Suspension of Countervailing Duty Investigation: Certain Hot- Rolled Flat-Rolled Carbon-Quality Steel Products From Brazil

DEPARTMENT OF COMMERCE

International Trade Administration

[C-351-829]

Suspension of Countervailing Duty Investigation: Certain Hot-

Rolled Flat-Rolled Carbon-Quality Steel Products From Brazil

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

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SUMMARY: The Department of Commerce (the Department) has suspended the

countervailing duty investigation involving certain hot-rolled flat-

rolled carbon-quality steel products from Brazil. The basis for the

suspension is an agreement between the Department and the Government of

Brazil wherein the GOB has agreed not to provide any new or additional

export or import substitution subsidies on the subject merchandise and

has agreed to restrict the volume of direct or indirect exports to the

United States of hot-rolled flat-rolled carbon-quality steel products

from all Brazilian producers/exporters in order to eliminate completely

the injurious effects of exports of this merchandise to the United

States.

EFFECTIVE DATE: July 6, 1999.

FOR FURTHER INFORMATION CONTACT: Linda Ludwig at (202) 482-3833,

Antidumping and Countervailing Duty Enforcement Group III, Import

Administration, International Trade Administration, U.S. Department of

Commerce, 14th Street and Constitution Avenue, NW, Washington, DC

20230.

SUPPLEMENTARY INFORMATION:

Background

On October 15, 1998, the Department initiated a countervailing duty

investigation under section 702 of the Tariff Act of 1930 (the Act), as

amended, to determine whether manufacturers, producers, or exporters of

certain hot-rolled flat-rolled carbon-quality steel products from

Brazil receive subsidies (63 FR 56623). On November 25, 1998, the

International Trade Commission (ITC) published its affirmative

preliminary injury determination. On December 1, 1998 and January 22,

1999, we postponed the preliminary determination until no later than

February 12, 1999. See Hot-Rolled Flat-Rolled Carbon-Quality Steel

Products from Brazil: Postponement of Time Limit for Countervailing

Duty Investigation, 63 FR 67459 (December 7, 1998) and Hot-Rolled Flat-

Rolled Carbon-Quality Steel Products from Brazil: Postponement of Time

Limit for Countervailing Duty Investigation, 64 FR 4638 (January 29,

1999).

On February 12, 1999, the Department preliminary determined that

countervailable subsidies are being provided to Companhia Siderugica

Nacional (CSN), Usinas Siderugicas de Minas Gerais (USIMINAS) and

Companhia Siderurgica Paulista (COSIPA). See Preliminary Affirmative

Countervailing Duty Determination and Alignment of Final Countervailing

Duty Determination With Final Antidumping Duty Determination: Certain

Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Brazil, 64 FR

8313 (February 19, 1999). We conducted verification of the

questionnaire responses of the Government of Brazil (GOB), CSN,

USIMINAS and COSIPA from April 5 through April 16, 1999.

The Department and the GOB initialed a proposed agreement

suspending the investigation on June 6, 1999. Interested parties were

informed that the Department intended to finalize the Agreement on July

6, 1999, and were invited to provide written comments on the agreement.

We received comments from petitioners (Bethlehem Steel Corp., Ispat

Inland Inc., LTV Steel Company, Inc., National Steel Corp., U.S. Steel

Group (a Unit of USX Corp.), California Steel Industries, Gallatin

Steel Company, Geneva Steel, Gulf States Steel Inc., Ipsco Steel Inc.,

Steel Dynamics, Weirton Steel Corporation, and Independent Steelworkers

Union).

The Department and the GOB signed the final suspension agreement on

July 6, 1999.

Scope of Suspension Agreement

See Final Affirmative Countervailing Duty Determination: Certain

Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Brazil,

signed on July 6, 1999.

Suspension of Investigation

The Department consulted with the parties to the proceeding and has

considered their positions with respect to the proposed suspension

agreement. In accordance with section 704(c) of the Act, we have

determined that extraordinary circumstances are present in this case as

defined by section 704(c)(4) of the Act. (See July 6, 1999,

Extraordinary Circumstances Memorandum to Robert S. LaRussa.)

The suspension agreement provides that: (1) The GOB will not

provide any new or additional export or import substitution subsidies

on the subject merchandise; and (2) the GOB will restrict the volume of

direct or indirect exports to the United States of subject merchandise

from all Brazilian producers/exporters.

We have also determined that the suspension agreement can be

monitored effectively and is in the public interest, pursuant to

section 704(d) of the Act. (See July 6, 1999, Public Interest

Memorandum to Robert S. LaRussa.) We find, therefore, that the criteria

for suspension of the investigation pursuant to section 704(c) of the

Act have been met. The terms and conditions of the suspension

agreement, signed July 6, 1999, are set forth in Appendix I to this

notice.

The suspension of liquidation ordered in the final affirmative

determination in this case shall continue in effect, subject to section

704(h)(3) of the Act. Section 704(f)(2)(B) of the Act provides that the

Department may adjust the security required to reflect the effect of

the Agreement. Pursuant to this provision, the Department has found

that the Agreement eliminates completely the injurious effects of the

imports and, thus, the Department is adjusting the security required

from producers and/or exporters to zero. The security rates in effect

for imports from non-signatory producers/exporters remain as published

in our final determination.

On July 6, 1999, we received a request from petitioners requesting

that we continue the investigation. Pursuant to this request, we are

continuing the investigation in accordance with section 704(g) of the

Act and have notified the ITC of our determination. If the ITC's injury

determination is negative, the agreement will have no force or effect,

and the investigation will be terminated

[[Page 38798]]

(see section 704(f)(3)(A) of the Act). If the ITC's determination is

affirmative, the Department will not issue a countervailing duty order

as long as the suspension agreement remains in force (see section

704(f)(3)(B) of the Act).

This notice is published pursuant to section 704(f)(1)(A) of the

Act.

Dated: July 6, 1999.

Bernard T. Carreau,

Acting Assistant Secretary for Import Administration.

Appendix I: Agreement Suspending the Countervailing Duty

Investigation on Hot-Rolled Flat-Rolled Carbon-Quality Steel From

Brazil

The U.S. Department of Commerce (the ``DOC'') enters into this

countervailing duty suspension agreement (``the Agreement'')

1 with the Government of Brazil (the ``GOB'') through the

Ministry of Foreign Relations. Pursuant to this suspension agreement,

the GOB will restrict exports to the United Sates of certain hot-rolled

flat-rolled carbon-quality steel products (hereinafter called Hot-

Rolled Steel) from all Brazilian producers/exporters, subject to the

terms and conditions set forth below.

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\1\ Pursuant to Section 704(b) and (c) of the Tariff Act of

1930, as amended (19 U.S.C. 1671c(b) & (c)) (the ``Act''), and

Section 208 of part 351 of Title 19 of the Code of Federal

Regulations (the ``Regulations'').

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I. Definitions

For purposes of this Agreement, the following definitions apply:

A. Date of Export--of Hot-Rolled Steel into the United States shall

be the date on which the GOB's export license issuing authority issued

the Export License.

B. Effective Date--means date on which this Agreement and the

notice of suspension of investigation are published in the Federal

Register.

C. Export License--is the document issued by the GOB's export

license issuing authority that serves as both an export limit

certificate and a certificate of origin.

D. Export and Import Substitution Subsidies--include those

subsidies that have been determined to be export or import substitution

subsidies in the preliminary determination in the countervailing duty

investigation underlying this agreement (unless the investigation is

continued and a contrary decision is reached in the final

determination), in any final U.S. countervailing duty investigation of

a Brazil product, or in any final review of a Brazil product under

section 751 of the Act, and include subsidies which may apply to other

products or exports to other destinations to the extent that such

subsidies cannot be segregated as applying solely to such other

products or exports.

D. Hot-Rolled Steel means the certain hot-rolled, flat-rolled,

carbon quality steel products from Brazil described in Appendix II and

sometimes referred to as the ``subject merchandise'' of the suspended

investigation.

E. Indirect Exports means exports of Hot-Rolled Steel from Brazil

to the United States through one or more third countries, whether or

not such exports are further processed, provided that the further

processing does not result in a substantial transformation or a change

in the country of origin.

F. Party to the Proceeding means any producer, exporter, or

importer of Hot-Rolled Steel, union of workers engaged in the

production of Hot-Rolled Steel, associations of such parties, or the

government of any country from which such merchandise is exported, that

actively participated in the countervailing duty investigation, through

written submission of factual information or written argument, as

provided for in section 771(9) of the Act.

G. Export Limit Period means one of the following periods:

H. Initial Export Limit Period--The Initial Export Limit Period

shall begin on October 1, 1999, and end on September 30, 2000. The

Subsequent Export Limit Periods shall consist of each subsequent year

period from October 1 through the following September 30.

I. United States means the customs territory of the United States

of America (the 50 States, the District of Columbia and Puerto Rico)

and foreign trade zones located within the territory of the United

States.

J. Violation means noncompliance with the terms of this Agreement,

whether through an act or omission, except for noncompliance that is

inconsequential, inadvertent, or does not substantially frustrate the

purposes of this Agreement.

II. Suspension of Investigation

On the Effective Date, the DOC will suspend its countervailing duty

investigation of Hot-Rolled Steel from Brazil initiated on October 15,

1998 (63FR56607, published October 22, 1998), in accordance with

Section 704 of the Act and Section 208 of the Regulations.

III. Non-provision of Export Subsidies

A. The GOB will not bestow any Export Subsidies or Import

Substitution Subsidies upon the subject merchandise.

B. The GOB recognizes that the provision of export or import

substitution subsidies on the production or shipment of Hot-Rolled

Steel exported directly or indirectly from Brazil to the United States

may result in termination of this Agreement and resumption of the

investigation pursuant to the provisions of section 704(i) of the Act.

C. The GOB shall notify the DOC in writing of any new benefit which

is, or which the GOB has reason to know would be, an export or import

substitution subsidy on shipments of Hot-Rolled Steel exported,

directly or indirectly, from Brazil to the United States, including

subsidies which may apply to both the subject merchandise and other

products or exports to other destinations, to the extent such benefits

cannot be segregated as applying solely to such other products or

exports.

IV. Export Limits

A. The quota level in metric tons (MT) for each of the periods

shall be as follows:

Effective Date through September 30, 1999: 0 MT

October 1, 1999 through September 30, 2000: 295,000 MT

October 1, 2000 through September 30, 2001: 295,000 MT

October 1, 2001 through September 30, 2002: 295,000 MT

October 1, 2002 through September 30, 2003: 295,000 MT

October 1, 2003 through September 30, 2004: 295,000 MT

B. No Hot-Rolled Steel covered by this Agreement, whether exported

directly or indirectly from Brazil, shall be entered into the United

States unless, when cumulated with all prior entries of Hot-Rolled

Steel exported from Brazil during each yearly Export Limit Period in

which that Hot-Rolled Steel was exported, it does not exceed the export

limits set forth in the previous paragraph.

C. When Hot-Rolled Steel is imported into the United States and is

subsequently re-exported, or re-packaged and re-exported, or further

processed (but still covered by this Agreement) and re-exported, the

amount re-exported shall be deducted from the amount of exports that

have been counted against the export limit for the Export Limit Period

in which the re-export takes place. The deduction will be applied only

after the DOC has received, and has had the opportunity to verify,

evidence demonstrating the original importation, any repackaging or

[[Page 38799]]

further processing, and subsequent exportation.

D. The GOB's export license issuing authority will not issue export

licenses authorizing the exportation to the United States of Hot-Rolled

Steel covered by this Agreement in any half of any Export Limit Period

that exceeds 60 percent of the export limit for that Export Limit

Period.

E. Notwithstanding any other provision of this Agreement, up to 15

percent of the export limit for any Export Limit Period may be carried

over to the Subsequent Export Limit Period and up to 15 percent of the

export limit for any Export Limit Period may be carried back to the

last 90 days of the previous Export Limit Period. Any carried over or

carried back allowance shall be counted against the export limit for

the subsequent or previous Export Limit Period, respectively.

V. Implementation

A. The United States shall require presentation of an original

stamped Export License as a condition for entry into the United States

of Hot-Rolled Steel covered by this Agreement, except where there are

multiple shipments under a single license. For multiple shipments at

multiple ports, the original license shall be presented at each port

and deductions made upon that original license for individual entries

at each Port. For multiple entries at one port, the original license

will be presented and deductions made for the first entry drawn from

that license. Subsequent entries at that port can be made from

certified copies of the original which reflect all of the deductions

made from the original license. The United States will prohibit the

entry of any Hot-Rolled Steel from Brazil not accompanied by an

original stamped Export License, except as provided herein.1

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\1\ The validity of an Export License will not be affected by a

subsequent change of an HTS number.

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B. Export Licenses must contain, for each Hot-Rolled Steel product

covered by the license, the exact product description, applicable

reference price, the quantity in metric tons, and dimensions (gauge,

width, and, in the case of coils, length, if appropriate). If

necessary, additional information may be included on the Export License

or, if necessary, a separate page attached to the Export License. DOC

will deduct the quantity listed on each Export License from the export

limit for the Export Limit Period in which the Date of Export falls.

However, if the bills of lading for all of the shipments under an

Export License establish that the actual imports into the United States

under that license were less than the total volume listed on the

license, DOC will reflect the actual amount as having been deducted

from the volume listed on the export license, but, notwithstanding the

carry-over and carry-back limitations in section IV.D., will authorize

the export license issue a new Export License in the same or Subsequent

Export Licensing Period authorizing additional exports equal in volume

to the volume of the undershipment. Exports under such additional

licenses will be counted against the export limit for the Export Limit

Period containing the Date of Export of the undershipment.

C. The GOB will ensure compliance with all of the provisions of

this Agreement. In order to ensure such compliance, the GOB will take

at least the following measures:

1. Ensure that no steel subject to this Agreement is exported from

Brazil for entry into the United States during any Export Limit Period

that exceeds the export limit for that Export Limit Period.

2. Establish an export limit licensing and enforcement program for

all direct and indirect exports of Hot-Rolled Steel to the United

States no later than 120 days after the Effective Date.

3. Require that applications for Export Licenses be accompanied by

a report containing all of the information listed in Appendix III

(Exports of Hot-Rolled Steel).

4. Refuse to issue an Export License to any applicant that does not

permit full verification and reporting under this Agreement of all of

the information in the application.

5. Issue Export Licenses sequentially, endorsed against the export

limit for the relevant Export Limit Period, and reference any notice of

export limit allocation results for the relevant Export Limit Period.

Export Licenses shall remain valid for entry into the United States for

six months. DOC and GOB may agree to an extension of the validity of

the Export License in extraordinary circumstances.

6. Issue Export Licenses in the English language and, at the

discretion of the export license issuing authority, also in the

Portugese language.

7. Issue Export Licenses no earlier than 90 days before the day on

which the Hot-Rolled Steel is accepted by a transportation company, as

indicated in the bill of lading or a comparable transportation

document, for export.

8. Permit full verification of all information related to the

administration of this Agreement on an annual basis or more frequently,

as deemed necessary, to ensure that the GOB is in full compliance with

this Agreement.

9. Ensure compliance with all procedures established in order to

effectuate this Agreement by any official Brazilian institution,

chamber, or other authorized Brazilian company, and any Brazilian

producer, exporter, broker, and trader of Hot-Rolled Steel.

10. Impose strict measures, such as prohibition from participation

in the export limits allowed by the Agreement, in the event that any

Brazilian company does not comply in full with the requirements

established by GOB pursuant to this Agreement.

D. If any Hot-Rolled steel from Brazil is entered into the United

States in excess of the Export Limit or without a valid Export Licence,

DOC shall notify GOB of the entry(ies) and provide to GOB all of the

information concerning the entry(ies) that DOC is able to disclose

consistent with U.S. law. GOB shall respond within 21 days. If DOC

determines that entry of Hot-Rolled Steel from Brazil in excess of the

Export Limit or without a valid Export License has occurred, DOC shall

provide GOB with an opportunity for prompt consultations, which shall

be completed within 60 days after DOC notified GOB of the excessive or

unlicensed entry. Once the consultations have been completed, unless

DOC has concluded that the excessive or unlicensed entry did not occur,

DOC shall count against the Export Limit for the period in which the

excessive or licenced entry occurred twice the volume of the entry. If

the Export Limit for the period in which the excessive or unlicensed

entry occurred has been reached, any remaining portion of the excessive

or unlicensed entry will be subtracted from the next period's Export

Limit.

VI. Anticircumvention

A. The GOB will take all necessary measures to prevent

circumvention of this Agreement. These measures shall include requiring

that all Brazilian exporters of Hot-Rolled Steel agree, as a condition

of receiving any Export License under this Agreement, not to export

directly or indirectly to the United States Hot-Rolled Steel that is

not accompanied by an Export License issued pursuant to this Agreement.

1. When GOB has received an allegation that circumvention has

occurred, including an allegation from DOC, GOB shall promptly initiate

an inquiry, normally complete the inquiry within 45 days and notify DOC

of the results of the inquiry within 15 days after the conclusion of

the inquiry.

2. If GOB determines that a Brazilian company has participated in a

[[Page 38800]]

transaction circumventing this agreement, GOB shall impose penalties

upon such company including, but not limited to, denial of access to

export certificates for hot-rolled steel under this agreement.

3. If GOB determines that a Brazilian company has participated in

the circumvention of this agreement, GOB shall count against the export

limit for the Export Limit Period in which the circumvention took place

and amount of hot-rolled steel equivalent to the amount involved in

such circumvention and shall immediately notify DOC of the amount

deducted. If sufficient tonnage is not available in the current Export

Limit Period, then the remaining amount shall be deducted from the

subsequent Export Limit Period or Periods.

4. If GOB determines that a company from a third country has

circumvented the Agreement and DOC and GOB agree that no Brazilian

company participated in or had knowledge of such activities, then the

parties shall hold consultations for the purpose of sharing information

regarding such circumvention and reaching mutual agreement on the

appropriate measures to be taken to eliminate such circumvention. If

the parties are unable to reach mutual agreement within 45 days, then

DOC may take appropriate measures, such as deducting the amount of hot-

rolled steel involved in such circumvention from the export limit for

the then-current Export Limit Period or a subsequent Period. Before

taking such measures, DOC will notify GOB of the facts and reasons

constituting the basis for DOC's intended action and will afford GOB 15

days in which to comment.

B. DOC will investigate any allegations of circumvention which are

brought to its attention both by asking GOB to investigate such

allegations and by itself gathering relevant information. GOB will

respond to requests from DOC for information relating to such

allegations. In distinguishing normal arrangements from those which

would result in the circumvention of the export limits established by

this Agreement, DOC will take the following factors into account:

1. Existence of any verbal or written agreement leading to

circumvention of this agreement;

2. Existence and function of any subsidiaries or affiliates of the

parties involved;

3. Existence and function of any historical and traditional

patterns of production and trade among the parties involved, and any

deviation from such patterns;

4. Existence of any payments unaccounted for by previous or

subsequent deliveries, or any payments to one party for Hot-rolled

steel delivered or swapped by another party;

5. Sequence and timing of the arrangements; and

6. Any other information relevant to the transaction or

circumstances.

C. In the event that DOC determines that a Brazilian company has

participated in a transaction circumventing this Agreement, DOC and GOB

shall hold consultations for the purpose of sharing evidence regarding

such circumvention and reaching mutual agreement on an appropriate

resolution of the problem. If DOC and GOB are unable to reach mutual

agreement within 60 days, DOC may take appropriate measures, such as

deducting the amount of hot-rolled steel involved in such circumvention

from the export limit for the current Export Limit Period (or, if

necessary, the Subsequent Export Limit Period) or instructing U.S.

Customs to deny entry to any Brazilian hot-rolled steel sold by the

company found to be circumventing the Agreement. Before taking such

measures, DOC will notify GOB of the basis for DOC's intended action

and GOB will comment within 30 days. DOC will enter its determinations

regarding circumvention into the record of the Agreement. GOB may

request an extension of up to 15 days for any of the deadlines

mentioned in this Section.

VII. Monitoring and Notifications

A. GOB will collect and provide to DOC such information as is

necessary and appropriate to monitor the implementation of, and

compliance with, this Agreement, including the following:

1. Thirty days following the allocation of export rights for any

Export Limit Period, GOB shall notify DOC of each allocation recipient

and the volume granted to each recipient. GOB also shall inform DOC of

any changes in the volume allocated to individual quota recipients

within 60 days of the date on which such changes become effective.

2. GOB shall collect and provide to DOC information on exports to

the United States in the format in Appendix III to this Agreement, and

on the aggregate quantity and value of exports of Hot-Rolled Steel to

all other countries. This information will be based on semi-annual

periods (October 1 through March 31 and April 1 through September 30),

and will be provided no later than 90 days following the end of each

half year period, beginning on June 30, 2000 (for the period from the

Effective Date through March 31, 2000).

3. The GOB shall certify to DOC, in accordance with the reporting

schedule in section VII.A.2., whether it continues to be in compliance

with the Agreement by providing that all exports of Hot-Rolled Steel to

the United States are not and will not be eligible for any export

subsidies, as provided in Section III. The GOB shall notify the DOC if

any producer/exporter of Hot-Rolled Steel to the United States applies

for or receives, directly or indirectly, any export or import

substitution subsidy.

4. The GOB shall immediately notify and provide copies to the DOC

of any resolution, decree, legislation or equivalent Government action

governing any export or import substitution subsidy which is issued,

altered or amended in any way as to be applicable or available to

producers/exporters of Hot-Rolled Steel to the United States.

5. The GOB will inform the DOC of any violations of any provisions

of this Agreement that come to its attention and of the measures taken

with respect thereto.

6. The GOB and the DOC recognize that the effective monitoring of

this Agreement may require that the GOB provide information additional

to that identified above. Accordingly, after consulting with the GOB,

the DOC may request additional reporting requirements consistent with

U.S. law and regulations during the course of this Agreement. The GOB

shall also collect and provide to DOC, within 45 days of the request,

any such additional information requested by DOC.

B. The DOC will verify all information related to the

administration of this Agreement, including all information relating to

potential circumvention of this Agreement, annually or more frequently

as deemed necessary.

C. The DOC may disregard any information submitted after the

deadlines set forth in this Section or any information which it is

unable to verify to its satisfaction.

VIII. Disclosure and Comment

A. The DOC shall make available to representatives of each Party to

the Proceeding, under appropriately-drawn administrative protective

orders consistent with U.S. laws and regulations, business proprietary

information submitted to the DOC semi-annually or upon request pursuant

to this Agreement, and in any administrative review of this Agreement.

B. Not later than 45 days after the date of disclosure of

information pursuant to section VII.A., the Parties to the Proceeding

may submit written

[[Page 38801]]

comments to DOC, not to exceed 30 pages.

C. At the end of each Export Limit Period, each Party to the

Proceeding may request a hearing on issues raised during the preceding

Export Limit Period. If such a hearing is requested, it will be

conducted in accordance with U.S. laws and regulations.

IX. Consultations

A. The DOC and the GOB may request consultations with the other

concerning this agreement at any time.

B. If the DOC requests consultations with the GOB concerning

potential noncompliance with, or Violation of, this Agreement, it may

simultaneously request the GOB to provide the DOC with all information

relating to the allegation. The GOB will provide the requested

information to the DOC within 21 days of the DOC's request. Any Party

to the Proceeding may submit comments on the information submitted by

the Signatory within 10 days after the DOC receives the information.

The consultations shall be held within 45 days after the DOC's request

for consultations or for relevant information, unless the DOC and the

GOB agree on a later date.

X. Violations

A. If the DOC determines that this Agreement is being or has been

violated, DOC will take such action as it determines appropriate under

U.S. laws and regulations.

B. If the DOC determines that this Agreement no longer meets the

requirements of the Act, the DOC shall take whatever action it deems

appropriate under Section 704(i) of the Act and the Regulations.

C. In the event that the DOC resumes the original investigation, it

will conduct the resumed investigation on the basis of the original

administrative record and the statutes, regulations, policies, and

practices in effect on the Effective Date.

XI. Duration

A. This Agreement will remain in force until the underlying

countervailing duty proceeding is terminated in accordance with U.S.

law.

B. The GOB may terminate this Agreement at any time upon written

notice to the DOC. Termination shall be effective 60 days after such

notice is given to the DOC. Upon termination at the request of the GOB,

the provisions of U.S. countervailing duty law and regulations shall

apply.

XII. Other Provisions

A. The DOC determines that extraordinary circumstances are present

in this case, that this Agreement is in the public interest, that

effective monitoring of this Agreement by the United States is

practicable, and that this Agreement will completely eliminate injury

to the domestic industry producing the like product by imports of Hot-

Rolled Steel from Brazil.

B. For all purposes hereunder, the signatory Parties shall be

represented by, and all communications and notices shall be given and

addressed to:

DOC:

U.S. DOC of Commerce, Assistant Secretary for Import Administration,

International Trade Administration, Washington, D.C. 20230

GOB:

Ministrio das Relaco6es Exteriores, Divisao de Politica Comercial,

70.170-900--Brasilia--DF--Brazil

Embassy of Brazil, 3006 Massachusetts Ave. NW, Washington, D.C. 20008

Signed on this 6th of July 1999. 3

Robert Larussa,

Assistant Secretary for Import Administration, U.S. Department of

Commerce.

Regis Arslanian,

Minister-Counselor, Embassy of Brazil.

Appendix I--Definition of Hot-Rolled Steel

For purposes of this investigation, the products covered are

certain hot-rolled flat-rolled carbon-quality steel products of a

rectangular shape, of a width of 0.5 inch or greater, neither clad,

plated, nor coated with metal and whether or not painted, varnished,

or coated with plastics or other non-metallic substances, in coils

(whether or not in successively superimposed layers) regardless of

thickness, and in straight lengths, of a thickness less than 4.75 mm

and of a width measuring at least 10 times the thickness. Universal

mill plate (i.e., flat-rolled products rolled on four faces or in a

closed box pass, of a width exceeding 150 mm, but not exceeding 1250

mm and of a thickness of not less than 4 mm, not in coils and

without patterns in relief) of a thickness not less than 4.0 mm is

not included within the scope of these investigations.

Specifically included in this scope are vacuum degassed, fully

stabilized (commonly referred to as interstitial-free (``IF''))

steels, high strength low alloy (``HSLA'') steels, and the substrate

for motor lamination steels. IF steels are recognized as low carbon

steels with micro-alloying levels of elements such as titanium and/

or niobium added to stabilize carbon and nitrogen elements. HSLA

steels are recognized as steels with micro-alloying levels of

elements such as chromium, copper, niobium, titanium, vanadium, and

molybdenum. The substrate for motor lamination steels contains

micro-alloying levels of elements such as silicon and aluminum.

Steel products to be included in the scope of this

investigation, regardless of HTSUS definitions, are products in

which: (1) Iron predominates, by weight, over each of the other

contained elements; (2) the carbon content is 2 percent or less, by

weight; and (3) none of the elements listed below exceeds the

quantity, by weight, respectively indicated:

1.80 percent of manganese, or

1.50 percent of silicon, or

1.00 percent of copper, or

0.50 percent of aluminum, or

1.25 percent of chromium, or

0.30 percent of cobalt, or

0.40 percent of lead, or

1.25 percent of nickel, or

0.30 percent of tungsten, or

0.012 percent of boron, or

0.10 percent of molybdenum, or

0.10 percent of niobium, or

0.41 percent of titanium, or

0.15 percent of vanadium, or

0.15 percent of zirconium.

All products that meet the physical and chemical description

provided above are within the scope of this investigation unless

otherwise excluded. The following products, by way of example, are

outside and/or specifically excluded from the scope of this

investigation:

Alloy hot-rolled steel products in which at least one

of the chemical elements exceeds those listed above (including e.g.,

ASTM specifications A543, A387, A514, A517, and A506).

SAE/AISI grades of series 2300 and higher.

Ball bearing steels, as defined in the HTSUS.

Tool steels, as defined in the HTSUS.

Silico-manganese (as defined in the HTSUS) or silicon

electrical steel with a silicon level exceeding 1.50 percent.

ASTM specifications A710 and A736.

USS Abrasion-resistant steels (USS AR 400, USS AR 500).

Hot-rolled steel coil which meets the following

chemical, physical and mechanical specifications:

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C Mn P S Si Cr Cu Ni

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0.10-0.14%................... 0.90% Max....... 0.025% Max...... 0.005% Max...... 0.30-0.50%...... 0.50-0.70%..... 0.20-0.40%..... 0.20% Max.

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Width = 44.80 inches maximum; Thickness = 0.063--0.198 inches;

Yield Strength = 50,000 ksi minimum; Tensile Strength = 70,000--

88,000 psi.

Hot-rolled steel coil which meets the following

chemical, physical and mechanical specifications:

[[Page 38802]]

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C Mn P S Si Cr Cu Ni Mo

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

0.10-0.16%...................... 0.70-0.90%........ 0.025% Max........ 0.006% Max........ 0.30-0.50%........ 0.50-0.70%........ 0.25% Max......... 0.20% Max......... 0.21% Max.

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Width = 44.80 inches maximum; Thickness = 0.350 inches maximum;

Yield Strength = 80,000 ksi minimum; Tensile Strength = 105,000 psi

Aim.

Hot-rolled steel coil which meets the following

chemical, physical and mechanical specifications:

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

C Mn P S Si Cr Cu Ni V(wt.) Cb

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

0.10-0.14%.................... 1.30-1.80%...... 0.025% Max...... 0.005% Max...... 0.30-0.50%...... 0.50-0.70%...... 0.20-0.40%...... 0.20% Max....... 0.10 Max........ 0.08% Max

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Width = 44.80 inches maximum; Thickness = 0.350 inches maximum;

Yield Strength = 80,000 ksi minimum; Tensile Strength = 105,000 psi

Aim.

Hot-rolled steel coil which meets the following

chemical, physical and mechanical specifications:

----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

C Mn P S Si Cr Cu Ni Nb Ca Al

----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

0.15% Max....................... 1.40% Max......... 0.025% Max........ 0.010% Max........ 0.50% Max......... 1.00% Max......... 0.50% Max......... 0.20% Max......... 0.005% Min........ Treated........... 0.01-0.07%

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Width = 39.37 inches; Thickness = 0.181 inches maximum;

Yield Strength = 70,000 psi minimum for thicknesses

0.148 inches and 65,000 psi minimum for thicknesses >0.148 inches;

Tensile Strength = 80,000 psi minimum.

Hot-rolled dual phase steel, phase-hardened, primarily

with a ferritic-martensitic microstructure, contains 0.9 percent up

to and including 1.5 percent silicon by weight, further

characterized by either (i) tensile strength between 540 N/mm\2\ and

640 N/mm\2\ and an elongation percentage 26 percent for

thicknesses of 2 mm and above, or (ii) a tensile strength between

590 N/mm\2\ and 690 N/mm\2\ and an elongation percentage

25 percent for thicknesses of 2mm and above.

Hot-rolled bearing quality steel, SAE grade 1050, in

coils, with an inclusion rating of 1.0 maximum per ASTM E 45, Method

A, with excellent surface quality and chemistry restrictions as

follows: 0.012 percent maximum phosphorus, 0.015 percent maximum

sulfur, and 0.20 percent maximum residuals including 0.15 percent

maximum chromium.

Grade ASTM A570-50 hot-rolled steel sheet in coils or

cut lengths, width of 74 inches (nominal, within ASTM tolerances),

thickness of 11 gauge (0.119 inch nominal), mill edge and skin

passed, with a minimum copper content of 0.20%.

The merchandise subject to these investigations is classified in

the Harmonized Tariff Schedule of the United States (``HTSUS'') at

subheadings: 7208.10.15.00, 7208.10.30.00, 7208.10.60.00,

7208.25.30.00, 7208.25.60.00, 7208.26.00.30, 7208.26.00.60,

7208.27.00.30, 7208.27.00.60, 7208.36.00.30, 7208.36.00.60,

7208.37.00.30, 7208.37.00.60, 7208.38.00.15, 7208.38.00.30,

7208.38.00.90, 7208.39.00.15, 7208.39.00.30, 7208.39.00.90,

7208.40.60.30, 7208.40.60.60, 7208.53.00.00, 7208.54.00.00,

7208.90.00.00, 7210.70.30.00, 7210.90.90.00, 7211.14.00.30,

7211.14.00.90, 7211.19.15.00, 7211.19.20.00, 7211.19.30.00,

7211.19.45.00, 7211.19.60.00, 7211.19.75.30, 7211.19.75.60,

7211.19.75.90, 7212.40.10.00, 7212.40.50.00, 7212.50.00.00. Certain

hot-rolled flat-rolled carbon-quality steel covered by this

investigation, including: Vacuum degassed, fully stabilized; high

strength low alloy; and the substrate for motor lamination steel may

also enter under the following tariff numbers: 7225.11.00.00,

7225.19.00.00, 7225.30.30.50, 7225.30.70.00, 7225.40.70.00,

7225.99.00.90, 7226.11.10.00, 7226.11.90.30, 7226.11.90.60,

7226.19.10.00, 7226.19.90.00, 7226.91.50.00, 7226.91.70.00,

7226.91.80.00, and 7226.99.00.00. Although the HTSUS subheadings are

provided for convenience and Customs purposes, the written

description of the merchandise under investigation is dispositive.

Appendix II--Information To Be Contained in Export Licenses

1. Export License: Indicate the number(s) relating to each sale and

or entry.

2. Complete Description of Merchandise: Include the 10 digit HTS

category, the ASTM or equivalent grade, and the width and thickness

of merchandise.

3. Quantity: Indicate in metric tons.

4 F.O.B. Sales Value: Indicate value and currency used.

5. Unit Price: Indicate unit price per metric ton and currency used,

and reference price.

6. Date of Sale: The date all essential terms of the order (i.e,

price and quantity) become fixed.

7. Sales Order Number(s): Indicate the number(s) relating to each

sale and/or entry.

8. Date of Export: Date the Export License is issued.

9. Date of Entry: Date the merchandise entered the United States or

the date book transfer took place.

10. Importer of Record: Name and address.

11. Trading Company: Name and address of trading company involved in

sale.

12. Customer: Name and address of the first unaffiliated party

purchasing from the Brazilian exporter.

13. Customer Relationship: Indicate whether the customer is

affiliated or unaffiliated to the Brazilian exporter.

14. Allocation to Exporter: Indicate the total amount of quota

allocated to the individual exporter during the Relevant Period.

15. Allocation Remaining: Indicate the remaining export limit

allocation available to the individual exporter during the export

limit period.

16. Destination: The complete name and address of the first

unaffiliated purchaser.

17. Other: The identity of any party(ies) in the transaction chain

between the producer and the first unaffiliated purchaser.

List of Heat Numbers

GOB shall ensure that all shipments of Hot-Rolled Steel exported to

the United States pursuant to this Agreement, shall be accompanied by a

list of heat numbers under the shipment. GOB understands that DOC

intends to fully verify this data during verifications.

Appendix III--Information on Exports of Hot-Rolled Steel

In accordance with the established format, the GOB's license

issuing authority shall collect and provide to DOC all information

necessary to ensure compliance with this Agreement. This information

will be provided to DOC on a semi-annual basis.

The GOB's license issuing authority will collect and maintain

data on exports to the United States on a continuous basis. Data for

exports to countries other than the United States, will be reported

upon request.

The GOB's license issuing authority will provide a narrative

explanation to substantiate all data collected in accordance with

the following formats.

The GOB's license issuing authority will provide all Export

Licenses issued to Brazilian entities, which shall contain the

following information with the exception that information requested

in item #9, date of entry, item #10, importer of record, item #16,

final destination, and item #17, other, may be omitted if unknown to

the licensing authority and the licensee.

[[Page 38803]]

1. Export License: Indicate the number(s) relating to each sale and

or entry.

2. Complete Description of Merchandise: Include the 10 digit HTS

category, the ASTM or equivalent grade, and the width and thickness

of merchandise.

3. Quantity: Indicate in metric tons.

4 F.O.B. Sales Value: Indicate value and currency used.

5. Unit Price: Indicate unit price per metric ton, currency used,

and reference price

6. Date of Sale: The date all essential terms of the order (i.e,

price and quantity) become fixed.

7. Sales Order Number(s): Indicate the number(s) relating to each

sale and/or entry.

8. Date of Export: Date the Export License is issued.

9. Date of Entry: Date the merchandise entered the United States or

the date book transfer took place.

10. Importer of Record: Name and address.

11. Trading Company: Name and address of trading company involved in

sale.

12. Customer: Name and address of the first unaffiliated party

purchasing from the Brazilian exporter.

13. Customer Relationship: Indicate whether the customer is

affiliated or unaffiliated to the Brazilian exporter.

14. Allocation to Exporter: Indicate the total amount of quota

allocated to the individual exporter during the Relevant Period.

15. Allocation Remaining: Indicate the remaining export limit

allocation available to the individual exporter during the export

limit period.

16. Destination: The complete name and address of the first

unaffiliated purchaser.

17. Other: The identity of any party(ies) in the transaction chain

between the producer and the first unaffiliated purchaser.

List of Heat Numbers

The GOB's license issuing authority shall ensure that all

shipments of Hot-Rolled Steel exported to the United States pursuant

to this Agreement, shall be accompanied by a list of heat numbers

under the shipment. The GOB's license issuing authority understands

that DOC intends to fully verify this data during verifications.

[FR Doc. 99-18227 Filed 7-16-99; 8:45 am]

BILLING CODE 3510-DS-P