Preliminary Results of Expedited Sunset Review: Porcelain-on- Steel Cooking Ware From Mexico

DEPARTMENT OF COMMERCE

International Trade Administration

[C-201-505]

Preliminary Results of Expedited Sunset Review: Porcelain-on-

Steel Cooking Ware From Mexico

AGENCY: Import Administration, International Trade Administration, U.S.

Department of Commerce.

ACTION: Notice of Preliminary Results of Expedited Sunset Review:

Porcelain-on-Steel Cooking Ware from Mexico.

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SUMMARY: On February 1, 1999, the Department of Commerce (``the

Department'') initiated a sunset review of the countervailing duty

order on porcelain-on-steel cooking ware from Mexico pursuant to

section 751(c) of the Tariff Act of 1930, as amended (``the Act''). On

the basis of a notice of intent to participate filed on behalf of

domestic interested parties and adequate substantive responses filed on

behalf of domestic and respondent interested parties, the Department is

conducting a full sunset review. As a result of this review, the

Department preliminarily determines that revocation of the

countervailing duty order would not be likely to lead to continuation

or recurrence of a countervailing subsidy.

For Further Information Contact: Martha V. Douthit or Melissa G.

Skinner, Office of Policy for Import Administration, International

Trade Administration, U.S. Department of Commerce, 14th St. &

Constitution Ave., NW., Washington, D.C. 20230; telephone (202) 482-

3207 or (202) 482-1560, respectively.

Effective Date: August 26, 1999.

Statute and Regulations

This review is being conducted pursuant to sections 751(c) and 752

of the Act. The Department's procedures for the conduct of sunset

reviews are set forth in Procedures for Conducting Five-year

(``Sunset'') Reviews of Antidumping and Countervailing Duty Orders, 63

FR 13516 (March 20, 1998) (``Sunset Regulations''). Guidance on

methodological or analytical issues relevant to the Department's

conduct of sunset reviews is set forth in the Department's Policy

Bulletin 98:3--Policies Regarding the Conduct of Five-year (``Sunset'')

Reviews of Antidumping and Countervailing Duty Orders; Policy Bulletin,

63 FR 18871 (April 16, 1998) (``Sunset Policy Bulletin'').

[[Page 46647]]

Scope

Imports covered by this order are shipments of porcelain-on-steel

(``POS'') cooking ware from Mexico, except teakettles, which do not

have self-contained electric heating elements. All of the foregoing are

constructed of steel, and are enameled or glazed with vitreous glasses.

This merchandise is classifiable under item number 7323.94.0020 of the

Harmonized Tariff Schedule (HTSUS). The HTS item number is provided for

convenience and customs purposes. The written description remains

dispositive.

History of the Order

On October 10, 1986, the Department issued a final affirmative

countervailing duty determination on POS cooking ware from

Mexico.1 During the investigation, the Department reviewed

two companies, Cinsa, S.A. (``Cinsa'') and Troqueles y Esmaltes, S.A.

(``TRES'').2 The Department calculated a country-wide

estimated net subsidy of 1.97 percent ad valorem based on two programs

found to confer subsidies--the Fund for the Promotion of Exportation of

Mexican Manufactured Products (FOMEX), 1.69 percent ad valorem, and the

Fund for Industrial Development (FONEI), 0.28 percent ad valorem. As a

result of a program-wide change in the FOMEX program, which occurred

prior to the preliminary determination, the Department adjusted the

duty deposit rate to 1.90 percent ad valorem.3 On December

12, 1986, the countervailing duty order on POS cooking ware from Mexico

was published in the Federal Register.4

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\1\ See Final Affirmative Countervailing Duty Determination;

Porcelain-on-Steel Cooking Ware from Mexico, Mexico, 51 FR 36447

(October 10, 1986).

\2\ TRES subsequently became Acero Porcelanizada, S.A.

(``APSA'').

\3\ The duty deposit rate attributable to FOMEX was reduced to

1.62 percent ad valorem.

\4\ See Porcelain-on-Steel Cooking Ware from Mexico

Countervailing Duty Order; 51 FR 44827 (December 12, 1986).

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Since the issuance of the countervailing duty order on POS cooking

ware from Mexico, the Department has conducted several administrative

reviews.5 In the administrative review covering January 1,

1990 through December 31, 1990, the Department found that the FOMEX

program was eliminated by decree published in the Diario Official on

December 30, 1989. Additionally, the Department found that effective

January 1, 1990, the Mexican Treasury Department transferred the FOMEX

trust to the Banco Nacional de Comercio Exterior, S.N.A.

(``Bancomext'') upon the elimination of the FOMEX loan program. The

Department found that the Bancomext program operates much like its

predecessor, FOMEX, and provided countervailable export subsidies. In

the same review, the Department found that the PITEX program (the

Program for Temporary Importation of Products used in the Production of

Exports) provided a countervailable export subsidy. For the first time,

the Department issued company-specific subsidy rates. (See 57 FR 562

(January 7, 1992) and 56 FR 48163 (September 24, 1991).) In the

administrative review covering the period January 1, 1993 through

December 31, 1993, the Department stated that FONEI, which provided

long-term loans at below-market rates, was a GOM trust administered by

the Banco de Mexico until its dissolution on December 31, 1989. (See 60

FR 39360 (August 2, 1995) and 60 FR 53165 (October 12, 1995).)

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\5\ See Porcelain-on-Steel Cooking Ware from Mexico; Final

Results of Countervailing Duty Administrative Review, 54 FR 13093

(March 30, 1989), Porcelain-on-Steel Cooking Ware from Mexico; Final

Results of Countervailing Duty Administrative Review, 55 FR 6666

(February 26, 1990), Porcelain-on-Steel Cooking Ware from Mexico;

Final Results of Countervailing Duty Administrative Review, 56 FR

2064 (June 6, 1991), Porcelain-on-Steel Cooking Ware from Mexico;

Final Results of Countervailing Duty Administrative Review, 57 FR

562 (January 7, 1992), Porcelain-on-Steel Cooking Ware from Mexico;

Final Results of Countervailing Duty Administrative Review, 60 FR

53165 (October 12. 1995), Porcelain-on-Steel Cooking Ware from

Mexico; Final Results of Countervailing Duty Administrative Review,

60 FR 62391 (December 6, 1995), and Porcelain-on-Steel Cooking Ware

from Mexico; Final Results of Countervailing Duty Administrative

Review, 61 FR 10726 (March 15, 1996). Twenty-two programs were made

available to manufacturers/producers/exporters of POS cooking ware

from Mexico since the countervailing duty order was placed in

effect. See the POS cooking ware from Mexico case information on the

Department's web site, http://www.ita.doc.gov/import__admin/records/

sunset/feb99.

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Background

On February 1, 1999, the Department initiated a sunset review of

the countervailing duty order on porcelain-on-steel cooking ware from

Mexico pursuant to section 751(c) of the Act. On February 16, 1999, the

Department received a Notice of Intent to Participate from Columbian

Home Products, LLC (``CHP''), within the deadline specified in section

351.218(d)(1)(i) of the Sunset Regulations. On March 3, 1999, the

Department received a complete substantive response from CHP, within

the deadline specified in section 351.218(d)(3)(i). CHP claimed

interested party status under section 19 U.S.C 1677(9)(C) as the sole

domestic manufacturer of porcelain-on-steel cooking ware. CHP asserts

that it participated in the original countervailing investigation.

The Department received substantive responses from respondent

interested parties, Cinsa, Esmaltaciones de Norte America, S.A. de C.V.

(ENASA), and from the Government of Mexico (``GOM'') (collectively

``Respondents''), within the 30-day deadline specified in the Sunset

Regulations under section 351.218(d)(3)(i). Cinsa claimed interested

party status as a foreign manufacturer and exporter of light-gauge POS

cook ware from Mexico. ENASA claimed interested party status as a

foreign manufacturer and exporter of heavy-gauge POS cooking ware from

Mexico. The GOM claimed interested party status within the meaning of

19 U.S.C. 1677(9)(B). Cinsa maintains that it was a respondent in the

original investigation and has participated in all of the subsequent

administrative reviews. ENASA maintains that it was incorporated in

1993, and began its shipments of POS cooking ware to the United States

in 1994. ENASA has been a participant in the two most recent

administrative reviews.6

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\6\ Cinsa and ENASA note that they are sister companies, each

100 percent owned subsidiaries of ISLO, S.A. de C.V., which in turn

is a wholly owned subsidiary of Grupo Industrial Saltillo, S.A. de

C.V. (``GIS'').

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The Department received rebuttal comments from CHP and Respondents

on March 12, 1999.7 Because we received complete substantive

responses from CHP, the GOM, and respondent foreign producers

accounting for significantly more than 50 percent of the value of

imports over the most recent five years, the Department is conducting a

full sunset review of this order.

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\7\ On March 5, 1999, the Department received a request from CHP

for an extension of deadline for filing rebuttal comments in this

sunset review. As a result, the Department granted a five day

extension for all participants eligible to file rebuttal comments.

The deadline for filing rebuttals to the substantive comments became

March 12, 1999, instead of the original deadline date of March 8,

1999.

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The Department determined that the sunset review of the

countervailing duty order on POS cooking ware from Mexico is

extraordinarily complicated. In accordance with section 751(c)(5)(C)(v)

of the Act, the Department may treat a review as extraordinarily

complicated if it is a review of a transition order (i.e., an order in

effect on January 1, 1995). (See section 751(c)(6)(C) of the Act.)

Therefore, on May 28, 1999 the Department extended the time limit for

completion of the final results of this review until not later than

August 20, 1999, in accordance with section 751(c)(5)(B) of the Act

(see 64 FR 28983).

[[Page 46648]]

Determination

In accordance with section 751(c)(1) of the Act, the Department is

conducting this review to determine whether revocation of the

countervailing duty order would be likely to lead to continuation or

recurrence of a countervailable subsidy. Section 752(b) of the Act

provides that, in making this determination, the Department shall

consider the net countervailable subsidy determined in the

investigation and subsequent reviews, and whether any change in the

program which gave rise to the net countervailable subsidy has occurred

that is likely to affect that net countervailable subsidy. Pursuant to

section 752(b)(3) of the Act, the Department shall provide to the

International Trade Commission (``the Commission'') the net

countervailable subsidy likely to prevail if the order is revoked. In

addition, consistent with section 752(a)(6), the Department shall

provide the Commission information concerning the nature of the subsidy

and whether the subsidy is a subsidy described in Article 3 or Article

6.1 of the 1994 WTO Agreement on Subsidies and Countervailing Measures

(``Subsidies Agreement'').

The Department's determination concerning continuation or

recurrence of a countervailable subsidy, the net countervailable

subsidy likely to prevail if the order is revoked, and nature of the

subsidy are discussed below. In addition, parties' comments with

respect to each of these issues are addressed within the respective

sections.

Continuation or Recurrence of a Countervailable Subsidy

Parties' Comments

In its substantive response, CHP argues that the history of this

proceeding indicates that Mexican producers and exporters of the

subject merchandise would likely continue to receive countervailable

subsidies from the Mexican Government if the order were revoked. CHP

argues that the FOMEX program, which was found to confer a

countervailable subsidy and was found to have been terminated, was

essentially replaced by the Bancomext program. Further, the Bancomext

program was found to confer a countervailable subsidy. Accordingly, CHP

argues that the Department should determine that the continued

existence of the FOMEX program, which was essentially replaced by the

Bancomext program, is a strong indication that Mexican producers would

likely continue to receive countervailable subsidies were the order

revoked.

With respect to the FONEI program, which CHP admits was found

terminated in December, 1989, CHP argues that the fact that the program

provided countervailable subsidies from the original investigation

through the seventh administrative review indicates that the program

could be reinstated and lead to future subsidization. Additionally, CHP

argues that the Department has never made a finding that the program

was not likely to be reinstated.

Finally, CHP argues that the PITEX program was found in the fourth

administrative review to confer a countervailable subsidy. Because the

program has not been discontinued, CHP asserts that the Department

should determine that were the order revoked, this program would likely

lead to continuation or recurrence of a countervailable subsidy.

In their substantive responses, Respondents argue that revocation

of the order will have no impact on the U.S. market or domestic

interested parties because no net countervailable subsidy has been

conferred on the subject merchandise since 1993 and because the

countervailing duty deposit rate has been zero since October 1995.

Respondents argue that the GOM terminated one of the two programs found

in the original investigation to confer countervailable benefits (FOMEX

export and pre-export loans) and that the GOM now provides loans to

Mexican companies (Bancomext loans and FONEI loans) consistent with

commercial considerations, thereby eliminating countervailable

benefits. Therefore, Respondents argue there is no likelihood that

Mexican producers of POS cooking ware could be able to obtain

countervailable benefits were the order revoked.

The GOM argues that because it no longer provides export loans or

long-term loans that are inconsistent with commercial considerations--

in compliance with its obligations pursuant to the Mexico-United States

Understanding Regarding Subsidies and Countervailing Duties (the

``Understanding'')--a subsidy rate from a period before the agreement

took effect does not provide a basis for a determination of likelihood

of continuation or recurrence of a countervailable subsidy. Finally,

the GOM argues that, had this investigation been conducted under the

current statute, a final country-wide subsidy rate of 1.97 percent

would be found de minimis and, as a result, the Department would issue

a negative final countervailing duty determination.

In its rebuttal comments CHP argues that although the FOMEX and

FONEI programs have changed since the time of the original

investigation, these changes do not provide a sufficient basis for

finding that the programs will not be used in the future to provide

subsidies to Mexican POS cooking ware manufacturers and exporters.

Specifically, CHP argues that, as admitted by respondents, the FOMEX

program has not been permanently terminated, but instead it continues

to exist in a slightly altered form as the Bancomext program. CHP

asserts, therefore, that it would be simple for the GOM to use this

program to provide subsidies to Mexican exporters of POS cooking ware.

CHP further argues that respondents provided no evidence to suggest

that changes in the FONEI program are either binding or permanent. CHP

argues that Mexico's elimination of the preferential element of FONEI

loans represents an exercise of administrative discretion which could

be reversed at any time. In conclusion, CHP argues, therefore, that the

Department should find that FONEI is likely to be reinstated as a

subsidy program in the event the order is revoked.

Finally, CHP argues that contrary to respondent's assertions, the

1985 Understanding does not reduce the likelihood of future

countervailable subsidization of subject merchandise. Referring to the

terms of the Understanding, CHP asserts that the terms of the

Understanding do not prohibit the use of domestic subsidies. Further,

CHP notes that Mexico continued to provide export subsidies (in the

form of PITEX) after the Understanding came into effect. Additionally,

CHP argues that the Understanding does not prohibit Mexico from

providing export subsidies, rather, it entitles the United States to

refuse to afford merchandise from Mexico an injury test in any pending

or future countervailing duty determination. In this connection, CHP

notes that as a WTO member country, Mexico is entitled to an injury

test regardless of the Understanding.

In conclusion, CHP argues that any recent decline in usage of the

programs found countervailable over the life of the order is not

indicative of what is likely to occur if the order is revoked. Rather,

as is clear from the terms of the Understanding, the Mexican Government

continues to be permitted to confer subsidies upon its manufacturers

and exporters. CHP argues that, accordingly, the Department should

determine that revocation of the order would likely lead to

continuation

[[Page 46649]]

or recurrence of a countervailable subsidy.

In its rebuttal comments the GOM asserts that the arguments

presented by CHP do not provide sufficient evidence or reasoning to

demonstrate that, given the producer-exporters commercial history and

current situation, there is a ``need'' to continue imposition of the

order. Referring to Article 21.1 of the Subsidies Agreement, the GOM

asserts that Commerce is required to demonstrate that there is a

``need'' to continue the order and that such a determination must be

demonstrable on the basis of evidence. Further, the GOM asserts that

the arguments presented by CHP do not provide sufficient evidence or

reasoning to demonstrate that, if the order is revoked, it is

``likely'' that exporters would continue to benefit from subsidization

at significant margins.

The GOM argues that contrary to CHP's assumption that FOMEX and

Bancomext are the same, FOMEX was terminated over ten years ago.

Additionally, although the FOMEX funds were taken in by Bancomext,

Bancomext is an entirely separate entity from FOMEX. Furthermore, the

GOM asserts that the only company in this case that benefitted from any

Bancomext loan, no longer exists. The GOM argues, therefore, that CHP's

assertion that Mexican producers would likely continue to benefit from

subsidies is a presumption unsupported by evidence or reasons.

Similarly, with respect to the FONEI domestic loan program which

was terminated in 1989, the GOM argues that CHP's assertion that there

is an indication that the program could be reinstated and provide

future subsidization because the program continued to have a

diminishing countervailable benefit (down to 0.01 percent in 1993)

until the 7th review, does not provide any evidence or reason as to why

the GOM would be interested in reinstating such a program. Further, the

GOM argues that CHP does not provide any evidence as to how the program

could be considered a prohibited or actionable subsidy as established

in articles 3, 5, or 6.1 of the Subsidies Agreement.

With respect to the PITEX program, the GOM first notes that the

program was not considered in the context of the investigation and

therefore has never been determined to cause injury to the U.S.

industry, as required by articles 15.5, 15.9, and 21.1 of the Subsidies

Agreement. Additionally, the GOM asserts that PITEX was only used by a

single company that no longer exists. As such, the GOM argues that

there is no reason to presume that exporters will continue to benefit

from a program that they have never used and, if such a presumption is

made, it must be demonstrated by the Department.

The GOM also argues that the producers and exporters affected by

this order have changed over the life of the order. Specifically, of

the two companies investigated in the original investigation--Cinsa and

TRES (later know as APSA)--APSA no longer exists. Therefore, the GOM

argues that it would be inappropriate for the Department to consider

the effect of the subsidy margins for APSA in the context of an order-

wide review. Rather, the Department should, analogous to its practice

of calculating separate subsidy margins in an original investigation or

review, determine likelihood specific to each producer.

The GOM expresses its belief that CHP's assumptions relied on

polices identified in the Sunset Policy Bulletin, policies which the

GOM believes may be inconsistent with the WTO and the Subsidies

Agreement. The GOM asserts that the policies, and general assumptions

contained therein, appear to operate to effectively require the

continued imposition of countervailing duties and place the burden on

respondents to prove the assumptions wrong. The GOM argues that,

contrary to the policies, the Department bears the burden of

demonstrating, with evidence, the issues regarding ``necessity'' and

``likelihood.''

In their rebuttal comments, Cinsa and ENASA (``respondent

companies'') argue that CHP's assertions are not correct and the

information before the Department establishes that if the order were

revoked, subsidization would not recur. Respondent companies argue that

CHP's assertions ignore several facts relevant to the Department's

determination. First, CHP, although acknowledging that the country-wide

rate has been de minimis since 1993, fails to give effect to the

Department's finding of zero subsidization. Further, CHP fails to give

effect to the Department's determination that Cinsa (the respondent

which presently accounts for the vast majority of Mexican exports of

POS cooking ware to the United States) has had company-specific

countervailing duty rates of de minimis since 1989, a period of ten

years.

Similar to the GOM, respondent companies argue that TRES, later

known as APSA--the company that received most of the countervailable

subsidies before becoming a zero rate company in 1993--no longer exists

and, as such, cannot possibly obtain future countervailable subsidies.

Further, respondent companies argue that it is inappropriate to assert

that subsidization would recur if the order were revoked based largely

upon the historical receipt of net countervailable subsidies by a

respondent that no longer exists. Rather, the Department's

determination of likelihood should be based upon the experience of the

companies that presently exist and have the potential to produce and

export subject merchandise to the United States.

Respondent companies also argue that the Understanding (which has

been fully implemented) and other multilateral agreements to which both

Mexico and the United States are parties, have been responsible for the

termination of export subsidies and the elimination of the preferential

elements from loan programs. Therefore, the magnitude of subsidization

that may have existed prior to Mexico's undertaking of its current

international obligations to eliminate improper subsidization does not

provide a rational basis for determining the magnitude of subsidization

that would likely prevail at this point in time if the order were

revoked.

Respondent parties argue that CHP is incorrect in its attempt to

have the Department assign the net subsidy rate from FOMEX to

Bancomext. Rather, they argue that the Department should confirm its

previous findings that the FOMEX program was terminated and then should

separately determine whether any subsidization under the Bancomext

program would recur if the order were revoked. With respect to

Bancomext, Respondent parties argue that the only time the Department

imposed countervailing duties attributable to Bancomext was in the 1990

administrative review and, even there, the duties were with regard to

TRES/APSA, a company that no longer exists. Further, Respondent parties

argue that given that in the most recently completed administrative

reviews the Department determined that the Bancomext program provided

zero or de minimis benefits, the likely net countervailable subsidy

rate that would prevail if the order were revoked would continue to be

zero.

With respect to the FONEI program, Respondent parties argue that

CHP's position is untenable. First, Respondent parties note that, in

the 1993 review, the Department determined that the net benefit

attributable to this previously revoked, long-term loan program was a

de minimis 0.01 percent. Further, even if the ten-year loan (the

maximum term under the program) which provided the

[[Page 46650]]

benefit in the original investigation has been taken out in 1985, the

benefit stream would have terminated in 1995. Even if a 10-year loan

had been taken out in the final year of the program (1989), the benefit

stream would terminate in 1999. Therefore, Respondent parties argue

that no possible benefit stream from a FONEI loan that could exist

beyond the date of revocation.

Lastly, with respect to the PITEX program, Respondent companies

argue that the information before the Department establishes that if

the order were revoked there would be no likely net countervailable

subsidy to existing POS cooking ware manufacturers and exporters.

Again, Respondent parties argue that only TRES/APSA ever received a net

countervailable subsidy from PITEX and that the Department has found

PITEX not used by any other company examined by the Department.

Further, Respondent companies argue that PITEX is countervailable only

to the extent that import duties are refunded or not collected for

imported machinery or spare parts used in the production of export

merchandise and that, in the 1989 review, the Department found that

PITEX benefits were not countervailable to the extent that they are

attributable to products that were physically incorporated into re-

exported merchandise. Additionally, Respondent parties refer to the

Department's Sunset Policy Bulletin and argue that the Department

recognizes that it is not appropriate to attribute future usage of a

program to companies that have never been found to have used that

program. In conclusion, Respondent parties argue that because the

Department has never found that Cinsa or ENASA have used

countervailable elements of the PITEX program, it would be contrary to

stated Departmental policy to attribute a net countervailable subsidy

for PITEX to existing POS cooking ware companies.

Department's Preliminary Determination

Drawing on the guidance provided in the legislative history

accompanying the Uruguay Round Agreement Act (``URAA''), specifically

the Statement of Administrative Act (``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), the

Department issued its Sunset Policy Bulletin providing guidance on

methodological and analytical issues, including the basis for

likelihood determinations. The Department clarified that the

determinations of likelihood will be made on an order-wide basis (see

section III.A.2. of the Sunset Policy Bulletin). Additionally, the

Department normally will determine that revocation of a countervailing

duty order 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 (see section III.A.3.a of

the Sunset Policy Bulletin). Exceptions to this policy are provided

where a company has a long record of not using a program (see section

III.A.3.b of the Sunset Policy Bulletin).

The Sunset Policy Bulletin, at section III.A.3.a, states that,

consistent with the SAA at 888, 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. However, the Sunset Policy Bulletin also provides that,

where a program has been officially terminated by the foreign

government, this will be probative of the fact that the program will

not continue or recur if the order is revoked. (See Sunset Policy

Bulletin at section III.A.5.)

As noted above, in the final affirmative countervailing duty

determination the Department determined that Mexican producers/

exporters of the subject merchandise were benefitting from

countervailable subsidies under the FOMEX and FONEI programs. In

subsequent administrative reviews, the Department found that the FOMEX

and FONEI programs were terminated in 1989. CHP argues that the FOMEX

program continues to exist by virtue of the fact that remaining funds

were transferred to the still existent Bancomext program. However, as

the Department determined in the 1990 administrative review, the FOMEX

program was officially eliminated by decree in December, 1989.

Additionally, the Department confirmed this determination in the final

results of the 1993 administrative review when it explained that the

FOMEX program was terminated on December 31, 1989 and effective January

1, 1990, the FOMEX trust was transferred to Bancomext. The Department

has, in numerous reviews, investigated Bancomext as a separate program.

Therefore, given that the FOMEX program was terminated by official

decree, we preliminarily determine that the FOMEX program has been

eliminated.

With respect to the FONEI program, we preliminarily determine that

the program has been eliminated without residual benefit. In the 1993

administrative review, the Department stated that FONEI was a GOM trust

administered by the Banco de Mexico until its dissolution on December

31, 1989. CHP does not argue that the program still exists. Rather,

they argue that the program could be easily reinstated. We are not

persuaded by mere assertions, however. Rather, based on the

Department's prior findings with respect to FONEI and absent evidence

to the contrary, we preliminarily determine that the FONEI program has

been eliminated and is not likely to be reinstated. Further, we agree

with respondents that any potential remaining countervailable benefit

from 10-year, long-term loans granted prior to the 1989 termination of

the FONEI program would not continue beyond 1999.

With respect to the PITEX program, we note that none of the parties

argued that the program has been terminated. Rather, CHP argues that we

should find that countervailable subsidies are likely to continue or

recur were the order revoked based on a finding in the 1990

administrative review that one company, APSA, used the program for

temporary imports of machinery and spare parts that were not physically

incorporated into exported products. The Respondents argue that APSA is

the only company in this proceeding ever found to have received a

countervailable subsidy under this program, APSA no longer exists, and

other companies have a long track record of not using this program.

Therefore, PITEX should not be found likely to provide a

countervailable subsidy.

We preliminarily determine that there is a long track record of

non-use of the PITEX program by companies that are currently, and are

likely to be, producing and exporting POS cooking ware to the United

States. In the administrative review of the antidumping duty order on

POS cooking ware from Mexico covering the period December 1, 1996

through November 31, 1997, the Department found that APSA had been sold

in 1997 and that Cinsa had incorporated some of APSA's production

equipment into its facility (see Porcelain-on-Steel Cookware from

Mexico: Final Results of Antidumping Duty Administrative Review, 64 FR

26934 (May 18, 1999)). Therefore, we agree that APSA no longer exists.

As to whether companies other than APSA are likely to receive a

countervailable subsidy from the PITEX program, we agree with

respondents that, where a

[[Page 46651]]

company has a long track record of not using a program, 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. (See section III.A.3.b of the Sunset Policy

Bulletin.) We preliminarily determine, therefore, that there is no

likelihood of a countervailable subsidy from the PITEX program were the

order revoked.

With respect to the Bancomext program, CHP argues that Bancomext

should be considered a replacement for FOMEX and, therefore, CHP does

not independently address Bancomext. As noted above, the Department

determined that the Bancomext program was separate from the FOMEX

program. Further, Bancomext has been found to provide countervailable

subsidies to the extent that loans are provided at preferential rates.

None of the parties have argued that the Bancomext program has been

terminated. Rather, respondents argue that, as a result of the 1985

Understanding, the GOM altered its practice and no longer provides

loans on terms inconsistent with commercial considerations. The

Department has reviewed the Bancomext program during reviews covering

1990, 1993, and 1994. In each of these reviews, the Department found

countervailable subsidies were provided by the Bancomext program,

albeit at de minimis rates. Therefore, we do not agree with respondents

that the Bancomext no longer provides countervailable subsidies.

However, we do agree, based on a history of de minimis findings, that

there is no evidence to suggest that the Bancomext program is likely to

provide above de minimis countervailable subsidies, if any, were the

order revoked. Therefore, we preliminarily determine that the Bancomext

program is not likely to confer a countervailable subsidy were the

order revoked.

On the basis of the above analysis regarding the termination, non-

use, and de minimis subsidies, we preliminarily determine that

revocation of the countervailing duty order on POS cooking ware from

Mexico is not likely to result in continuation or recurrence of a

countervailable subsidy.

Net Countervailable Subsidy

Parties' Comments

In its substantive and rebuttal comments, CHP argues that in

accordance with the Department's policy, the Department should report

to the Commission a net countervailable subsidy of 3.84 percent as the

subsidy likely to prevail if the order were revoked. CHP argues that

the Department should add to the 1.97 percent subsidy from the original

investigation (attributable to FOMEX and FONEI) the 1.87 percent

subsidy rate found in the 1990 administrative review attributable to

PITEX.

In their substantive and rebuttal comments, the respondents argue

that the zero or de minimis rates from the most recent administrative

reviews are the rates likely to prevail if the order were revoked.

Department's Preliminary Determination

Because we preliminarily determine that a countervailable subsidy

is not likely to continue or recur were the order revoked, there is no

net countervailable subsidy to report to the Commission.

Nature of the Subsidy

Parties' Comments

Neither party specifically addressed this issue. As noted above,

however, the GOM did argue that the Department must be able to

demonstrate, with evidence, that any subsidy found likely to continue

or recur if the order were revoked is a subsidy inconsistent with

articles 3, 5, or 6 or the Subsidies Agreement.

Department's Position

Because we preliminarily determine that a countervailable subsidy

is not likely to continue or recur were the order revoked, there is no

nature of the subsidy to report to the Commission.

Preliminary Results of Review

As a result of this review, the Department preliminarily finds that

revocation of the countervailing duty order would not be likely lead to

continuation or recurrence of a countervailable subsidy. As a result of

this determination, the Department, pursuant to section 751(d)(2) of

the Act, preliminarily intends to revoke the order on POS cooking ware

from Mexico. Pursuant to section 751(c)(6)(A)(iv) of the Act, this

revocation would be effective January 1, 2000.

Any interested party may request a hearing within 30 days of

publication of this notice in accordance with 19 CFR 351.310(c). Any

hearing, if requested, will be held on October 20, 1999. Interested

parties may submit case briefs no later than October 11, 1999, in

accordance with 19 CFR 351.309(c)(1)(i). Rebuttal briefs, which must be

limited to issues raised in the case briefs, may be filed not later

than October 18, 1999. The Department will issue a notice of final

results of this sunset review, which will include the results of its

analysis of issues raised in any such comments, no later than December

28, 1999.

This five-year (``sunset'') review and notice are in accordance

with sections 751(c), 752, and 777(i)(1) of the Act.

Dated: August 20, 1999.

Joseph A. Spetrini,

Acting Assistant Secretary for Import Administration.

[FR Doc. 99-22197 Filed 8-25-99; 8:45 am]

BILLING CODE 3510-DS-P