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Final Determination - Refined Sugar

OTTAWA, October 5, 1995

4237-80
4218-2
AD1110

STATEMENT OF REASONS

FINAL DETERMINATION OF DUMPING OF REFINED SUGAR FROM THE UNITED STATES OF AMERICA, DENMARK, THE FEDERAL REPUBLIC OF GERMANY, THE NETHERLANDS, THE UNITED KINGDOM AND THE REPUBLIC OF KOREA

AND

FINAL DETERMINATION OF SUBSIDIZING OF REFINED SUGAR FROM THE EUROPEAN UNION DECISION

Pursuant to paragraph 41(1)(a) of the Special Import Measures Act, the Deputy Minister of National Revenue has today made a final determination of dumping respecting refined sugar, refined from sugar cane or sugar beets, in granulated, liquid and powdered form, originating in or exported from the United States of America, Denmark, the Federal Republic of Germany, the Netherlands, the United Kingdom and the Republic of Korea and a final determination of subsidizing respecting refined sugar, refined from sugar cane or sugar beets, in granulated, liquid and powdered form, originating in or exported from the European Union.

This Statement of Reasons is also available in French.
Cet énoncé des motifs est également disponible en français.

STATEMENT OF REASONS

SUMMARY

On March 17, 1995, the Deputy Minister of National Revenue caused an investigation to be initiated respecting the alleged dumping of refined sugar, originating in or exported from the United States of America, Denmark, the Federal Republic of Germany, the Netherlands, the United Kingdom, and the Republic of Korea, and the alleged subsidizing of refined sugar, originating in or exported from the United States of America and the European Union (E.U.). The investigation was initiated in response to a complaint filed by the Canadian Sugar Institute.

As a result of the investigation, the Deputy Minister is satisfied that the subject goods from all the named countries have been dumped, that the subject goods from the European Union have been subsidized, that the margins of dumping and the amount of subsidy are not insignificant and that the actual or potential volumes of dumped and subsidized goods are not negligible. Accordingly, the Deputy Minister has made a final determination of dumping with respect to the subject goods from all the named countries, and a final determination of subsidizing with respect to subject goods from the European Union.

INTERESTED PARTIES

Complainant

The complaint was filed by the Canadian Sugar Institute (CSI), on behalf of its members. The CSI is a trade association comprised of all Canadian producers of the subject goods. Its address is:

Canadian Sugar Institute

WaterPark Place

Suite 620-10 Bay Street

Toronto, Ontario

M5J 2R8

There are three Canadian producers of refined sugar: The British Columbia Sugar Refining Company, Limited (B.C. Sugar), Lantic Sugar Limited (Lantic), and Redpath Sugars, a Division of Redpath Industries Limited (Redpath). B.C. Sugar owns 100 per cent of Lantic, however, the two companies are managed as independent operating units in different regions of the country.

Exporters

The names and addresses of the exporters are listed in Appendix A.

Importers

A list of the names and addresses of the importers can be obtained upon request.

BACKGROUND

On February 10, 1995, the CSI submitted a formal written complaint concerning the dumping of refined sugar from the United States of America, Denmark, the Federal Republic of Germany, the Netherlands, the United Kingdom and the Republic of Korea and subsidizing of refined sugar from the United States of America and the European Union.

On March 17, 1995, the Department initiated an investigation into the alleged dumping and subsidizing of refined sugar. The investigation was extended on June 14, 1995, due to the complexity of the issues involved in the investigation.

On July 7, 1995, pursuant to paragraph 38(1)(a) of the Special Import Measures Act (SIMA), the Deputy Minister made a preliminary determination of dumping with respect to refined sugar from the named countries and a preliminary determination of subsidizing with respect to refined sugar from the European Union. At that time, the Deputy Minister also caused the subsidy investigation to be terminated pursuant to paragraph 35(1)(c) of SIMA with respect to refined sugar from the United States of America.

PRODUCT

Product Definition

For purposes of this investigation, the subject goods are defined as refined sugar, refined from sugar cane or sugar beets, in granulated, liquid and powdered form. For greater clarity, the subject goods include:

1. white granulated sugar;
2. liquid sugar including invert sugar; and
3. specialty sugars (specialty sugars include soft yellow and brown sugar, icing sugar, Demerara sugar and others).

Additional Product Information

The subject goods are available in a broad range of shipping and packaging configurations including:

1. bulk rail car;
2. truck load;
3. tanker load;
4. one tonne intermediate bulk containers (tote bags);
5. 0, 20, 10, 4, 2, 1 kg, and 500 g bags (some of these are packaged in boxes);
6. individual service envelopes; and
7. cubes.

The classification numbers under which the subject goods may be imported are listed in Appendix B. It should be noted that, at the time of initiation, classification numbers 2106.90.10 and 2106.90.21 were included in the list of subject goods. It has subsequently been determined that these classification numbers do not apply to the subject goods.

CANADIAN INDUSTRY

Refined sugar is produced at six locations across Canada. The four Canadian cane sugar refineries are located in Saint John, New Brunswick; Montreal, Quebec; Toronto, Ontario; and Vancouver, British Columbia. The two sugar beet factories owned by B.C. Sugar are located in Winnipeg, Manitoba and Taber, Alberta.

Approximately 90 per cent of the refined sugar produced in Canada is from raw cane sugar. The balance of the sugar produced in Canada is from processed sugar beets.

Canada produces refined sugar primarily to meet its domestic needs. Export markets for refined sugar are limited due to high transportation costs and various trade barriers. Notwithstanding Canada's proximity to the United States, only minor quantities of Canadian refined sugar are exported to that market due to import restrictions which are part of the United States Sugar Program.

MARKET SHARE - DOMESTIC AND IMPORTS

The Canadian market for refined sugar is divided into two segments: the retail market segment and the industrial market segment. Generally, in terms of volume, the industrial market represents between 70 and 80 per cent of the total Canadian refined sugar market and the retail market represents between 20 and 30 per cent of the refined sugar market.

The Canadian market, as the table in Appendix C demonstrates, has been increasing steadily since 1990. Over the four year period, 1990 to 1994, the total Canadian market has increased by
15.5 per cent or 150,045 tonnes. This increase represents an average increase of about 3.9 per cent each year. During the same period, Canadian domestic shipments, which exclude exports, have increased by about 11.7 per cent or 101,459 tonnes. This increase represents an average increase of about 2.9 per cent each year. Appendix D also provides statistics for the total Canadian market for January 1994 to February 1995 which is the period of investigation for dumping.

Information on market share was outlined in more detail in the Statement of Reasons released when the investigation was initiated.

DUMPING INVESTIGATION

The dumping investigation covered shipments of the subject goods to Canada from January 1, 1994 to February 28, 1995.

THE UNITED STATES OF AMERICA

The Department contacted 34 companies in the United States which were considered to be potential exporters of the subject goods to Canada. Of these, four companies representing approximately 85 per cent of the shipments of the subject goods to Canada were requested to provide complete responses to the Department's Request for Information. The remaining companies were advised that they could provide a submission on a voluntary basis, however, none were received. It was subsequently determined that some of the companies identified at the time of initiation do not export subject goods to Canada.

Verification visits were conducted by departmental officers at the premises of four exporters, Domino Sugar Corporation, United Sugars Corporation, Savannah Foods & Industries, Inc. and Refined Sugars, Inc.

Normal Value Considerations

Following the preliminary determination, a number of representations were received from certain U.S. exporters, a major Canadian importer and a Canadian user of refined sugar alleging that the Department had erred in the manner in which the cost of producing the refined sugar was determined.

In a dumping investigation, the Department is required to compare normal value, ideally based on the exporter's domestic market prices, to the export price to Canada. However, where the exporter's domestic market sales are made at prices below the cost of production, the sales cannot be accepted, and the legislation directs that the normal value be based on the cost of production, a reasonable amount for administrative, selling and all other costs and a reasonable amount for profit. Hence, the determination of cost of production is central to the determination of normal value. Since the major component of refined sugar is the raw sugar or the sugar beet, the cost of these inputs is of particular importance in this investigation.

For many years, the United States has provided support to its domestic cane and beet sugar industry. Imports of raw sugar are restricted, and are permitted for domestic consumption only at a high support price level. This practice results in high prices for raw sugar and for the refined sugar produced in the United States. The pricing of the raw sugar is established on the New York Coffee, Sugar and Cocoa Commodity Exchange. Raw sugar is referred to as #14 raw sugar if it is the high-priced sugar for internal use in the United States, as opposed to #11 raw sugar that is the lower world price raw sugar. Generally, the price of #14 raw sugar is about double the price of #11 raw sugar.

To allow the U.S. refiners to remain competitive in export markets, the United States has instituted the "Sugar to be Re-exported in Refined Form" program (Re-export Program). This program permits licensed U.S. refiners to import raw sugar at the low prevailing #11 price, for the production of refined sugar or sugar-containing products destined for export. The sugar or sugar-containing products made from this low-priced imported sugar may not be sold in the United States except under the substitution provisions of the program.

The Re-export Program recognizes that it is impractical for refiners to physically separate their inventories of #14 raw sugar for domestic production and imported #11 raw sugar for export production, and it permits substitution of exports of the finished product. That is, the #11 and #14 raw sugar may be commingled, but the refiner must maintain records and ensure that a quantity of refined sugar is exported or transferred to a manufacturer of sugar-containing products within a specified time period to correspond with the quantity of #11 raw sugar imported. In addition to allowing the commingling of the #11 and #14 sugars, the substitution provisions of the program permit sugar refined from sugar beet to be substituted for refined sugar produced from imported #11 raw sugar. Further, the program permits the exportation of refined sugar prior to the importation of the corresponding quantity of #11 raw sugar.

In keeping with the objectives and requirements of the Re-export Program, the U.S. sugar industry has developed a costing methodology for assigning the input cost to sales depending on whether the refined sugar was destined for domestic consumption or for export. Based on this costing methodology, certain parties have argued that the lower cost #11 raw sugar should be assigned to the sales for export, whether the goods are produced from raw sugar or from sugar beets and that similarly, the higher #14 cost or the cost of the sugar beets should be assigned to the domestic sales. These parties note that the Re-export Program stipulates that the exported sugar need not be produced from the same raw sugar that was imported, and permits substitution of any refined sugar provided that the quantity exported is equivalent to the quantity which would be produced from imported #11 raw sugar.

In establishing the cost of production of refined sugar, the Department had to determine how to attribute the different costs of the inputs. The international Anti-dumping Agreement states that costs should normally be calculated on the basis of records kept by the exporter, provided these are in accordance with generally accepted accounting principles (GAAP) of the exporting country and reasonably reflect the cost of the product. The representations have held that the accounting for the raw sugar costs in the exporter's financial records is in keeping with GAAP as practiced by the U.S. sugar industry and is acceptable to the U.S. tax authorities and the Securities and Exchange Commission. It is also argued that the #11 sugar cannot be legally sold in the U.S. domestic market.

The SIMA requires that when establishing a normal value using a costing approach, the actual cost of production of goods be used. The Special Import Measures Regulations (Regulations), regulation 11(a), defines the cost of production as all costs that are attributable to, or in any manner related to the production of the exported good. There is no doubt that the sugar in question is refined from a blend of both #11 and #14 sugars and it is impossible to identify the source of the input material used in producing the refined cane sugar. The exporters have acknowledged that the sugar physically exported to Canada under the Re-export Program, may have been produced from either the higher priced #14, the #11 world priced raw sugar, a combination of #11 and #14 raw sugars or, where applicable, from sugar beets.

It is the Department's position that the cost allocation proposed by the exporters does not reflect the actual cost of the goods. The Department believes that the cost of the refined sugar must reflect the actual cost of the inputs. Hence, the input cost must reflect either the cost of the actual raw sugar consumed in the production of the goods or the cost of the sugar beets. The fact that the exporter's method is acceptable under GAAP in the United States for reporting to tax authorities in accordance with the Re-export Program does not mean that it must be accepted under SIMA.

In determining the cost of the raw sugar consumed in producing any particular shipment of the subject goods, and in the absence of specific identification of the raw material input due to the commingling of the #11 and #14 raw sugar, the weighted average cost of the raw sugar from all sources was used to determine the cost of producing the sales of refined sugar, as required under SIMA. This approach facilitates the proper matching of costs incurred against the revenues generated from the individual sales in question. As such, the Department considers this to be a reasonable approach to valuing raw materials and meets the requirements of the SIMA.

The weighted average cost of the raw sugar was used in costing all refined cane sugar exported to Canada. As well, it was used in the profitability analysis of domestic sales of like goods, since it reflects the actual cost of the domestic sales of refined sugar made using raw sugar from all sources.

Results of the Investigation

1. Domino Sugar Corporation

Domino Sugar Corporation (Domino) is a refiner of raw sugar, wholly-owned by Tate & Lyle PLC, London, England, which is a publicly held company. Domino, which is a major supplier of refined sugar to Canada, operates three refineries, in Brooklyn, New York; Baltimore, Maryland; and Chalmette, Louisiana.

(a) Normal Value

Domino sold refined sugar in both the domestic market and to importers in Canada during the period of investigation. These products were sold to customers at the industrial trade level.

Where there were profitable sales of like goods and sales were made to more than one domestic customer, normal values were established using section 15 of SIMA, based on the weighted average selling price of the like goods sold to customers in the United States at the same trade level as the importer in Canada. Where applicable, the weighted average selling price was adjusted in accordance with the Regulations. A regulation 5(a) adjustment was allowed in instances where there were differences, such as differences in packaging configurations, between the exported product and the like goods sold in the domestic market. A regulation 6 cash discount was allowed when discounts were generally granted in the domestic market and the importer would have qualified if the sale had occurred in the United States.

Where sales of like goods were found not to be profitable or where sales of like goods were to only one customer, normal values were established using paragraph 19(b) of SIMA, based on the cost of the raw sugar, processing costs, packaging, reasonable amounts for administrative, selling and all other costs and a reasonable amount for profit. The raw sugar costs were determined as per the methodology outlined in the Normal Value Considerations section of this Statement of Reasons. The amount for profit was determined in accordance with the provisions of regulation 11(b). Normal values of the goods exported to Canada by Domino were determined on the basis of sales or costs at the refinery or plant from which the goods were exported to Canada.

(b) Export Price

The goods were generally sold to importers in Canada on an ex-factory basis.

Domino also exported subject goods to Redpath Sugars, a related company. For these importations, export prices were calculated pursuant to both section 24 and paragraph 25(1)(c) of SIMA. Export prices under paragraph 25(1)(c) were calculated on the basis of the importer's resale prices in Canada less all costs incurred by the exporter in preparing, shipping and exporting the goods, all general, selling and administrative costs incurred by the importer and an amount for profit. In determining this profit, regulation 22 provides that the amount shall be that which generally results from sales in Canada by vendors of like goods or goods of the same general category. The Department had information on sales realized by a limited number of vendors, however, the Department did not use this information in order to preserve its confidentiality. The Department also considered financial data obtained from Statistics Canada. However, due to the inclusion of a broad range of products and due to the time lag between the period covered by this information and the period of investigation, the Statistics Canada data has not been used. Where an industry profit cannot be determined, regulation 22(c) provides for a profit of 7.4 per cent. This amount was used for all export price calculations under paragraph 25(1)(c) of SIMA.

A comparison of export prices calculated pursuant to paragraph 25(1)(c) of SIMA, with the section 24 export prices, revealed that the latter prices were reliable. Therefore, the section 24 export prices were used to calculate the margin of dumping for shipments by Domino to Redpath Sugars.

(c) Margin of Dumping

The Department reviewed 100.0 per cent of Domino's goods shipped to Canada during the period of investigation and determined that 99.9 per cent were dumped. The margins of dumping ranged from 1.8 to 56.1 per cent with a weighted average margin of 45.9 per cent when expressed as a percentage of the normal value.

2. United Sugars Corporation

United Sugars Corporation (United Sugars) markets and sells refined sugar on behalf of its three member sugar beet processors: American Crystal Sugar Company, Minn-Dak Farmers Cooperative and Southern Minnesota Beet Sugar Cooperative. American Crystal accounted for a large proportion of United Sugars' exports to Canada during the period of investigation.

(a) Normal Value

United Sugars sold refined sugar in both the domestic and Canadian markets during the period of investigation. These products were sold to customers at the industrial and retail trade levels. Where there were profitable sales of like goods and sales were made to more than one domestic customer at each trade level, normal values were established using section 15 of SIMA, based on the weighted average selling price of the like goods sold to customers in the United States at the same trade level as the importer in Canada. Where applicable, the weighted average selling price was adjusted in accordance with the Regulations. A regulation 5(a) adjustment was allowed in instances where there were differences, such as differences in packaging configurations, between the exported product and the like goods sold in the domestic market. A regulation 6 cash discount was allowed when discounts were generally granted in the domestic market and the importer would have qualified if the sale had occurred in the United States. A regulation 7 adjustment was allowed when delivery costs were incurred in transporting the goods from the point of direct shipment to the domestic customer and were included in the selling price.

Where sales of like goods were to only one domestic customer, normal values were established using paragraph 19(b) of SIMA, based on the cost of the sugar beets, processing costs, packaging, administrative, selling and all other costs and an amount for profit. The amount for profit was determined in accordance with the provisions of regulation 11(b).

(b) Export Price

United Sugars acts as a non-resident importer and identifies itself as the importer of record on the Customs documents. United Sugars ships subject goods directly to its customers in Canada which are identified as consignees on the Customs documentation. For Customs purposes, the importer in Canada must be resident in Canada and carry on business in Canada. United Sugars does not meet these criteria. Accordingly, the persons in Canada who purchase the goods from United Sugars are deemed to be, in reality, the importers of the goods for the purposes of this investigation and, as such, are liable for the payment of any provisional and anti-dumping duties.

The goods were generally sold to importers in Canada on a delivered basis. Export prices have been determined using section 24 of SIMA based on the exporter's selling price to the Canadian customer with deductions for freight, regular duty and brokerage.

(c) Margin of Dumping

The Department reviewed 99.7 per cent of United Sugars' goods shipped to Canada during the period of investigation and determined that 99.9 per cent were dumped. The margins of dumping ranged from 0.3 to 64.3 per cent with a weighted average margin of 40.7 per cent when expressed as a percentage of the normal value.

3. Savannah Foods & Industries, Inc.

Savannah Foods & Industries, Inc. (Savannah) operates cane sugar refineries in Georgia, Florida and Louisiana, four sugar beet processing plants in Michigan, a sugar beet processing plant in Ohio and a raw sugar mill in Louisiana. It markets its products primarily in the eastern half of the United States. Savannah is a publicly held company which is listed on the New York Stock Exchange.

Prior to the preliminary determination, Savannah made a written submission that in the case of sales to Canada for the goods produced by its subsidiary, Michigan Sugar Company (Michigan), Savannah was the exporter of the subject goods and not Michigan. As such, in Savannah's view, normal values should not be determined on the basis of Michigan's domestic sales. The Canadian International Trade Tribunal's finding in the J.B. Multi-National Trade Inc. appeal against the Deputy Minister of National Revenue [Appeal No. AP-93-055] was presented in support of Savannah's arguments.

In view of the fact that this issue arose during the latter stage of the preliminary investigation, the Department felt that thorough consideration was warranted before reaching a decision in this matter. As such, the issue was set aside to be looked at during the final investigation phase when it could be thoroughly researched and addressed.

In making a decision, the Department considered representations made by Savannah, the intent of SIMA, policies and practices of the Department in dealing with multiple-plant operations and guidance provided by the Federal Court, the Tribunal and Binational Panel decisions. After careful consideration of the facts, it was determined that the raw cane refineries and the beet processing plants operated by Savannah, either directly or through wholly-owned subsidiaries, are part of a single economic entity. Savannah is a multiple-plant company, with the refineries and beet processing plants operating under its corporate umbrella. As such, Savannah Foods & Industries, Inc., and its subsidiaries, collectively as a corporate group, is the exporter of the subject goods to Canada.

In determining the normal values of any goods on the basis of section 15, paragraph 15(e) provides for the comparison to be made at the place of direct shipment to Canada. In the application of this provision, the Department's policy and practice in dealing with a company with multiple plants is to look at the domestic sales and costs of the plant which produced the goods that were exported to Canada. This approach is necessary in view of the differences in costs, efficiencies, economies of scale, technology, plant equipment and production methodology between plants, all of which can impact on the costs and profitability of the goods produced and sold by the various plants. Therefore, normal values of the goods exported to Canada by Savannah were determined on the basis of sales or costs at the refinery or plant from which the goods were exported to Canada.

(a) Normal Value

Savannah sold refined sugar in both the domestic and Canadian markets during the period of investigation. These products were sold to customers at the industrial and retail trade levels. Where there were profitable sales of like goods and sales were made to more than one domestic customer, normal values were established using section 15 of SIMA, based on the weighted average selling price of the like goods sold to customers in the United States at the same trade level as the importer in Canada. Where applicable, the weighted average selling price was adjusted in accordance with the Regulations. A regulation 6 cash discount was allowed when discounts were generally granted in the domestic market and the importer would have qualified for the discount if the sale had occurred in the United States.

Where sales of like goods were found not to be profitable or where sales of like goods were to only one customer, normal values were established using paragraph 19(b) of SIMA, based on the cost of the raw sugar or sugar beets, processing costs, packaging, administrative, selling and all other costs and an amount for profit. The raw sugar costs were determined as per the methodology outlined in the Normal Value Considerations section of this Statement of Reasons. The amount for profit was determined in accordance with the provision of regulation 11(b).

(b) Export Price

Savannah acts as a non-resident importer and identifies itself as the importer of record on the Customs documents. Savannah ships subject goods directly to its customers in Canada which are identified as consignees on the Customs documentation. For Customs purposes, the importer in Canada must be resident in Canada and carry on business in Canada. Savannah does not meet these criteria. Accordingly, the persons in Canada who purchase the goods from Savannah are deemed to be, in reality, the importers of the goods for the purposes of this investigation and, as such, are liable for the payment of any provisional and anti-dumping duties.

The goods were generally sold to importers in Canada on a delivered basis. Export prices have been determined using section 24 of SIMA based on the exporter's selling price to the Canadian customer with deductions for freight, regular duty and brokerage.

(c) Margin of Dumping

The Department reviewed 96.5 per cent of Savannah's goods shipped to Canada during the period of investigation and determined that 100.0 per cent were dumped. The margins of dumping ranged from 18.7 to 61.0 per cent with a weighted average margin of 43.8 per cent when expressed as a percentage of the normal value.

4. Refined Sugars, Inc.

Refined Sugars, Inc. (RSI) is a refiner of raw cane sugar. All of RSI's sugar is sold through its own sales organization or through brokers. RSI's major market is the northeastern part of the United States.

RSI, a U.S. corporation, is a wholly-owned subsidiary of Lantic Enterprises Ltd., a Canadian based holding company. Lantic Enterprises Ltd. is wholly-owned by Lantic Sugar Limited of Westmount, Quebec, which is wholly-owned by British Columbia Sugar Refinery Limited of Vancouver, BC. RSI has one refinery which is located in Yonkers, New York and all shipments of subject goods to Canada were from this location.

(a) Normal Value

RSI sold refined sugar in both the domestic market and to importers in Canada during the period of investigation. These products were sold to customers at the industrial trade level.

Where there were profitable sales of like goods and sales were made to more than one domestic customer, normal values were established using section 15 of SIMA, based on the weighted average selling price of the like goods sold to customers in the United States at the same trade level as the importer in Canada. Where applicable, the weighted average selling price was adjusted in accordance with the Regulations. A regulation 6 cash discount was allowed when discounts were generally granted in the domestic market and the importer would have qualified if the sale had occurred in the United States. A regulation 7 adjustment was allowed when delivery costs were incurred in transporting the goods from the point of direct shipment to the domestic customer and were included in the selling price.

Where sales of like goods were found not to be profitable or where sales of like goods were to only one customer, normal values were established using paragraph 19(b) of SIMA, based on the cost of the raw sugar, processing costs, packaging, administrative, selling and all other costs and an amount for profit. The raw sugar costs were determined as per the methodology outlined in the Normal Value Considerations section of this Statement of Reasons. The amount for profit was determined in accordance with the provisions of regulation 11(b).

(b) Export Price

The goods were sold to importers in Canada on both a delivered and an ex-factory basis. For sales to unrelated customers, export prices have been determined using section 24 of SIMA based on the exporter's selling price to the Canadian customer with deductions for freight and U.S. broker fees, where applicable.

RSI also exported subject goods to Lantic Sugar Limited, a related company. For these sales, export prices were determined pursuant to both section 24 and paragraph 25(1)(c) of SIMA. Export prices under paragraph 25(1)(c) were calculated on the basis of Lantic's resale prices of the goods in Canada, less all costs incurred by the exporter in preparing, shipping and exporting the goods, all general, selling and administrative costs incurred by the importer and an amount for profit. In determining the amount for profit, regulation 22 provides that the amount shall be that which generally results from sales in Canada by vendors of like goods or goods of the same general category. The Department had information on sales realized by a limited number of vendors, however, the Department did not use this information in order to preserve its confidentiality. The Department also considered financial data obtained from Statistics Canada. However, due to the inclusion of a broad range of products and due to the time lag between the period covered by this information and the period of investigation, the Statistics Canada data has not been used. Where an industry profit cannot be determined, regulation 22(c) provides for a profit of 7.4 per cent. This amount was used for all export price calculations under paragraph 25(1)(c) of SIMA.

A comparison of export prices calculated pursuant to paragraph 25(1)(c) of SIMA with the section 24 export prices revealed that the latter prices were not reliable. Therefore the paragraph 25(1)(c) export prices were used to calculate the margin of dumping for shipments by RSI to Lantic.

(c) Margin of Dumping

The Department reviewed 100.0 per cent of RSI's goods shipped to Canada during the period of investigation and determined that 100.0 per cent were dumped. The margins of dumping ranged from 15.5 to 58.4 per cent with a weighted average margin of 46.0 per cent when expressed as a percentage of the normal value.

5. Other Exporters in the United States

The remaining exporters in the United States were informed that they could provide a response to the Department's Request for Information on a voluntary basis, however, no submissions were received. Since no information was provided, it was not possible to establish normal values for these companies under section 15 or 19 of SIMA. Therefore, for purposes of the final determination, the margin of dumping for subject goods exported to Canada by these exporters was determined pursuant to the provisions of subsection 30.3(3) of SIMA and regulation 25.2(1)(a) on the basis of the weighted average margin of dumping found for exporters in the United States who provided complete information. The weighted average margin of dumping was equal to 44.3 per cent when expressed as a percentage of the normal value.

THE EUROPEAN UNION

At the time of initiation of the investigation, a Request for Information was sent to eleven companies in the European Union. E D & F Man Limited, a sugar broker, was the only company which was requested to provide a complete response to the Department's questionnaire because the volume it shipped to Canada represented a major portion of the subject goods shipped during the period of investigation. E D & F Man acted as a broker for goods shipped from all the European countries included in the dumping investigation. The remaining companies were informed that they could provide a submission on a voluntary basis. It was subsequently determined that some of the companies identified at the time of initiation do not export subject goods to Canada. Complete submissions were not received from any of the exporters, including E D & F Man, for either the preliminary or final determinations. Therefore, the margin of dumping must be established on the basis of the facts available to the Department.

Results of the Dumping Investigation

For E D & F Man, which was requested to provide information and did not provide a complete submission, the normal values were determined by ministerial specification under section 29 of SIMA on the basis of the export price determined under section 24 advanced by the highest margin of dumping found during the period of investigation. The highest margin of dumping found for exporters in the United States which provided complete information, was equal to 64.3 per cent, when expressed as a percentage of the normal value.

The remaining exporters in the European Union were informed that they could provide a response to the Department's Request for Information on a voluntary basis, however, no submissions were received. Since no information was provided, it was not possible to establish normal values for these companies under section 15 or 19 of SIMA. Therefore, for purposes of the final determination, the margin of dumping for subject goods exported to Canada by these exporters was determined pursuant to the provisions of subsection 30.3(3) of SIMA and regulation 25.2(1)(b) on the basis of the weighted average margin of dumping found for exporters in the United States who provided complete information. The weighted average margin of dumping was equal to 44.3 per cent when expressed as a percentage of the normal value.

THE REPUBLIC OF KOREA

A Request for Information was sent to six companies in the Republic of Korea. Four companies which represented over 95 per cent of the subject goods, were requested to provide a complete response to the Department's questionnaire. The remaining companies were informed that they could provide a submission on a voluntary basis. Complete submissions were not received from any of the companies for either the preliminary or final determinations. Therefore, the margin of dumping must be established on the basis of the facts available to the Department.

Results of the Dumping Investigation

For the four companies which were requested to provide information and did not provide a complete submission, the normal values were determined by ministerial specification under section 29 of SIMA on the basis of the export price determined under section 24 advanced by the highest margin of dumping found during the period of investigation. The highest margin of dumping found for exporters in the United States which provided complete information, was equal to 64.3 per cent, when expressed as a percentage of the normal value.

The remaining exporters in Korea were informed that they could provide a response to the Department's Request for Information on a voluntary basis, however, no submissions were received. Since no information was provided, it was not possible to establish normal values for these companies under section 15 or 19 of SIMA. Therefore, for purposes of the final determination, the margin of dumping for subject goods exported to Canada by these exporters was determined pursuant to the provisions of subsection 30.3(3) of SIMA and regulation 25.2(1)(b) on the basis of the weighted average margin of dumping found for exporters in the United States who provided complete information. The weighted average margin of dumping was equal to 44.3 per cent when expressed as a percentage of the normal value.

SUBSIDY INVESTIGATION - THE EUROPEAN UNION

The period of investigation selected was January 1, 1993 to December 31, 1994.

In determining whether a program results in a subsidy, the Department considered whether:

1. there was a financial contribution by a government of a country other than Canada; and
2. there was a benefit conferred to persons engaged in the production, manufacture, growth, processing, purchase, distribution, transportation, sale, export or import of goods.

Under SIMA, there is a financial contribution by a government of a country other than Canada

where:

1. practices of the government involve the direct transfer of funds or liabilities or the contingent transfer of funds or liabilities;
2. amounts that would otherwise be owing and due to the government are exempted or deducted or amounts that are owing and due to the government are forgiven or not collected;
3. the government provides goods or services, other than general governmental infrastructure, or purchases goods; or
4. the government permits or directs a non- governmental body to do any thing referred to in any of paragraphs (a) to (c) where the right or obligation to do the thing is normally vested in the government and the manner in which the non-governmental body does the thing does not differ in a meaningful way from the manner in which the government would do it.

For a subsidy to be subject to countervailing duties, inter alia, the subsidy must be specific to an enterprise or industry; or it must be a prohibited subsidy, such as an export subsidy which is contingent on export performance. A subsidy is not specific where the criteria or conditions governing eligibility for, and the amount of, the subsidy are:

1. objective;
2. set out in a legislative, regulatory or administrative instrument or other public document; and
3. applied in a manner that does not favour or is not limited to a particular enterprise. Under subsection 2(1) of SIMA, the term "enterprise" is defined to include "a group of enterprises, an industry and a group of industries".

Notwithstanding that a subsidy is not limited in the foregoing manner, the Deputy Minister may still determine the subsidy to be specific if:

1. there is exclusive use of the subsidy by a limited number of enterprises;
2. there is predominant use of the subsidy by a particular enterprise;
3. disproportionately large amounts of the subsidy are granted to a limited number of enterprises; and
4. the manner in which discretion is exercised by the granting authority indicates that the subsidy is not generally available.

The amount of subsidy is calculated on the basis of the total benefits to the recipients and is considered to be insignificant if the amount of subsidy attributable to the subsidized imports from a particular country is less than one per cent of the total export price of all subject goods under investigation from that country. Where the amount of subsidy for a particular country is insignificant, the subsidy investigation for this particular country must be terminated.

At the time of initiation, a Request for Information was sent to the Commission of the European Communities and to 16 companies which were considered to be potential exporters of the subject goods to Canada; two in Belgium, one in Denmark, three in France, five in Germany, one in the Netherlands and four in the United Kingdom. All exporters were advised that a response was required to the Department's questionnaire.

For preliminary determination purposes, after receiving a complete submission from the Commission of the European Communities, a verification visit was conducted at its premises in Brussels. Subsequent to the preliminary determination, departmental officials met with representatives of the Commission on August 10, 1995, to discuss the preliminary determination of subsidizing. At the request of the Commission, consultations were held in Geneva on September 25, 1995, pursuant to paragraph 13.2 of the Agreement of Subsidies and Countervailing Measures. The main issue raised at both meetings was the Department's approach to calculating the amount of subsidy.

The Department did not receive any additional information from the exporters, for purposes of the final determination.

Results of the Subsidy Investigation

The following programs were identified at the time of initiation and examined in order to establish if there were financial contributions made by any level of government, and if so, to establish if a benefit was conferred to persons engaged in the production, manufacture, growth, processing, purchase, distribution, transportation, sale, export or import of the subject goods:

1. export refunds;
2. compensation system for storage costs;
3. system of preferential imports;
4. UK refining aid; and
5. framework program for research and technological development.

The Department concluded at the preliminary determination, after detailed examination of the potential subsidy programs, that the export refunds, the compensation system for storage costs and the United Kingdom refining aid programs were countervailable subsidies pursuant to SIMA. Further, for the system of preferential imports for which payment of the variable import levy is waived, it was concluded that the benefit provided by this program is accounted for in the amount of subsidy determined for the export refunds program. Finally, for the framework program for research and technological development, it was determined that the program did not result in a countervailable subsidy.

Appendix E contains a brief description of the countervailable programs, the rationale used by the Department in determining whether the programs resulted in countervailable subsidies and the amount of subsidy which was determined in accordance with the legislation.

Clause 41(1)(a)(iv)(C) of SIMA provides for the Deputy Minister to specify where there is a prohibited subsidy on the goods and the amount of the prohibited subsidy. In this case, the export refunds program has been designated a prohibited subsidy and the amount of this subsidy has been specified.

The submission of the Commission was complete, however, the exporters of the subject goods did not provide any information. Since the Department did not have the information necessary to determine the amount of subsidy for each exporter, the amount of subsidy was determined by ministerial specification under subsection 30.4(2) of SIMA. The benefit that each program provides to the recipients of the subsidy is contained in Appendix E.

The total amount of subsidy attributable to the goods exported to Canada during the period of investigation, when allocated over the total export price of the goods exported to Canada from the European Union, equals 171 per cent in 1993 and 133 per cent in 1994.

VOLUME OF IMPORTS

The Deputy Minister is satisfied that the actual or potential volumes of the dumped or subsidized goods are not negligible. If the volume of dumped goods of a country is less than three per cent of the total volume of like goods that are released into Canada from all countries, the volume is considered to be negligible. The exception is where the total volume of dumped goods of three or more countries, each of whose exports of dumped goods into Canada is less than the three per cent figure, is more than seven per cent of the total volume of like goods imported into Canada, such a volume is not considered to be negligible.

Appendix D summarizes total imports of subject goods during the dumping investigation period. Imports from the United States and from Denmark, respectively, represent approximately 86 per cent and 4.5 per cent of total imports and, as such, are not negligible. Imports from the Republic of Korea, Germany, the Netherlands and the United Kingdom individually are under the three per cent figure and collectively total 6.85 per cent. However, the potential exists for the volume of imports to be more than seven per cent, particularly if the Canadian International Trade Tribunal should make an injury finding against imports of dumped goods from the United States. Given the capacity of these sources to ship refined sugar to Canada, the Deputy Minister has concluded that the potential volume of dumped goods from these countries is not negligible.

With respect to the volume of imports of subsidized goods, imports from the European Union represent nine per cent of the total imports of the like goods from all countries. The volume of subsidized goods from the European Union is not negligible.

DECISION

The investigation has revealed that the goods are dumped and subsidized and that the margins of dumping and the amount of subsidy are not insignificant and that the actual or potential volumes of the dumped and subsidized goods are not negligible. Accordingly, on this date, pursuant to paragraph 41(1)(a) of the Special Import Measures Act, the Deputy Minister has made a final determination that refined sugar, refined from sugar cane or sugar beets, in granulated, liquid and powdered form, originating in or exported from the United States of America, Denmark, the Federal Republic of Germany, the Netherlands, the United Kingdom and the Republic of Korea has been dumped; and that refined sugar, refined from sugar cane or sugar beets, in granulated, liquid and powdered form, originating in or exported from the European Union has been subsidized.

FUTURE ACTION

The Canadian International Trade Tribunal's inquiry concerning the question of injury to production in Canada is continuing and an order or finding will be made on or about November 6, 1995. Imported goods subject to the investigation, which are released from Customs' possession, will continue to be assessed provisional duty as determined at the time of the preliminary determination. This provisional period began on the date of the preliminary determination, July 7, 1995, and will end on the date the Tribunal issues its finding on the question of injury.

If the Tribunal finds that the dumping or subsidizing has caused injury, any subject goods released from Customs' possession during the provisional period will be subject to a determination pursuant to section 55 of SIMA to establish the final amount of anti-dumping or countervailing duty payable. Should it be found that provisional duties paid are in excess of those finally determined, the excess duties paid will be refunded.

In the event of an injury finding, all subject goods released from Customs' possession after the date of the finding will be subject to anti-dumping or countervailing duties equal to the margin of dumping or the amount of subsidy. If this is the case, such duties are hereby demanded pursuant to section 11 of SIMA. Normal values have been provided to the United States exporters which provided complete responses. The margin of dumping is the difference by which the normal value exceeds the export price of the goods. Where specific normal values have not been issued, the margin of dumping or the amount of subsidy is expressed as a percentage of the export price, and the anti-dumping and countervailing duties to be collected in the event of a positive injury finding may be found in appendix F.

If the Tribunal finds that no injury has been caused or is threatened by dumped or subsidized imports, all proceedings relating to this investigation will be terminated. In such a case, imports will not be subject to anti-dumping and countervailing duties and all provisional duty paid or security posted by importers will be returned.

PUBLICATION

Notice of this final determination is being published in the Canada Gazette, pursuant to paragraph 41(3)(a) of the Special Import Measures Act.

INFORMATION

A Statement of Reasons explaining this decision has been provided to persons directly interested in these proceedings. A free copy may be obtained by contacting the Revenue Canada officers named below. For further information, please contact the following officers by fax at (613) 954-2510 or by telephone:

United States:

Wayne Lee at (613) 954-7346, or

Ronald Medas at (613) 954-1664;

European Union:

Michel Desmarais at (613) 954-7188;

Korea:

Karen Humphries at (613) 954-7176;

or at the following address:

Department of National Revenue

Anti-dumping and Countervailing Directorate

191 Laurier Avenue West

19th Floor

Ottawa, Ontario

K1A 0L5

 

B. Brimble

Director General

Anti-dumping and Countervailing Directorate

APPENDIX A

EXPORTERS

United States

Allen Sugar Company
6515 Carnegie Avenue
Cleveland, Ohio
44103 USA

Amalgamated Sugar Company
2427 Lincoln Avenue
P.O. Box 1520,
Ogden,Utah
84402 USA

Bariatrix Int'l Inc.
40 Allen Road
S. Burlington, VT
05403 USA

Bunge Foods
6901 Fox Avenue South
Seattle, WA
98108 USA

California & Hawaiian Sugar
830 Loring Avenue
Crockett, California
94525 USA

Chicago Sweeteners Incorporated
1700 Higgins Road
Suite 610
Des Plaines, Illinois
60018 USA

Crompton & Knowles Corp.
Ingredient Technology Div.
1533 Union Ave.
Pennsauken, NJ
08110 USA

D.W. Montgomery & Co.
608 Manatee Drive
Satellite Beach, Florida
32937 USA

Domino Sugar Corporation
Grace Building
1114 Avenue of the Americas
New York, NY
10036-7783 USA

Federal Bakers Supply Corp.
1400 William Street
Buffalo, New York
14206 USA

Fountain Industries
922 East, 14th Street
Albert Lea, MN
560073218 USA

Guernsev Dell Inc
4300 South Morgan
Chicago, IL
60609 USA

Liquid Sugars
1285 66th Street
PO Box 96
Oakland, CA
94604-0096 USA

Mark-Lynn Industries Inc.
420 Sangamore Road
Bremen, GA
30110 USA

Nutracane Inc.
58 Meadowbrook Parkway
Milford, NH
03055 USA

Paular Corporation
2 Marlen Drive
Robbinsville, NJ
08691 USA

Refined Sugars, Inc.
PO Box 509
1 Federal Street
Yonkers, New York
10702 USA

Reisenberg & Associates
7440 Jager Court
Cinncinnati, Ohio
45230 USA

Savannah Foods & Industries, Inc.
Post Office Box 339
Savannah, Georgia
31402-0339 USA

Select Ingredients
263 North Forman St.
Detroit, Michigan
48209 USA

Spreckels Sugar Company, Inc.
4256 Hacienda Drive
PO Box 8025
Pleasanton, CA
94588-8625 USA

Sucanat North American Corp.
26 Clinton Drive
Unit 117
Hollis, NH
03049 USA

The Lucks Company
3434 Second Avenue South
PO Box 24266
Seattle, WA
98124-0266 USA

The Natural Source Company
PO Box 860970
Orlando, Florida
32866-0970 USA

Tropical Nut & Fruit
6580 Huntley Rd.
Columbus, Ohio
43229 USA

United Sugars Corporation
7801 East Bush Lake Road
Bloomington, MN
55439 USA

Westreco, Inc.
809 Collins Ave.
Marysville, OH
43040 USA

Republic of Korea

Cheil Foods & Chemicals Inc.
Po Box 1155
150, 2-Ka
Taepyungro
Chung-Ku, Seoul, 100-102
Korea

Da Bong Industrial Company Ltd.
72-5 Samjeon-Dong
Songpa-ku
Seoul, Korea

Samsung Co. Ltd.
C.P.O. Box 1144
Seoul, Korea

Sam Yang Co. Ltd.
Sugar Department
Po Box 1797
263 Yeonji-Dong
Jongro-Ku, Seoul, 110-470
Korea

Samjin Trading Co. Ltd.
C.P.O. Box 2
Seoul, Korea

Taihan Sugar Industrial Co. Ltd.
Po Box 7043
7-23, Sincheon-Dong
Songpa-Ku
Seoul, 138-240
Korea

European Union

August Topfer Co. Gmbh
Raboisen S8
D-20095 Hamburg
Federal Republic of Germany

E D & F Man (Sugar) Ltd.
Sugar Quary
Lower Thames Street
London, England
EC3R 6DU

Eridania Beghin Say
B.P. 471-08
F-75360
Paris (France)
Cedex 08

Générale Sucrière S.N.C.
25, av. Franklin D. Roosevelt
F-75008
Paris (France)

Pâtes et gaufres industrielles (PEGI)
37, rue des étangs noirs
B-1080 Bruxelles
Belgique

Raffinerie Tirlemontoise S.A.
Avenue de Tervueren, 182
B-1150 Bruxelles (Belgique)

Tate & Lyle Sugars
Export Department
Sugar Quay
Lower Thames Street
London, England
EC3R 6DQ

VAN TOL B.V.
P.O. Box 64
2410 AB Bodegraven
Holland

APPENDIX B

CLASSIFICATION OF IMPORTS

The subject goods may be classified under the following Harmonized System classification numbers which are set out in Schedule I to the Customs Tariff:

• 1701.91 Refined sugar (containing added flavouring or colouring matter)
• 1701.99 Refined sugar (granulated, icing, other)
• 1702.90 Other sugars, including liquid sugar and invert sugar as follows:
  • 1702.90.31 Containing reducing sugars after inversion not exceeding 65 per cent by weight of the total syrup
  • 1702.90.32 Containing reducing sugars after inversion exceeding 65 per cent but not exceeding 70 per cent by weight of the total syrup
  • 1702.90.33 Containing reducing sugars after inversion exceeding 70 per cent but not exceeding 71 per cent by weight of the total syrup
  • 1702.90.34 Containing reducing sugars after inversion exceeding 71 per cent but not exceeding 72 per cent by weight of the total syrup
  • 1702.90.35 Containing reducing sugars after inversion exceeding 72 per cent but not exceeding 73 per cent by weight of the total syrup
  • 1702.90.36 Containing reducing sugars after inversion exceeding 73 per cent but not exceeding 74 per cent by weight of the total syrup
  • 1702.90.37 Containing reducing sugar after inversion exceeding 74 per cent but not exceeding 75 per cent by weight of the total syrup
  • 1702.90.38 Containing reducing sugars after inversion exceeding 75 per cent by weight the total syrup
  • 1702.90.40 Other invert sugars and other sugar syrups
  • 1702.90.50 Other sucrose sugars

APPENDIX C

CANADIAN MARKET (in tonnes)

Location	1990	1991	1992	1993	1994	January 94 - February 95
Domestic: 1	869,227	861,210	902,447	932,447	970,686	1,097,387
Imports: 2	98,768	129,129	119,364	158,302	147,356	171,587
US	64,686	68,519	81,236	138,466	125,600	147,706
European Union	14,344	27,549	24,247	16,526	14,863	16,105
Republic of Korea	1,438	1,831	1,470	1,590	3,752	3,981
Other Countries	18,300	31,230	12,411	1,720	3,141	3,795
Total	967,995	990,339	1,021,697	1,090,749	1,118,042	1,268,974

1. Domestic shipments excluding exports - Statistics Canada catalogue 32-013, 'The Sugar Situation'
2. Statistics Canada data for subject goods within H.S. categories 1701.91, 1701.99 and 1702.90

APPENDIX D

TOTAL IMPORTS DURING THE INVESTIGATION PERIOD

JANUARY 1994 TO FEBRUARY 1995 - TONNES

Item	U.S.A.	Korea	EU - DK	EU - DE	EU - NL	EU - UK	EU - Other	Other Countries	Total Imports
Total	147,706	3,981	7,718	3,357	2,581	1,840	609	3,795	171,587
% of Total	86.08%	2.32%	4.50%	1.96%	1.50%	1.07%	0.35%	2.21%	100.00%
Total Imports from EU					16,105
EU as a % of all imports					9.39%

APPENDIX E

THE EUROPEAN UNION

In the European Union (E.U.), sugar producers are supported by a sugar regime which is administered as part of the Common Agricultural Policy by the Commission of the European Communities. This regime guarantees sugar producers in the member countries a price for sugar which is higher than the world price. The E.U. market is shielded from the fluctuations of prices in the international market through a system of variable import levies and "export refunds". The variable import levies are used to prevent lower-priced imports from entering the market. "Export refunds" are direct financial payments to exporters based on the amount of sugar exported and are granted to encourage export sales of production that is surplus to E.U. needs.

In order to ensure that the financial support to sugar producers is not open-ended, the E.U. operates a system of production quotas that limit the quantity of sugar entitled to price supports and "export refunds". These quotas apply to three distinct categories of sugar, which are designated as either A, B or C sugar. The A quota is the amount of sugar produced to fulfill the expected demand within the E.U. market. The B quota is the amount of sugar produced as a security margin, in case of unexpected circumstances, such as crop failure or unanticipated increase in demand. The E.U. price support measures apply only to sugar produced in the A and B quotas. The level of the A and B quotas are established by the Commission and are allocated among producers in all member countries based on historical production patterns. Any sugar produced in excess of the A and B quotas is referred to as C sugar. The price support measures do not apply to C sugar and it may not be sold for consumption in the E.U. countries.

The legal basis for the sugar regime is laid down in the Council Regulation (EEC) No 1785/81 of June 30, 1981. In addition to the "export refunds", the Commission provides direct financial support to sugar producers through a storage cost equalization scheme and authorizes certain national grant aids such as the United Kingdom adjustment aid to sugar cane refiners. Although the various programs set out under this regulation have the same objective, they operate independently. These programs are described in more detail in this appendix.

EXPORT REFUNDS

To ensure that surplus sugar can be exported, the Commission provides a monetary payment to companies that export sugar produced within the A or B quotas that is surplus to E.U. requirements. This payment is basically equivalent to the difference between the high support price, known as the intervention price, which the Commission establishes as the internal E.U. price for refined sugar, and the world market price. The payments are granted under Article 19 of Council Regulation 1785/81, and are commonly known as "export refunds".

The Commission charges production levies to producers on all sugar within the A and B quotas. These levies are intended to finance the cost of disposing of their production surpluses. The amount of levy paid to the Commission on the B sugar is greater than the amount of the levy paid on the A sugar. Accordingly, the net return to the refiners and sugar beet growers for the B sugar is lower than the net return for the A sugar. There is no production levy on C sugar, since this sugar cannot be sold in the European Union and must all be exported. The levies imposed under this system cover the disposal costs of that part of their quota production which exceeds internal consumption and do not cover the disposal costs of the E.U. sugar surpluses resulting from the imports under preferential arrangements such as ACP imports and imports to Portugal.

The payments on the exported goods are made out of the E.U. budget, through Member States' agencies to the exporters. These payments, which are direct transfers of funds by the Commission, are financial contributions as defined in subsection 2(1.6) of SIMA. These financial contributions confer benefits to exporters by providing them with payments covering the price difference between the E.U. price level and the world price level, thereby allowing the exporters to be competitive in export markets. Therefore, a subsidy exists as defined in section 2 of SIMA. Moreover, the payments are direct subsidies contingent upon export performance. Thus, they are considered to be prohibited subsidies and, consequently, specific and countervailable.

In order to determine the amount of subsidy, the Department must calculate the benefit to the recipient. In this case, the benefit to the recipient is the payment received by the exporter, i.e., the "export refunds". The response by the Commission, while complete, did not contain information concerning the specific benefits received by individual exporters. Further, since none of the exporters responded to the Request for Information, no information was available that may have allowed adjustments to be made such as those allowed pursuant to Special Import Measures Regulations, regulation 26. Thus, for purposes of the final determination, the Minister specified that the amount of subsidy was equal to the average maximum theoretical "export refund" as published by the Commission of the European Communities for the month of shipment.

The average maximum theoretical export refund used for the marketing years July 1992/June 1993 and July 1993/June 1994 were, respectively, 40.37 and 36.55 agriculture ECU/100 kg.

The system of preferential imports was listed as a potential subsidy in the Statement of Reasons at the time of the preliminary determination. At that time, the Department considered the preferential treatment given to raw sugar from African, Caribbean and Pacific States (ACP) countries and from non-Community countries for refining in Portugal. The effect of these programs is to increase the amount of refined sugar available for export and this additional quantity is entitled to the "export refunds".

COMPENSATION SYSTEM FOR STORAGE COSTS

Article 8 of Council Regulation # 1785/81 provides for a compensation system for storage costs. The purpose of this system is to ensure a regular flow of sugar from the manufacturer to the consumer at a reasonably constant price. In order to accomplish this, the Commission provides a monthly reimbursement to the sugar refiners for the costs related to storage and financing of the inventory.

The Commission has stated that in order to finance the system, a storage levy is charged when the sugar is sold by the refiners to their customers. This storage levy is fixed by the Commission on the basis of the quantity of sugar held in storage and the average number of months the sugar is stored before being marketed. The Commission attempts to establish the amount of the levy in such a manner that it covers the monthly payments paid out under the program. During the period of investigation, however, the total payments were larger than the total levy.

The payments of storage funds are direct transfers of funds by the Commission to persons engaged in the distribution of sugar. These payments are financial contributions as defined in subsection 2(1.6) of SIMA. These financial contributions confer benefits to the participants in this scheme, which include the exporters to Canada, in the form of monthly payments to cover their costs of storing sugar and are subsidies as defined in section 2 of SIMA.

As stated previously, in order to determine the amount of subsidy, the Department must calculate the benefit to the recipient. The response by the Commission, while complete, did not contain information concerning the specific benefits received by individual exporters. Further, since none of the exporters responded to the Request for Information, no information was available that may have allowed adjustments to be made such as those allowed pursuant to regulation 26. Thus, for purposes of the final determination, the Minister specified that the amount of subsidy was equal to the average amount of storage payments paid during the marketing year. The Department determined that these payments were additional to the "export refunds" payments. The calculation was done for each member of the European Union. This approach differs from that used at the time of the preliminary determination, when the calculation was done for the European Union as a whole. The average amount found for the marketing years July 1992/June 1993 and July 1993/June 1994 for the European Union were, respectively, 3.04 and 3.64 agriculture ECU/100 kg.

UK REFINING AID

Article 46(6) of Council Regulation # 1785/81 authorizes the United Kingdom (UK) to pay to sugar cane refiners an adjustment aid for the refining of preferential raw cane sugar. Adjustment aid is a payment to compensate the sugar cane refiners for reduced margins earned on the processing of cane sugar. The aid is set at 4.08 agriculture ECU/100 kg, which is equal to the amount of the storage levy collected and an extra amount paid by the UK government and the Commission. This extra amount represents the difference between the storage levy and the set amount of 4.08 ECU/100 kg.

This involves a direct transfer of funds to the refiners by the Commission through the UK government and, therefore, there is a financial contribution as defined in subsection 2(1.6) of SIMA. These financial contributions confer benefits to the participants in this program, which include the exporters to Canada, by authorizing them to keep the storage levy which would otherwise be payable to the government and by providing a payment which equals the difference between 4.08 ECU/100 kg and the amount of the storage levy which is retained.

This aid program is limited to the UK sugar cane refineries and results in a specific and countervailable subsidy.

As stated, in order to determine the amount of subsidy, the Department must calculate the benefit to the recipient. Further, since none of the UK refiners responded to the Request for Information, no information was available that may have allowed adjustments to be made such as those allowed pursuant to regulation 26. Thus, for purposes of the final determination, the Minister specified that the amount of subsidy for sugar originating in the United Kingdom was equal to 4.08 agriculture ECU/100 kg. The Department was notified by the Commission of the European Communities on August 7, 1995, that there has been no national aid paid by the United Kingdom government to refiners in 1995.

APPENDIX F

DUTIES TO BE COLLECTED

The following list provides the Anti-dumping and Countervailing duties to be collected in the event of a positive injury finding.

ANTI-DUMPING DUTIES:

Country	Company	Duties Expressed as a Per Cent of Export Price
United States	Domino Sugar	85%
United States	United Sugars	69%
United States	Savannah Foods	78%
United States	Refined Sugars	85%
United States	All Other US Exporters	79%
European Union	E D & F Man	42%
European Union	All Other UK Exporters	0% *
European Union	All Other EU Exporters Excluding UK Exporters	0% *
Republic of Korea	Cheil Foods & Chemicals Ltd	180%
Republic of Korea	Samsung Co. Ltd.	180%
Republic of Korea	Sam Yang Co. Ltd.	180%
Republic of Korea	Taihan Sugar Industrial Co.	180%
Republic of Korea	All Other Korean Exporters	79%

COUNTERVAILING DUTIES:

All EU Members

50.79 ECU/100kg

^* Note: The duty to be collected will equal the amount of subsidy, as all of the estimated margin of dumping is attributable to the export subsidy