Final Affirmative Countervailing Duty Determination: Certain Cut- to-Length Carbon-Quality Steel Plate from Indonesia

DEPARTMENT OF COMMERCE

International Trade Administration

[C-560-806]

Final Affirmative Countervailing Duty Determination: Certain Cut-

to-Length Carbon-Quality Steel Plate from Indonesia

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: December 29, 1999.

FOR FURTHER INFORMATION CONTACT: Eva Temkin or Richard Herring, Office

of CVD/AD Enforcement VI, Import Administration, U.S. Department of

Commerce, Room 4012, 14th Street and Constitution Avenue, N.W.,

Washington, D.C. 20230; telephone (202) 482-2786.

FINAL DETERMINATION: The Department of Commerce (the Department)

determines that countervailable subsidies are being provided to

producers and exporters of certain cut-to-length carbon-quality steel

plate from Indonesia. For information on the estimated countervailing

duty rates, please see the ``Suspension of Liquidation'' section of

this notice.

SUPPLEMENTARY INFORMATION:

Petitioners

The petition in this investigation was filed by Bethlehem Steel

Corporation, U.S. Steel Group, a unit of USX Corporation, Gulf States

Steel, Inc., IPSCO Steel, Inc., Tuscaloosa Steel Corporation, and the

United Steel Workers of America (the petitioners).

Case History

Since the publication of our preliminary determination in this

investigation on July 26, 1999 (Preliminary Affirmative Countervailing

Duty Determination and Alignment of Final Countervailing Duty

Determination With Final Antidumping Duty Determination: Certain Cut-

to-Length Carbon-Quality Steel Plate From Indonesia, 64 FR 40457

(Preliminary Determination)), the following events have occurred:

On July 15, we reissued the Department's June 22, 1999 supplemental

questionnaire to the Government of Indonesia (GOI). We received a

response on July 22, 1999. We conducted verification of the

countervailing duty questionnaire responses from July 28 through August

3, 1999. Because the final determination of this countervailing duty

investigation was aligned with the final antidumping duty determination

(see 64 FR at 40458), and the final antidumping duty determination was

postponed (see 64 FR 46341), the Department on August 25, 1999,

extended the final determination of this countervailing duty

investigation until no later than December 13, 1999 (see 64 FR 46341).

On August 26, 1999, the Department released its verification reports to

all interested parties. Petitioners filed comments on September 10,

1999. Respondents made no arguments. No rebuttal briefs were filed.

On November 23, 1999, we discontinued the suspension of liquidation

of all entries of the subject merchandise entered or withdrawn from

warehouse for consumption on or after that date, pursuant to section

703(d) of the Act. See the ``Suspension of Liquidation'' section of

this notice.

Scope of Investigation

The products covered by this scope are certain hot-rolled carbon-

quality steel: (1) universal mill plates (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 nominal or actual thickness of

not less than 4 mm, which are cut-to-length (not in coils) and without

patterns in relief), of iron or non-alloy-quality steel; and (2) flat-

rolled products, hot-rolled, of a nominal or actual thickness of 4.75

mm or more and of a width which exceeds 150 mm and measures at least

twice the thickness, and which are cut-to-length (not in coils).

Steel products to be included in this scope are of rectangular,

square, circular or other shape and of rectangular or non-rectangular

cross-section where such non-rectangular cross-section is achieved

subsequent to the rolling process (i.e., products which have been

``worked after rolling'')--for example, products which have been

beveled or rounded at the edges. Steel products that meet the noted

physical characteristics that are painted, varnished or coated with

plastic or other non-metallic substances are included within this

scope. Also, specifically included in this scope are high strength, low

alloy (HSLA) steels. HSLA steels are recognized as steels with micro-

alloying levels of elements such as chromium, copper, niobium,

titanium, vanadium, and molybdenum.

Steel products to be included in this scope, regardless of

Harmonized Tariff Schedule of the United States (HTSUS) definitions,

are products in which: (1) iron predominates, by weight, over each of

the other contained elements, (2) the carbon content is two percent or

less, by weight, and (3) none of the elements listed below is equal to

or exceeds the

[[Page 73156]]

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

0.10 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 zirconium.

All products that meet the written physical description, and in

which the chemistry quantities do not equal or exceed any one of the

levels listed above, are within the scope of these investigations

unless otherwise specifically excluded. The following products are

specifically excluded from these investigations: (1) products clad,

plated, or coated with metal, whether or not painted, varnished or

coated with plastic or other non-metallic substances; (2) SAE grades

(formerly AISI grades) of series 2300 and above; (3) products made to

ASTM A710 and A736 or their proprietary equivalents; (4) abrasion-

resistant steels (i.e., USS AR 400, USS AR 500); (5) products made to

ASTM A202, A225, A514 grade S, A517 grade S, or their proprietary

equivalents; (6) ball bearing steels; (7) tool steels; and (8) silicon

manganese steel or silicon electric steel.

The merchandise subject to these investigations is classified in

the HTSUS under subheadings: 7208.40.3030, 7208.40.3060, 7208.51.0030,

7208.51.0045, 7208.51.0060, 7208.52.0000, 7208.53.0000, 7208.90.0000,

7210.70.3000, 7210.90.9000, 7211.13.0000, 7211.14.0030, 7211.14.0045,

7211.90.0000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 7225.40.3050,

7225.40.7000, 7225.50.6000, 7225.99.0090, 7226.91.5000, 7226.91.7000,

7226.91.8000, 7226.99.0000.

Although the HTSUS subheadings are provided for convenience and

Customs purposes, the written description of the merchandise under

investigation is dispositive.

The Applicable Statute and Regulations

Unless otherwise indicated, all citations to the statute are

references to the provisions of the Tariff Act of 1930, as amended by

the Uruguay Round Agreements Act (URAA) effective January 1, 1995 (the

Act). In addition, unless otherwise indicated, all citations to the

Department's regulations are to the current regulations as codified at

19 C.F.R. Part 351 (1998) and to the substantive countervailing duty

regulations published in the Federal Register on November 25, 1998 (63

FR 65348) (CVD Regulations).

Injury Test

Because Indonesia is a ``Subsidies Agreement Country'' within the

meaning of section 701(b) of the Act, the International Trade

Commission (ITC) is required to determine whether imports of the

subject merchandise from Indonesia materially injure, or threaten

material injury to, a U.S. industry. On April 5, 1999, the ITC

announced its preliminary finding that there is a reasonable indication

that an industry in the United States is being materially injured, or

threatened with material injury, by reason of imports from Indonesia of

the subject merchandise (see Certain Cut-to-Length Steel Plate from the

Czech Republic, France, India, Indonesia, Italy, Japan, Korea, and

Macedonia, 64 FR 17198 (April 8, 1999)).

Period of Investigation

The period of investigation for which we are measuring subsidies

(the POI) is calendar year 1998.

Attribution of Subsidies

Section 351.525 of the CVD Regulations states that the Department

will attribute subsidies received by two or more corporations to the

products produced by those corporations where cross ownership exists.

According to section 351.525(b)(6)(vi) of the CVD Regulations, cross-

ownership exists between two or more corporations where one corporation

can use or direct the individual assets of the other corporation in

essentially the same ways it can use its own assets. The regulations

state that this standard will normally be met where there is a majority

voting ownership interest between two corporations. The preamble to the

CVD Regulations identifies situations where cross ownership may exist

even though there is less than a majority voting interest between two

corporations: ``in certain circumstances, a large minority interest

(for example, 40 percent) or a `golden share' may also result in cross-

ownership.'' See 63 FR 65401.

Because we preliminarily found both Gunawan and Jaya Pari to have

zero subsidy rates, we did not reach the question of whether the

relationship between the companies satisfies the standard of cross-

ownership. However, in the Preliminary Determination, we stated that if

we discovered subsidies at verification or otherwise modified our

findings so that one or more of the companies did indeed have a subsidy

rate for the final determination, we would consider whether there is

cross-ownership between Gunawan and Jaya Pari and thus, whether, for

purposes of calculating a countervailing duty rate, we should attribute

any subsidies received by either or both companies to the products

produced by both companies. We invited the parties to comment on

whether the relationship between the firms satisfies our new cross-

ownership standard.

Since the publication of our Preliminary Determination, we have

found no evidence of subsidies having been given to either Gunawan or

Jaya Pari; nor have we otherwise modified our findings in a way such

that either company has a subsidy rate in this final determination.

Moreover, we received no comments from the parties on this issue. Thus,

the question of whether the relationship between the companies

satisfies the standard of cross-ownership is moot for purposes of this

investigation.

Use of Facts Available

As discussed in detail in the Preliminary Determination, Krakatau

failed to respond to any of the Department's questionnaires. The GOI

provided some, although not all, of the information requested about

Krakatau. In the Preliminary Determination, relying upon section 782(e)

of the Act, the Department determined that based on the GOI's

submission of some data, the administrative record was not so

incomplete that it could not serve as a reliable basis for reaching a

preliminary determination. Therefore, the Department used the GOI's

data where possible, i.e., the Department relied on information

provided by the GOI to reach a preliminary determination that Krakatau

had not used the Rediscount Loan Program and Tax Holiday Program. The

Department only resorted to the facts otherwise available in those

instances where data necessary for the calculation of Krakatau's

subsidy rate was missing. See Preliminary Determination. In addition,

as described in detail in the Preliminary Determination, the Department

determined that in those instances when resort to facts available was

necessary, the use of an adverse inference was warranted under section

776(b) of the Act because the Department determined that Krakatau

failed to cooperate by not acting to the best of its ability in

complying with requests for information in this investigation.

[[Page 73157]]

After the issuance of the Preliminary Determination, the Department

attempted to verify with the GOI that Krakatau had not used the

Rediscount Loan Program, but was unable to do so. See Memorandum to

David Mueller, ``Verification Report of the Government of Indonesia,''

dated August 26, 1999 (GOI Verification Report), public version on file

in the Central Records Unit (CRU) (Room B-099 of the Main Commerce

Building). We were, however, able to verify that no respondent in this

investigation used the Tax Holiday Program.

Section 782(e) of the Act provides that the Department shall not

decline to consider information submitted by an interested party, if,

among other factors, the information can be verified. Because

information submitted by the GOI concerning Krakatau's use of the

Rediscount Loan Program could not be verified, we have declined to

consider it for this final determination, and find it necessary to

resort to the facts available for this program, as well. Therefore, for

this final determination, all components of Krakatau's subsidy rate are

based on the facts available.

Moreover, the Department determines that when selecting among the

facts otherwise available for the Rediscount Loan Program, an adverse

inference is warranted because the GOI and Krakatau have failed to

cooperate by not acting to the best of their abilities. Krakatau and

the GOI failed on numerous occasions to respond to the Department's

questions. Specifically, Krakatau has failed to participate in any way

in this investigation. The GOI responded to the Department's initial

questionnaire, but did not respond fully to supplemental

questionnaires, and did not respond at all to the Department's final

questionnaire. Regarding the information that the GOI did place on the

record in this investigation, we specifically requested in the outline

sent to the GOI prior to verification that the GOI be prepared to

review any files maintained on the Rediscount Loan Program, and to

demonstrate whether Krakatau used the program for shipments of subject

merchandise to the United States in 1998. However, at verification, GOI

officials stated that due to the nature and volume of their files on

this program, they were unable to present them. Thus, the Department

was unable to verify certain information submitted by the GOI. For

these reasons, we find that the GOI, like Krakatau, did not cooperate

to the best of its ability in this investigation.

Further, as stated in the Preliminary Determination, petitioners

made new subsidy allegations with respect to Krakatau on June 7, 1999.

The Department determined that these allegations were adequate, but as

of the date of the Preliminary Determination, the Department had not

had sufficient time to collect information from Krakatau and the GOI on

the Pre-1993 Equity Infusions to Krakatau, P.T., Cold-Rolled Mill

Indonesia (CRMI) Equity Infusions, and Two-Step Loan programs. Thus, we

did not make preliminary determinations with respect to these programs'

countervailability. We asked both Krakatau and the GOI to submit

information specific to these allegations. We received no response from

Krakatau, and the GOI stated that they did not have access to the

relevant files.

Therefore, because both Krakatau and the GOI have failed to provide

information necessary for the calculation of subsidy rates for these

newly alleged programs, pursuant to section 776(a)(2)(B) of the Act, we

find it necessary to resort to the facts otherwise available for this

final determination. As described in detail in the Preliminary

Determination and above, because we have determined that both Krakatau

and the GOI have failed to cooperate to the best of their abilities in

this investigation, we find the use of adverse inferences necessary

when selecting among the facts available, in accordance with section

776(b) of the Act.

When employing an adverse inference, the statute indicates that the

Department may rely upon information derived from (1) the petition; (2)

a final determination in a countervailing duty or an antidumping

investigation; (3) any previous administrative review, new shipper

review, expedited antidumping review, section 753 review, or section

762 review; or (4) any other information placed on the record. See also

section 351.308(c) of the CVD Regulations. Due to the absence of any

other relevant information on the record, we consider the petition to

be an appropriate source for the necessary information.

Furthermore, the Statement of Administrative Action accompanying

the URAA clarifies that information from the petition and prior

segments of the proceeding is ``secondary information.'' See Statement

of Administrative Action, accompanying H.R. 5110 (H.R. Doc. No. 103-

316) (1994) (SAA), at 870. If the Department relies on secondary

information as facts available, section 776(c) of the Act provides that

the Department shall, ``to the extent practicable,'' corroborate such

information using independent sources reasonably at its disposal. The

SAA provides that to corroborate secondary information means simply

that the Department will satisfy itself that the secondary information

to be used has probative value. Furthermore, the SAA explicitly states,

``[t]he fact that corroboration may not be practicable in a given

circumstance will not prevent [Commerce] from applying an adverse

inference . . . .'' SAA at 870.

As explained above, we are using the petition information as

adverse facts available in countervailing the programs involved in this

investigation. For a more detailed description of our treatment of

these programs, see the program descriptions in the ``Programs

Determined to be Countervailable'' section of this notice. Due to a

lack of available public information, with respect to the programs for

which we did not receive information from respondents, or for which we

could not verify information which had been submitted, we corroborated

the information used as adverse facts available by comparing it to the

exhibits attached to the petition, including Krakatau's financial

statements. In the case of the Rediscount Loan Program, we used

information from Final Negative Countervailing Duty Determination:

Extruded Rubber Thread From Indonesia, 64 FR 14695, (March 26, 1999)

(ERT), where we examined the same program and found it to be

countervailable. In addition, where calculations from the petition were

used, we modified and adjusted the calculation of the ad valorem

subsidy rates to conform to the Department's methodologies when

necessary or when possible. More detailed explanations of our

corroboration of the petition information is contained in the

``Equityworthiness'' and ``Programs Determined to be Countervailable''

sections of this notice. In places where we do not explain our

corroboration of information used, we did not find it practicable to

corroborate the information because of a lack of reasonably available

independent sources. However, as discussed above, a finding that it is

not practicable to corroborate certain information, does not prevent

the Department from using the information as adverse facts available.

See SAA at 870.

Changes in Ownership

In this investigation, we have examined subsidies that were

conferred upon CRMI at a time when it was partially owned by Krakatau.

Since that time, Krakatau has taken control over the remaining share of

CRMI, which is presently a wholly-owned subsidiary of Krakatau. In

change of ownership situations such as this, it is the Department's

standard practice to

[[Page 73158]]

follow the methodology outlined in the General Issues Appendix (GIA),

attached to the Final Affirmative Countervailing Duty Determination;

Certain Steel Products from Austria, 58 FR 37217, 37265 (July 9, 1993),

with respect to the treatment of subsidies received prior to the sale

of the company. See also, Final Affirmative Countervailing Duty

Determination: Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel

Products from Brazil, 64 FR 38741, 38745 (July 19, 1999).

Over the course of this investigation, we repeatedly asked both

Krakatau and the government to provide information that would allow us

to use this methodology, but they did not. In the absence of this

information, as adverse facts available, for equity infusions provided

to CRMI, we treated these equity infusions as though the entire amount

was attributable to Krakatau. Accordingly, we assigned the total amount

of the equity infusions directly to Krakatau.

Subsidies Valuation Information

Allocation Period

Section 351.524(d)(2) of the CVD Regulations states that we will

presume the allocation period for non-recurring subsidies to be the

average useful life (AUL) of renewable physical assets for the industry

concerned, as listed in the Internal Revenue Service's (IRS) 1977 Class

Life Asset Depreciation Range System and updated by the Department of

Treasury. The presumption will apply unless a party claims and

establishes that these tables do not reasonably reflect the AUL of the

renewable physical assets for the company or industry under

investigation, and the party can establish that the difference between

the company-specific or country-wide AUL for the industry under

investigation is significant.

In this investigation, no party to the proceeding has claimed that

the AUL listed in the IRS tables does not reasonably reflect the AUL of

the renewable physical assets for the firm or industry under

investigation. Therefore, according to section 351.524(d)(2) of the CVD

Regulations, we have allocated Krakatau's non-recurring benefits over

15 years, the AUL listed in the IRS tables for the steel industry.

Equityworthiness

In analyzing whether a company is equityworthy, the Department

considers whether that company could have attracted investment capital

from a reasonable private investor in the year of the government equity

infusion based on the information available at that time. In this

regard, the Department has consistently stated that a key factor for a

company in attracting investment capital is its ability to generate a

reasonable return on investment within a reasonable period of time. In

making an equityworthiness determination, in accordance with section

351.507(a)(4) of the CVD Regulations, the Department may examine the

following factors, among others:

A. Objective analyses of the future financial prospects of the

recipient firm or the project as indicated by, inter alia, market

studies, economic forecasts, and project or loan appraisals prepared

prior to the government-provided equity infusion in question;

B. Current and past indicators of the recipient firm's financial

health calculated from the firm's statements and accounts, adjusted, if

appropriate, to conform to generally accepted accounting principles;

C. Rates of return on equity in the three years prior to the

government equity infusion; and

D. Equity investment in the firm by private investors.

The Department has examined Krakatau's equityworthiness for the

period 1988 through 1992, as well as in 1995, to the extent that equity

infusions may have been received in these years. In our preliminary

determination, we found that Krakatau was unequityworthy in 1995. We

received no comments from the interested parties relating to our

analysis of Krakatau's equityworthiness. Thus, for the reasons

specified in the Preliminary Determination, we determine that Krakatau

was unequityworthy in 1995. See Preliminary Determination, 64 FR at

40460.

The Department has also examined Krakatau's equityworthiness for

the period 1988 through 1992, to the extent equity infusions may have

been received in these years. Because neither Krakatau nor the GOI

responded to our repeated attempts to gather information regarding the

new allegations pertaining to the period 1988 through 1992, we used the

information in the petition as adverse facts available in accordance

with section 776(b) of the Act to conclude that Krakatau was

unequityworthy during the period 1988 through 1992. (For further

discussion, see the ``Facts Available'' section of this notice.)

With respect to factor A, no studies or other relevant data have

been submitted to the record. The petition cites several press articles

which describe Krakatau as inefficient, unprofitable, and uncompetitive

during the years prior to 1992. See Countervailing Duty Petition,

public version on file in the CRU. In order to corroborate the petition

information demonstrating that Krakatau was inefficient and

unprofitable prior to 1992, we examined the newspaper articles cited by

the petition. We found that these independent sources did indeed

describe Krakatau's financial and operational difficulties, thus

corroborating a finding of unequityworthiness.

To address factors B and C, we examined Krakatau's financial ratios

for 1990 through 1992, provided in the petition, which show that

Krakatau's rates of return were far less than the average rate of

return available in Indonesia. With respect to the final factor,

Krakatau has no private investors. Therefore, there are no private

investments that may be used to evaluate Krakatau's equityworthiness.

The available financial ratios, coupled with press reports used as

adverse facts available, demonstrate that no reasonable private

investor would have made equity investments in Krakatau during the

period 1988 through 1992. On this basis, we find that Krakatau was

unequityworthy during the period 1988 through 1992.

We have also examined the equityworthiness of Krakatau's

subsidiary, the Cold Rolling Mill of Indonesia (CRMI), in 1989 and

1990, to the extent that equity infusions may have been received in

these years. As discussed above, because neither Krakatau nor the GOI

responded to our repeated attempts to gather information regarding the

allegations pertaining to CRMI, we have relied upon the information

provided in the petition as adverse facts available in accordance with

section 776(b) of the Act. (For further discussion, see the ``Facts

Available'' section of this notice.)

Because no financial statements for CRMI for years prior to 1994

have been available, the petition cites to several press articles to

demonstrate CRMI's unequityworthiness. One such article, from 1989,

quotes a government official (who was also a company official at the

time) as stating that CRMI had failed to make a profit since being

inaugurated in 1987. Another 1989 article reports that CRMI's money-

losing performance was caused by large debts, technical problems and

poor sales, which led to accumulated losses of about US$120 million. At

the same time, CRMI's estimated debt was reported to be US$485 million.

The petition shows that CRMI's financial situation declined further in

1990. According to press reports from 1990, the company's losses

[[Page 73159]]

increased to US$150 million and its outstanding debts grew to US$492

million. In order to corroborate this petition information

demonstrating CRMI's unequityworthiness, we examined the independent

press reports cited in the petition and confirmed that they in fact

described CRMI's operational and financial difficulties in a manner

that supports an unequityworthy determination.

These articles are the only evidence on the record concerning

CRMI's equityworthiness, and suggest that no reasonable private

investor would have deemed CRMI capable of generating a reasonable rate

of return within a reasonable period at the time of the equity

infusions. On this basis, we determine that CRMI was unequityworthy in

1989 and 1990.

Equity Methodology

In measuring the benefit from a government equity infusion, in

accordance with section 351.507(a)(2) of the CVD Regulations, the

Department compares the price paid by the government for the equity to

actual private investor prices, if such prices exist. According to

section 351.507(a)(3) of the CVD Regulations, where actual private

investor prices are unavailable, the Department will determine whether

the firm was unequityworthy at the time of the equity infusion. In

these cases, private investor prices were unavailable; thus, we

conducted equityworthy analyses. As discussed above, we have determined

that Krakatau was unequityworthy during the period from 1988 to 1992,

and in 1995, and that CRMI was unequityworthy from 1989 to 1990.

Section 351.507(a)(3) of the CVD Regulations provides that a

determination that a firm is unequityworthy constitutes a determination

that the equity infusion was inconsistent with the usual investment

practices of private investors. The Department will then apply the

methodology described in section 351.507(a)(6) of the regulations, and

treat the equity infusion as a grant. Use of the grant methodology for

equity infusions into an unequityworthy company is based on the premise

that an unequityworthiness finding by the Department is tantamount to

saying that the company could not have attracted investment capital

from a reasonable investor in the infusion year based on the available

information.

Creditworthiness

As discussed in the Preliminary Determination, we only initiated an

investigation of Krakatau's creditworthiness during 1995. In the

Preliminary Determination, based on adverse facts available, we found

Krakatau to be uncreditworthy in 1995. We received no comments from the

interested parties relating to our analysis of Krakatau's

creditworthiness. Thus, for the reasons specified in the Preliminary

Determination, we continue to find that Krakatau was uncreditworthy in

1995. See Preliminary Determination, 64 FR at 40461.

Discount Rates and Loan Benchmarks

For equity infusions given to Krakatau, we calculated the discount

rates in accordance with the formula for constructing a long-term

interest rate benchmark for uncreditworthy companies as stated in the

Department's new regulations. See Section 351.505 (a)(3)(iii) of the

CVD Regulations. This formula requires values for the probability of

default by uncreditworthy and creditworthy companies. For the

probability of default by an uncreditworthy company, we relied on the

average cumulative default rates reported for the Caa to C-rated

category of companies as published in Moody's Investors Service,

``Historical Default Rates of Corporate Bond Issuers, 1920-1997,''

(February 1998). For the probability of default by a creditworthy

company, we used the average cumulative default rates reported for the

Aaa to Baa.1 Because no timely allegation of

uncreditworthiness was made against CRMI in this investigation, no

determination has been made regarding CRMI. Thus, we did not add an

uncreditworthiness margin to interest rates used to calculate benefits

received by CRMI.

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\1\ We note that since publication of the CVD Regulations,

Moody's Investors Service no longer reports default rates for Caa to

C-rated category of companies. Therefore for the calculation of

uncreditworthy interest rates, we will continue to rely on the

default rates as reported in Moody Investor Service's publication

dated February 1998 (see Exhibit 28).

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For subsidies received by Krakatau between 1994 and 1998, we used

the average cost of long-term fixed-rate loans in Indonesia as the

interest rates that would have been paid by a creditworthy company,

specifically the investment rates offered by commercial banks in

Indonesia as reported in the Indonesian Financial Statistics of

February 1999, attached to the GOI's April 29, 1999, questionnaire

response, a public document on file in the CRU. In order to calculate a

benefit for long-term allocable subsidies that were received prior to

1994, we used interest rate data for Indonesian long-term non-

guaranteed commercial loans as published in the International Monetary

Fund's International Financial Statistics. For 1998, since Indonesia

experienced very high inflation during this year, we converted the

subsidy into U.S. dollars and then applied a long-term dollar rate as

the discount rate, specifically, the average yield to maturity on

selected long-term Baa-rated bonds. See Memorandum to David Mueller,

``Preliminary Analysis and Calculations,'' dated July 16, 1999

(Preliminary Analysis Memo), public version on file in the CRU. This

conforms with our practice in Final Affirmative Countervailing Duty

Determination: Steel Wire Rod from Venezuela, 62 FR 55014, 55019

(October 22, 1997).

To calculate the benefit from the Two-Step Loan Program, because

the loans were denominated in Austrian schillings, we used as our

benchmark the Austrian national average government bond rate, as

published in the International Monetary Fund's International Financial

Statistics. While it is not our policy to use government bonds as a

benchmark, due to the lack of record evidence in this investigation, a

commercial lending rate was unavailable. Therefore, this is the only

information we were able to find for a schilling benchmark. As with the

equity infusions, we calculated the discount rates in accordance with

the formula for constructing a long-term interest rate benchmark for

uncreditworthy companies as stated in the Department's new regulations.

See Section 351.505 (a)(3)(iii) of the CVD Regulations

For the Rediscount Loan Program, we used as our benchmark the

reported average cost of short-term fixed-rate loans in Indonesia as

the interest rate that would be paid by a creditworthy company,

specifically the working capital rate offered by commercial banks in

Indonesia as reported in the Indonesian Financial Statistics of

February 1999, attached to the GOI's April 29, 1999, questionnaire

response, a public document on file in the CRU.

I. Programs Determined To Be Countervailable

A. 1995 Equity Infusion into Krakatau

In the Preliminary Determination, because Krakatau did not respond

to this allegation, we used the information and data provided in the

petition as adverse facts available, in accordance with section 776(b)

of the Act (see ``Facts Available'' discussion above). We corroborated

this information in accordance with section 776(c) of the Act as

described in the Preliminary

[[Page 73160]]

Analysis Memo. We received no comments from the interested parties

relating to our analysis of Krakatau's 1995 equity infusion. Thus, for

the reasons specified in the Preliminary Determination, we determine

that this equity infusion constituted a countervailable subsidy. See

Preliminary Determination, 64 FR at 40461.

As explained in the ``Equity Methodology'' section above, we have

treated equity infusions into unequityworthy companies as grants given

in the year the infusion was received because no market benchmark

exists. In accordance with section 351.507(c) of the CVD Regulations,

the equity infusion is allocated as a non-recurring subsidy. We

allocated the subsidy and converted the remaining face value of the

infusion in 1998 into U.S. dollars using the average 1997 rupiah/dollar

exchange rate and applied the long-term U.S. dollar uncreditworthy

interest rate described in the ``Discount Rate'' section of this

notice. We then divided the benefit amount allocable to the POI by

Krakatau's estimated 1998 U.S. dollar total sales figure, which was

calculated based on the facts available in the petitioner's submission

and corroborated as detailed in the Preliminary Analysis Memo, public

version on file in the CRU. On this basis, we determine the net

countervailable subsidy to be 16.21 percent ad valorem for Krakatau.

B. Pre-1993 Equity Infusions to Krakatau

As discussed in the Preliminary Determination, on June 7, 1999,

petitioners alleged that the GOI had made equity infusions into

Krakatau prior to 1993. At the time of the preliminary determination,

the Department had not had sufficient time to collect information from

Krakatau and the GOI on the alleged Pre-1993 Equity Infusions to

Krakatau, and so did not make a determination with respect to this

program's countervailability.

After the preliminary determination, both Krakatau and the GOI were

given an opportunity to provide information regarding these programs,

but they did not. Therefore, in accordance with section 776(b) of the

Act, we have used the information contained in the petition as adverse

facts available in order to make a determination with regard to this

program. (See ``Facts Available'' discussion above).

According to the petitioners, the GOI provided Krakatau with equity

infusions totaling US$765 million during the period from 1988 to 1992.

We corroborated the assertion made in the petition by comparing it to

the independent newspaper article cited in the petition which states

that, ``Excluding the cold-rolled mill, government subsidies for

Krakatau totaled Rps. 1.6 trillion (US$765 million) in the five years

to 31 December 1992.''

Because we have determined that Krakatau was unequityworthy during

this period in accordance with section 776(b) of the Act, we determine

that under section 771(5)(E)(i) of the Act, these equity infusions into

Krakatau were not consistent with the usual investment practice of a

private investor and confer a benefit in the amount of each infusion

(see ``Equityworthiness'' section above). The equity infusions are

specific within the meaning of section 771(5A)(D) of the Act because

they were limited to Krakatau. Accordingly, we find that the equity

granted to Krakatau during the period in question provides a

countervailable subsidy within the meaning of section 771(5) of the

Act.

As explained in the ``Equity Methodology'' section above, we have

treated equity infusions into unequityworthy companies as grants given

in the year the infusion was received because no market benchmark

exists. In accordance with section 351.507(c) of the CVD Regulations,

the equity conversion is allocated as a non-recurring subsidy. Due to

the lack of record information regarding this program, we were unsure

of the years in which the equity was given. Therefore, we treated the

entire amount as a grant provided in equal payments over the five-year

period from 1988 to 1992. We allocated the subsidy and converted the

remaining face value of the infusion in 1998 into U.S. dollars using

the average 1997 rupiah/dollar exchange rate and applied the long-term

U.S. dollar interest rate to uncreditworthy companies described in the

``Discount Rate'' section of this notice. We then divided the benefit

amount allocable to the POI by Krakatau's estimated 1998 U.S. dollar

total sales figure, which was calculated based on the facts available

in the petitioner's submission and corroborated as detailed in our

Preliminary Analysis Memo. On this basis, we determine the net

countervailable subsidy to be 16.66 percent ad valorem for Krakatau.

C. 1989 Equity Infusion to CRMI

As discussed in the Preliminary Determination, on June 7, 1999,

petitioners alleged that massive equity infusions were provided to

Krakatau's subsidiary, the Cold Rolling Mill of Indonesia (CRMI).

Krakatau owned 40 percent of CRMI's equity until 1991, when it

purchased the remaining shares to become a 100 percent owner.

Petitioners alleged that these 1989 and 1990 equity infusions provided

a countervailable benefit to Krakatau based on its ownership share in

CRMI. At the time of the preliminary determination, the Department had

not had sufficient time to collect information from Krakatau and the

GOI on the alleged Equity Infusions to CRMI, and so did not make a

determination with respect to this program's countervailability. Since

the preliminary determination, however, the Department afforded both

Krakatau and the GOI the opportunity to provide information regarding

these subsidy allegations. Because neither party responded to our

questionnaires, we have used the information contained in the petition

as adverse facts available, in accordance with section 776(b) of the

Act. (See ``Facts Available'' discussion above).

According to the Countervailing Duty Petition, the GOI provided

CRMI with an equity infusion totaling US$75 million in 1989. In support

of this allegation, the petition points to quotes from GOI officials

regarding the cash injections. To the extent practicable, we have

corroborated the information provided in the petition with numerous

press articles which describe the equity infusion, provided as

attachments to the petition. On the basis of this information, as

adverse facts available, we determine that under section 771(5)(E)(i)

of the Act, these equity infusions into CRMI were not consistent with

the usual investment practices of a private investor and confer a

benefit to CRMI in the amount of each infusion (see

``Equityworthiness'' section above). The equity infusions are specific

within the meaning of section 771(5A)(D) of the Act because they were

limited to CRMI. Accordingly, we find that the equity granted to CRMI

during the period in question provides a countervailable subsidy within

the meaning of section 771(5) of the Act.

As discussed in the ``Changes in Ownership'' section, above, as

adverse facts available, we are assuming that Krakatau did not pay for

its total acquisition of CRMI in 1991. Therefore, all of the benefit to

CRMI would have passed through to Krakatau at the time of the

acquisition. As explained in the ``Equity Methodology'' section above,

we have treated equity infusions into unequityworthy companies as

grants given in the year the infusion was received because no market

benchmark exists. In accordance with section 351.507(c) of the CVD

Regulations, the equity conversion is allocated as a non-

[[Page 73161]]

recurring subsidy. Therefore, we treated the entire amount as a grant

given to Krakatau in 1989. We allocated the subsidy over 15 years, and

applied the long-term U.S. dollar uncreditworthy interest rate

described in the ``Discount Rate'' section of this notice. We then

divided the benefit amount allocable to the POI by Krakatau's estimated

1998 U.S. dollar total sales figure, which was calculated based on the

facts available in the petitioner's submission and corroborated as

detailed in our Preliminary Analysis Memo. On this basis, we determine

the net countervailable subsidy to be 1.50 percent ad valorem for

Krakatau.

D. Three-Step Equity Infusion to CRMI

Information in the petition indicates that in 1989, an equity

infusion of US$357 million was to be provided to CRMI in three

installments--US$290 million, US$49 million and US$18 million. A 1990

article corroborates that the GOI was considering an equity infusion in

the amount of US$290 to CRMI. See Third Petition Attachment, Exhibits

15, 48. At the time of the preliminary determination, the Department

had not had sufficient time to collect information from Krakatau and

the GOI on these alleged Equity Infusions to CRMI, and so did not make

a determination with respect to this program's countervailability.

After the preliminary determination, both Krakatau and the GOI were

given the opportunity to provide information regarding these programs,

but did not. Therefore, as adverse facts available, we determine that

under section 771(5)(E)(i) of the Act, these equity infusions into CRMI

were not consistent with the usual investment practice of a private

investor and confer a benefit to CRMI in the amount of each infusion

(see ``Equityworthiness'' section above). To the extent that Krakatau

had a 40 percent stake in CRMI at the time of the infusion, and has

full ownership presently, the benefit to CRMI is equivalent to a

benefit to Krakatau. The equity infusions are specific within the

meaning of section 771(5A)(D) of the Act because they were limited to

CRMI. Accordingly, we find that the equity granted to CRMI during the

period in question provides a countervailable subsidy within the

meaning of section 771(5)(A) of the Act.

As explained in the ``Changes in Ownership'' section above, as

adverse facts available, we are assuming that all of the benefit to

CRMI would have passed through to Krakatau at the time of the

acquisition. As explained in the ``Equity Methodology'' section above,

we have treated equity infusions into unequityworthy companies as

grants given in the year the infusion was received because no market

benchmark exists. In accordance with section 351.507(c) of the CVD

Regulations, the equity conversion is allocated as a non-recurring

subsidy. Therefore, we treated the entire amount as a grant. The

information in the petition, corroborated by an independent newspaper

article attached to the petition, indicated that the GOI was going to

give the infusion in 1990; likewise, we have treated this equity

infusion as a grant given to Krakatau in 1990. We allocated the subsidy

and applied the long-term U.S. dollar interest rate described in the

``Discount Rate'' section of this notice. We then divided the benefit

amount allocable to the POI by Krakatau's estimated 1998 U.S. dollar

total sales figure, which was calculated based on the facts available

in the petitioner's submission and corroborated as detailed in our

Preliminary Analysis Memo. On this basis, we determine the net

countervailable subsidy to be 7.64 percent ad valorem for Krakatau.

E. Two-Step Loan Program

Prior to the Department's preliminary determination in this

proceeding, the petitioners alleged that the GOI had provided so-called

``two-step loans'' to Krakatau for the construction of certain fixed

assets. At the time of the preliminary determination, the Department

had not had sufficient time to collect information from Krakatau and

the GOI regarding this alleged Two-Step Loan program, and so did not

make a determination with respect to this program's countervailability.

Although the GOI and Krakatau were both asked repeatedly to respond to

the Department's questions about this program, neither party provided

any information that could be used in making a determination with

respect to this program's countervailability. Thus, in accordance with

section 776(b) of the Act, we have used the information provided by

petitioner as adverse facts available. (See ``Facts Available''

discussion above).

According to the petition, and corroborated by the descriptions

contained in Krakatau's 1996 and 1997 annual reports, these two-step

loans were drawn by Krakatau from ``credit facilities'' (i.e., lines of

credit) in the billing currencies of its equipment suppliers, who, in

turn, receive payment from banks appointed by lenders. According to

Krakatau's annual reports, the loans, which were converted into rupiah

based on the exchange rate on the drawing date, are repayable in the

currency in which they were borrowed, Austrian schillings. Krakatau's

annual reports indicate that Krakatau received a credit facility from

the GOI in fiscal year (FY) 1995 for ``optimization projects for the

slab steel plant and billet steel plant'' from which it drew down loan

amounts in FY 1995, FY 1996, and FY 1997. For all loan amounts drawn

under this credit facility, Krakatau pays interest at a rate of 4

percent per annum. The first principal installment on the loan balance

is scheduled for April 30, 2003 and last payment on October 30, 2020.

In 1995, the year in which the credit facilities were extended, a

lending rate of 4 percent would be inconsistent with an interest rate

the company would have received on a comparable commercial loan

denominated in Austrian schillings, and would thus provide a benefit

pursuant to section 351.505(a) of the Department's regulations. (See

the International Monetary Fund's International Financial Statistics,

October 1999, at 110). The information provided in the petition and

corroborated by the company's financial statements further demonstrates

that these loans are specific because they were provided by the GOI as

part of the financing for Krakatau's projects. There is no information

on the record of this investigation which would indicate that the two-

step loan was provided to Krakatau pursuant to a program to which other

companies ostensibly had access. As adverse facts available, pursuant

to section 776(b) of the Act, we find that the loan is specific as a

matter of law. Accordingly, we find that the two-step loan granted to

Krakatau provides a countervailable subsidy within the meaning of

section 771(5) of the Act.

In order to calculate the benefit from this program, we compared

the interest rates Krakatau paid on these two-step loans during the POI

to the interest rates the company would have paid for comparable

commercial loans, based on the long-term Austrian schilling loan

benchmark for uncreditworthy companies described in the ``Discount

Rates'' section of this notice, above. This difference was then divided

by Krakatau's estimated sales during the POI which were calculated

based on petition information and corroborated as detailed in the

Preliminary Analysis Memo. On this basis, we determine the

countervailable subsidy from this program to be 0.65 percent ad valorem

for Krakatau.

F. Rediscount Loan Program

In our Preliminary Determination, the Department found that

Krakatau had not

[[Page 73162]]

used this program. This determination was based on information provided

by the GOI; this information indicated that while Krakatau was eligible

to receive benefits under this program, it had neither applied for nor

received such benefits. The Department found, at the preliminary stage

of this investigation, that the administrative record with regard to

Krakatau was not so incomplete that it could not serve as a reliable

basis for reaching a determination with regard to this program.

According to section 782(e)(2) of the Act, the Department shall not

decline to consider information submitted by an interested party if,

among other factors, the information can be verified. We attempted to

verify with the GOI that Krakatau had not used the Rediscount Loan

Program, but were unable to do so. See, GOI Verification Report at 3.

As explained in the ``Facts Available'' section of this notice, we have

determined to resort to adverse facts available for our determination

with regard to this program.

Under Decree No. 132/MPP/Kep/1996 of June 4, 1996, the Ministry of

Industry and Trade, the Ministry of Finance, and the Bank of Indonesia

(BI) provide support for certain exporters with the goal of achieving

diversification of the Indonesian export base. Companies designated as

Perusahaan Eksportir Tertentu (PET) are eligible to participate in this

program. Under the program, PETs sell their letters of credit and

export drafts at a discount to the BI through participating foreign

exchange banks, which are commercial banks that have obtained a license

to conduct activities in foreign currencies. The sale of the letters of

credit and export drafts by the PETs provides them with working capital

at lower interest rates than they would otherwise pay on short-term

commercial loans.

This same program was determined to constitute an export subsidy in

Final Negative Countervailing Duty Determination: Extruded Rubber

Thread From Indonesia, 64 FR 14695 (March 26, 1999) (ERT).

On the basis of this information, and in conformance with section

776(b) of the Act, we determine that the loans provided under this

program are countervailable in accordance with section 771(5)(A) of the

Act. Through this program, the BI provides working capital to PETs at

interest rates which are more favorable than those provided to non-

PETs. The benefit is the difference between the amount the borrower of

the loan pays on the loan and the amount the borrower would pay on a

comparable commercial loan. Finally, because the program is contingent

upon export performance, it is an export subsidy under section

771(5A)(B) and is, therefore, specific.

In the ERT determination, the Department verified that the interest

rates in effect during that investigation's POI were the Singapore

Interbank Offering Rate (SIBOR) for PETs, and SIBOR plus 1 percent for

non-PETs. See ERT, 64 FR at 14696. The interest rates used in the

petition, as corroborated by the questionnaire response of the GOI were

SIBOR for PET exporters, and SIBOR plus 1 percent for non-PET exporters

during the first half of the POI. During the second half of the POI

rediscount loan rates rose to SIBOR plus 3 percent for PET exporters,

and SIBOR plus 4 percent for non-PET exporters. See Third Petition

Amendment, Exhibit 42; see also GOI Verification at 2. Thus, we have

used these interest rates to calculate the benefit to Krakatau. We

compared the interest rates Krakatau paid on loans for shipments to the

United States to the interest rates that non-PET companies would have

had to pay for comparable commercial short-term loans. This difference

was then divided by Krakatau's total exports sales. As adverse facts

available, we used the estimated export sales calculated in the

petition to calculate the subsidy rate. On this basis, we determine the

countervailable subsidy from this program to be 5.05 percent ad valorem

for Krakatau.

Based on the verified information provided by respondents and the

GOI, we determine that neither Gunawan nor Jaya Pari applied for or

received benefits under the Rediscount Loan Program during the POI.

II. Program Determined Not To Exist

Reduction in Electricity Tariffs

In the Preliminary Determination, the Department found no basis for

concluding that the steel industry had received a special electricity

discount. Moreover, based on the record evidence, the electricity

discount was not limited to a specific enterprise, industry or group

thereof, but was available to all industrial users in the country.

Therefore, we preliminarily determined that the electricity discount

program is not countervailable. (See Preliminary Determination, 64 FR

at 40462).

At verification, we met with officials from the government-owned

electricity company, PLN, to discuss the tariff rates. Officials

explained that, prior to the increase in question, the last tariff

schedule was implemented in 1994. The President established a tariff

increase with Decree No. 70 of 1998, because of the increased costs of

providing electricity. The increase was to be implemented in three

stages. However, due to the financial crisis and the instability of the

rupiah, only the first of these three stages was actually implemented,

in May 1998. In early 1999, with Presidential Decree No. 1, 1999, the

second two stages were officially postponed in a decree which legalized

the existing tariff schedule. See Exhibit 12 to the GOI's June 2, 1999,

questionnaire response, public version on file in the CRU. Thus, the

subsequent stages were never implemented and there were no refunds. The

May 1998 tariff schedule is still presently in place.

Additionally, we verified that there are no special rates for

particular industries; all industries are charged based on industrial

usage categories. On these bases, we find this program not to exist.

III. Program Determined To Be Not Used

Based on the verified information provided by respondents and the

GOI, we determine that neither Gunawan nor Jaya Pari applied for or

received benefits from Corporate Income Tax Holidays during the POI.

With regard to Krakatau, the facts available regarding this program

have not changed from the preliminary determination; therefore we

continue to find that Krakatau did not use this program during the POI.

Interested Party Comments

Comment 1: Whether the Department Should Countervail the 1989 Equity

Infusion to CRMI, the Three-Step Equity Infusion, and the Two-Step Loan

from the GOI

Petitioners argue that the Department should countervail three

subsidies to Krakatau which were outlined in the June 7, 1999 amendment

to the petition: the 1989 Equity Infusion to CRMI, the Three-Step

Equity Infusion, and the Two-Step Loan from the GOI. The information in

the petition amendment was not rebutted by Krakatau or the GOI, nor did

Krakatau or the GOI present any affirmative information regarding these

programs in the investigation. Therefore, petitioners argue, the

Department should apply adverse facts available in its final

determination, in accordance with the Department's own regulations.

Department's Position: We agree with Petitioners. In the

Preliminary Determination, we stated that due to the lateness of the

allegations, the parties had not been given sufficient time to provide

information with regard to these alleged programs. However, since the

[[Page 73163]]

preliminary determination, both Krakatau and the GOI have been afforded

opportunities to present information regarding these allegations.

Neither Krakatau nor the GOI responded to our questions concerning

these programs. Therefore, as discussed in detail in both the ``Use of

Facts Available'' and ``Programs Determined to be Countervailable''

sections of this notice, we have applied adverse facts available in

accordance with the Department's regulations, at 351.308(a) and with

section 776(b) of the Act.

Comment 2: Whether the GOI has Failed Verification with Respect to the

Rediscount Loan Subsidy

In the Preliminary Determination, the Department found that

Krakatau had not used rediscount loans, on the basis of the GOI's

questionnaire responses. However, petitioners assert that the GOI had

placed conflicting information on the record, information that should

have been clarified at verification. As the Department was unable to

verify this program, petitioners argue that the Department should

resort to the use of facts available to countervail Krakatau's use of

this program, which has been found to be countervailable in prior

proceedings. To support their position, petitioners point to the

verification outlines, which clearly stated that the Department would

need to examine records maintained on Krakatau with regard to this

subsidy. Because the Department requested that the GOI be prepared to

present documentation at verification, petitioners argue that the GOI

should have been fully prepared for verification.

Simply put, petitioners argue that because officials from the GOI

were unable to present information beyond mere assertions at

verification that Krakatau did not use this program, the GOI failed

verification with respect to this program and the Department is obliged

to countervail Krakatau's use of this program as adverse facts

available. Petitioners cite to Stainless Steel Sheet and Strip in Coils

from Taiwan, in which the Department applied adverse facts available

because a party was in control of necessary information but did not

provide that information.

Department's Position: As discussed in the ``Use of Facts

Available'' section of this notice, above, according to section

782(e)(2) of the Act, the Department shall not decline to consider

information if, among other factors, that information can be verified.

In this case, we attempted to verify with the GOI that Krakatau had not

used the Rediscount Loan Program, but were unable to do so. At

verification, we asked to review any records the Bank of Indonesia

maintains with regard to the users of this program. The officials

indicated that, although they searched their files for any information

on Krakatau Steel and did not find anything, it was not possible to

review each and every file to demonstrate that Krakatau did not use the

program. See, GOI Verification Report, page 3. Moreover, the government

officials did not propose any other way in which Krakatau's non-use

could be adequately verified. Consequently, we agree with petitioners'

assertion that the Department was unable to verify Krakatau's non-use

of the rediscount loan program and we must, therefore, base our final

determination on the facts available on the record. Additionally, as

explained in the ``Facts Available'' section above, because we

determined that the GOI failed to cooperate by not acting to the best

of its ability in this investigation, we determined that an adverse

inference is warranted when selecting among the facts available. For

more information, see the ``Programs Determined to be Countervailable''

section of this notice.

Verification

In accordance with section 782(i) of the Act, except as noted in

the ``Facts Available'' and ``Programs Determined to Be

Countervailable'' sections, above, we verified the information used in

making our final determination. We followed standard verification

procedures, including meeting with the government and company

officials, and examining relevant accounting records and original

source documents. Our verification results are outlined in detail in

the public versions of the verification reports, which are on file in

the CRU.

Suspension of Liquidation

In accordance with section 703(d)(1)(A)(i) of the Act, we have

calculated individual rates for each of the companies under

investigation.

According to section 705(5)(A)(i) of the Act, the all others rate

normally will be ``an amount equal to the weighted average

countervailable subsidy rates established for exporters and producers

individually investigated, excluding any zero and de minimis

countervailable subsidy rates and any rates determined entirely under

section 776.'' In this case, all exporters and producers individually

investigated have zero rates or a rate based entirely on facts

available.

According to section 705(5)(A)(ii) of the Act, in situations where

the countervailable subsidy rates established for all exporters and

producers individually investigated are zero or de minimis rates, or

are determined entirely under section 776, the Department may use any

reasonable method to establish an all others rate. In antidumping duty

investigations, where petitions typically have a range of calculated

dumping rates, the Department often bases the all others rate on a

simple average of the petition rates in such situations. See, e.g.,

Notice of Final Determination of Sales at Less Than Fair Value:

Stainless Steel Plate in Coils From Italy, 64 FR 15458, 15459 (Mar. 31,

1999). In this investigation, we do not have information from the

petition that would allow us to calculate the all others rate in this

fashion. Therefore, we have considered the options of using a weighted

average of the countervailing subsidy rates of the exporters and

producers individually examined in this investigation or a simple

average of these same rates. Because of concerns about the potential

disclosure of proprietary data through the use of a weighted average of

the subsidy rates in this case, the Department has decided to use a

simple average of the subsidy rates of the producers and exporters

examined as the all others rate in this case.

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

Producer/exporter Net subsidy rate

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

P.T. Krakatau Steel....................... 47.71% ad valorem

P.T. Gunawan Steel........................ 0.00% ad valorem

P.T. Jaya Pari............................ 0.00% ad valorem

All others rate........................... 15.90% ad valorem

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

In accordance with our preliminary affirmative determination, we

instructed the U.S. Customs Service to suspend liquidation of all

entries of certain cut-to-length carbon-quality steel plate from

Indonesia which were entered, or withdrawn from warehouse, for

consumption on or after July 26, 1999, the date of the publication of

our preliminary determination in the Federal Register. In accordance

with section 703(d)(3) of the Act, which provides that suspension

ordered after the preliminary determination may not remain in effect

for more than four months, we instructed the U.S. Customs Service to

discontinue the suspension of liquidation for merchandise entered on or

after November 23, 1999, but to continue the suspension of liquidation

of entries made between July 26 and November 22, 1999.

We will reinstate suspension of liquidation under section 706(a) of

the Act if the ITC issues a final affirmative injury determination, and

will require a cash deposit of estimated countervailing duties for such

entries of merchandise in the amounts indicated above. Because the

estimated net

[[Page 73164]]

countervailing duty rates for Gunawan and Jaya Pari are zero, these

companies will be excluded from the suspension of liquidation, and the

order, if one is issued.

ITC Notification

In accordance with section 705(d) of the Act, we will notify the

ITC of our determination. In addition, we are making available to the

ITC all non-privileged and non-proprietary information related to this

investigation. We will allow the ITC access to all privileged and

business proprietary information in our files provided the ITC confirms

that it will not disclose such information, either publicly or under an

administrative protective order, without the written consent of the

Assistant Secretary for Import Administration.

If the ITC determines that material injury, or threat of material

injury, does not exist, this proceeding will be terminated and all

estimated duties deposited or securities posted as a result of the

suspension of liquidation will be refunded or canceled. If, however,

the ITC determines that such injury does exist, we will issue a

countervailing duty order.

Destruction of Proprietary Information

In the event that the ITC issues a final negative injury

determination, this notice will serve as the only reminder to parties

subject to Administrative Protective Order (APO) of their

responsibility concerning the destruction of proprietary information

disclosed under APO in accordance with 19 CFR 351.305(a)(3). Failure to

comply is a violation of the APO.

This determination is published pursuant to sections 704(g) and

777(i) of the Act.

Dated: December 13, 1999.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

[FR Doc. 99-33231 Filed 12-28-99; 8:45 am]

BILLING CODE 3510-DS-P