15 percent

Certain Cut-To-Length Carbon Steel Plate

Country-Wide Rate--5.92 percent

Cockerill--23.15 percent

Subsequent to our final determinations on July 9, 1993, the

International Trade Commission (ITC) issued negative determinations

with regard to injury resulting from the importation of hot-rolled and

cold-rolled flat-rolled carbon steel products from Belgium in Certain

Steel Products from Belgium, 58 FR 43905 (ITC August 18, 1993). These

determinations were affirmed by the CIT in decisions issued on December

30, 1994, for hot-rolled carbon steel products, and January 27, 1995,

for cold-rolled carbon steel products. See United States Steel Group--A

Unit of USX Corp. v. United States, 873 F. Supp. 673 (CIT 1994); Kern-

Liebers USA, Inc. v. United States, Slip Op. 95-9 (1995 Ct. Int'l Trade

LEXIS 10). The decisions of the CIT were subsequently affirmed by the

Court of Appeals for the Federal Circuit on August 29, 1996. United

States Steel Group et al. v. United States, 96 F.3d 1352 (Fed. Cir.

1996), reh'g denied, 1996 U.S. App. LEXIS 31227 (Nov. 21, 1996).

Therefore, we will instruct Customs to continue to suspend

liquidation on entries of cut-to-length carbon steel plate from

Belgium, the only merchandise covered by the countervailing duty order

issued on August 17, 1993 (58 FR 43749), entered, or withdrawn from

warehouse, for consumption and to collect cash deposits, at the new

rates on all such entries made on or after publication of this notice

in the Federal Register.

Dated: July 1, 1997.

Robert S. LaRussa,

Acting Assistant Secretary for Import Administration.

[FR Doc. 97-18450 Filed 7-14-97; 8:45 am]

BILLING CODE 4310-MR-M