Notice of Initiation of Countervailing Duty Investigations: Certain Cold-Rolled Flat-Rolled Carbon-Quality Steel Products From Brazil, Indonesia, Thailand, and Venezuela

[Federal Register Volume 64, Number 122 (Friday, June 25, 1999)]
[Notices]
[Pages 34204-34209]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-16249]


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DEPARTMENT OF COMMERCE

International Trade Administration
[C-351-831, C-560-808, C-549-815, C-307-816]


Notice of Initiation of Countervailing Duty Investigations: 
Certain Cold-Rolled Flat-Rolled Carbon-Quality Steel Products From 
Brazil, Indonesia, Thailand, and Venezuela

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce

EFFECTIVE DATE: June 25, 1999.

FOR FURTHER INFORMATION CONTACT: Dana Mermelstein or Javier Barrientos 
(Brazil), at (202) 482-2786; Rosa Jeong (Indonesia), at (202) 482-3853; 
Eva Temkin (Thailand), at (202) 482-1167; and Dana Mermelstein or Sean 
Carey (Venezuela), at (202) 482-2786, Import Administration, U.S. 
Department of Commerce, Room 1870, 14th Street and Constitution Avenue, 
N.W., Washington, D.C. 20230.
INITIATION OF INVESTIGATIONS:

The Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (the Act) by the 
Uruguay Round Agreements Act (URAA). In addition, unless otherwise 
indicated, all citations to the Department's regulations are to the 
regulations 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).

The Petitions

    On June 2, 1999, the Department of Commerce (the Department) 
received petitions filed in proper form on behalf of Bethlehem Steel 
Corporation, Gulf States Steel, Inc., Ispat Inland, Inc., LTV Steel 
Co., Inc., National Steel Corporation, Steel Dynamics, Inc., U.S. Steel 
Group, a Unit of USX Corporation, Weirton Steel Corporation, and United 
Steelworkers of America, (collectively, ``the petitioners''). On June 
8, 1999, the Independent Steelworkers Union joined as a co-petitioner. 
Supplements to the petitions were filed on June 8, 10, 11, 14, and 15, 
1999.
    In accordance with section 702(b)(1) of the Act, petitioners allege 
that manufacturers, producers, or exporters of certain cold-rolled 
flat-rolled carbon-quality steel products (cold-rolled or subject 
merchandise) in Brazil, Indonesia, Thailand, and Venezuela receive 
countervailable subsidies within the meaning of section 701 of the Act. 
Petitioners also allege that ``critical circumstances'' exist within 
the meaning of section 703(e) of the Act, with respect to imports of 
subject merchandise from Thailand and Venezuela.
    The Department finds that petitioners are interested parties as 
defined under sections 771(9)(C) and (D) of the Act, and have filed the 
petitions on behalf of the domestic industry. The petitioners have 
demonstrated sufficient industry support with respect to each of the 
countervailing duty investigations, which they are requesting the 
Department to initiate (see Determination of Industry Support for the 
Petitions below).

Scope of the Investigations

    For purposes of these investigations, the products covered are 
certain cold-rolled (cold-reduced) flat-rolled carbon-quality steel 
products, neither clad, plated, nor coated with metal, but whether or 
not annealed, painted, varnished, or coated with plastics or other non-
metallic substances, both in coils, 0.5 inch wide or wider, (whether or 
not in successively superimposed layers and/or otherwise coiled, such 
as spirally oscillated coils), and also in straight lengths, which, if 
less than 4.75 mm in thickness having a width that is 0.5 inch or 
greater and that measures at least 10 times the thickness; or, if of a 
thickness of 4.75 mm or more, having a width exceeding 150 mm and 
measuring at least twice the thickness. The products described above 
may be rectangular, square, circular or other shape and include 
products of either rectangular or non-rectangular cross-section where 
such 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.
    Specifically included in this scope are vacuum degassed, fully 
stabilized (commonly referred to as interstitial-free (``IF'')) steels, 
high strength low alloy (``HSLA'') steels, and motor lamination steels. 
IF steels are recognized as low carbon steels with micro-alloying 
levels of elements such as titanium and/or niobium added to stabilize 
carbon and nitrogen elements. HSLA steels are recognized as steels with 
micro-alloying

[[Page 34205]]

levels of elements such as chromium, copper, niobium, titanium, 
vanadium, and molybdenum. Motor lamination steels contain micro-
alloying levels of elements such as silicon and aluminum.
    Steel products included in the scope of these investigations, 
regardless of definitions in the Harmonized Tariff Schedules of the 
United States (``HTSUS''), are products in which: (1) iron 
predominates, by weight, over each of the other contained elements; (2) 
the carbon content is 2 percent or less, by weight, and; (3) none of 
the elements listed below exceeds the quantity, by weight, respectively 
indicated:

1.80 percent of manganese, or
2.25 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 (also called columbium), or
0.15 percent of vanadium, or
0.15 percent of zirconium

    All products that meet the written physical description, and in 
which the chemistry quantities do not exceed any one of the noted 
element levels listed above, are within the scope of these 
investigations unless specifically excluded. The following products, by 
way of example, are outside and/or specifically excluded from the scope 
of these investigations:
    •  SAE grades (formerly also called AISI grades) above 2300;
    •  Ball bearing steels, as defined in the HTSUS;
    •  Tool steels, as defined in the HTSUS;
    •  Silico-manganese steel, as defined in the HTSUS;
    •  Silicon-electrical steels, as defined in the HTSUS, that 
are grain-oriented;
    •  Silicon-electrical steels, as defined in the HTSUS, that 
are not grain-oriented and that have a silicon level exceeding 2.25 
percent;
    •  All products (proprietary or otherwise) based on an alloy 
ASTM specification (sample specifications: ASTM A506, A507).
    The merchandise subject to these investigations is typically 
classified in the HTSUS at subheadings: 7209.15.0000, 7209.16.0030, 
7209.16.0060, 7209.16.0090, 7209.17.0030, 7209.17.0060, 7209.17.0090, 
7209.18.1530, 7209.18.1560, 7209.18.2510, 7209.18.2550, 7209.18.6000. 
7209.25.0000, 7209.26.0000, 7209.27.0000, 7209.28.0000, 7209.90.0000, 
7210.70.3000, 7210.90.9000, 7211.23.1500, 7211.23.2000, 7211.23.3000, 
7211.23.4500, 7211.23.6030, 7211.23.6060, 7211.23.6075, 7211.23.6085, 
7211.29.2030, 7211.29.2090, 7211.29.4500, 7211.29.6030, 7211.29.6080, 
7211.90.0000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 7225.19.0000, 
7225.50.6000, 7225.50.7000, 7225.50.8010, 7225.50.8015, 7225.50.8085, 
7225.99.0090, 7226.19.1000, 7226.19.9000, 7226.92.5000, 7226.92.7050, 
7226.92.8050, and 7226.99.0000.
    Although the HTSUS subheadings are provided for convenience and 
U.S. Customs Service (``U.S. Customs'') purposes, the written 
description of the merchandise under investigation is dispositive.
    During our review of the petition, we discussed the scope with the 
petitioners to ensure that the scope in the petition accurately 
reflects the product for which the domestic industry is seeking relief. 
Moreover, as discussed in the preamble to the Department's regulations 
(62 FR 27323), we are setting aside a period for parties to raise 
issues regarding product coverage. In particular, we seek comments on 
the specific levels of alloying elements set out in the description 
above, the clarity of grades and specifications excluded by example 
from the scope, and the physical and chemical description of the 
product coverage. The Department encourages all parties to submit such 
comments by July 7, 1999. Comments should be addressed to Import 
Administration's Central Records Unit at Room 1870, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C. 
20230. The period of scope consultations is intended to provide the 
Department with ample opportunity to consider all comments and consult 
with parties prior to the issuance of the preliminary determination.

Consultations

    Pursuant to section 702(b)(4)(A)(ii) of the Act, the Department 
invited representatives of the relevant foreign governments for 
consultations with respect to the petitions filed. On June 16, 1999, 
the Department held consultations with representatives of the Royal 
Thai Government (RTG). Also on June 16, 1999, the Department held 
consultations with representatives of the Government of Brazil (GOB). 
On June 18, 1999, the Department held consultations with 
representatives of the Government of Venezuela (GOV). See the June 21, 
1999, memoranda to the file regarding these consultations (public 
documents on file in the Central Records Unit of the Department of 
Commerce, Room B-099).

Determination of Industry Support for the Petition

    Section 732(b)(1) of the Act requires that a petition be filed on 
behalf of the domestic industry. Section 732(c)(4)(A) of the Act 
provides that a petition meets this requirement if the domestic 
producers or workers who support the petition account for: (1) At least 
25 percent of the total production of the domestic like product; and 
(2) more than 50 percent of the production of the domestic like product 
produced by that portion of the industry expressing support for, or 
opposition to, the petition.
    Section 771(4)(A) of the Act defines the ``industry'' as the 
producers of a domestic like product. Thus, to determine whether the 
petition has the requisite industry support, the statute directs the 
Department to look to producers and workers who produce the domestic 
like product. The International Trade Commission (``ITC''), which is 
responsible for determining whether ``the domestic industry'' has been 
injured, must also determine what constitutes a domestic like product 
in order to define the industry. While both the Department and the ITC 
must apply the same statutory definition regarding the domestic like 
product (section 771(10) of the Act), they do so for different purposes 
and pursuant to separate and distinct authority. In addition, the 
Department's determination is subject to limitations of time and 
information. Although this may result in different definitions of the 
like product, such differences do not render the decision of either 
agency contrary to the law.1
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    \1\ See Algoma Steel Corp. Ltd., v. United States, 688 F. Supp. 
639, 642-44 (CIT 1988); High Information Content Flat Panel Displays 
and Display Glass from Japan: Final Determination; Rescission of 
Investigation and Partial Dismissal of Petition, 56 FR 32376, 32380-
81 (July 16, 1991).
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    Section 771(10) of the Act defines the domestic like product as ``a 
product that is like, or in the absence of like, most similar in 
characteristics and uses with, the article subject to an investigation 
under this title.'' Thus, the reference point from which the domestic 
like product analysis begins is ``the article subject to an 
investigation,'' i.e., the class or kind of merchandise to be 
investigated, which normally will be the scope as defined in the 
petition.

[[Page 34206]]

    The domestic like product referred to in the petitions is the 
single domestic like product defined in the ``Scope of Investigation'' 
section, above. The Department has no basis on the record to find the 
petitioners' definition of the domestic like product to be inaccurate. 
The Department, therefore, has adopted the domestic like product 
definition set forth in the petitions.
    Moreover, the Department has determined that the petitions (and 
subsequent amendments) and supplemental information obtained through 
the Department's research, contain adequate evidence of industry 
support; therefore, polling is unnecessary (see Attachment to the 
Initiation Checklist, Re: Industry Support, June 21, 1999). For all 
countries, petitioners established industry support representing over 
50 percent of total production of the domestic like product. 
Accordingly, the Department determines that these petitions are filed 
on behalf of the domestic industry within the meaning of section 
732(b)(1) of the Act.

Injury Test

    Because Brazil, Indonesia, Thailand, and Venezuela are ``Subsidies 
Agreement Countries'' within the meaning of section 701(b) of the Act, 
section 701(a)(2) applies to these investigations. Accordingly, the ITC 
must determine whether imports of the subject merchandise from these 
countries materially injure, or threaten material injury to, a U.S. 
industry.
    In our consultations with the Government of Venezuela , the GOV 
stated that Article 27.10(b) of the SCM Agreement requires that the 
Department decline to initiate a countervailing duty investigation of 
certain cold-rolled carbon steel flat products from Venezuela or to 
terminate any countervailing duty investigation, if initiated. The GOV 
noted that the volume of imports as described in the petition does not 
reach the thresholds required by Article 27(10)(b): the volume of 
imports of the subject merchandise from Venezuela is less than four 
percent of total U.S. imports of the like product, and, when aggregated 
with imports from the other developing countries named in the petition 
whose individual exports constitute less than four percent of total 
imports (Thailand and Indonesia), less than nine percent of total U.S. 
imports (by volume) of the like product. Article 27.10(b) is given 
effect by Section 771(24)(B) of the Act, which directs the 
International Trade Commission to apply a particular standard to 
developing countries' imports when considering whether those imports 
are ``negligible.'' Thus, the applicability of Article 27(10)(b) will 
be properly considered by the International Trade Commission during its 
investigation pursuant to section 703(a) of the Act. The ITC is 
scheduled to make its preliminary determination by July 16, 1999.

Allegations and Evidence of Material Injury and Causation

    The petitioners allege that the U.S. industry producing the 
domestic like product is being materially injured, and is threatened 
with material injury, by reason of the individual and cumulated 
subsidized imports of the subject merchandise. The petitioners 
explained that the industry's injured condition is evident in the 
declining trends in net operating profits, net sales volumes, profit-
to-sales ratios, and industry employment level. The allegations of 
injury and causation are supported by relevant evidence including 
business proprietary data from the petitioning firms and U.S. Customs 
import data. The Department assessed the allegations and supporting 
evidence regarding material injury and causation, and determined that 
these allegations are supported by accurate and adequate evidence and 
meet the statutory requirements for initiation. See the June 21, 1999, 
memoranda to the file (for each country) regarding the initiation of 
each investigation (public versions on file in the Central Records Unit 
of the Department of Commerce, Room B-099).
    Section 702(b) of the Act requires the Department to initiate a 
countervailing duty proceeding whenever an interested party files a 
petition, on behalf of an industry, that (1) alleges the elements 
necessary for an imposition of a duty under section 701(a), and (2) is 
accompanied by information reasonably available to petitioners 
supporting the allegations.

Initiation of Countervailing Duty Investigations

    The Department has examined the petitions on certain cold-rolled 
flat-rolled carbon-quality steel products from Brazil, Indonesia, 
Thailand, and Venezuela, and found that they comply with the 
requirements of section 702(b) of the Act. Therefore, in accordance 
with section 702(b) of the Act, we are initiating countervailing duty 
investigations to determine whether manufacturers, producers, or 
exporters of cold-rolled from these countries receive subsidies. See 
the June 21, 1999, memoranda to the file (for each country) regarding 
the initiation of each investigation (public documents on file in the 
Central Records Unit of the Department of Commerce, Room B-099). We 
will also make a determination as to whether critical circumstances 
exist with respect to the subject merchandise from Thailand and 
Venezuela no later than the date of our preliminary determination.

A. Brazil

    We are including in our investigation the following programs 
alleged in the petition to have provided countervailable subsidies to 
producers and exporters of the subject merchandise in Brazil:

1. GOB Equity Infusions
    a. Pre-1992 Equity Infusions
    b. GOB Equity Infusions to Companhia Siderurgica Paulista (COSIPA) 
in 1992 and 1993
    c. GOB Equity Infusion to Companhia Siderugica Nacional (CSN) in 
1992
2. GOB Tax Deferrals
    a. COFINS, IPI, Social Contribution, Finsocial, PIS and IRPJ 
Arrears to the National Tax Authority;
    b. INSS and FNDE Arrears to the Federal Social Security 
Administration;
    c. ICMS Arrears to the State of Sao Paulo;
    d. IPTU Arrears to the City of Cubatao.

Based of the information contained in the petition, we are also 
investigating whether COSIPA was uncreditworthy in the years from 1984 
to 1989 and from 1991 to 1993, whether CSN was uncreditworthy in the 
years from 1984 to 1992, and whether Usinas Siderugicas de Minas Gerais 
(USIMINAS) was uncreditworthy in the years from 1984 to 1988. Further, 
we will investigate whether the producers of subject merchandise were 
unequityworthy to the extent that they received government equity 
infusions.

B. Indonesia

    We are including in our investigation the following programs 
alleged in the petition to have provided countervailable subsidies to 
producers and exporters of the subject merchandise in Indonesia:
    1. 1995 Equity Infusion to PT Krakatau Steel (Krakatau).
    2. Pre-1993 Equity Infusions to Krakatau.
    3. Equity Infusions to PT Cold-Rolled Mill Indonesia (CRMI).
    4. Two-Step Loan.
    5. Bank of Indonesia Rediscount Loans.
    6. Reduction in Electricity Tariffs.

Based in the information in the petition, we are also investigating 
whether

[[Page 34207]]

Krakatau was uncreditworthy in 1995, whether Krakatau was 
unequityworthy during the years from 1988 to 1992, and in 1995, and 
whether CRMI was unequityworthy in 1989 and 1990.

C. Thailand

    We are including in our investigation the following programs 
alleged in the petition to have provided countervailable subsidies to 
producers and exporters of the subject merchandise in Thailand:
    1. Duty Exemptions on Imports of Raw and Essential Materials Under 
Section 30 of the Investment Promotion Act (IPA).
    2. Duty Exemption on Imports of Machinery Under IPA Section 28.
    3. Exemptions from VAT Under Section 21(4) of the VAT Act.
    4. Corporate Income Tax Exemptions Under IPA Section 31.
    5. Tax Benefits from Revaluation.
    6. Additional Tax Deductions Under IPA Section 35.
    7. Loan Guarantees on 1996 Loan to Thai Cold-rolled Steel Sheet Plc 
(TCRSS).
    8. Subsidy on the 1996 Loan from RTG-Banks and Commercial Thai 
Banks.
    9. Loans from the IFCT and the Thai Export-Import Bank.
    10. Investment Inducements.
    11. Loans from Banks Owned, Controlled, or Influenced by the RTG.
    12. Packing Credits.
    13. Pre-Shipment Finance Facilities.
    14. Export Insurance Program.
    15. Trust Receipt Financing for Raw Materials.
    16. Tax Certificates for Export.
    17. Import Duty Exemptions for Industrial Estates.
    18. Export Processing Zone Incentives.
    19. IPA Subsidies for Building and Operating the Prachuap Port.
    20. Subsidized Waterworks from Eastern Water.
    21. Plant Construction Subsidies for Sahaviriya's Power Plant.

Based on the information in the petition, we are also investigating 
whether TCRSS was uncreditworthy during the period from 1996 to the 
POI. Petitioners also alleged that SUS was uncreditworthy and 
unequityworthy during this period. However, no evidence was provided to 
substantiate this allegation. Thus, we are not initiating an 
investigation of these allegations.
    We are not including in our investigation the following programs 
alleged to be benefitting producers and exporters of the subject 
merchandise in Thailand:

1. Subsidized Transport, Electricity, and Water Charges From the BoI

    Petitioners allege that, since 1995, the Board of Investment (BoI) 
has awarded projects of certain industries customized incentives for 
investments of particular strategic importance. In particular, 
petitioners allege that since the BoI has bestowed benefits upon the 
Thai auto industry, and in light of the BoI's history of promoting the 
steel industry, the Department should investigate whether the BOI is 
also offering exclusive transport, electricity, and water discounts to 
the steel industry. However, petitioners have not provided information 
showing that the Thai steel industry is eligible for any benefits in 
this capacity. Therefore, we are not initiating an investigation of 
this subsidy allegation.

2. Regional Electricity Subsidies From EGAT

    The Petitioners assert that the RTG is providing a countervailable 
subsidy to producers of subject merchandise through the pricing policy 
of the state-owned electric company. Petitioners argue that because the 
Thai electric company (EGAT) charges all customers of the same type the 
same rate for electricity, regardless of where they live or operate, 
EGAT is subsidizing electricity users (including TCRSS) in regions with 
much higher operating costs.
    We are not initiating an investigation into this subsidy 
allegation. Petitioners have not provided information to support their 
allegation that RTG charged TCRSS electricity rates for less than 
adequate remuneration.

3. Fuel Subsidies for SSI's On-Site Power Plant

    Petitioners allege that PTT, Thailand's national oil company, which 
has a monopoly on petroleum based fuels, normally charges monopoly 
premiums but charged international market level prices to SSI. 
Petitioners allege that TCRSS would receive a benefit if it pays for 
fuel at less than adequate remuneration. Thus, petitioners argue that 
the Department should investigate whether SSI's Bangsaphan steel 
complex has its own generation facility, what price that facility pays 
for fuel, and what amounts TCRSS pays for use of electricity generated 
from the plant. However, the information in the petition does not 
support the claim that PTT charges monopoly premiums to all users of 
petroleum based fuels in Thailand. Because petitioners have failed to 
substantiate their allegation of discriminatory pricing in favor of 
TCRSS, we are not initiating an investigation of this subsidy 
allegation.

D. Venezuela

    We are including in our investigation the following programs 
alleged in the petition to have provided countervailable subsidies to 
producers and exporters of the subject merchandise in Venezuela:
    1. Government Equity Infusions into Siderurgica del Orinoco C.A. 
(SIDOR), Conversion of SIDOR'S Debt to Equity.
    2. Dividend Advances from Hacienda.
    3. Debt Assistance as Part of the Privatization of SIDOR.
    4. GOV Provision of Iron Ore for Less than Adequate Remuneration.
    5. Export Bond Program.
    6. FINEXPO.
    7. Government of Venezuela Port Concession.
    8. Preferential Tax Incentives under Decree 1477.
    9. 1988 Grant from the National Executive of the Government of 
Venezuela.
    10. Discounted Prepayment of SIDOR Debt.

Based on the information in the petition, we are also investigating 
whether SIDOR was uncreditworthy during the period from 1979 to 1991, 
with the exception of 1988, and during the period from 1995 to 1998. 
Further, we will investigate whether SIDOR was unequityworthy to the 
extent that it received government equity infusions.
    We are not including in our investigation at this time the 
following program alleged to be benefitting producers and exporters of 
the subject merchandise in Venezuela:

1. Provision of Electricity, Water, Gas and Other Fuels for Less Than 
Adequate Remuneration

    Petitioners allege that the GOV provides to SIDOR electricity, 
water, gas, and other fuels, for less than adequate remuneration. 
Petitioners cite to an August 1997, press report which states ``the 
contract guarantees the winning consortium the necessary supply of 
electricity, water, and gas to operate the company.'' Petitioners also 
cite to the Final Affirmative Countervailing Duty Determination; 
Ferrosilicon from Venezuela; and Countervailing Duty Order for Certain 
Ferrosilicon from Venezuela, 58 FR 27539 (May 10, 1993) (Ferrosilicon 
from Venezuela), in which the Department found countervailable benefits 
from the preferential government provision of electricity. Petitioners 
contest the Department's finding in Final Affirmative Countervailing 
Duty Determination; Steel Wire Rod From

[[Page 34208]]

Venezuela, 62 FR 55014 (October 22, 1997) (Steel Wire Rod) that 
electricity was not provided for less than adequate remuneration. 
Further, in petitioners' view, SIDOR's privatization provides new 
information which warrants the reexamination of the GOV provision of 
electricity, and the examination of the GOV provision of water and gas.
    Notwithstanding the Department's negative determination with 
respect to the provision of electricity for less than adequate 
remuneration in Steel Wire Rod (62 FR at 55022), petitioners have 
failed to provide adequate information that electricity, water and gas 
are being provided to SIDOR for less than adequate remuneration. We 
disagree with petitioners that a press report of the GOV's intent to 
continue providing these utilities to SIDOR after privatization 
suggests that those utilities are being provided for less than adequate 
remuneration. Petitioners have not provided any information about 
pricing policies or cost data that would indicate that the rates that 
SIDOR pays are not based upon market principles. Neither have 
petitioners provided any new information which would warrant 
reexamining our finding in Steel Wire Rod. Thus, we are not including 
this program in our initiation.

2. GOV-Induced Contribution

    Petitioners alleged that, as part of the privatization, the 
Amazonia Consortium was required to invest $300 million in plant 
modernization, and $74 million in environmental control and clean-up. 
SIDOR's financial statement indicates that the Consortium committed to 
make a minimum investment of $300 million within three years. 
Petitioners alleged that this committed investment constitutes revenue 
foregone by the GOV in its privatization of SIDOR. Petitioners also 
contended that in the absence of a GOV-induced equity infusion, the 
benefit may have taken the form of a direct reimbursement to, or credit 
against the purchase price.
    While petitioners have documented the committed investment element 
of SIDOR's privatization, a simple assertion that the investment was a 
condition of SIDOR's sale is insufficient to demonstrate the existence 
of a direct or indirect financial contribution by the GOV to SIDOR. 
Thus, we are not investigating the investment commitments which were 
made as part of the privatization of SIDOR.

3. Grant Given Through the Reduction of Sale Price

    Petitioners alleged that SIDOR's purchasers received a discount on 
the purchase price of SIDOR in return for agreeing to a one-year worker 
layoff prohibition and a two-year retraining program. Petitioners 
alleged that this discount constitutes revenue foregone by the GOV in 
its sale of SIDOR and it confers a benefit which is specific to SIDOR.
    While petitioners have documented their allegation that the terms 
of SIDOR's sale may have included a payment of cash and commitments 
with respect to employee retention and worker retraining, they have not 
provided evidence that demonstrates that the terms give rise to a 
direct or indirect financial contribution by the GOV to SIDOR. Thus, we 
are not investigating whether the purchase price was discounted in 
exchange for other commitments by SIDOR's purchasers.
    Petitioners have also alleged that SIDOR was uncreditworthy from 
1993 to 1998 and unequityworthy from 1996 to 1998. However, petitioners 
did not provide information to indicate that the company was 
uncreditworthy or unequityworthy during these years. Thus, we are not 
investigating these allegations.

Critical Circumstances

    The petitioners have alleged that critical circumstances exist with 
regard to imports of cold-rolled steel from Thailand and Venezuela, and 
have supported their allegations with the following information.
    As discussed above, petitioners have provided documentation 
supporting allegations of countervailable subsidies which are 
inconsistent with the Subsidies Agreement, including export subsidies 
that are similar to those contained in Annex I of the Subsidies 
Agreement.
    The petitioners also have alleged that imports from Thailand and 
Venezuela have been massive over a relatively short period. Alleging 
that there was sufficient pre-filing notice of these countervailing 
duty petitions, the petitioners contend that the Department should 
compare imports during October-December 1998 to imports during July-
September 1998 for purposes of this determination. Specifically, 
petitioners supported this allegation with copies of news articles 
discussing the likelihood of filing unfair trade complaints against 
producers of cold-rolled steel. For example, petitioners cite to an 
international trade publication in September 1998 that carried an 
article discussing the likelihood that U.S. steel producers would file 
unfair trade cases related to cold-rolled steel. In addition, 
petitioners cite to comments made in September 1998 by the Chairman of 
Bethlehem Steel Corporation, who discussed the rise of cold-rolled 
steel imports and the possibility that trade remedy cases would be 
filed. The Department concludes that this level of press coverage 
provided foreign producers of cold-rolled steel with prior knowledge of 
pending unfair trade investigations. Therefore, the Department 
considered import statistics contained in the petition for the periods 
October-December 1998 and July-September 1998. Based on this 
comparison, imports of cold-rolled steel from Thailand increased by 114 
percent, and imports of cold-rolled steel from Venezuela increased by 
44 percent.
    Although the ITC has not yet made a preliminary decision with 
respect to injury, petitioners note that in the past the Department has 
also considered the extent of the increase in the volume of imports of 
the subject merchandise as one indicator of whether a reasonable basis 
exists to impute knowledge that material injury was likely. In the 
cases involving Thailand, and Venezuela, the increases in imports were 
more than double the amount considered ``massive.'' Taking into 
consideration the foregoing, we find that the petitioners have alleged 
the elements of critical circumstances and supported them with 
information reasonably available for purposes of initiating a critical 
circumstances inquiry. For these reasons, we will investigate this 
matter further and will make a preliminary determination at the 
appropriate time, in accordance with section 735(e)(1) of the Act and 
Department practice (see Policy Bulletin 98/4 (63 FR 55364, October 15, 
1998)).

Distribution of Copies of the Petitions

    In accordance with section 702(b)(4)(A)(i) of the Act, copies of 
the public version of the petition have been provided to the 
governmental representatives of Brazil, Indonesia, Thailand, and 
Venezuela. We will attempt to provide copies of the public version of 
the petition to all the exporters named in the petition, as provided 
for under section 351.203(c)(2) of the Department's regulations.

ITC Notification

    Pursuant to section 702(d) of the Act, we have notified the ITC of 
these initiations.

Preliminary Determination by the ITC

    The ITC will determine by July 16, 1999, whether there is a 
reasonable indication that an industry in the United States is 
materially injured, or is threatened with material injury, by

[[Page 34209]]

reason of imports of certain cold-rolled flat-rolled carbon-quality 
steel products from Brazil, Indonesia, Thailand, and Venezuela. A 
negative ITC determination for any country will result in the 
investigation being terminated with respect to that country; otherwise, 
the investigations will proceed according to statutory and regulatory 
time limits.
    This notice is published pursuant to section 777(i) of the Act.

    Date: June 21, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-16249 Filed 6-24-99; 8:45 am]
BILLING CODE 3510-DS-P