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Notice

WTO Dispute Settlement Proceedings Regarding Countervailing Duty Measures Concerning Certain Products From the European Communities

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Information about this document as published in the Federal Register.

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AGENCY:

Office of the United States Trade Representative.

ACTION:

Notice; request for comments.

SUMMARY:

The Office of the United States Trade Representative (USTR) is providing notice that on August 8, 2001, the European Communities (EC) requested the establishment of a dispute settlement panel under the Marrakesh Agreement Establishing the World Trade Organization (WTO Agreement). The request relates to the continued application by the United States of countervailing duties based upon the “change-in-ownership” methodologies used by the U.S. Department of Commerce (Commerce). The EC alleges that the methodologies used by Commerce in certain identified countervailing duty proceedings is inconsistent with various provisions of the WTO Agreement on Subsidies and Countervailing Measures (SCM Agreement), and Article XVI:4 of the WTO Agreement. The EC also alleges that section 771(5)(F) of the Tariff Act of 1930, as amended, 19 U.S.C. 1677(5)(F), is also inconsistent with these provisions to the extent that it allows Commerce to apply the disputed methodologies. USTR invites written comments from the public concerning the issues raised in this dispute.

DATES:

Although USTR will accept any comments received during the course of the dispute settlement proceedings, comments should be submitted on or before October 12, 2001, to be assured of timely consideration by USTR.

ADDRESSES:

Submit comments to Sandy McKinzy, Monitoring and Enforcement Unit, Office of the General Counsel, Room 122, Office of the United States Trade Representative, 600 17th Street, NW., Washington, DC 20508, Attn: Change in Ownership in Methodology Dispute. Telephone: (202) 395-3582.

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FOR FURTHER INFORMATION CONTACT:

William D. Hunter, Associate General Counsel, Office of the United States Trade Representative, 600 17th Street, NW., Washington, DC 20508. Telephone: (202) 395-3582.

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SUPPLEMENTARY INFORMATION:

Section 127(b) of the Uruguay Round Agreements Act (URAA) (19 U.S.C. 3537(b)(1)) requires that notice and opportunity for comment be provided after the United States receives a request for the establishment of a WTO dispute settlement panel. Consistent with this obligation, USTR is providing notice that the EC has requested the establishment of a dispute settlement panel pursuant to the WTO Dispute Settlement Understanding. Such panel, which would hold its meetings in Geneva, Switzerland, would be expected to issue a report on its findings and recommendations within six to nine months after it is established.

Major Issues Raised by the EC

In its panel request, the EC alleges that in United States—Imposition of Countervailing Duties on Certain Hot-Rolled Lead and Bismuth Carbon Steel Products Originating in the United Kingdom, WT/DS138/AB/R (“U.K. Lead Bar”), the WTO Appellate Body found the change-in-ownership methodology applied by Commerce for purposes of the U.S. countervailing duty law to be inconsistent with the SCM Agreement. The EC also alleges that the Appellate Body found that a change of ownership at fair market value eliminated the benefit of any prior subsidies to the privatized company. Therefore, the EC alleges that the continued application by Commerce of the change-in-ownership methodology at issue in U.K. Lead Bar, and the continued imposition of countervailing duties based upon that methodology, is consistent with Articles 1.1, 10 (including footnote 36), 14(d), 19.1, 19.3, 19.4, 21.1, 21.2, 21.3, and 32.5 of the SCM Agreement , and Article XVI:4 of the WTO Agreement. According to the EC in its panel request, this pre-U.K. Lead Bar methodology “fails to examine whether there is a subsidy to the producer concerned in circumstances where a financial contribution was grant to a previous owner of a company or its productive assets and there has been a change of ownership or privatization thereof at arm's-length for fair market value.”

Following the Appellate Body report in U.K. Lead Bar and a related decision by the U.S. Court of Appeals for the Federal Circuit, Commerce revised its change-in-ownership methodology. Under its new methodology, Commerce Start Printed Page 47516examines whether the entity existing after a change-in-ownership transaction is the same legal person that existed prior to the transaction and that received subsidies. The EC alleges that this new methodology also is inconsistent with the provisions of the SCM Agreement and the WTO Agreement cited above. According to the EC in its panel request, this methodology “ignores the consideration paid by the current producer in the privatisation or change of ownership, instead purporting to undertake an analysis of whether the buyer is ‘for all intents and purposes’ the ‘same person’ as the company which had received a financial contribution before privatisation.”

The measures identified by the EC (including the relevant Comerce case nuber) are as follows:

  • Original Imposition of Countervailing Duties
  • Stainless Steel Sheet and Strip in Coils from France (C-427-815)
  • Certain Cut-to-Length Carbon Quality Steel from France (C-427-817)
  • Stainless Steel Sheet and Strip in Coils from Italy (C-475-825)
  • Certain Stainless Steel Wire Rod from Italy (C-475-821)
  • Stainless Steel Plate in Coils from Italy (C-475-823)
  • Certain Cut-to-Length Carbon-Quality Steel Plate from Italy (C-475-827)
  • Administrative Reviews
  • Cold-rolled Carbon Steel Flat Products from Sweden (C-401-401)
  • Cut-to-Length Carbon Steel Plate from Sweden (C-401-804)
  • Grain-Oriented Electrical Steel from Italy (C-475-812)

(With respect to case C-475-812, the EC panel request refers to a “Definitive determination in administrative review 2nd request; final sunset results ... .”).

  • Sunset Reviews
  • Cut-to-Length Carbon Steel Plat from the United Kingdom (C-412-815)
  • Certain Corrosion-Resistant Carbon Steel Flat Products from France (C-427-810)
  • Cut-to-Length Carbon Steel Plate from Germany (C-428-817)
  • Cut-to-Length Carbon Steel Plate from Spain (C-469-804)

In addition, the EC also cites section 771(5)(F) of the Tariff Act of 1930, as amended, which is entitled “Change in ownership”. According to the EC in its panel request, section 771(5)(F) is inconsistent with the provisions of the SCM Agreement and the WTO Agreement cited above “to the extent that it allows [Commerce] to impose countervailing duties without assessing the existence of a countervailable subsidy after a privatisation or change of ownership ... .”

Public Comment: Requirements for Submissions

Interested persons are invited to submit written comments concerning the issues raised in the dispute. Comments must be in English and provided in fifteen copies. A person requesting that information contained in a comment submitted by that person be treated as confidential business information must certify that such information is business confidential and would not customarily be released to the public by the commenter. Confidential business information must be clearly marked BUSINESS CONFIDENTIAL in a contrasting color ink at the top of each page of each copy.

Information or advice contained in a comment submitted, other than business confidential information, may be determined by USTR to be confidential in accordance with section 135(g)(2) of the Trade Act of 1974 (19 U.S.C. 2155 (g)(2)). If the submitter believes that information or advice may qualify as such, the submitter—

(1) Must so designate the information or advice;

(2) Must clearly mark the material as SUBMITTED IN CONFIDENCE in a contrasting color ink at the top of each page of each copy; and

(3) Is encouraged to provide a non-confidential summary of the information or advice.

Pursuant to section 127(e) of the URAA (19 U.S.C. 3537 (e)), USTR will maintain a file on this dispute settlement proceeding, accessible to the public, in the USTR Reading Room: Room 101, Office of the United States Trade Representative, 600 17th Street, N.W., Washington, D.C. 20508. The public file will include non-confidential comments received by USTR from the public with respect to the dispute; if a dispute settlement panel is convened, the U.S. submissions to that panel, the submissions, or non-confidential summaries of submissions to the panel received from other participants in the dispute, as well as the report of the panel; and, if applicable, the report of the Appellate Body. An appointment to review the public file (Docket WTO/D-212, Change in Ownership Methodology Dispute) may be made by calling Brenda Webb, (202) 395-6186. The USTR Reading Room is open to the public from 9:30 a.m. to 12 noon and 1 p.m. to 4 p.m., Monday through Friday.

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A. Jane Bradley,

Assistant United States Trade Representative for Monitoring and Enforcement.

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[FR Doc. 01-22826 Filed 9-11-01; 8:45 am]

BILLING CODE 3190-01-M