NOTICES
DEPARTMENT OF COMMERCE
[C-357-403]
Oil Country Tubular Goods From Argentina, Final Results of Countervailing Duty
Administrative Review
Tuesday, December 10, 1991
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AGENCY: International Trade Administration/Import Administration,
Department of Commerce.
ACTION: Notice of Final Results of Countervailing Duty Administrative Review.
SUMMARY: On October 9, 1991, the Department of Commerce published the preliminary
results of its administrative review of the countervailing duty order on oil country
tubular goods from Argentina. We have now completed that review and determine the
total bounty or grant to be 0.36 percent ad valorem for the period January 1, 1989
through December 31, 1989. In accordance with 19 CFR 355.7, any rate less than 0.50
percent ad valorem is de minimis.
EFFECTIVE DATE: December 10, 1991.
FOR FURTHER INFORMATION CONTACT:Laurie Goldman or Barbara Tillman, Office of
Countervailing Compliance, International Trade Administration, U.S. Department
of Commerce, Washington, D.C. 20230; telephone: (202) 377-2786.
SUPPLEMENTARY INFORMATION:
Background
On October 9, 1991, the Department of Commerce (the Department) published in the
Federal Register (56 FR 50855) the preliminary results of its administrative review of the
countervailing duty order on oil country tubular goods from Argentina (49 FR
46564; November 27, 1984). The Department has now completed that administrative
review in accordance with section 751 of the Tariff Act of 1930, as amended (the Tariff
Act).
Scope of Review
Imports covered by this review are shipments of Argentine oil country tubular goods.
These products include finished or unfinished oil country tubular goods, which are hollow
steel products of circular cross section intended for use in the drilling of oil or gas, and oil
well casing, tubing and drill pipe of carbon or alloy steel, whether welded or seamless,
manufactured to either American Petroleum Institute (API) or proprietary specifications.
During the review period this merchandise was classifiable under item numbers
7304.20.20, 7304.20.40, 7304.20.50, 7304.20.60, 7304.20.70, 7304.20.80,
7304.39.00, 7304.51.50, 7304.59.60, 7304.59.80, 7304.90.70, 7305.20.40,
7305.20.60, 7305.20.80, 7305.31.40, 7305.31.60, 7305.39.10, 7305.39.50,
7305.90.10, 7305.90.50, 7306.20.20, 7306.20.30, 7306.20.40, 7306.20.60,
7306.20.80, 7306.30.50, 7306.50.50, 7306.60.70 and 7306.90.10 of the Harmonized
Tariff Schedule (HTS).
HTS numbers are provided for convenience and Customs purposes. The written
description remains dispositive of the scope of the order. The review covers the period
January 1, 1989 through December 31, 1989, and eleven programs.
Analysis of Comments Received
We gave interested parties an opportunity to comment on the preliminary results. We
received comments and rebuttals to comments from North Star Steel Ohio, petitioner,
and Siderca S.A., a respondent.
Comment 1: Respondent argues that the Department did not have sufficient evidence to
warrant a reinvestigation of counterguarantees provided by the Ministry of Economy for
Inter-American Development Bank (IADB) loans. Respondent claims that the Ministry of
Economy has been empowered to provide loan guarantees under Law 16,432, in effect
since 1961, and Decree 8739, in effect since 1973. The Department has been aware of the
loan guarantees since its original investigation, when it found these guarantees to be not
countervailable. At that time, the Department found that "the vast majority of BANADE
(Banco Nacional de Desarollo) loans were accompanied by a counterguarantee of the
Secretariat of Finance."
Respondent further argues that the Department chose not to reinvestigate this program in
the previous administrative review because it did not have "specific information
indicating that there were changes in the program sufficient to warrant reinvestigation."
See Oil Country Tubular Goods From Argentina; Final Results of Countervailing
Duty Administrative Review (56 FR 38116, August 12, 1991). Respondent cites
numerous other cases wherein the Department refused to reinvestigate a program absent
new information (e.g., PPG v. United States, 746 F. Supp. 119 (CIT 1990), Unprocessed
Float Glass From Mexico; Final Results of Countervailing Duty Administrative Review
(56 FR 23866, May 24, 1991), and Rice From Thailand; Final Results of Countervailing
Duty Administrative Review (56 FR 68, January 2, 1991)). Respondent notes that in all of
these past cases there has been a "presumption in favor of the validity of the past
determination and the party challenging it carries the burden of persuasion." Respondent
maintains that
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the only new evidence provided by petitioner in this review was
information showing a general decline in the use of Ministry of Economy guarantees in
1984.
Petitioner argues that the Department correctly decided to reexamine the
counterguarantee program. The Department has long-established criteria to reinvestigate
a program that has been found not countervailable when there is evidence of a change in
that program or its application. See Oil Country Tubular Goods From Israel, Final Results
of Countervailing Duty Administrative Review (55 FR 46703, November 6, 1990).
The Court of International Trade in PPG Industries, Inc. v. United States, 746 F. Supp. 119
(CIT 1990) (PPG Industries), has ruled that the Department "has discretion in deciding
whether to reinvestigate a program previously found not countervailable." Petitioner
insists that substantial "new" evidence provided was sufficient to justify a reinvestigation
of the program.
Department's Position: We agree with petitioner that the Department has discretion in
deciding whether to reinvestigate a program previously found not countervailable. The
Department's authority to reexamine a program previously found not countervailable is
discussed at length by the Court of International Trade in PPG Industries. In that case, the
Court concluded that the Department "is entitled to draw upon its own knowledge and
expertise and facts capable of judicial notice" in deciding whether to reinvestigate a
program. In this case, the Department determined that there was sufficient information to
warrant a reinvestigation of counterguarantees provided by the Government of
Argentina.
As stated in the preliminary results of this administrative review, the original
investigation determined that the BANADE guarantee program was not countervailable
based on section 771(5)(A)(ii) of the Tariff Act (see Final Affirmative Countervailing
Duty Determination and Countervailing Duty Order; Oil Country Tubular Goods
From Argentina (49 FR 46564, November 27, 1984)). However, during the course of
the current review petitioner provided additional information suggesting that guarantees
and counterguarantees have been provided on a specific basis in Argentina after the
time period examined in the Department's final determination in the OCTG investigation.
Petitioner's allegation and supporting information regarding counterguarantees were
provided in this review in a timely manner and were deemed sufficient to warrant a
reexamination of the guarantee program.
Comment 2: Respondent argues that, based on evidence available to the Department, the
counterguarantee provided by the Ministry of Economy cannot be a countervailable
subsidy. In order for a domestic subsidy to be found countervailable, two conditions
must be met. First, the program must be provided to a specific enterprise or industry or
group thereof, and second, the program must be provided on terms inconsistent with
commercial considerations. Respondent argues that neither of these two conditions you
been met.
With respect to the Department's first criterion, respondent claims that Ministry of
Economy counterguarantees are widely available to all industries within Argentina. The
only information provided by petitioner to support the allegation that the program is
limited was an observation that the amount of financing the Ministry of Economy
counterguarantees declined in 1984. Respondent maintains the fact does not signify that
the program is being provided on a limited, or industry-specific, basis.
In fact, respondent claims it has provided information refuting petitioner's evidence,
including charts showing that the amount of financing guaranteed by the Ministry of
Economy was five times greater than the amount of financing guaranteed by BANADE
without a Ministry of Economy counterguarantee, as well as evidence showing that
BANADE loans were widely distributed throughout the economy and the country. The
Ministry of Economy also submitted a letter stating that loan counterguarantees had been
issued to various sectors of the economy both before and after 1984, the year in which
petitioner claimed that counterguarantees for private companies ceased.
With regard to the Department's policy regarding commercial considerations, respondent
argues that the Department cannot rule that the counterguarantee program is
inconsistent with commercial considerations. Respondent asserts that the
counterguarantee was requirement of the IADB, and, in past cases, the Department has
determined that "a company which could have obtained unguaranteed funds does not
receive a countervailable subsidy when a guarantee is required and is provided at rates
which might be less than the general level of guarantee fees." See e.g., Carbon Steel
Products From Austria; Final Affirmative Countervailing Duty Determination (50 FR
33369, August 19, 1985) and Carbon Steel Wire Rope From Spain; Final Affirmative
Countervailing Duty Determination (49 FR 19551, May 8, 1984). Respondent could
have obtained alternative financing without securing a counterguarantee. Further, the
counterguarantee actually imposed an additional cost for Siderca. Respondent notes that
the Department has measured the benefit from the counterguarantee as the difference
between a guarantee fee that is not secured with a counterguarantee and the fee paid for a
guarantee that has been secured with a counterguarantee. However, respondent claims
the Department has failed to explain how this lower guarantee fee could provide a benefit
when the alternative would be to obtain commercial market financing in which no
guarantee fee would be required.
Petitioner argues that the counterguarantee program changed since the Department's
original investigation. Petitioner provided evidence that the number of
counterguarantees granted dropped significantly during the period after the
investigation, indicating that the program may have provided benefits to a specific
enterprise or industry, or group thereof. Petitioner alleged that respondent was probably
the sole beneficiary of the counterguarantee program in 1985, since the amount of the
guarantee almost exactly equals the total amount of counterguarantees of its kind granted
in that year, and there is no evidence that any other company used this program in 1985.
Petitioner also points out that counterguarantees remained unused in Argentina during
1986 and 1987.
Petitioner argues that these circumstances led to an economic benefit for respondent by
(1) reducing the fee respondent had to pay for the guarantee on the IADB loan, and (2)
allowing respondent to receive a preferential loan from the IADB that it would not have
received absent the counterguarantee. Information provided by respondent does not
rebut the evidence provided by petitioner and only provides irrelevant information
regarding the number of loans from the BANADE that were counterguaranteed.
Respondent did not receive a BANADE loan. Further, respondent's insistence that
petitioner was required to provide more compelling information could not have been met
because such information is only available to respondent.
Petitioner claims that respondent paid a fee for the guarantee in order to obtain the
benefit of a lower interest rate that would not have been attainable in the commercial
banking market. Petitioner
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contends that the combination of government
benefits with the IADB loan was inconsistent with commercial considerations because
"where the market charges a risk premium (in terms of higher interest rates), the
government provided a guarantee for free."
Department's Position: We disagree with respondent that the counterguarantee program
cannot be countervailable. Petitioner provided information indicating that the number of
counterguarantees issued by the Ministry of Economy dropped significantly during the
period after the investigation, indicating that the program may have provided benefits to
a specific enterprise, industry, or group thereof. Based on this information, the
Department decided it had sufficient evidence to reexamine whether counterguarantees
provided countervailable benefits to respondent. The Department sent questionnaires to
the Government of Argentina requesting information on the use and distribution of
Ministry of Economy counterguarantees. The responses provided by the Government of
Argentina to the Department's questionnaires were incomplete. They only stated that
counterguarantees were widely available; and they did not include specific information
regarding the industries and regions receiving counterguarantees, as requested by the
Department. Accordingly, based on the information available, we determined in the
preliminary results of review that counterguarantees were countervailable. None of the
arguments submitted by respondent in its case and rebuttal briefs leads us to conclude
that we should change our determination for these final results of review. Furthermore,
because the counterguarantee is provided at no charge to Siderca, we also maintain that it
is inconsistent with commercial considerations.
Comment 3: Petitioner argues that the purpose of the countervailing duty law is to
offset any unfair competitive advantage conferred through government intervention in
the marketplace and that the counterguarantee program provided respondent with such a
competitive advantage. While petitioner does not advocate countervailing this particular
unique benefit provided to Siderca because it meets the statutory definition of a subsidy
as "(t)he provision of * * * loan grantees on terms inconsistent with commercial
considerations." See 19 CFR 1677(5)(A)(ii)(I).
Petitioner also argues that Departmental precedent and regulations compel it to calculate
the full value of the subsidy by comparing the IADB financing package, which could not
have been obtained absent the counterguarantee, with a commercial alternative available
to Siderca.
Petitioner claims that because the Department is required to offset the full value of a
subsidy, the benefit received by Siderca from the Ministry of Economy counterguarantee
was incorrectly calculated. In order to account for the full value of the subsidy, the
Department should measure the difference in the terms of the IADB loan with a
commercial benchmark rate. petitioner cites New Steel Rail, Except Light Rail, From
Canada; Final Affirmative Countervailing Duty Determination and Countervailing
Duty Order (54 FR 31991, August 3, 1989) (New Steel Rail), wherein the Department
found that the guarantee rate obtained by the company was the same as the commercial
guarantee rate, and subsequently compared the company's total cost for the government
guaranteed loan with the total cost for a benchmark loan. Petitioner states that the instant
case is similar and, because there is not an acceptable alternative commercial benchmark
for loan guarantees, the Department must compare the total IADB loan cost with a market
determined commercial benchmark for similar loans.
Respondent replies that the preliminary results of review recognized that land from
international lending institutions such as the IADB cannot provide countervailable
benefits under U.S. law. Respondent claims that in this case the counterguarantee
provided by the Ministry of Economy likewise cannot be countervailed because it was a
requirement of the IADB. The Department's determination that this counterguarantee
provided a countervailable benefit is "tantamount to permitting the receipt of loans from
international institutions, but then not allowing companies to apply for those loans."
Respondent further argues that the Department has previously concluded that loan
guarantees obtained because they are required by international lending institutions are
not countervailable. See, e.g., Carbon Steel Products from Austria; Final Affirmative
Countervailing Duty Determination (50 FR 33369, August 19, 1985) and Carbon Steel
Wire Rope From Spain; Final Affirmative Countervailing Duty Determination (49 FR
19551, May 8, 1984).
Respondent next contends that, even if the Department determines that benefits from
counterguarantees provide countervailable benefits, the Department's methodology for
valuing the benefit does not require an evaluation of the cost of international financing
because it is the Department's practice not to countervail loans from international lending
institutions. Respondent cites a number of authorities that demonstrate the Department'
practice, including Certain Stainless Steel Hollow Products From Sweden; Final
Affirmative Countervailing Duty Determination and Countervailing Duty Order
(52 FR 5794, February 26, 1987) (Stainless Steel from Sweden), (New Steel Rail), and
Countervailing Duties: Notice of Proposed Rulemaking and Request for Public
Comment (54 FR 23366, April 27, 1989) 19 CFR 355.44(c)(1).
In Stainless Steel From Sweden, the Department stated that "If we have a benchmark
guarantee fee, we would not generally examine the interest rate on the guaranteed loan
because any benefit to the borrower would be reflected in the difference in guarantee
fees." Respondent argues that this confirms the Department's practice of finding that the
difference in the amount actually paid for the government guarantee and the benchmark
guarantee will account for the full value of the benefit. The Department has only examined
the terms of a loan in those cases when there was no commercial alternative benchmark
to measure guarantees. Respondent further argues that the appropriate benchmark
should have been zero because the commercial alternative available to respondent would
have been to obtain a loan with no guarantee. It is clear from the evidence provided by
respondent that the company could easily have obtained commercial financing without
having to obtain a loan guarantee. Moreover, even if the Department rejects the zero
benchmark, it should instead compare the fee for the BANADE guarantee with the fee
actually paid which is what the Department did in the preliminary results of review.
Respondent also claims that in past cases where the Department has evaluated
government actions in connection with international financing, the Department has
carefully isolated the benefit attributed only to the actions of that government.
Respondent cites Fuel Ethanol from Brazil; Final Affirmative Countervailing Duty
Determination (51 FR 3361, January 27, 1986) (Ethanol), where the Department
explicitly stated that "the portion of funds provided which represents the financing of the
World Bank is not countervailable." In no case has the
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Department ever
measured the benefit of the government action by measuring the preferentiality of the
funding from the international institution. Any change in that policy would overturn
extensive and consistent Departmental practice.
Department's Position: As stated in the preliminary results of this administrative review,
"(w)hile the Department does not consider loans provided by international lending
institutions to be countervailable under U.S. countervailing duty law * * *, we do
consider the government action taken in connection with such loans is within the purview
of U.S. countervailing duty law." Our final determination in Ethanol reflects this
position. In Ethanol, the Department found that, even though the loans provided by the
government were part of a World Bank contract, the portion of the loans provided
directly by the Government of Brazil were countervailable. However, the Department
countervailed "only that portion attributable to the government of Brazil's commitment
under the terms of the World Bank contract." The portion of the loans funded by the World
Bank was not countervailed.
With regard to petitioner's argument that the benefit from the counterguarantee is the
difference between the interest rate on the IADB loan and a commercial benchmark loan,
this would be tantamount to countervailing the IADB loan itself. As stated in the
preliminary results of review, we do consider that government actions taken in
connection with loans from international lending institutions can be reached under U.S.
countervailing duty law; however, the action of the international lending institution is
not within the purview of the countervailing duty law. The international lending
institution sets the interest rate on its loans. While the international lending institution
may take into account local economic conditions in setting the rate, the government in
the recipient country does not have control over the interest rate set by the lending
institution. The New Steel Rail case cited by the petitioner to support its argument that
the interest rate on the IADB loan itself should be compared to a commercial benchmark
did not involve financing from international lending institutions. Moreover, the company
involved was a government-owned company that was deemed to be uncreditworthy, and
the methodologies applied to government-owned, uncreditworthy companies are distinct
from the methodologies applied to privately-owned, creditworthy companies. See
Countervailing Duties: Notice of Proposed Rulemaking and Request for Public
Comment (54 FR 23366, April 27, 1989), 19 CFR 355.44(c)(1).
With respect to the government of Argentina's argument that the counterguarantee was
a condition of the IADB, and, as such, is not countervailable, the government of
Argentina had sole control over the terms of the counterguarantee itself. By not
charging Siderca a fee for the counterguarantee, despite the fact that a fee is usually
charged for a loan guarantee in Argentina, the government took an action that was
inconsistent with commercial considerations. Furthermore, contrary to respondent's
arguments, we do not consider that the commercial alternative to the IADB loan and the
counterguarantee would have been for Siderca to obtain a private loan with no guarantee.
The commercial alternative available to respondent would have been to pay the full
amount for the guarantee fee charged by BANADE. The effect of the Government of
Argentina's action in providing the counterguarantee was to reduce the total cost of the
guarantee package. Therefore, the Department determines that its methodology
accurately captures the benefit received by Siderca from the countergurantee, and does
not countervail any portion of the IADB loan itself.
Comment 4: Petitioner argues that Department incorrectly applied the methodology it
used to calculate the benefit attributable to Ministry of Economy counterguarantees.
Petitioner claims that the BANADE guarantee fee was converted from dollars to australes
at the exchange rate effective on December 7, 1989, while the total sales figure was
expressed in year-end australes. Petitioner argues that the BANADE guarantee fee should
have also been converted at the year-end exchange rate.
Respondent states that, although they do not believe that this program provides
countervailable benefits, the methodology used by the Department correctly calculated
the benefit attributable to this program. Respondent claims that petitioner confuses the
concepts of exchange rates and inflation adjustment. The payment made by respondent
on December 7, 1989 was correctly converted from dollars at the exchange rate in effect
on that day. The year- end adjustment to the figure for total sales was an adjustment for
inflation and is completely irrelevant to the exchange rate. The adjustment, from
historical value to a value adjusted for inflation, is made because of the need to express all
values in constant terms. Further, since the actual payment occurred in December, there
was no need to perform an adjustment to December australes.
Department's Position: We agree with respondent. In evaluating the benefit received from
a program found to be countervailable, the Department seeks to determine the actual
value of that benefit. The methodology used by the Department measures the value of an
actual payment that was made on December 7, 1989 by converting from dollars to
australes according to the exchange rate on that same day. We subsequently measured
that actual figure against the total sales reported for the year. This is the same figure used
to report to government authorities. In Argentina, the total sales figure is adjusted for
inflation according to a published monthly inflation index. In this case, the figure for total
sales is adjusted through December. The payment for the loan guarantee is also a
December figure and does not need to be adjusted. The Department routinely adjusts for
inflation in hyperinflationary economies such as Argentina. However, since the
payment in question was made in December, there was no need to perform an additional
calculation. (See Cotton Yarn From Brazil; Preliminary Results of Countervailing Duty
Administrative Review (56 FR 47456, September 19, 1991)). The Department, therefore,
finds that the methodology it used to determine the benefit received from the Ministry of
Economy counterguarantee is correct.
Comment 5: Petitioner argues that the Department incorrectly used only one bank's
interest rate as the country-wide benchmark for pre-export financing obtained under the
RF-153 loan program, and that this methodology violates Departmental practice of using
the predominant source of short-term financing in the country in question. Petitioner
states that it was the responsibility of the Department to seek out a representative sample
of interest rates and requests that the Department undertake such an inquiry to establish
a true country-wide benchmark. Petitioner cites the proposed countervailing duty
regulations and Certain Iron-Metal Castings From India; Final Results of
Countervailing Duty Administrative Review, (51 FR 45788, December 22, 1986).
Petitioner further states that although the Department used the same information to
determine the benchmark interest rate in Leather From Argentina; Final Affirmative
Countervailing Duty Determination and Countervailing Duty
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Order
(Leather) (55 FR 40212, October 2, 1990), the Leather decision only addressed the
appropriateness of using a separate benchmark for dollar- denominated financing and did
not address the issue of the use of one bank's interest rates.
Respondent contends that the Department used the correct benchmark interest rate to
analyze the benefits received from pre-export financing. The benchmark chosen by the
Department for 1989 loans was a benchmark that had already been established in Leather
and Textile Mill Products and Apparel From Argentina; Final Results of Administrative
Review (Apparel) (56 FR 41823, August 23, 1991). In Leather, the Department relied on
various sources of information to establish the benchmark interest rate, including letters
received from other international banks which indicated that the benchmark rate should
actually have been lower than the rate used by the Department. There is no requirement
that the Department reestablish a benchmark interest rate for a particular year in each
review and investigation that it conducts.
Respondent also argues that petitioner is incorrect in stating that Leather did not address
the usage of one bank's interest rate. The Department did not explicitly "consider" whether
one bank's interest rate would satisfy its benchmark requirements because it was not
faced with that issue in either Leather or Apparel. The Department consistently used the
same benchmark for the same review period in Leather, Apparel and in the present
review. That benchmark was calculated in accordance with the Department's standard
methodology.
Department's Position: We disagree with petitioner that the Department's use of one bank's
interest rate as the country-wide benchmark for pre-export financing obtained under the
RF-153 loan program was incorrect. In this administrative review, the Department used
the same benchmark to measure the benefit received from the RF-153 loan program as it
did in Leather, which covered the same review period. See also Apparel; § 355.44(b)(3)(i)
of Countervailing Duties; Notice of Proposed Rulemaking and Request for Public
Comments (54 FR 23380, May 31, 1989) (describing the Department's procedures for
determining a benchmark interest rate for short-term financing).
Both the preliminary and final countervailing duty determinations in Leather also
discuss at length the Department's procedure for arriving at a benchmark interest rate for
short-term (less that one year) loans. In those reviews, the Department stated that "it is
our practice to use the average interest rate for an alternative source of short-term
financing in the country in question. In determining this benchmark, we will normally
rely upon the predominant source of short-term financing. In the absence of such
financing, we may use a benchmark composed of the interest rates for two or more
sources of short-term financing, weighted, wherever possible, according to the value of
the financing from each source." (55 FR at 40215). Since the Department utilized the
predominant source of short-term financing, it is not necessary to decide whether other
alternative source should be used. Therefore, the Department determines that it used the
appropriate benchmark for short-term loans in its calculation of the benefit from the
RF-153 loan program.
Comment 7: Petitioner claims that they have presented new evidence in this
administrative review that requires the Department to reexamine whether price
premiums are being provided to Siderca by YPF, a state-owned oil company. Petitioner
argues that because the "Buy Argentina" law required the state-owned oil company to
buy OCTG from Siderca, the only domestic producer, a monopoly was created allowing
Siderca to sell OCTG at prices 30 to 50 percent higher than export prices.
Petitioner further contends that, although the Department has previously found this
program to be not countervailable, the Department erroneously based its conclusion on
the preferentiality test which compared YPF and private company prices. Petitioner
claims that the preferentiality test is not appropriate in that it deals with the provision of
goods or services and, therefore, which does not apply to the current case. The
Department should be evaluating whether YPF purchased OCTG at excessive prices,
thereby providing Siderca with funds similar to a grant.
Respondents argue that the Department has already rejected petitioner's argument in
previous administrative reviews. (See Oil Country Tubular Goods From Argentina, Final
Results of Countervailing Duty Administrative Review (56 FR 38116, August 12,
1991)). Respondents states that the Department's decision, based on lack of proof that the
Government paid more for OCTG than other purchasers within the jurisdiction, was
justified. Further, respondent claims that petitioner has provided no "new" evidence or
interpretation to justify a reexamination of price premiums by the Department.
Moreover, petitioner's submission of its alleged "new information" on September 19,
1990, was untimely.
Department's Positions We agree with respondent. Petitioner has provided neither new
evidence nor new argument during this administrative review that would require the
Department to reexamine the issue of whether price premiums are being provided to
respondent. As stated in Oil Country Tubular Goods From Argentina, Final Results of
Administrative Review (56 FR 38116, August 12, 1991), "the Department continues to use
the same methodology in this review as used in its original investigation. A government
cannot be found to be providing a subsidy when independent, arms-length prices within
the same jurisdiction are actually higher. The Department undertook a thorough analysis,
including verification of price documentation, which showed that the Government of
Argentina actually paid a lower price for OCTG than did private companies."
Therefore, because petitioner did not provide any new information, the Department
continues to hold, as in past reviews, that price premiums are not being provided to
respondent by the Government of Argentina.
Comment 8: Respondent claims that any benefits calculated from the RF-153 pre- export
financing program should not be included for purposes of the cash deposit rate. To the
extent that RF-153 financing may be found countervailable, the Department should take
into account program-wide changes when calculating the cash deposit rate.
Respondent contends that benefits from the RF-153 loan program were indefinitely
suspended under Central Bank Communication A-1870, effective March 8, 1991. On
September 20, 1991, prior to the Department's preliminary results, the Government of
Argentina signed the "Understanding between the United States and Argentina
Regarding Subsidies and Countervailing Duties" (the Understanding) and committed
to "not reinstate, recommence funding of or replace any suspended programs nor
increase any export subsidy or export subsidy element of any program described in the
Understanding," including the pre-export financing program. Since the Department has
recognized that program-wide changes occurring prior to the preliminary results of
review may be considered for purposes of the cash deposit rate, a zero cash deposit rate
for RF-153 pre-export financing is warranted for this review.
Petitioner argues that the Understanding does not by itself eliminate Argentina's
countervailable
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subsidies and does not meet the Department's criteria for
recognizing a program-wide change. Petitioner claims that, in order for the Department to
make an adjustment because of a program- wide change, several criteria must be met
including (1) that it be effectuated by an official act, such as the enactment of a statute,
regulation or decree, or contained in the schedule of an existing statute, regulation or
decree; (2) the modification must occur prior to the preliminary results of an
administrative review; and (3) the modification must effect a measurable change in the
amount of countervailable subsidies provided by the program. See Countervailing
Duties; Notice of Proposed Rulemaking and Request for Public Comment (54 FR 23366,
May 31, 1989) and Certain Textile Mill Products and Apparel From Peru, Final Results of
Administrative Review (50 FR 9871, March 12, 1985).
Petitioner claims that the Understanding does not directly affect the operation of
pre-export financing and that the criteria for considering a program-wide change have
not been met. Petitioner contends that the Understanding itself is not a statute, regulation
or decree and is too vague to bring about actual change to a program. Additionally,
because the changes in question will take place gradually over a period of several years,
they cannot be considered to have been implemented prior to publication of the
preliminary results of review. Finally, because there is no actual legislation regulating the
changes, there is no way for the Department to value the effect of any changes that may
occur. See Rice From Thailand; Final Results of Countervailing Duty Administrative
Review (56 FR 68, January 2, 1991).
Department's Response: Because the program-wide change claimed by respondent could
only further reduce the cash deposit rate, which is already de minimis, the Department
need not make a determination regarding this issue.
Final Results of Review
As a result of our review, we determine the total bounty or grant to be 0.36 percent ad
valorem for the period January 1, 1989 through December 31, 1989. In accordance with
19 CFR 355.7, any rate less than 0.50 percent ad valorem is de minimis.
The Department will instruct the Customs Service to liquidate, without regard to
countervailing duties, all shipments of this merchandise exported to the United States
on or after January 1, 1989 and on or before December 31, 1989.
Further, the Department will instruct the Customs Service to waive cash deposits of
estimated countervailing duties, as provided by section 751(a)(1) of the Tariff Act, on
all shipments of this merchandise entered, or withdrawn from warehouse, for
consumption on or after the date of publication of these final results of administrative
review. This deposit requirement shall remain in effect until publication of the final
results of the next administrative review.
This administrative review and notice are in accordance with section 751(a)(1) of the
Tariff Act (19 U.S.C. 1675(a)(1)) and 19 CFR 355.22.
Dated: December 2, 1991.
Alan M. Dunn,
Assistant Secretary for Import Administration.
[FR Doc. 91-29483 Filed 12-9-91; 8:45 am]
BILLING CODE 3510-DS-M