98-824

(Cite as: 63 FR 45045)

NOTICES

DEPARTMENT OF COMMERCE

International Trade Administration

[C-122-815]

Pure and Alloy Magnesium From Canada; Final Results of the Fifth (1996)
Countervailing Duty Administrative Reviews

Monday, August 24, 1998

*45045
(Cite as: 63 FR 45045, *45045)

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

ACTION: Notice of final results of countervailing duty administrative reviews.

(Cite as: 63 FR 45045, *45045)

SUMMARY: On April 30, 1998, the Department of Commerce (the Department) published in the Federal Register its
preliminary results of the fifth administrative reviews of the countervailing duty orders on pure and alloy
magnesium from Canada covering the period January 1, 1996 through December 31, 1996 (see Pure
Magnesium and Alloy Magnesium From Canada; Preliminary Results of the Fifth Countervailing Duty
Administrative Reviews (Preliminary Results), 63 FR 23728). We have completed these reviews and determine the net
subsidy in each to be 2.78 percent ad valorem for Norsk Hydro Canada, Inc. (NHCI). We will instruct the U.S. Customs
Service (Customs) to assess countervailing duties in this amount.

EFFECTIVE DATE: August 24, 1998.

FOR FURTHER INFORMATION CONTACT: Marian Wells or Rosa Jeong, AD/CVD Enforcement, Group 1, Office 1, Import
Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution
Avenue, NW, Washington, DC. 20230; telephone: (202) 482-6309 or (202) 482- 3853, respectively.

SUPPLEMENTARY INFORMATION:

(Cite as: 63 FR 45045, *45045)

Background

In accordance with 19 CFR 355.22(a), these reviews cover only those producers or exporters of the subject merchandise for
which reviews were specifically requested. Accordingly, these reviews cover only NHCI, a producer of the subject
merchandise which exported pure and alloy magnesium to the United States during the review period.
On April 30, 1998, the Department published in the Federal Register the Preliminary Results of its fifth administrative
reviews of the countervailing duty orders on pure and alloy magnesium from Canada (63 FR 23728). We
invited interested parties to comment on the Preliminary Results. On June 1, 1998, case briefs were submitted by the
Government of Que1bec (GOQ), and the petitioner, Magnesium Corporation of America (MAGCORP). The GOQ
subsequently filed a rebuttal brief on June 8, 1998. The Department did not conduct a hearing for these reviews because none
of the interested parties requested one.
These reviews cover the period January 1, 1996 through December 31, 1996 (the period of review or POR). The reviews
involve one company (NHCI) and the following programs: Exemption from Payment of Water Bills, Article 7 Grants from the
Que1bec Industrial Development Corporation (SDI), St. Lawrence River Environment Technology Development Program,
Program for Export Market Development, the Export Development Corporation, Canada-Que1bec Subsidiary
(Cite as: 63 FR 45045, *45045)

Agreement on the Economic Development of the Regions of Que1bec, Opportunities to Stimulate Technology Programs,
Development Assistance Program, Industrial Feasibility Study Assistance Program, Export Promotion Assistance Program,
Creation of Scientific Jobs in Industries, Business Investment Assistance Program, Business Financing Program, Research
and Innovation Activities Program, Export Assistance Program, Energy Technologies Development Program, and
Transportation Research and Development Assistance Program.

Applicable Statute

Unless otherwise indicated, all citations to the statute are references to the provisions of the Tariff Act of 1930, as amended
by the Uruguay Round Agreements Act (URAA), effective January 1, 1995 (the Act). The Department is conducting this
administrative review in accordance with section 751(a) of the Act. References to "Countervailing Duties: Notice of
Proposed Rulemaking and Request for Public Comments," (54 FR 23366, May 31, 1989) ("1989 Proposed Regulations"), which
have been withdrawn, are provided solely for further explanation of the Department's countervailing duty practice.

Scope of the Reviews

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The products covered by these reviews are shipments of pure and alloy magnesium from Canada. Pure
magnesium contains at least 99.8 percent magnesium by weight and is sold in various slab and ingot forms and
sizes. Magnesium alloys contain less than 99.8 percent magnesium by weight with magnesium being the
largest metallic element in the alloy by weight, and are sold in various ingot and billet forms and sizes. Pure and alloy
magnesium are currently classifiable under subheadings 8104.11.0000 and 8104.19.0000, respectively, of the
Harmonized Tariff Schedule of the United States (HTSUS). Although the HTSUS subheadings are provided for convenience
and customs purposes, our written description of the scope of this proceeding is dispositive.
Secondary and granular magnesium are not included in the scopes of these orders. Our reasons for excluding granular
magnesium are summarized in the Preliminary Determination of Sales at Less Than Fair Value: Pure and Alloy
Magnesium From Canada (57 FR 6094, February 20, 1992). *45046
(Cite as: 63 FR 45045, *45046)

Analysis of Programs

Based upon our analysis of the questionnaire responses and written comments from the interested parties, we determine the
following:

I. Programs Conferring Subsidies

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A. Exemption from Payment of Water Bills

In the Preliminary Results, we found that this program conferred countervailable benefits on the subject merchandise. Our
analysis of the comments submitted by the interested parties, summarized below, has not led us to change our findings from
the Preliminary Results. On this basis, the net subsidy rate for this program is as follows:

-------------------------------------
Manufacturer/exporter Rate (percent)
-------------------------------------
NHCI 0.46
-------------------------------------

B. Article 7 Grants from the Que1bec Industrial Development Corporation

to change our findings from the Preliminary Results. On this basis, the net subsidy rate for this program is as follows:

-------------------------------------
Manufacturer/exporter Rate (percent)
-------------------------------------
NHCI 2.32
-------------------------------------

II. Programs Found Not to be Used

In the Preliminary Results, we found that NHCI did not apply for or receive benefits under the following programs:
- St. Lawrence River Environment Technology Development Program
- Program for Export Market Development
- Export Development Corporation
- Canada-Que1bec Subsidiary Agreement on the Economic Development of the Regions of Que1bec
- Opportunities to Stimulate Technology Programs
- Development Assistance Program

(Cite as: 63 FR 45045, *45046)

- Industrial Feasibility Study Assistance Program
- Export Promotion Assistance Program
- Creation of Scientific Jobs in Industries
- Business Investment Assistance Program
- Business Financing Program
- Research and Innovation Activities Program
- Export Assistance Program
- Energy Technologies Development Program
- Transportation Research and Development Assistance Program.
We received no comments on these programs from the interested parties; therefore, we have not changed our findings from
the Preliminary Results.

Analysis of Comments

In its June 1, 1998 case brief, Magcorp affirmed all of the Department's positions in the preliminary results of review.

Comment 1: Obligation of Department to Re-examine Specificity of Article 7 Assistance

In the event the Department continues to treat the Article 7 assistance as a
(Cite as: 63 FR 45045, *45046)

nonrecurring grant, the GOQ argues that the Department must re-examine whether the assistance was specific. In particular,
the Department is obliged to evaluate, according to the GOQ, in each administrative review the countervailability of a
program previously determined to be de facto specific, regardless of whether the parties have provided new information. The
Department may not rely, as it did in the Preliminary Results, on a de facto specificity determination made in the original
investigations.

DOC Position

Just as it does not revisit prior determinations that a program is not specific, it is the Department's policy not to revisit prior
determinations that a program is specific, absent the presentation of new facts or evidence (see e.g., Carbon Steel Wire Rod
From Saudi Arabia; Final Results of Countervailing Duty Administrative Review and Revocation of Countervailing
Duty Order (Carbon Steel Wire Rod from Saudi Arabia), 59 FR 58814 (November 15, 1994); Final Results of the First
Countervailing Duty Administrative Reviews: Pure Magnesium and Alloy Magnesium From Canada
(First Magnesium Reviews), 62 FR 13857 (March 24, 1997); Final Results of the Second Countervailing Duty
Administrative Reviews: Pure Magnesium and Alloy Magnesium From Canada (Second Magnesium
Reviews), 62 FR 48607 (September 16, 1997); and Final Results of the
(Cite as: 63 FR 45045, *45046)

Third Countervailing Duty Administrative Reviews: Pure Magnesium and Alloy Magnesium From
Canada (Third Magnesium Reviews), 62 FR 18749 (April 17, 1997)). In the present reviews, no new facts or
evidence have been presented which would lead us to question our original specificity determination for the POI.

Comment 2: Alternative Methodology for Determining Specificity of Article 7 Assistance

The GOQ continues to argue, as it has in previous reviews, that the Department should take an entirely different approach to
the question of how to determine if a nonrecurring grant is disproportionately large, and therefore, specific. Rather than base
its analysis on the entire amount of the grant at the time of bestowal, the GOQ maintains that the Department must instead
examine only the portion of the benefit allocated--in accordance with the Department's standard allocation methodology--to
the POR. It is this amount, in relationship to the portions of benefits allocated to the POR for all assistance bestowed under
the program to all other enterprises, that must be determined to be disproportionate. Because the benefit attributable to the
POR is the subsidy at issue, it is that amount, according to the GOQ, that must be found specific before it may be
countervailed.

(Cite as: 63 FR 45045, *45046)

The GOQ also counters the Department's assertion in Final Results of the Fourth Countervailing Duty Administrative
Reviews: Pure Magnesium and Alloy Magnesium From Canada (Fourth Magnesium Reviews), 62 FR
48812, 48814 (September 17, 1997) that the GOQ has not cited a single determination by the Department or any other legal
authority to support its position. The GOQ asserts that it has cited to the sixth administrative review of Live Swine from
Canada: Final Results of Countervailing Duty Administrative Review (Live Swine from Canada), 59 FR 12243,
12249 (March 16, 1994) as an example where the Department reexamined the countervailability of benefits found to be de
facto specific in prior reviews.

DOC Position

As we have explained in previous final results (see First Magnesium Reviews, Second Magnesium Reviews, and
Third Magnesium Reviews), the GOQ is confusing the determination of specificity with the measurement of the subsidy.
The specificity determination and the measurement of the subsidy are two separate and distinct processes. The question of
whether a nonrecurring grant is disproportionately large is based on an examination of the entire amount of the grant at the
time of bestowal. If such a grant is found to be *45047
(Cite as: 63 FR 45045, *45047)

disproportionately large, it is determined to be specific. (As a grant
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specifically provided, it is also at this point that the statutory requirements for countervailing the grant are met. See section
771(5) of the Act.) The separate and distinct second step is the measurement of the benefit. This step involves allocating
portions of the grant over time. It is these portions of the grant which then provide the basis for the calculation of the ad
valorem rate of subsidization. The portions of subsidies allocated to periods of time using the Department's standard
allocation methodology are irrelevant to an examination of the actual distribution of benefits by the granting government at
the time of bestowal.
The GOQ refers to the sixth review of the countervailing duty order on Live Swine from Canada as demonstrating
that the Department has, as a matter of course, revisited its de facto specificity determinations from one segment of a
proceeding to another. We continue to believe that the situation in the Magnesium reviews can be distinguished from
the situation in Live Swine from Canada. As explained in the First, Second, and Third Magnesium Reviews the facts
underlying our analyses in Live Swine from Canada differ from the situation here. Because those facts have not changed,
we continue to make the identical distinction in the current reviews. For a full discussion of the distinction made between the
revisiting specificity determinations in Live Swine from Canada and the Magnesium case, see First Magnesium
Reviews at 13861, Second Magnesium Reviews at 48609, and Third Magnesium Reviews at 18753.)

(Cite as: 63 FR 45045, *45047)

Comment 3: Appropriate Time of Specificity Determination: "Bestowal" or Disbursement

The GOQ argues that although the Department concluded in the First Magnesium Reviews and the Third Magnesium
Reviews that the proper time period for a specificity determination is the time of bestowal, the Department did not examine
specificity in the original period of investigation (POI) at the time of bestowal. Rather, the Department examined specificity at
the time of approval of the funds. The GOQ states that it is confused by the Department's policy to determine specificity at a
time when no funds have been provided to NHCI. The GOQ argues that the time of bestowal for the purpose of a specificity
determination should refer to the time of actual disbursement of funds, and should not refer to the time funds are approved
by the granting authority.

DOC Position

We disagree with the GOQ's assertion that the Department's specificity analysis during the original investigations should have
been conducted based on the time of actual disbursement of funds. We acknowledge that the specificity
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determination in the original investigations was based on the action of the granting authority, i.e., the GOQ, at the time of
approval. However, we note that the Department uses the terms "approval" and "bestowal" interchangeably in this context.
The time of bestowal or approval is the appropriate basis for the specificity determination because it most directly
demonstrates whether a government has limited the benefits bestowed upon an enterprise or industry, or group thereof.

Comment 4: Relevance of New Information

The GOQ maintains that given the Department's responsibility to make a finding of specificity and countervailability based on
the information relevant to the POR, the Department should consider any new assistance provided by SDI since the end of the
original POI. To this end, the GOQ provided information on the Article 7 assistance extended up to, and including, the POR in
a submission dated January 15, 1997. According to the GOQ, this new factual information was apparently considered
irrelevant information by the Department.

DOC Position

As stated above, the proper time period for a specificity determination is the
(Cite as: 63 FR 45045, *45047)

time of bestowal. Therefore, information submitted by the GOQ concerning assistance that was provided subsequent to the
time of bestowal of the assistance granted to NHCI under Article 7 of the SDI Act is not relevant to the specificity
determination. The remaining information presented by the GOQ on the Article 7 assistance granted prior to and including
the time of bestowal of NHCI's Article 7 benefits is nearly identical to that utilized by the Department in its original specificity
determination. Differences between the updated information on Article 7 provided by the GOQ and information used in the
original specificity determination are sufficiently small so as not to compromise the original specificity determination.
Fourth Magnesium Reviews at 48815.

Comment 5: Relevance of Article 9 Information

The GOQ argues that assistance under Article 9 should be included in the Article 7 specificity analysis because Article 9 was
the predecessor of Article 7 and the provisions of Article 9 functioned basically the same as those of Article 7.

DOC Position

(Cite as: 63 FR 45045, *45047)

We disagree. The GOQ did not provide any information which would allow us to make a determination on whether Article 9
and Article 7 should be considered integrally linked or otherwise considered a single program for purposes of our specificity
analysis (see Section 355.43(b)(6) of the 1989 Proposed Regulations). Information on the record in these proceedings with
respect to Article 9 consists only of a statement by the GOQ in its case brief that Article 9 was the predecessor of Article 7.
This is an insufficient basis to determine that the two programs should be treated as one.

Final Results of Review

In accordance with 19 CFR 355.22(c)(4)(ii), we calculated an individual subsidy rate for each producer/exporter subject to
these administrative reviews. For the period January 1, 1996 through December 31, 1996, we determine the net subsidy for
NHCI to be 2.78 percent ad valorem. We will instruct Customs to assess countervailing duties in this amount for all
entries of NHCI's merchandise during this period. The Department will also instruct Customs to collect cash deposits of
estimated countervailing duties of 2.78 percent of the f.o.b. invoice price on all shipments of subject merchandise
from NHCI, entered, or withdrawn from warehouse, for consumption on or after the date of publication of the final results of
these reviews.

(Cite as: 63 FR 45045, *45047)

Because the URAA replaced the general rule in favor of a country-wide rate with a general rule in favor of individual rates for
investigated and reviewed companies, the procedures for establishing countervailing duty rates, including those for
non-reviewed companies, are now essentially the same as those in antidumping cases, except as provided for in section
777A(e)(2)(B) of the Act. Consequently, the requested review will normally cover only those companies specifically named
(19 CFR 355.22(a)). Pursuant to 19 CFR 355.22(g), for all companies for which a review was not requested, duties must be
assessed at the cash deposit rate, and cash deposits must continue to be *45048
(Cite as: 63 FR 45045, *45048)

collected at the rate previously ordered. As such, the countervailing duty cash deposit rate applicable to a company
can no longer change, except pursuant to a request for a review of that company. See Federal-Mogul Corporation and The
Torrington Company v. United States, 822 F. Supp. 782 (CIT 1993) and Floral Trade Council v. United States, 822 F. Supp.
766 (CIT 1993) (interpreting 19 CFR 353.22(e), the antidumping regulation on automatic assessment, which is identical to 19
CFR 355.22(g)). Therefore, the cash deposit rates for all companies except NHCI are unchanged by the results of these
reviews.
We will instruct Customs to continue to collect cash deposits for non-reviewed companies at the most recent
company-specific or country-wide rate applicable to the company, except from Timminco Limited (which was excluded from
the order in the original investigations). Accordingly, the cash deposit rates that will
(Cite as: 63 FR 45045, *45048)

be applied to non-reviewed companies covered by these orders are those established in the administrative reviews
completed for the most recent POR, conducted pursuant to the statutory provisions that were in effect prior to the URAA
amendments. See Fourth Magnesium Reviews. This rate shall apply to all non-reviewed companies until a review of a
company assigned this rate is requested. In addition, countervailing duties will be assessed on any entries during the
period January 1, 1996 through December 31, 1996, for all non- reviewed companies at the cash deposit rates in effect at the
time of entry.
This notice serves as a reminder to parties subject to administrative protective order (APO) of their responsibility
concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 355.34(d). Timely
written notification of return/destruction of APO materials or conversion to judicial protective order is hereby requested.
Failure to comply with the regulations and the terms of an APO is a sanctionable violation.
These administrative reviews and notice are in accordance with section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)).
Dated: August 18, 1998.

Joseph A. Spetrini,

(Cite as: 63 FR 45045, *45048)

Acting Assistant Secretary for Import Administration.

[FR Doc. 98-22664 Filed 8-21-98; 8:45 am]

BILLING CODE 3510-DS-P