51 FR 43949
NOTICES
DEPARTMENT OF COMMERCE
[C-401-602]
Preliminary Affirmative Countervailing Duty Determination; Certain Stainless
Steel Hollow Products from Sweden
Friday, December 5, 1986
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AGENCY: Import Administration, International Trade Administration, Commerce.
ACTION: Notice.
SUMMARY: We preliminarily determine that certain benefits which constitute subsidies within the
meaning of the countervailing duty law are being provided
to manufacturers, producers, or exporters in Sweden of certain stainless steel hollow products
(SSHP). The estimated net subsidy for SSHP is 1.24 percent ad valorum for all manufacturers,
producers, or exporters in Sweden.
We have notified the U.S. International Trade Commission (ITC) of our determination. We are
directing the U.S. Customs Service to suspend liquidation of all entries of SSHP from Sweden
that are entered, or withdrawn from warehouse, for consumption, on or after the date of
publication of this notice, and to require a cash deposit or bond on entries of these products in the
amount equal to the estimated net subsidy.
It was originally contemplated that more than one investigation of SSHP from Sweden would
be undertaken. Hence, our notice of initiation referred to "investigations" of certain stainless steel
hollow products. Based on further deliberations by the Department's industry experts, and after a
careful review of the relevant facts, we preliminarily determine that, in fact, only one "class or kind
of merchandise" is being investigated. If this investigation proceeds normally, we will make our
final determination by February 17, 1987.
EFFECTIVE DATE: December 5, 1986.
FOR FURTHER INFORMATION CONTACT:Jack Davies, Carole Showers, or Gary Taverman, Office of
Investigations, Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230;
telephone: (202) 377-1785, 377-3217, or 377-0161.
SUPPLEMENTARY INFORMATION:
Preliminary Determination
Based upon our investigation, we preliminarily determine that certain benefits which constitute
subsidies within the meaning of section 701 of the Tariff Act of 1930, as amended (the Act), are
being provided to manufacturers, producers, or exporters in Sweden of SSHP. For purposes of
this investigation, the following programs are found to confer subsidies:
- 1977-1979 Structural Reorganization Fund
- 1983-1984 Specialty Steel Restructuring Program--Forgiveness of Long-Term Investment Loan to
Avesta AB
- Regional Development Incentives
- 1978-1979 Employment Promotion Grants
- Research and Development Assistance to Companies
We preliminarily determine the estimated net subsidy for SSHP to be 1.24 percent ad valorem for
all manufacturers, producers, or exporters in Sweden.
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Case History
On September 5, 1986, we received a petition in proper form from the Specialty Tubing Group and
its six member companies filed on behalf of the U.S. industry producing SSHP. In compliance with
the filing requirements of § 355.26 of the Commerce Regulations (19 CFR 355.26), the petition
alleges that manufacturers, producers, or exporters in Sweden of SSHP directly or indirectly
receive benefits which constitute subsidies within the meaning of section 701 of the Act, and that
these imports materially injure, or threaten material injury to, a U.S. industry.
We found that the petition contained sufficient grounds upon which to initiate a countervailing
duty investigation, and on September 25, 1986, we in initiated this investigation (51 FR 35018,
October 1, 1986). We stated that we expected to issue a preliminary determination by December 1,
1986.
Since Sweden is a "country under the Agreement" within the meaning of section 701(b) of the
Act, an injury determination is required for this investigation. Therefore, we notified the ITC of our
initiation. On October 20, 1986, the ITC determined that there is a reasonable indication that these
imports materially
injure, or threaten material injury to, a U.S. industry.
We presented a questionnaire concerning the allegations to the Government of Sweden in
Washington, D.C. on October 6, 1986.
On November 5, 1986, we received a response to our questionnaire from the Government of
Sweden, AB Sandvik Steel, Sandvik AB, Avesta Sandvik Tube AB, and Avesta AB. According to
information on the record of this investigation, there are two known manufacturers, producers,
and exporters of SSHP in Sweden: AB Sandvik Steel and Avesta Sandvik Tube AB. AB Sandvik
Steel, wholly owned by Sandvik AB, produces and exports seamless SSHP. Avesta Sandvik Tube AB,
owned 75 percent by Avesta AB and 25 percent by Sandvik AB, produces and exports welded
SSHP. Avesta Sandvik Tube AB was formed when Avesta AB acquired the stainless steel facilities
and assets of Fagersta AB and Uddeholm AB under the 1984 Specialty Steel Restructuring Program.
On November 17, 1986, petitioners requested a full extension of the period within which a
preliminary countervailing duty determination must be made pursuant to section 703(c)(1)
of the Act, and 19 CFR 355.28(c) of our regulations. Because this request was not filed in a timely
manner, we were unable to extend the deadline for the preliminary determination.
On November 20 and 21, 1986, we received letters on behalf of the companies under investigation
challenging the standing of the Specialty Tubing Group and requesting dismissal of the petition. As
we have previously stated [see e.g.,
Final Affirmative Countervailing Duty Determination: Certain Fresh Atlantic Groundfish
from Canada (51 FR 10041, March 24, 1986)], neither the Act nor the Commerce Regulations
requires a petitioner to establish affirmatively that it has the support of a majority of a particular
industry. The Department relies on petitioner's representation that it has, in fact, filed on behalf of
the domestic industry, until it is affirmatively shown that this is not the case. Where domestic
industry members opposing an investigation provide a clear indication that there are grounds to
doubt a petitioner's standing, the Department will review whether the opposing parties do, in fact,
represent a major proportion of the domestic industry. In this case, we have not received any
opposition from the domestic industry.
Scope of Investigation
The products covered by this investigation are certain stainless steel hollow products including
pipes, tubes, hollow bars, and blanks therefor, of circular cross-section, containing over 11.5
percent chromium by weight, provided for in items 610.3701, 610.3727, 610.3731, 610.3741,
610.3742, 610.5130, 610.5202, 610.5229, 610.5230, and 610.5231 of the Tariff Schedules of the
United States Annotated.
Analysis of Programs
Throughout this notice we refer to certain general principles applied to the facts of the current
investigation. These principles are described in the "Subsidies Appendix" attached to the notice of
Cold-Rolled Carbon Steel Flat- Rolled Products from Argentina: Final Affirmative
Countervailing Duty Determination and Countervailing Duty Order (49 FR 18006,
April 26, 1984).
Consistent with our practice in preliminary determinations, where a response to an allegation
denies the existence of a program, receipt of benefits under a program, or eligibility of a company
or industry under a program, and the Department has no persuasive evidence showing that the
response is incorrect, we accept the response for purposes of the preliminary determination. All
such responses are subject to verification. If the response cannot be supported at verification, and
the program is otherwise countervailable, the program will be considered a subsidy in the final
determination.
For purposes of this preliminary determination, the period for which we are measuring
subsidization (the review period) is calendar year 1985. Based upon our analysis of the petition and
the responses submitted by the Government of Sweden, AB Sandvik Steel, Sandvik AB, Avesta
Sandvik Tube AB, and Avesta AB, to our questionnaire, we preliminarily determine the following:
I. Programs Preliminarily Determined to Confer Subsidies
We preliminarily determine that subsidies are being provided to manufacturers, producers, or
exporters in Sweden of the subject merchandise under the following programs:
A. 1977-1979 Structural Reorganization Fund
Petitioners allege that in 1977 the Government of Sweden established a Structural
Reorganization Fund for loans and loan guarantees specifically limited to the SSHP industry.
Petitioners claim that the loans were made at rates inconsistent with commercial considerations,
and the loan guarantees resulted in borrowing on open capital markets at below commercial
market rates. Petitioners further allege that the companies (or their successors) that received these
loans, and loan guarantees, restructured the industry by engaging in mergers and forming joint
ventures to manufacture the subject merchandise.
The Structural Reorganization Fund is governed by the Swedish Code of Statutes (SFS) 1977:1123.
According to the government response, the purpose of this program was to facilitate needed
structural change within the specialty steel industry. Aid was given in the form of loans
(investment, conditional,
and liquidity) and loan guarantees. The loans and loan guarantees that were given under this
program are as follows: Long-term investment loans to Avesta AB and Sandvik AB for use in
building continuous casting plants; long-term conditional loans by Nyby Uddeholm AB (a company
which produced SSHP and was later purchased by Avesta AB); and government guarantees for
commercial loans to Avesta AB and Nyby Uddeholm AB. According to the responses, no liquidity
loans were given under this program to the companies under investigation.
Certain of the loans and loan guarantees provided under this program are treated in other sections
of this notice as follows: (1) The investment
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loan provided to Avesta AB and later forgiven by the government under the 1984 Restructuring
Program is discussed in section I.B; (2) the conditional loans provided to Nyby Uddeholm AB and
later transferred by the government to the parent company, Uddeholm AB, under the 1984
Restructuring Program are discussed in section II.A; and (3) the loan guarantees provided to Nyby
Uddeholm AB are discussed in section III.A.
Therefore, the only remaining assistance under this program that must be considered here is an
investment loan to Sandvik AB and loans guarantees to Avesta AB. Because the investment loan
and loan guarantees under this program were provided solely to the specialty steel industry, we
determine that this program is limited to a specific enterprise or industry, or group of enterprises
or industries.
To determine whether the investment loan to Sandvik AB was inconsistent with commercial
considerations, we compared the amount of interest actually paid by Sandvik AB in 1985 to the
amount of interest the company would have paid if this loan were granted on terms consistent with
commercial considerations. Since the investment loan was a long-term, variable rate loan, we used
the short-term loan benchmark for 1985 to calculate the amount of interest the company would
have paid if the loan were granted on terms consistent with commercial considerations. We divided
the interest differential by the total 1985 steel sales of all products to all markets by Sandvik AB
plus the 1985 sales of Avesta Sandvik Tube AB.
To determine whether the government loan guarantees to Avesta AB were inconsistent with
commercial considerations, we compared the guarantee fee paid by Avesta AB to the highest
average fee in 1985 on secured loans, as listed in the 1985 Statistical Yearbook of the Swedish
Riksbank. Based on this comparison, we find that the fee the government charged to guarantee the
loans is also inconsistent with commercial considerations. Accordingly, we also preliminarily
determine that these loan guarantees are countervailable. To calculate the benefit conferred by the
loan guarantees we multiplied the difference in the guarantee fees by the amount of principal
outstanding on these loans during the review period. We divided this benefit by total 1985 sales by
Avesta AB of all products to all markets.
Adding the benefits from the loan and loan guarantees, we arrive at an estimated net subsidy of
0.088 percent ad valorem for SSHP.
B. 1983-1984 Specialty Steel Restructuring Program--Forgiveness of Long-Term Investment Loan
to Avesta AB
Petitioners allege that in 1984 there was a further restructuring of the specialty steel industry in
Sweden during which time the Swedish government provided the industry with investment
loans, liquidity loans, and government loan guarantees. Petitioners further allege that this
restructuring included conditional reconstruction loans and loans that were forgiven by the
government.
The Specialty Steet Restructuring Program is governed under Government Bill 1983/84:157. This
bill established the terms of the restructuring of the specialty welded steel industry, under which
assets of three independent, unrelated companies (Avesta AB, Fagersta Sandvik Tube AB, and Nyby
Uddeholm AB) were merged into one company, Avesta Sandvik Tube AB. Avesta AB purchased the
stainless steel facilities and assets of Fagersta AB (i.e., Fagersta Sandvik Tube AB) and Uddeholm AB
(i.e., Nyby Uddeholm AB) to form this new company. Avesta AB controls 75 percent of the
ownership of the new company and Sandvik AB controls 25 percent.
One of the factors upon which this negotiated purchase was contingent was the government's
forgiveness of various loans held by the companies involved. Three of these loan write-offs are at
issue in this investigation. One is discussed in this section and the other two are discussed in
section III.A of this notice. The loan discussed in this section was given to Avesta AB under the
1977-79 Structural Reorganization Fund (see section I.A of this notice) and later forgiven under
the current program in 1984.
We preliminary determine that the government's forgiveness of Avesta AB's loan is
countervailable, because it is limited to a specific enterprise or industry, or group of enterprise or
industries. We treated the forgiveness of the 1978 Avesta AB loan as a grant. In accordance with
the grant methodology, we allocated the amount of the loan principal forgiven in 1984 (the grant
amount) over 15 years (the average useful life of renewable physical assets for the steel industry)
using the weighted-average cost of capital for 1984, the year in which the loan was forgiven. To
calculate the ad valorem benefit conferred by the forgiveness of the loan, we divided the 1985
benefit by the total value of 1985 SSHP sales. The estimated net subsidy is 0.407 percent ad
valorem.
C. Regional Development Incentives
The regional development assistance programs provide asssistance to promote
new employment in regions with high unemployment or retarded development. Assistance is
provided in the form of localization grants and loans. These are granted for location of industry,
freight relief, regional investment projects, health care facilities, building and construction, and
various employment schemes. According to the government response, the size of the location
grant or loan is determined by several factors, including the number of new jobs created by the
investment, the size of the investment, and the area in which it is made.
The response lists Sandvik AB as a direct recipient of a loan and a grant. Avesta AB is listed as a
direct recipient of freight relief and of two loans, which were later forgiven under the 1984
Restructuring Program (see section I.B). Fagersta AB and Nyby Uddeholm AB were listed as
recipients of localization loans under this program (all but one of which is discussed in section
III.A of this notice). One of the loans received by Fagersta AB under this program and later
transferred to Avesta AB, was forgiven in 1985 and is included below. We determine that all of the
above assistance is limited to companies in specific regions.
We compared the loan terms for Sandvik AB and Avesta AB on those loans under this program
which were not forgiven under the 1984 Restructuring Program with our benchmark interest rate,
which in this case consists of the effective base rate for 15-year industrial bonds, as listed in the
response to the
Swedish government. On the basis of this comparison, we found that these loans were not on terms
inconsistent with commercial consideration.
For the grant under this program, we evaluated the benefits in accordance with the grant
methodology in the Subsidies Appendix. Since the amount of the 1973 grant (the only grant
provided in 1973) was less than 0.5 percent of sales for that year, we expensed the grant fully in the
year of receipt. Therefore, no benefit was provided during the review period.
For loans which were forgiven, we determine that the forgiveness is countervailable. We treated
those portions of the loans which were forgiven as grants. In accordance with the grant
methodology, we allocated the amount of the loan forgiven in 1984 (the grant amount) over 15
years using the weighted- average costs of capital in the
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year in which the loan was forgiven. For the loan forgiven in 1985, because the sum of all grants
received by Avesta AB for that year was less than 0.5 percent ad valorem, we expensed the entire
amount of the grant in the year of receipt.
For the freight relief provided under the regional development incentives program, we expensed
the amount received during the review period.
We divided the sum of the benefits from the forgiven loans and freight relief by total sales of SSHP
for the review period to arrive at an estimated net subsidy of 0.734 percent ad valorem for SSHP.
D. 1978-1979 Employment Promotion Grants
In the Department's Final Affirmative Countervailing Duty Determinations; Certain Carbon
Steel Products from Sweden (Carbon Steel) (50 FR 33375, August 19, 1985), we determined
that certain Swedish employment promotion grants conferred subsidies. We verified that in March
1977, the Swedish Parliament passed a bill (1976/77:55) under which grants were paid to
companies recognized as the dominant employers in a particular community. In order to prevent
layoffs, these grants were designed to cover 75 percent of the wages and salaries of surplus workers
who performed work at the company unrelated to normal production activities. We found a
portion of the program to be countervailable because after July 1978, benefits under the program
were limited solely to the steel industry.
According to the government response in this case, and consistent with our findings in Carbon
Steel, the program was originally available to virtually all industries within Sweden. The only
industries excluded during this period were textiles and shipyards. The response also states that
the program was later limited to steel producers. However, the effective dates according to the
government response are different from the dates verified in the earlier case. In the Carbon Steel
case, we verified that the grants were available only to the steel industry for the period July 1978
through June 1979. The government
response lists the dates as July 1979 to December 1979. The importance of this discrepancy lies in
the fact that the government response indicates that the companies under investigation received
all their grants between June 1977 and December 1978--before the program was limited to steel.
It is our practice in preliminary determinations, in the absence of persuasive evidence to the
contrary, to accept a response where it is alleged that no benefits were received under a particular
program. All such responses are, of course, subject to verification. If it cannot be supported at
verification, and the program is otherwise countervailable, the program will be considered a
subsidy in the final determination. Here, the Department does have persuasive evidence which
conflicts with the government response. Therefore, we preliminarily determine that between July
1978 and June 1979, this program provided countervailable benefits because it was limited to a
specific enterprise or industry, or group of enterprises or industries.
To calculate the benefit to producers of SSHP from employment promotion grants and training
funds received between July 1978 and June 1979, we applied our grant methodology. Because the
sum of all grants received by Avesta AB in 1978 was greater than 0.5 percent ad valorem, we
allocated the benefits from the grant over 15 years (the average useful life of renewable physical
assets for the steel industry). We used as our discount rate Avesta AB's 1978 weighted- average
cost of capital. We divided the 1985 portion of the benefits by total
sales for the review period to arrive at an estimated net subsidy of 0.009 percent ad valorem for
SSHP.
E. Government Funding to Companies for Research and Development
The Swedish Board of Technical Development (STU) provides direct funding to Swedish industries
for research and development purposes. Repayment of the monies given as grants is conditional
upon the success of the funded project. If the project is successful, these grants are repaid to the
government with interest. According to Carbon Steel, results obtained from direct funding of
individual corporate research and development projects are not publicly available.
The government and company responses list two grants to Sandvik AB for projects related to SSHP;
three grants to Nyby Uddeholm for projects related to SSHP, one of which was successful and has
been repaid (these grants are discussed in section III.A); and two loans to Avesta AB, one for a
project related to SSHP, which was successful and has been repaid, and the other for a project
which does not appear to be related to SSHP.
Because the results of the government funded corporate research and development projects are
not publicly available, we preliminarily determine the research and development funds provided
to these companies, and not repaid, to be countervailable.
We did not include in our calculations loans which had been repaid before the review period or
loans which were not applicable to SSHP. We determined that the amounts of the 1982 grants to
Sandvik AB were less than 0.5 percent ad valorem of sales in that year and thus, were expensed
fully in the year of receipt. Therefore, we determine that these grants do not provide any benefits
during the review period.
II. Programs Preliminarily Determined Not To Confer Subsidies
We preliminarily determine that subsidies are not being provided to manufacturers, producers, or
exporters in Sweden of the subject merchandise under the following programs:
A. Transfer of 1979 Government Conditional Loans to Uddeholm
Petitioners allege that the Government of Sweden, as part of the 1977-1979 Structural
Reorganization of the steel industry described in section I.A of this notice, provided conditional
loans to Nyby Uddeholm. Petitioners contend that these loans were made on terms inconsistent
with commercial considerations and were limited to the specialty steel industry.
According to the responses of the Government of Sweden and Avesta AB, between 1979 and
1983, the Government of Sweden provided various conditional loans to Nyby Uddeholm AB.
In 1983 and 1984, an agreement was reached among the government and various specialty steel
producers which led to the acquisition of Nyby Uddeholm AB's stainless steel operations by Avesta
AB (see section I.B of this notice).
As part of the arrangement which led to this purchase by Avesta AB of Nyby Uddeholm AB, the
conditional government loans were transferred to Uddeholm AB (Nyby Uddeholm AB's parent
company) and were not assumed by Avesta AB when it took control of Nyby Uddeholm AB's assets.
Because the loans, as well as any countervailable benefit therefrom, were transferred to Uddeholm
AB, a company which, according to the response, neither produces nor exports the products under
investigation, we preliminarily determine that there is no subsidy being conferred by this program
upon exports of SSHP to the United States during the review period.
B. Bank Guarantee on 1984 Stock Issuance by Avesta
Petitioners allege that in 1984, as part of the structural reorganization of the
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specialty steel industry described in section I.B, and also as part of the deal that facilitated the
merger of Avesta AB and Nyby Uddeholm AB,
the government provided guarantees of stock issued by Avesta AB in 1984. Petitioners assert that
the capital raised by this stock issuance was used by Avesta AB to support its stainless steel
operations.
According to the responses of the Government of Sweden and Avesta AB, Avesta AB's stock
issued in 1984 was underwritten and guaranteed by Skandinaviska Enskilda Banka, a commercial
bank that is not owned or controlled by the government. The response further states that an
underwriter's guarantee is standard practice in Sweden. Because there is no evidence that the
government had any role in the guarantee provided for Avesta AB's 1984 stock issuance, we
preliminarily determine that no countervailable benefit was bestowed under this program.
C. 1972 and 1976-1978 Inventory Grants
Petitioners allege that the Government of Sweden has provided funding for increases in
stainless steel inventories in order to keep surplus personnel employed.
According to the responses of the Government of Sweden, Avesta AB, and Avesta Sandvik
Tube AB, inventory grants have been provided pursuant to the Swedish Code of Statutes (SFS)
1971:1249, ss 1 and 2. The purpose of the program is to maintain existing level of employment.
To receive a grant under this program, the company must have at least 20 employees and the
inventories of finished or semifinished goods manufactured by the company must have increased
over a certain period of time. If a grant is received, the company must undertake to maintain its
existing levels of employment.
Both company responses state that this program was, and is, available to all Swedish
manufacturers. Figures provided in the government response support this statement. Because
there is no indication that this program is limited to producers of stainless steel products, or is
otherwise limited to a specific enterprise or industry, or group of enterprises or industries or to
specific regions within Sweden, we preliminarily determine that no countervailable benefit was
bestowed under this program.
III. Programs for Which Additional Information Is Needed
We preliminarily determine that we need additional information in order to determine whether the
following programs confer subsidies on the manufacture, production, or exportation of SSHP.
A. 1983-1984 Specialty Steel Restructuring Program--Forgiveness of Long-Term Investment Loans
to Fagersta AB and Nyby Uddeholm AB, Localization Loans to
Fagersta AB and Nyby Uddeholm AB, Loan Guarantees to Nyby Uddeholm AB, and Research and
Development Grants to Nyby Uddeholm AB
Petitioners allege that during the 1984 Specialty Steel Restructuring Program, the Government of
Sweden forgave long-term investment loans given to Fagersta AB and Nyby Uddeholm AB
under the 1977-1979 Structural Reorganization Fund (see section I.A), as part of a restructuring
plan for the welded specialty steel industry. Petitioners argue that this program has directly
benefited the production of SSHP.
In addition, Fagersta AB and Nyby Uddeholm AB received localization loans, described in section
I.C. Avesta AB acquired these loans when it purchased Fagersta Sandvik Tube AB and Nyby
Uddeholm AB in 1984. Similarly, it acquired loan guarantees to Nyby Uddeholm AB, described in
section I.A, as well as R&D grants to Nyby Uddeholm AB, which are described in section I.E.
As described in section I.B of this notice, the 1984 Specialty Steel Restructuring Program included
an agreement under which Avesta AB purchased 75 percent of Fagersta Sandvik Tube AB (Fagersta
AB's stainless steel operations), and Uddeholm AB's shares in Nyby Uddeholm AB (its subsidiary
which produced stainless steel). The result was the formation of a new company, Avesta Sandvik
Tube AB. One of the conditions upon which this restructuring was contingent was the forgiveness of
various government loans. The Government of
Sweden forgave loans to all three companies involved in these transactions. The forgiveness of
the loan to Avesta AB, a company still producing SSHP, is discussed in section I.B of this notice. We
require further information on loan forgiveness, loan guarantees, localization loans, and R&D
grants provided to Fagersta AB and Nyby Uddeholm AB, companies which no longer product SSHP.
After carefully reviewing the petitioners' allegations and the government and company responses,
it is still not clear whether the loan forgiveness, loan guarantees, localization loans, and R&D grants
are attributable to SSHP. To determine whether these benefits confer a direct or indirect benefit to
the production of SSHP, we will be seeking and verifying the following information: The terms of the
purchase of these companies' assets, including the value of the assets and the basis on which this
value was determined (e.g., the standard requirements for security, and collateral requirements on
loans), and whether the purchases can be viewed as arm's-length transactions.
B. Government Funding to Certain Research Organizations
The Government of Sweden provides research and development grants to Swedish industries
either directly or indirectly through various research and development (R&D) agencies. The
Swedish Board for Technical Development (STU)
is Sweden's central agency for funding of R&D grants. There are two research organizations in
Sweden for which funding is provided by STU which benefits the SSHP industry, the Swedish
Institute for Metals Research and the Foundation of Metallurgical Research.
The Swedish Institute for Metals Research is a branch research institute for the steel and
non-ferrous industry. The basis and prerequisite for the activities at the Institute is a triennial
agreement between private industry and STU. This agreement sets out the details of a general
research program, under which the industry contributes 53 percent and the government 47
percent of the cost.
The Foundation of Metallurgical Research owns and operates two experimental plants called the
Metallurgical and the Metal Working Research Plant. Approximately 60 percent of the
Foundation's budget is provided by Foundation's members and 40 percent is contributed by the
government through STU.
Although we determined the research funded through these research organizations not to be
countervailable in Carbon Steel, we preliminarily determine that with respect to research
conducted for the specialty steel industry, we need additional information in order to determine
whether countervailable benefits are being provided. Specifically, we are seeking and will verify the
availability to parties other than the members of the Institute and Foundation of all research and
development project results obtained with the aid of government financing.
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IV. Programs Preliminarily Determined Not To Exist
A. Working Capital Increase by Sandvik
Petitioners allege that an increase in "Interest-Free Trading Debts" shown in Sandivik's 1983 Annual
Report was the result of a government transfer of interest-free loans to the company. According to
the responses of the Government of Sweden and Sandvik, this increase was the result of a sale
by Sandvik of one of its assets, with no participation on the part of the government. Because the
responses indicate that this was a commercial transaction, unrelated to any government program
or action, we preliminarily determine that there is no program by which the Government of
Sweden provided interest-free loans to Sandvik.
B. Government Convertible Loan to Avesta for Purchase of Nyby Uddeholm
Petitioners allege that the Government of Sweden provided convertible loans on terms
inconsistent with commercial considerations to Avesta AB for the purpose of financing the
acquisition by Nyby Uddeholm AB's and Fagersta AB's stainless steel operations.
According to the responses of the Government of Sweden and Avesta AB, the government has
never issued any convertible loans to Avesta AB, or any of its subsidiaries. Rather, Avesta AB
issued convertible loans in 1984 to Fagersta AB and Uddeholm AB as payment for the assets of, and
stock ownership held by, these two companies in Nyby Uddeholm AB and Fagersta Sandvik Tube
AB. The responses of both Avesta AB and the government state that the government had no role in
financing this transaction. Because the responses state that the Government of Sweden had no
involvement in this part of the structural reorganization of the speciality steel industry, we
preliminarily determine that there was no program by which the government provided convertible
loans to Avesta.
Verification
In accordance with section 776(a) of the Act, we will verify the information used in making our
final determination.
Suspension of Liquidation
In accordance with section 703(d) of the Act, we are directing the U.S.
Customs Service to suspend liquidation of all entries of certain stainless steel hollow products from
Sweden which are entered, or with drawn from warehouse, for consumption on or after the
date of publication of this notice in the Federal Register, and to require a cash deposit or bond for
each entry of this merchandise in the amount of the estimated ad valorem subsidy rates. The
estimated net subsidy for SSHP is 1.24 percent ad valorem for all manufactureres, producers, or
exporters in Sweden. This suspension will remain in effect until further notice.
ITC Notification
In accordance with section 703(f) of the Act, we will notify the ITC of our determination. In
addition, we are making available to the ITC all nonprivileged and nonproprietary information
relating to this investigation. We will allow the ITC access to all privileged and 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 Deputy
Assistant Secretary for Import Administration.
The ITC will determine whether these imports materially injure, or threaten material injury to, a
U.S. industry 120 days after the Department makes its
preliminary affirmative determination or 45 days after its final affirmative determination,
whichever is latest.
Public Comment
In accordance with § 355.35 of our regulations, we will hold a public hearing, if requested, to afford
interested parties an opportunity to comment on this preliminary determination at 10:00 a.m. on
January 20, 1987, at the U.S. Department of Commerce, Room 3708, 14th Street and Constitution
Avenue NW., Washington, DC 20230. Individuals who wish to participate in the hearing must
submit a request to the Deputy Assistant Secretary for Import Administration, Room B-099, at the
above address within 10 days after publication of this notice in the Federal Register. Requests
should contain: (1) The party's name, address, and telephone number; (2) the number of
participants; (3) the reason for attending; and (4) a list of the issues to be discussed. In addition, ten
copies of the proprietary version and seven copies of the nonproprietary version of the
pre-hearing briefs must be submitted to the Deputy Assistant Secretary by January 13, 1987. Oral
presentations will be limited to issues raised in the briefs. In accordance with 19 CFR 355. 33(d)
and 19 CFR 355.34, written views will be considered if received not less than 30 days before the
final determination is due or, if a hearing is held, within ten days after the
hearing transcript is available.
This determination is published pursuant to section 703(f) of the Act (19 U.S.C. 1671b(f).
Gilbert B. Kaplan,
Deputy Assistant Secretary for Import Administration.
December 1, 1986.
[FR Doc. 86-27385 Filed 12-4-86; 8:45 am]
BILLING CODE 3510-DS-M