Policies Regarding the Conduct of Five-year (``Sunset'') Reviews of Antidumping and Countervailing Duty Orders; Policy Bulletin

DEPARTMENT OF COMMERCE

International Trade Administration

Policies Regarding the Conduct of Five-year (``Sunset'') Reviews

of Antidumping and Countervailing Duty Orders; Policy Bulletin

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Policy Bulletin; request for comments.

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SUMMARY: The Department of Commerce is proposing policies regarding the

conduct of five-year (``sunset'') reviews of antidumping and

countervailing duty orders and suspended investigations pursuant to the

provisions of sections 751(c) and 752 of the Tariff Act of 1930, as

amended, and the Department's regulations. The proposed policies are

intended to complement the applicable statutory and regulatory

provisions by providing guidance on methodological or analytical issues

not explicitly addressed by the statute and regulations.

DATES: To be assured of consideration, written comments must be

received not later than May 12, 1998. Rebuttal comments must be

received not later than June 2, 1998.

ADDRESSES: A signed original and six copies of each set of comments,

including reasons for any recommendation, along with a cover letter

identifying the commenter's name and address, should be submitted to

Robert S. LaRussa, Assistant Secretary for Import Administration,

Central Records Unit, Room 1870, U.S. Department of Commerce,

Pennsylvania Avenue and 14th Street, NW, Washington, DC 20230;

Attention: Sunset Policy Bulletin.

FOR FURTHER INFORMATION CONTACT: Melissa G. Skinner, Office of Policy,

Import Administration, International Trade Administration, U.S.

Department of Commerce, at (202) 482-1560, or Stacy J. Ettinger, Office

of the Chief Counsel for Import Administration, U.S. Department of

Commerce, at (202) 482-4618.

SUPPLEMENTARY INFORMATION: This policy bulletin proposes guidance

regarding the conduct of sunset reviews. As described below, the

proposed policies are intended to complement the applicable statutory

and regulatory provisions by providing guidance on methodological or

analytical issues not explicitly addressed by the statute and

regulations. We invite public comment on the policies.

Request for Comment

The Department solicits comments pertaining to its proposed

policies concerning sunset reviews. Initial comments should be received

by the Assistant Secretary not later than May 12, 1998. Any rebuttals

to the initial comments should be received by the Assistant Secretary

not later than June 2, 1998. Commenters should file a signed original

and six copies of each set of initial and rebuttal comments. All

comments will be available for public inspection and photocopying in

the Import Administration's Central Records Unit, Room B-099, between

the hours of 8:30 am and 5:00 pm on business days.

Each person submitting a comment should include the commenter's

name and address, and give reasons for any recommendations. To

facilitate their consideration by the Department, initial and rebuttal

comments regarding these proposed policies should be submitted in the

following format: (1) number each comment in accordance with the

paragraph numbering of the proposed policy being addressed; (2) begin

each comment on a separate page; (3) provide a brief summary of the

comment (a maximum of three sentences) and label this section ``Summary

of the Comment;'' and (4) concisely state the issue identified and

discussed in the comment and provide reasons for any recommendation.

To help simplify the processing and distribution of comments, the

Department requests the submission of initial and rebuttal comments in

electronic form to accompany the required paper copies. Comments filed

in electronic form should be on a DOS formatted 3.5'' diskette in

either WordPerfect format or a format that the WordPerfect program can

convert and import into WordPerfect. Please make each comment a

separate file on the diskette and name each separate file using the

paragraph numbering of the proposed policy being addressed in the

comment.

Comments received on diskette will be made available to the public

on the Internet at the following address: ``http://www.ita.doc.gov/

import__admin/records/''. In addition, upon request, the Department

will make comments filed in electronic form available to the public on

3.5'' diskettes (at cost), with specific instructions for accessing

compressed data (if necessary). Any questions concerning file

formatting, document conversion, access on the Internet, or other

electronic filing issues should be addressed to Andrew Lee Beller, IA

Webmaster, at (202) 482-0866.

Dated: April 10, 1998.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

Policy Bulletin 98:3

Policies Regarding the Conduct of Five-year (``Sunset'') Reviews of

Antidumping and Countervailing Duty Orders

Sunset Review Policies

I. Overview

II. Sunset Reviews in Antidumping Proceedings

A. Determination of Likelihood of Continuation or Recurrence of

Dumping

1. In general

2. Basis for likelihood determination

3. Likelihood of continuation or recurrence of dumping

4. No likelihood of continuation or recurrence of dumping

5. Treatment of zero or de minimis margins

B. Magnitude of the Margin of Dumping That is Likely to Prevail

1. In general

2. Use of a more recently calculated margin

3. Duty absorption

C. Consideration of Other Factors

1. In general

2. Example

3. Timing of determination of good cause

III. Sunset Reviews in Countervailing Duty Proceedings

A. Determination of Likelihood of Continuation or Recurrence of

a Countervailable Subsidy

1. In general

2. Basis for likelihood determination

3. Continuation, temporary suspension, or partial termination of

a subsidy program

4. Subsidies for which benefits are allocated over time

5. Elimination of a subsidy program or exclusion of subject

companies by the foreign government

6. Treatment of zero or de minimis rates

B. Net Countervailable Subsidy That is Likely to Prevail

1. In general

2. Determination of net countervailable subsidy; company-

specific rates

3. Adjustments to the net countervailable subsidy

4. Nature of the countervailable subsidy

C. Consideration of Other Factors

1. Programs determined to provide countervailable subsidies in

other investigations or reviews

2. Programs newly alleged to provide countervailable subsidies

[[Page 18872]]

Sunset Review Policies

I. Overview

The Uruguay Round Agreements Act (``URAA'') revised the Tariff Act

of 1930, as amended (``the Act''), by requiring that antidumping

(``AD'') and countervailing duty (``CVD'') orders be revoked, and

suspended investigations be terminated, after five years unless

revocation or termination would be likely to lead to a continuation or

recurrence of (1) dumping or a countervailable subsidy, and (2)

material injury to the domestic industry. The URAA assigns to the

Department of Commerce (``the Department'') the responsibility of

determining whether revocation of an antidumping or countervailing duty

order, or termination of a suspended investigation, would be likely to

lead to a continuation or recurrence of dumping or a countervailable

subsidy. The Department then must transmit to the International Trade

Commission (``the Commission'') its likelihood determination and its

determination regarding the magnitude of the margin of dumping or the

net countervailable subsidy that is likely to prevail if the order is

revoked or the suspended investigation is terminated. The URAA also

requires that the Department begin initiating sunset reviews in July

1998, that all sunset reviews of ``transition orders''--those

antidumping and countervailing duty orders and suspended investigations

in effect on January 1, 1995, the effective date of the URAA--be

initiated by December 31, 1999, and that all reviews of transition

orders be completed by June 30, 2001. The URAA further requires that

the Department initiate a sunset review of each order or suspended

investigation that is not a ``transition order'' not later than 30 days

before the fifth anniversary of publication of the order or suspension

agreement in the Federal Register. Pursuant to section 751(c)(1) of the

Act, initiation of sunset reviews is automatic.

Sunset reviews of antidumping and countervailing duty orders and

suspended investigations will be conducted pursuant to the provisions

of the Act, including sections 751(c) and 752 of the Act, and the

Department's regulations at 19 CFR Part 351, including Secs. 351.218,

351,221, 351.222(i), 351.307, 351.308(f), 351.309, and 351.310 (see

Procedures for Conducting Five-year (``Sunset'') Reviews of Antidumping

and Countervailing Duty Orders, 63 FR 13516 (March 20, 1998) (interim

final rules)). These policies are intended to complement the applicable

statutory and regulatory provisions by providing guidance on

methodological or analytical issues not explicitly addressed by the

statute and regulations. In developing these policies, the Department

has drawn on the guidance provided by the legislative history

accompanying the URAA, specifically the Statement of Administrative

Action (``the SAA''), H.R. Doc. No. 103-316, vol. 1 (1994), the House

Report, H.R. Rep. No. 103-826, pt. 1 (1994), and the Senate Report, S.

Rep. No. 103-412 (1994).

II. Sunset Reviews in Antidumping Proceedings

A. Determination of Likelihood of Continuation or Recurrence of Dumping

1. In General

In accordance with section 752(c)(1) of the Act, in determining

whether revocation of an antidumping order or termination of a

suspended dumping investigation would be likely to lead to continuation

or recurrence of dumping, the Department will consider--

(a) the weighted-average dumping margins determined in the

investigation and subsequent reviews, and

(b) the volume of imports of the subject merchandise for the period

before and the period after the issuance of the antidumping order or

acceptance of suspension agreement.

2. Basis for Likelihood Determination

Consistent with the SAA at 879, and the House Report at 56, the

Department will make its determination of likelihood on an order-wide

basis.

3. Likelihood of Continuation or Recurrence of Dumping

The SAA at 889, the House Report at 63, and the Senate Report at

52, state that,

[D]eclining import volumes accompanied by the continued

existence of dumping margins after the issuance of the order may

provide a strong indication that, absent an order, dumping would be

likely to continue, because the evidence would indicate that the

exporter needs to dump to sell at pre-order volumes.

In addition, the SAA at 890, and the House Report at 63-64, state

that,

[E]xistence of dumping margins after the order, or the cessation

of imports after the order, is highly probative of the likelihood of

continuation or recurrence of dumping. If companies continue to dump

with the discipline of an order in place, it is reasonable to assume

that dumping would continue if the discipline were removed. If

imports cease after the order is issued, it is reasonable to assume

that the exporters could not sell in the United States without

dumping and that, to reenter the U.S. market, they would have to

resume dumping.

Therefore, the Department normally will determine that revocation

of an antidumping order or termination of a suspended dumping

investigation is likely to lead to continuation or recurrence of

dumping where--

(a) dumping continued at any level above de minimis after the

issuance of the order or the suspension agreement, as applicable;

(b) imports of the subject merchandise ceased after issuance of the

order or the suspension agreement, as applicable; or

(c) dumping was eliminated after the issuance of the order or the

suspension agreement, as applicable, and import volumes for the subject

merchandise declined significantly.

The Department recognizes that, in the context of a sunset review

of a suspended investigation, the data relevant to the criteria under

paragraphs (a) through (c), above, may not be conclusive with respect

to likelihood. Therefore, the Department may be more likely to

entertain good cause arguments under paragraph II.C in a sunset review

of a suspended investigation.

4. No Likelihood of Continuation or Recurrence of Dumping

The SAA at 889-90, and the House Report at 63, state that,

[D]eclining (or no) dumping margins accompanied by steady or

increasing imports may indicate that foreign companies do not have

to dump to maintain market share in the United States and that

dumping is less likely to continue or recur if the order were

revoked.

See also, the Senate Report at 52.

Therefore, the Department normally will determine that revocation

of an antidumping order or termination of a suspended dumping

investigation is not likely to lead to continuation or recurrence of

dumping where dumping was eliminated after issuance of the order or the

suspension agreement, as applicable, and import volumes remained steady

or increased. Declining margins alone normally would not qualify

because the legislative history makes clear that continued margins at

any level would lead to a finding of likelihood. See section II.A.3,

above. In analyzing whether import volumes remained steady or

increased, the Department normally will consider companies' relative

market share. Such information should be provided to the Department by

the parties.

The Department recognizes that, in the context of a sunset review

of a suspended investigation, the elimination of dumping coupled with

[[Page 18873]]

steady or increasing import volumes may not be conclusive with respect

to no likelihood. Therefore, the Department may be more likely to

entertain good cause arguments under paragraph II.C in a sunset review

of a suspended investigation.

5. Treatment of Zero or De Minimis Margins

Section 752(c)(4)(A) of the Act provides that a weighted-average

dumping margin determined in the investigation or subsequent reviews

that is zero or de minimis shall not by itself require the Department

to determine that revocation of an antidumping duty order or

termination of a suspended investigation would not be likely to lead to

continuation or recurrence of sales at less than fair value.

Therefore, although the Department may consider the existence of a

zero or de minimis dumping margin in making its determination of

likelihood, a zero or de minimis dumping margin, in itself, will not

require that the Department determine that continuation or recurrence

of dumping is not likely. In accordance with section 752(c)(4)(B) of

the Act and 19 CFR 351.106(c)(1), the Department will treat as de

minimis any weighted-average dumping margin that is less than 0.5

percent ad valorem or the equivalent specific rate.

B. Magnitude of the Margin of Dumping That is Likely to Prevail

1. In General

Section 752(c)(3) of the Act provides that the Department will

provide to the Commission the magnitude of the margin of dumping that

is likely to prevail if the order is revoked or the suspended

investigation is terminated. The SAA at 890, and the House Report at

64, provide that the Department normally will select a margin ``from

the investigation, because that is the only calculated rate that

reflects the behavior of exporters * * * without the discipline of an

order or suspension agreement in place.''

Therefore, except as provided in paragraphs II.B.2 and II.B.3, the

Department normally will provide to the Commission the margin that was

determined in the final determination in the original investigation. In

certain situations, the Department may provide to the Commission the

margin that was determined in the preliminary determination in the

original investigation, e.g., where the Department did not issue a

final determination because the investigation was suspended and

continuation was not requested. Specifically, the Department normally

will provide the company-specific margin from the investigation for

each company regardless of whether the margin was calculated using a

company's own information or based on best information available or

facts available. Furthermore, in light of the legislative history

discussed above, for companies not specifically investigated or for

companies that did not begin shipping until after the order was issued,

the Department normally will provide a margin based on the all others

rate from the investigation. In addition, the Department normally will

provide to the Commission a list of companies excluded from the order

based on zero or de minimis margins, if any, or subsequently revoked

from the order, if any.

In a sunset review of an antidumping duty finding, i.e., where the

original investigation was conducted by the Department of the Treasury

(``Treasury''), the Department normally will provide to the Commission

the company-specific margin or the all others rate included in the

Treasury finding published in the Federal Register. If no company-

specific margin or all others rate is included in the Treasury finding,

the Department normally will provide to the Commission the company-

specific margin from the first final results of administrative review

published in the Federal Register by the Department. If the first final

results of administrative review of the finding do not contain a margin

for a particular company, the Department normally will provide to the

Commission, as the margin for that company, the first ``new shippers''

rate \1\ established by the Department for the finding.

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\1\ In 1993, the Department began using the all others rate from

the original investigation as the appropriate cash deposit rate for

companies not covered by a review or the original investigation.

Prior to that time, the Department's practice was to use a ``new

shippers'' rate resulting from a particular review as the cash

deposit rate for companies whose first shipment occurred after the

period covered by the review. The Department used as the ``new

shippers'' rate the highest of the rates of all responding firms

with shipments during the review period. This ``new shippers'' rate

is unrelated to new shipper reviews conducted pursuant to the URAA

under section 751(a)(2)(B) of the Act.

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2. Use of a More Recently Calculated Margin

The SAA at 890-91, and the House Report at 64, provide that in

certain instances, it may be more appropriate for the Department to

provide the Commission with a more recently calculated margin.

Specifically, the SAA and the House Report state that, ``if dumping

margins have declined over the life of an order and imports have

remained steady or increased, [the Department] may conclude that

exporters are likely to continue dumping at the lower rates found in a

more recent review.'' In addition, the SAA at 889-90, and the House

Report at 63, state that, ``declining (or no) dumping margins

accompanied by steady or increasing imports may indicate that foreign

companies do not have to dump to maintain market share in the United

States and that dumping is less likely to continue or recur if the

order were revoked.'' See also, the Senate Report at 52.

Therefore, unless the Department finds no likelihood of

continuation or recurrence of dumping, the Department may, in response

to argument from an interested party, provide to the Commission a more

recently calculated margin for a particular company where, for that

particular company, dumping margins declined or dumping was eliminated

after the issuance of the order or the suspension agreement, as

applicable, and import volumes remained steady or increased. In

analyzing whether import volumes remained steady or increased, the

Department normally will consider the company's relative market share.

Such information should be provided to the Department by the parties.

In addition, a company may choose to increase dumping in order to

maintain or increase market share. As a result, increasing margins may

be more representative of a company's behavior in the absence of an

order. Therefore, unless the Department finds no likelihood of

continuation or recurrence of dumping, the Department may, in response

to argument from an interested party, provide to the Commission a more

recently calculated margin for a particular company where, for that

particular company, dumping margins increased after the issuance of the

order, even if the increase was as a result of the application of best

information available or facts available.

3. Duty Absorption

a. In General

Section 751(a)(4) of the Act provides that, during the second or

fourth administrative review of an order (or, for transition orders,

during an administrative review initiated in 1996 or 1998 (see 19 CFR

351.213(j))), upon request, the Department will determine whether

antidumping duties have been absorbed by a foreign producer or exporter

subject to an order if the subject merchandise is sold in the

[[Page 18874]]

United States through an importer who is affiliated with such foreign

producer or exporter. The statute further provides that the Department

will notify the Commission of its findings regarding such duty

absorption for the Commission to consider in conducting a sunset

review.

Therefore, the Department will provide to the Commission, on a

company-specific basis, its findings regarding duty absorption, if any,

for all reviews in which the Department conducted a duty absorption

analysis.

b. Effect on Magnitude of the Margin

The SAA at 885, and the House report at 60, state that,

Duty absorption is a strong indicator that the current dumping

margins calculated by [the Department] in reviews may not be

indicative of the margins that would exist in the absence of an

order. Once an order is revoked, the importer could achieve the same

pre-revocation return on its sales by lowering its prices in the

U.S. in the amount of the duty that previously was being absorbed.

See also, the Senate Report at 50. The SAA at 886, and the House Report

at 61, also provide that if, in the fourth administrative review (or,

for transition orders, for an administrative review initiated in 1998),

the Department finds that absorption has taken place, the Department

will take that into account in its determination regarding the dumping

margins likely to prevail if an order were revoked. The Senate Report

at 50, suggests that the Department's notification to the Commission of

its findings on duty absorption should include, to the extent

practicable, some indication of the magnitude of the absorption.

Therefore, notwithstanding paragraphs II.B.1 and II.B.2, where the

Department has found duty absorption in the fourth administrative

review of the order (or, for transition orders, in an administrative

review initiated in 1998), the Department normally will--

(a) determine that a company's current dumping margin is not

indicative of the margin likely to prevail if the order is revoked; and

(b) provide to the Commission the higher of the margin that the

Department otherwise would have reported to the Commission or the most

recent margin for that company adjusted to account for the Department's

findings on duty absorption.

The Department normally will adjust a company's most recent margin

to take into account its findings on duty absorption by increasing the

margin by the amount of duty absorption on those sales for which the

Department found duty absorption.

C. Consideration of Other Factors

Section 752(c)(2) of the Act provides that, if the Department

determines that good cause is shown, the Department also will consider

other price, cost, market or economic factors in determining the

likelihood of continuation or recurrence of dumping. The SAA at 890,

states that such other factors might include,

the market share of foreign producers subject to the antidumping

proceeding; changes in exchange rates, inventory levels, production

capacity, and capacity utilization; any history of sales below cost

of production; changes in manufacturing technology in the industry;

and prevailing prices in relevant markets.

The SAA at 890, also notes that the list of factors is illustrative,

and that the Department should analyze such information on a case-by-

case basis.

Therefore, the Department will consider other factors in AD sunset

reviews if the Department determines that good cause to consider such

other factors exists. The burden is on an interested party to provide

information or evidence that would warrant consideration of the other

factors in question. With respect to a sunset review of a suspended

investigation, where the Department determines that good cause exists,

the Department normally will conduct the sunset review consistent with

its practice of examining likelihood under section 751(a) of the Act.

III. Sunset Reviews in Countervailing Duty Proceedings

A. Determination of Likelihood of Continuation or Recurrence of a

Countervailable Subsidy

1. In General

In accordance with section 752(b)(1) of the Act, in determining

whether revocation of a countervailing duty order or termination of a

suspended countervailing duty investigation would be likely to lead to

continuation or recurrence of a countervailable subsidy, the Department

will consider--

(a) the net countervailable subsidy determined in the investigation

and subsequent reviews, and

(b) whether any change in the program which gave rise to the net

countervailable subsidy determined in the investigation and subsequent

reviews has occurred that is likely to affect that net countervailable

subsidy.

2. Basis for Likelihood Determination

Consistent with the SAA at 879, and the House Report at 56, the

Department will make its determination of likelihood on an order-wide

basis.

3. Continuation, Temporary Suspension, or Partial Termination of a

Subsidy Program

a. In General

The SAA at 888, states that,

Continuation of a program will be highly probative of the

likelihood of continuation or recurrence of countervailable

subsidies. Temporary suspension or partial termination of a subsidy

program also will be probative of continuation or recurrence of

countervailable subsidies, absent significant evidence to the

contrary.

See also, the Senate Report at 52.

Therefore, the Department normally will determine that revocation

of a countervailing duty order or termination of a suspended

investigation is likely to lead to continuation or recurrence of a

countervailable subsidy where--

(a) a subsidy program continues;

(b) a subsidy program has been only temporarily suspended; or

(c) a subsidy program has been only partially terminated.

b. Exception

The SAA at 888-89, provides that, if companies have a long track

record of not using a program, the mere availability of the program

should not, by itself, indicate likelihood of continuation or

recurrence of a countervailable subsidy. However, the SAA at 888, also

provides that as long as a subsidy program continues to exist, the

Department should not consider company- or industry-specific

renunciations of countervailable subsidies, by themselves, as an

indication that continuation or recurrence of countervailable subsidies

is unlikely.

Therefore, where a company has a long track record of not using a

program, including during the investigation, the Department normally

will determine that the mere availability of the program does not, by

itself, indicate likelihood of continuation or recurrence of a

countervailable subsidy. In addition, where a subsidy program continues

to exist, the Department normally will not consider company-specific or

industry-specific renunciation of countervailable subsidies under that

program, by themselves, as an indication that continuation or

recurrence of a countervailable subsidy is unlikely.

4. Subsidies for Which Benefits Are Allocated Over Time

The SAA at 889, provides that, with respect to subsidies for which

the benefits are allocated over time, such as grants, long-term loans,

or equity infusions, the Department ``will consider whether the fully

allocated

[[Page 18875]]

benefit stream is likely to continue after the end of the review,

without regard to whether the program that gave rise to the long-term

benefit continues to exist.''

Therefore, where the Department is examining a subsidy for which

the benefits are allocated over time, the Department normally will

determine that a countervailable subsidy will continue to exist when

the benefit stream, as defined by the Department, will continue beyond

the end of the sunset review, without regard to whether the program

that gave rise to the long-term benefit continues to exist.

5. Elimination of a Subsidy Program or Exclusion of Subject Companies

by the Foreign Government

The SAA at 888, states that,

If the foreign government has eliminated a subsidy program, . .

. [the Department] will consider the legal method by which the

government eliminated the program and whether the government is

likely to reinstate the program. For example, programs eliminated

through administrative action may be more likely to be reinstated

than those eliminated through legislative action.

Therefore, where the foreign government has eliminated a subsidy

program or changes a program to exclude subject companies, the

Department will consider--

(a) the legal method by which the government eliminated the

program, and

(b) whether the government is likely to reinstate the program,

in determining whether revocation of a countervailing duty order or

termination of a suspended investigation is likely to lead to

continuation or recurrence of a countervailable subsidy. The Department

normally will determine that programs eliminated through administrative

action are more likely to be reinstated than those eliminated through

legislative action.

6. Treatment of Zero or De Minimis Rates

a. In General

Section 752(b)(4)(A) of the Act provides that a net countervailable

subsidy determined in the investigation or subsequent reviews that is

zero or de minimis shall not by itself require the Department to

determine that revocation of a countervailing duty order or termination

of a suspended investigation would not be likely to lead to

continuation or recurrence of a countervailable subsidy.

Therefore, although the Department may consider the existence of a

zero or de minimis countervailable subsidy rate in making its

determination of likelihood, a zero or de minimis countervailable

subsidy rate, in itself, will not require that the Department determine

that continuation or recurrence of a countervailable subsidy is not

likely. In accordance with section 752(b)(4)(B) of the Act and 19 CFR

351.106(c)(1), the Department will treat as de minimis any

countervailable subsidy rate that is less than 0.5 percent ad valorem

or the equivalent specific rate.

b. De Minimis Combined Benefits

The SAA at 889, and the House Report at 63, state that,

[I]f the combined benefits of all programs considered by [the

Department] for purposes of its likelihood determination have never

been above de minimis at any time the order was in effect, and if

there is no likelihood that the combined benefits of such programs

would be above de minimis in the event of revocation or termination,

[the Department] should determine that there is no likelihood of

continuation or recurrence of countervailable subsidies.

Therefore, if the combined benefits of all programs considered by

the Department for purposes of its likelihood determination have never

been above de minimis at any time the order was in effect, and if there

is no likelihood that the combined benefits of such programs would be

above de minimis in the event of revocation or termination, the

Department normally will determine that there is no likelihood of

continuation or recurrence of countervailable subsidies. In accordance

with section 752(b)(4)(B) of the Act and 19 CFR 351.106(c)(1), the

Department will treat as de minimis any overall countervailable subsidy

rate that is less than 0.5 percent ad valorem or the equivalent

specific rate.

B. Net Countervailable Subsidy That is Likely to Prevail

1. In General

Section 752(b)(3) of the Act provides that the Department will

provide to the Commission the net countervailable subsidy that is

likely to prevail if the order is revoked or the suspended

investigation is terminated. The SAA at 890, and the House Report at

64, provide that the Department normally will select a rate ``from the

investigation, because that is the only calculated rate that reflects

the behavior of exporters and foreign governments without the

discipline of an order or suspension agreement in place.''

Therefore, except as provided in paragraph III.B.3, the Department

normally will provide to the Commission the net countervailable subsidy

that was determined in the final determination in the original

investigation. In certain situations, the Department may provide to the

Commission the net countervailable subsidy that was determined in the

preliminary determination in the original investigation, e.g., where

the Department did not issue a final determination because the

investigation was suspended and continuation was not requested. In

addition, the Department normally will provide to the Commission a list

of companies excluded from the order based on zero or de minimis rates,

if any, or subsequently revoked from the order, if any.

In a sunset review of a countervailing duty order where the

original investigation was conducted by Treasury, the Department

normally will provide to the Commission the net countervailable subsidy

(sometimes previously called the net bounty, subsidy, or grant) from

the first final results of administrative review published in the

Federal Register by the Department, where the net countervailable

subsidy was first calculated on an ad valorem basis.

2. Determination of Net Countervailable Subsidy; Company-Specific Rates

Prior to enactment of the URAA, the Department calculated company-

specific countervailable subsidy rates in the original investigation

only where such rates were ``significantly different'' from the

country-wide rate. See 19 CFR 355.20(d) (1995). Since enactment of the

URAA, and in accordance with section 777A(e)(1) of the Act, the

Department, where possible, calculates individual countervailable

subsidy rates in an investigation for each known exporter or producer

of the subject merchandise (see section 777A(e)(2) of the Act

(providing for an exception to the calculation of individual rates

where it is not practicable to do so because of the large number of

exporters or producers involved in the investigation)).

Therefore, except as provided in paragraph III.B.3, where a

company-specific countervailing duty rate was determined for a

particular company in the original investigation, the Department

normally will provide that rate to the Commission as the net

countervailable subsidy that is likely to prevail for that company if

the order is revoked or the suspended investigation is terminated.

Specifically, the Department normally will provide the company-specific

countervailing duty rate from the investigation for each company, where

available, regardless of whether the rate was calculated using a

[[Page 18876]]

company's own information or was based on best information available or

facts available. If no company-specific countervailing duty rate was

determined for a particular company in the original investigation,

because the company's rate was not ``significantly different'' from the

country-wide rate, the company was not specifically investigated, or

the company did not begin shipping until after the order was issued,

except as provided in paragraph III.B.3, the Department normally will

provide to the Commission the country-wide rate or all others rate

determined in the original investigation as the net countervailable

subsidy that is likely to prevail for that particular company if the

order is revoked or the suspended investigation is terminated.

3. Adjustments to the Subsidy

As discussed in paragraph III.B.1, the Department normally will

provide to the Commission the net countervailable subsidy that was

determined in the original investigation. However, the purpose of the

net countervailable subsidy in the context of sunset reviews is to

provide the Commission with a rate which represents the countervailable

rate that is likely to prevail if the order is revoked or the suspended

investigation is terminated. Furthermore, section 752(b)(1)(B) of the

Act provides that the Department will consider whether any change in

the program which gave rise to the net countervailable subsidy

determination in the investigation or subsequent reviews has occurred

that is likely to affect the net countervailable subsidy. Consequently,

although the SAA at 890, and the House Report at 64, provide that the

Department normally will select a rate from the investigation, this

rate may not be the most appropriate if, for example, the rate was

derived (in whole or part) from subsidy programs which were found in

subsequent reviews to be terminated, there has been a program-wide

change, or the rate ignores a program found to be countervailable in a

subsequent administrative review.

Therefore, the Department may make adjustments to the net

countervailable subsidy determined pursuant to paragraphs III.B.1 and

III.B.2, including, but not limited to, the following:

(a) Where the Department has conducted an administrative review of

the order, or suspension agreement, as applicable, and found that a

program was terminated with no residual benefits and no likelihood of

reinstatement, the Department normally will adjust the net

countervailable subsidy rate determined in the original investigation

to reflect the change. If, in an investigation, the Department found

that a program had been terminated with no residual benefits subsequent

to the period of investigation, the Department normally will consider

this information in determining the net countervailable subsidy.

(b) The Department normally will not make adjustments to the net

countervailable subsidy rate for programs that still exist, but were

modified subsequent to the order, or suspension agreement, as

applicable, to eliminate exports to the United States (or subject

merchandise) from eligibility.

(c) Where the Department has conducted an administrative review of

the order, or suspension agreement, as applicable, and found a new

countervailable program, or found a program previously not used but

subsequently found countervailable, that was included in the new

subsidy rate for the administrative review, the Department normally

will adjust the net countervailable subsidy rate determined in the

original investigation to reflect the change.

(d) Where the Department has conducted an administrative review of

the order, or suspension agreement, as applicable, and determined to

increase the net countervailable subsidy rate for any reason, including

as a result of the application of best information available or facts

available, the Department may adjust the net countervailable subsidy

rate determined in the original investigation to reflect the increase

in the rate.

(e) Where the Department has conducted an administrative review of

the order, or suspension agreement, as applicable, and found that a

program is not countervailable based on sections 771(5B)(B), (C), or

(D) of the Act, the Department normally will adjust the net

countervailable subsidy rate determined in the original investigation

to reflect the change. Also, where a subsidy is provided pursuant to a

program that has been notified in accordance with Article 8.3 of the

Subsidies Agreement (see section 771(5B)(E)(i) of the Act), the

Department normally will adjust the net countervailable subsidy rate

determined in the original investigation to reflect the change, unless

the Department determines to treat the subsidy as countervailable based

upon notification from the Trade Representative under section

771(5B)(E)(ii) of the Act.

(f) Where the Department has conducted an administrative review of

the order, or suspension agreement, as applicable, and found that a

program is not countervailable based on section 771(5B)(F) of the Act,

the Department normally will adjust the net countervailable subsidy

rate determined in the original investigation to reflect the change.

(g) Where the Department has not conducted an administrative review

of the order, or suspension agreement, as applicable, subsequent to the

investigation, except as provided in paragraph III.C, the Department

normally will not make adjustments to the net countervailable subsidy

rate determined in the original investigation.

4. Nature of the Countervailable Subsidy

Consistent with section 752(a)(6) of the Act, the Department will

provide information to the Commission concerning the nature of a

countervailable subsidy and whether the subsidy is a subsidy described

in Article 3 or Article 6.1 of the Subsidies Agreement.

C. Consideration of Other Factors

1. Programs Determined To Provide Countervailable Subsidies in Other

Investigations or Reviews

Section 752(b)(2)(A) of the Act provides that if the Department

determines that good cause is shown, the Department also will consider

programs determined to provide countervailable subsidies in other

investigations or reviews, but only to the extent that such programs--

(a) can potentially be used by the exporters or producers subject

to the sunset review, and

(b) did not exist at the time that the countervailing duty order

was issued or the suspension agreement accepted.

Therefore, the Department will consider such other programs in CVD

sunset reviews if the Department determines that good cause to consider

such other programs exists. The burden is on interested parties to

provide information or evidence that would warrant consideration of the

subsidy program in question. In addition, with respect to a sunset

review of a suspended investigation, where the Department determines

that good cause exists, the Department normally will conduct the sunset

review consistent with its practice of examining likelihood under

section 751(a) of the Act.

2. Programs Newly Alleged To Provide Countervailable Subsidies

Section 752(b)(2)(B) of the Act provides that if the Department

determines that good cause is shown, the Department also will consider

programs newly alleged to provide countervailable subsidies, but only

to

[[Page 18877]]

the extent that the Department makes an affirmative countervailing duty

determination with respect to such programs and with respect to the

exporters or producers subject to the sunset review. The SAA at 889,

states that,

[S]ubsidy allegations normally should be made in the context of

[administrative] reviews * * *, and [the Department is not expected]

to entertain frivolous allegations in . . . [sunset] reviews.

However, where there have been no recent [administrative] reviews or

where the alleged countervailable subsidy program came into

existence after the most recently completed [administrative] review,

[the Department] may consider new subsidy allegations in the context

of a * * * [sunset] review.

Therefore, the Department will consider programs newly alleged to

provide countervailable subsidies if the Department determines that

good cause to consider such programs exists. Furthermore, the

Department normally will consider a new subsidy allegation in the

context of a sunset review only where information on such program was

not reasonably available to domestic interested parties during the most

recently completed administrative review or the alleged countervailable

subsidy program came into existence after that administrative review.

The burden is on interested parties to provide information or evidence

that would warrant consideration of the subsidy program in question. In

addition, with respect to a sunset review of a suspended investigation,

where the Department determines that good cause exists, the Department

normally will conduct the sunset review consistent with its practice of

examining likelihood under section 751(a) of the Act.

[FR Doc. 98-10039 Filed 4-15-98; 8:45 am]

BILLING CODE 3510-DS-P