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Final Determination - Hot-rolled Carbon Steel Plate
OTTAWA, May 29, 2000
4258-108 AD/1228
4218-8 CV/89
STATEMENT OF REASONS
Concerning the making of a final determination
of dumping with respect to
CERTAIN HOT-ROLLED CARBON STEEL PLATE
ORIGINATING IN OR EXPORTED FROM
BRAZIL, FINLAND, INDIA, INDONESIA, THAILAND AND UKRAINE
and of subsidizing with respect to
CERTAIN HOT-ROLLED CARBON STEEL PLATE
ORIGINATING IN OR EXPORTED FROM
INDIA, INDONESIA AND THAILAND
DECISION
Pursuant to paragraph 41(1)(a) of the Special Import Measures Act, the Commissioner of Customs and Revenue has today made a final determination of dumping with respect to certain hot-rolled carbon steel plate originating in or exported from Brazil, Finland, India, Indonesia, Thailand and Ukraine and a final determination of subsidizing with respect to the same goods originating in or exported from India, Indonesia and Thailand.
This Statement of Reasons is also available in French.
Cet énoncé des motifs est également disponible en français.
STATEMENT OF REASONS
SUMMARY
On October 15, 1999, the Deputy Minister of National Revenue, now the Commissioner of Customs and Revenue (Commissioner), initiated an investigation respecting the alleged injurious dumping into Canada of certain hot-rolled carbon steel plate originating in or exported from Brazil, Finland, India, Indonesia, Thailand and Ukraine and the injurious subsidizing of the same goods originating in or exported from India, Indonesia and Thailand.
The investigation was initiated in response to a complaint filed by Algoma Steel Inc. of Sault Ste. Marie, Ontario and Stelco Inc. of Hamilton, Ontario, and supported by Ipsco Inc. of Regina, Saskatchewan.
On February 28, 2000, the Commissioner made a preliminary determination of dumping and subsidizing with respect to the subject goods from the named countries.
The investigation continued after the preliminary determination and the Commissioner is now satisfied that the margins of dumping and amounts of subsidizing are not insignificant and that the volumes of dumped and subsidized goods are not negligible. Accordingly, the Commissioner has made a final determination of dumping and subsidizing in accordance with paragraph 41(1)(a) of the Special Import Measures Act (SIMA).
INTERESTED PARTIES
Complainants
The complainants are Algoma Steel Inc., Sault Ste. Marie and Stelco Inc., Hamilton, Ontario, two of the three producers of hot-rolled carbon steel plate in Canada. The third producer, Ipsco Inc., Regina, Saskatchewan, has supported the complaint.
Exporters
The Canada Customs and Revenue Agency (CCRA) has identified 10 producers and 22 vendors of subject goods. The names and addresses of these producers and vendors are listed in Appendix 1 and Appendix 2, respectively.
Importers
The CCRA has identified 23 importers of subject goods. The names and addresses of these importers are listed in Appendix 3.
BACKGROUND
On September 13, 1999, Algoma Steel Inc. and Stelco Inc. filed a complaint concerning the alleged injurious dumping into Canada of certain hot-rolled carbon steel plate originating in or exported from Brazil, Finland, India, Indonesia, Thailand and Ukraine and the injurious subsidizing of the same goods from India, Indonesia and Thailand. The other Canadian producer of the subject goods, Ipsco Inc., filed a letter of support and provided additional evidence of injury to the Canadian industry.
On September 17, 1999, the complainants were informed that the complaint was properly documented and the governments of the named countries were notified that a complaint had been filed.
The investigation into the alleged dumping and subsidizing was initiated on October 15, 1999.
On November 13, 1999, an exporter, Steel Authority of India Limited, referred to the
Canadian International Trade Tribunal the question of whether the evidence before the Commissioner disclosed a reasonable indication that the dumping or subsidizing of the subject goods had caused injury or retardation or was threatening to cause material injury to the domestic industry. On December 14, 1999, the Tribunal ruled that there was a reasonable indication that the dumping or subsidizing of subject goods from all the named countries had caused or was threatening to cause material injury to the domestic industry.
On January 7, 2000, the preliminary investigation was extended from 90 to 135 days due to the volume of the data and information to be analyzed and the complexity of the issues presented by the investigation.
On February 28, 2000, the Commissioner made a preliminary determination of dumping and subsidizing with respect to the subject goods from the named countries pursuant to subsection 38(1) of SIMA.
PRODUCT INFORMATION
Definition
For the purpose of this investigation, subject goods are:
- hot-rolled carbon steel plate and high strength low alloy steel plate not further manufactured than hot-rolled, heat-treated or not, in cut lengths, in widths from 24 inches (+/- 610 mm) to 152 inches (+/- 3,860 mm) inclusive, and:
- in thicknesses from 0.187 inches (+/- 4.75 mm) to 5.25 inches (+/-133 mm) inclusive, excluding plate produced to ASTM specifications A515 and A516M/A516 Grade 70 in thicknesses greater than 3.125 inches (+/- 79.3 mm), originating in or exported from Brazil, Finland, India, Indonesia and Thailand,
- in thicknesses from 4.0 inches (+/- 101 mm) to 5.25 inches (+/- 133 mm) inclusive, excluding plate produced to ASTM specifications A515 and A516M/A516 Grade 70, originating in or exported from Ukraine,
- in thicknesses from 0.187 inches (+/- 4.75 mm) to 3.125 inches (+/- 79.3 mm) inclusive originating in or exported from Ukraine, produced to ASTM specifications A515 and A516M/A516 Grade 70 which meet the following carbon equivalent as per ASME SA-20:
- carbon equivalent equal to or less than 0.40 for plate equal to or less than 1.5 inches (38.1 mm) in thickness; or
- carbon equivalent equal to or less than 0.42 for plate greater than 1.5 inches (38.1 mm) in thickness; or
- carbon equivalent equal to or less than 0.42, with maximum hydrogen and oxygen contents of 2 parts per million and 10 parts per million respectively, for plate equal to or less than 1.5 inches (38.1 mm) in thickness,
- excluding universal mill plate, plate for use in the manufacture of pipe and plate having a rolled, raised figure at regular intervals on the surface (also known as floor plate), originating in or exported from Brazil, Finland, India, Indonesia, Thailand and Ukraine.
Additional Product Information
For greater clarity, the Canadian Standards Association (CSA) specifications covered by the product definition represent different grades within the broad specification G40.21 that covers steel for general construction purposes.
In the American Society for Testing & Materials (ASTM), specifications A283M/ A283 and A36M/A36 include structural plate; specifications A572M/A572, A588M/A588 and A242M/A242 include high strength low alloy steel plate; and specifications A515M/A515 and A516M/A516 include pressure vessel quality plate. The ASTM specification A36M/A36 is considered to be equivalent to the CSA specification G40.21, grade 300W/44W and together these are the most common specifications of structural quality plate sold in Canada. The most common specification of pressure vessel quality plate sold in Canada is the ASTM specification A516M/A516, grade 70.
Product Application
The subject hot-rolled carbon steel plate can be used in a number of applications, the most common being in the production of rail cars, oil and gas storage tanks, heavy construction machinery, agricultural equipment, bridges, industrial buildings, high rise office towers, automobiles and truck parts, and shipbuilding and repairs (including pressure vessels).
CLASSIFICATION OF IMPORTS
The subject hot-rolled carbon steel plate is properly classified under the following Harmonized System classification numbers:
7208.51.91.10
7208.51.99.10
7208.52.90.10
7208.51.91.91
7208.51.99.91
7208.52.90.91
7208.51.91.92
7208.51.99.92
7208.52.90.92
7208.51.91.93
7208.51.99.93
7208.52.90.93
7208.51.91.94
7208.51.99.94
7208.52.90.94
7208.51.91.95
7208.51.99.95
7208.52.90.95
THE CANADIAN INDUSTRY
There have been no significant changes in the structure of the Canadian industry since the investigation was initiated. For details on the Canadian industry, refer to the Statement of Reasons issued at the time of the initiation of the investigation which is available on the CCRA internet web site at:
www.cbsa-asfc.gc.ca/sima-lmsi/menu-eng.html.
THE CANADIAN MARKET
In the Statement of Reasons issued at the initiation of this investigation, statistics were provided on the apparent Canadian market for hot-rolled carbon steel plate, including import volumes from the named countries and other countries and the sales volumes of the Canadian producers. The data was derived from the information provided by the complainants and from the CCRA's internal information system. Since that time, as part of the ongoing investigative process and to ensure that the statistics reflect the actual situation, the CCRA has continued to review and evaluate import data available.
As a result of information provided by the Brazilian exporters, the volume of imports from Brazil has increased slightly. Similarly, the volume of imports from Thailand increased slightly with the identification of an additional shipment during the Period of Investigation (POI) of July 1, 1998 to June 30, 1999. In the Statement of Reasons issued for the Preliminary Determination, the volume of imports from India for 1998 was understated. This has been changed to reflect the correct volume imported, but does not affect the volumes during the POI.
The revised apparent market statistics are contained in Appendix 4.
RESULTS OF THE INVESTIGATION
During the investigation the identified exporters, vendors and importers were requested to provide the information necessary to determine the normal values and export prices of the subject goods. The government and the exporters of Ukraine were asked to provide information to determine whether the steel sector in Ukraine was operating under market economy conditions. In addition, information was requested from the governments of India, Indonesia and Thailand to determine whether or not the steel industry in those countries had benefited from countervailable subsidies. Exporters from these countries were also requested to provide information concerning the benefits, if any, conferred by any subsidy program.
The dumping and subsidy investigation covered all subject goods released into Canada during the POI.
Responses to requests for information were received from two exporters in Brazil, one exporter in India, two exporters in Indonesia, one exporter in Thailand and one exporter in Ukraine. In addition, submissions respecting subsidy programs were received from the governments of India, Indonesia and Thailand. A partial submission was received from the Government of Ukraine. No responses were received from the companies involved in the shipment of the subject goods originating in or exported from Finland.
DUMPING INVESTIGATION
Normal values and export prices for the exporters are discussed below. Where export price is less than normal value, the difference is the margin of dumping. In this section, the margins of dumping are expressed as a percentage of normal value.
BRAZIL
Companhia Siderurgica Paulista (COSIPA)
A submission was received from COSIPA subsequent to the preliminary determination. Verification meetings were held at the company's premises in Cubatão, Brazil. All products were exported to Canada from COSIPA's production facility located in Cubatão, Brazil.
Normal Value
As COSIPA had sufficient profitable domestic sales of like goods to unassociated customers, normal values were determined on the basis of the weighted average selling prices of these sales pursuant to section 15 of SIMA. Special Import Measures Regulations (SIMR) adjustments to domestic selling prices were made for delivery costs pursuant to section 7, and for taxes and duties pursuant to section 10.
Export Price
As goods were sold to unrelated importers in Canada, export prices were determined on the basis of the exporter's ex-factory selling price, pursuant to section 24 of SIMA.
Margin of Dumping
All the goods exported to Canada by COSIPA and imported during the POI were reviewed and were found to be dumped. The weighted average margin of dumping was 40.3 per cent. The margins ranged from 24.5 to 48.1 per cent.
Usiminas Siderurgicas De Minas Gerais S.A. (USIMINAS)
USIMINAS provided a complete submission subsequent to the preliminary determination. Verification meetings were held at the company's premises in Bello Horizonte and Ipatinga, Brazil. All products were exported to Canada from USIMINAS's plant located in Ipatinga.
Normal Value
As USIMINAS had sufficient profitable domestic sales of like goods to unassociated customers, normal values were determined on the basis of the weighted average selling prices of these sales pursuant to section 15 of SIMA. SIMR adjustments to domestic selling prices were made for qualitative differences pursuant to paragraph 5(a), for differences in conditions of sale pursuant to paragraph 5(d), for delivery costs pursuant to section 7, and for taxes and duties pursuant to section 10.
Export Price
As goods were sold to unrelated importers in Canada, export prices were determined on the basis of the exporter's ex-factory selling price, pursuant to section 24 of SIMA.
Margin of Dumping
All the goods exported to Canada by USIMINAS and imported during the POI were reviewed and were found to be dumped. The weighted average margin of dumping was 30.8 per cent. The margins ranged from 24.6 to 36.3 per cent.
FINLAND
One producer in Finland informed the CCRA that it would not participate in the investigation. Information was received from some vendors of the subject goods shipped to Canada, but sufficient information to determine normal values was not provided.
Normal Value
Normal values were determined pursuant to ministerial specification under subsection 29(1) of SIMA on the basis of the export price advanced by 135.8 per cent. This advance was based on the highest margin of dumping found for a co-operating exporter.
Export Price
Export prices were determined on the basis of the importer's purchase price of the goods adjusted to an ex-factory basis, pursuant to section 24 of SIMA.
Margin of Dumping
All the goods exported from Finland and imported into Canada during the POI were reviewed and were found to be dumped. The weighted average margin of dumping was 57.6 per cent.
INDIA
Steel Authority of India Limited (SAIL)
A complete submission was received from SAIL. Verification meetings were held at the company's corporate headquarters in New Delhi and at its production facilities in Bhilai. Subsequent to the preliminary determination, SAIL submitted revised data on its domestic sales. Previously, information on certain domestic transportation costs that were included in the selling price of the goods had not been provided by the exporter.
Normal Value
There were insufficient acceptable sales of like goods in the domestic market that met the conditions of section 15 of SIMA. Therefore, normal values were determined on the basis of the aggregate of the cost of production, selling, administrative and other costs, and an amount for profit, pursuant to paragraph 19(b) of SIMA. SIMR adjustments were made to account for differences in conditions of sale pursuant to paragraph 5(d), and for delivery costs pursuant to section 7.
Export Price
As the goods were sold to unrelated importers in Canada, export prices were determined on the basis of the exporter's ex-factory selling prices, pursuant to section 24 of SIMA.
Margin of Dumping
All of the goods exported to Canada by SAIL and imported during the POI were reviewed. Of the goods, 85.6 per cent were found to be dumped. The weighted average margin of dumping was 14.9 per cent. The margins ranged from 1.3 to 28.4 per cent.
INDONESIA
PT Gunawan Dianjaya Steel (Gunawan)
Normal Value
There were insufficient profitable sales of like goods in the domestic market that met the conditions of section 15 of SIMA. Therefore, normal values were determined on the basis of the aggregate of the costs of production, selling, administrative and other expenses, and an amount for profit, pursuant to paragraph 19(b) of SIMA. SIMR adjustments were made to account for delivery costs pursuant to section 7 and for taxes and duties pursuant to section 10.
Export Price
As the goods were sold to unrelated importers in Canada, export prices were determined on the basis of the exporter's ex-factory selling prices, pursuant to section 24 of SIMA.
Margin of Dumping
All the goods exported to Canada by Gunawan and imported during the POI were reviewed and were found to be dumped. The weighted average margin of dumping was 27.6 per cent. The margins ranged from 16.0 to 48.6 per cent.
PT Krakatau Steel (Krakatau)
Normal Value
Krakatau had sales of like goods in its domestic market. Where there were sufficient profitable domestic sales of like goods to unassociated customers, normal values were determined on the basis of the weighted average selling price of these sales pursuant to section 15 of SIMA. SIMR adjustments to domestic selling prices were made for differences in conditions of sale pursuant to paragraph 5(d), for delivery costs pursuant to section 7, and for taxes and duties pursuant to section 10.
Where there were insufficient profitable domestic sales of like goods that met the requirements of paragraph 16(2)(b) of SIMA, normal values were determined on the basis of the aggregate of the cost of production, selling, administrative and other costs, and an amount for profit, pursuant to paragraph 19(b) of SIMA. SIMR adjustments were made to account for differences in conditions of sale pursuant to paragraph 5(d), for delivery costs pursuant to section 7, and for taxes and duties pursuant to section 10.
Export Price
As the goods were sold to unrelated importers in Canada, export prices were determined on the basis of the exporter's ex-factory selling prices, pursuant to section 24 of SIMA.
Margin of Dumping
All the goods exported to Canada by Krakatau and imported during the POI were reviewed and were found to be dumped. The weighted average margin of dumping was 15.0 per cent. The margins ranged from 10.1 to 26.5 per cent.
THAILAND
LPN Plate Mill Public Co. Ltd. (LPN)
A submission was received from LPN. Verification meetings were held at the company's premises in Bangkok, Thailand, prior to the preliminary determination. All products were exported to Canada from LPN's production facility located in Samutprakarn, Thailand.
Subsequent to the preliminary determination, LPN made representations on issues pertaining to the establishment of normal values. This resulted in revisions to the allocations of selling, administrative and other costs for the majority of the subject goods examined for the Period of Investigation.
Normal Value
As LPN had insufficient profitable sales of like goods in the domestic market that met the conditions of section 15 of SIMA, normal values were determined on the basis of the aggregate of the costs of production, selling, administrative and other expenses, and an amount for profit. Since an amount for profit could not be determined on the basis of the domestic sales in Thailand, normal values were determined pursuant to subsection 29 (1) of SIMA, on the basis of a ministerial specification using the actual cost of production of the goods, an amount for selling and administrative and other expenses that are reasonably attributable to the goods, and an amount for profit of 3.2 per cent of the full cost of the goods. The 3.2 per cent represents the weighted average net profit earned in calendar year 1998 by Canadian producers of steel plate.
Export Price
As goods were sold to unrelated importers in Canada, export prices were determined on the basis of the exporter's ex-factory selling price, pursuant to section 24 of SIMA. For goods exported by LPN that were produced on behalf of a third party, export price was based on the importer's purchase price adjusted to an ex-factory basis.
Margin of Dumping
All the goods exported to Canada by LPN and imported during the POI were reviewed and were found to be dumped. The weighted average margin of dumping was 32.0 per cent. The margins ranged from 24.1 to 57.6 per cent.
Other Exporters
Subject goods originating in Thailand were shipped to a vendor in the United States and were subsequently exported to Canada. Requests for information were sent to the United States exporters, but the exporters did not provide the required information.
Normal Value
Normal values were determined pursuant to ministerial specification under subsection 29(1) of SIMA on the basis of the export price advanced by 135.8 per cent. This advance was based on the highest margin of dumping found for a co-operating exporter.
Export Price
Export prices were determined on the basis of the importer-declared purchase price less declared export expenses.
Margin of Dumping
All the goods exported from Thailand and imported to Canada from the United States during the POI were reviewed and were found to be dumped. The weighted average margin of dumping was 57.6 per cent.
UKRAINE
In past investigations, Ukraine has been treated as a non-market economy, with the result that normal values for imports from Ukraine have been determined pursuant to section 20 of SIMA on the basis of sales of like goods in third or surrogate countries.
Requests for information were sent to the Government of Ukraine and to Ukrainian exporters to elicit the information necessary to determine whether section 20 of SIMA applies to the steel sector in Ukraine. The information provided by the government was not complete. In addition, only one exporter provided a response which was also not complete. The other two exporters did not respond.
Normal Value
Normal values were determined in accordance with subsection 29(1) of SIMA on the basis of the export price advanced by 135.8 per cent. This advance was based on the highest margin of dumping found for a co-operating exporter.
Export Price
Export prices were determined on the basis of the importer's purchase price of the goods adjusted to an ex-factory basis, pursuant to section 24 of SIMA.
Margin of Dumping
All the goods of Ukrainian origin imported into Canada during the POI were reviewed and were found to have been dumped. The weighted average margin of dumping was 57.6 per cent.
ALL OTHER EXPORTERS
All other exporters to Canada either did not provide a response to the CCRA request for information or their submission was incomplete. In such cases, normal value was determined in accordance with subsection 29(1) of SIMA on the basis of the export price advanced by 135.8 per cent. This advance was based on the highest margin of dumping found for a co-operating exporter.
Summary of Results (dumping)
A summary of the margins of dumping for all exporters of subject goods is contained in Appendix 5.
Volume Of Dumped Imports
Before making a final determination of dumping, the Commissioner must be satisfied that the actual or potential volume of dumped goods is not negligible. If the volume of dumped goods of a country is less than three per cent of the total volume of the goods of the same description that are released into Canada from all countries, the volume is considered to be negligible. However, if there are three or more countries each of whose dumped goods represent less than three per cent of the total imports, but which collectively represent more than seven per cent of the total imports into Canada, the imports of these countries are not considered to be negligible.
Appendix 6 summarizes the volume of imports of the subject goods during the period July 1, 1998 to June 30, 1999. Imports of dumped goods from each of the named countries are above the three per cent threshold and, therefore, are not negligible. In performing this analysis, imports of universal mill plate, plate for use in the manufacture of pipe, floor plate and hot-rolled plate in coils were extracted.
SUBSIDY INVESTIGATION
Background
The subsidy portion of the investigation covered all shipments of the subject goods originating in or exported from India, Indonesia and Thailand and released into Canada during the Period of Investigation of July 1, 1998, to June 30 1999. Requests for information were sent to each of the governments and exporters in the named countries. Responses to the subsidy request for information were received from one exporter in India, two exporters in Indonesia and one exporter in Thailand. In addition, submissions were received from the governments of India, Indonesia and Thailand. Verification visits were conducted at the premises of the four exporters, Steel Authority of India Limited of India, PT Krakatau Steel and PT Gunawan Dianjaya Steel of Indonesia, and LPN Plate Mill Public Co., Ltd. of Thailand, and at the offices of the responsible government representatives.
In determining whether a program results in a subsidy, the CCRA considered whether: (1) there was a financial contribution by a government of a country other than Canada; and (2) whether 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:
- practices of the government involve the direct transfer of funds or liabilities or the contingent transfer of funds or liabilities;
- 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;
- the government provides goods or services, other than general governmental infrastructure, or purchases goods; or
- 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.
If a subsidy is found to exist, it will be subject to countervailing duties if the subsidy is specific. A subsidy is considered specific when it is limited, in law, to a particular enterprise or is a prohibited subsidy. Under subsection 2(1) of SIMA, the term "enterprise" is defined to include "a group of enterprises, an industry and a group of industries". A prohibited subsidy includes 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:
- objective;
- set out in a legislative, regulatory or administrative instrument or other public document; and
- applied in a manner that does not favour or is not limited to a particular enterprise.
Notwithstanding that a subsidy is not limited in the foregoing manner, the Commissioner may still determine the subsidy to be specific if:
- there is exclusive use of the subsidy by a limited number of enterprises;
- there is predominant use of the subsidy by a particular enterprise;
- disproportionately large amounts of the subsidy are granted to a limited number of enterprises; and
- 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 generally 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. However, the three countries in this investigation are developing countries according to the Organization for Economic Development and Co-operation. When a subsidy investigation involves developing countries, section 41.2 of SIMA requires the Commissioner to take into account the provisions of paragraphs 10 and 11 of Article 27 of the WTO Agreement on Subsidies and Countervailing Measures (SCM Agreement). This article will require termination of the countervailing duty portion of the investigation if the Commissioner determines that:
- the overall level of subsidies granted upon the product in question does not exceed two per cent of its value calculated on a per unit basis or three per cent of its value calculated on a per unit basis in respect of those developing countries meeting the criteria set out in paragraph 11 of Article 27 of the SCM Agreement; or
- the volume of the subsidized imports represents less than four per cent of the total imports of the like product in the importing Member, unless imports from developing country Members whose individual shares of total imports represent less than four per cent collectively account for more than nine per cent of the total imports of the like products in the importing Member.
In this investigation, Thailand is subject to the two per cent level of subsidization. India and Indonesia are subject to the three per cent level of subsidization as they are included in paragraph 11 of Article 27 as being developing country Members referred to in Annex VII of the SCM Agreement.
RESULTS OF THE SUBSIDY INVESTIGATION
The subsidy programs identified are discussed below for each country and exporter.
INDIA:
Steel Authority of India Limited
At the time of initiation, requests for information were sent to the Government of India (GoI) and to possible exporters. Responses were received from the GoI and from SAIL, the only exporter of subject goods during the POI. Additional information was requested and verification visits were conducted in GoI and SAIL offices in New Delhi and at SAIL's Bhilai Steel Plant.
At the time of the preliminary determination, the CCRA found three GoI schemes that constituted export subsidies, found eight programs that did not confer any benefit to the exporter, and identified nine programs that were still under review.
After the preliminary determination, additional information was requested from SAIL and the GoI. Responses were received and discussed with GoI and SAIL officials and their legal counsel in Ottawa. As a result, the Commissioner of the CCRA has determined that:
- There is a financial contribution by the GoI that has conferred a benefit to SAIL under the following programs:
- Duty Entitlement Pass Book (export subsidy)
- Advance Licences (export subsidy)
- Special Import Licences (export subsidy)
- Export Promotion Capital Goods Scheme (export subsidy)
- Pre-Shipment Export Financial Assistance (export subsidy)
- These programs are specific for the reason that they are prohibited subsidies in accordance with paragraph 2(7.2)(b) of the Act; they are prohibited subsidies because they are contingent upon export performance as defined in Article 3.1(a) of the Agreement on Subsidies and Countervailing Measures.
- c) The benefits received from these programs, in aggregate, represent 1738 rupees per metric tonne, which exceeds the three per cent threshold stipulated in Article 27.11 of the Agreement on Subsidies and Countervailing Measures concerning developing countries referred to in section 41.2 of the Act.
- d) The volume of the subject goods, 24,382 net tons, exceeds the four per cent threshold stipulated in Article 27.10(b) of the Agreement on Subsidies and Countervailing Measures concerning developing countries referred to in section 41.2 of the Act.
- There is no benefit to SAIL in respect of the following programs:
- Sales of unused Advance Licences
- Long-Term Credit Provided by the Export-Import Bank of India
- Loans from the Steel Development Fund
- Tax Exemption for Export Profits
- Central or State Sales Tax and Excise duty Exemption
- Export Oriented Units
- Free Trade Zones
- Export Processing Zones
- Market Development Assistance Grants
- Post Shipment Financial Assistance
- Long-Term Loans
- Grants-in-Aid
- Prime Minister's Trophy Award Fund
- Land Gifted by State Government.
Appendix 9 contains the rationale used in determining why these programs result in countervailable subsidies in accordance with the legislation. It also provides why the information received for certain programs identified indicates that they did not confer benefits to SAIL.
INDONESIA:
The government of Indonesia (GoID), Gunawan and Krakatau responded to the subsidy request for information by the deadline date of November 22, 1999. However, Gunawan and Krakatau were unable to schedule verification meetings in sufficient time for the CCRA to analyze all of the data received prior to the preliminary determination. Consequently, for purposes of the preliminary determination, the estimated amounts of subsidy for Gunawan and Krakatau were based on the amounts by which the export prices of the subject goods were lower than their costs as estimated by the complainants at initiation of the investigation.
PT Krakatau Steel
Krakatau provided a response to the subsidy request for information. Verification meetings were conducted at the company's premises in Jakarta, Indonesia.
One of the subsidy programs identified in the complaint was an infusion of equity by the Government of Indonesia to Krakatau. During the verification meetings, the CCRA requested certain information relating to this equity infusion. The information requested included correspondence between the Government of Indonesia and Krakatau relating to the equity infusion, and copies of the loan contracts for all loans that were converted from debt into equity by the Government of Indonesia.
The correspondence between the Government of Indonesia and Krakatau was necessary to verify the terms of the equity infusion. The loan contracts were necessary to verify the terms of the debt, including the amount of interest payable, that was subsequently converted into equity. Krakatau was unable to provide this information during the verification meetings. A subsequent request for this information was made by the CCRA, but the information has not been provided. Consequently, sufficient information has not been provided to determine an amount of subsidy in the prescribed manner for subject goods exported by Krakatau. Therefore, the amount of subsidy has been determined according to a ministerial specification pursuant to subsection 30.4(2) of SIMA.
The amount of subsidy is equal to 757,728 Indonesian rupiah per metric tonne, which is the amount by which the export price of the goods was lower than the weighted average costs as estimated by the complainants at the time of the initiation.
During the investigation, additional imports of subject goods from Krakatau were identified that were not included in the preliminary estimate of the amount of subsidy. The amounts of subsidy determined for these goods were greater on a per metric tonne basis than the amount estimated for the goods previously identified. As a result, the amount of subsidy increased significantly from the amount estimated at the preliminary determination.
PT Gunawan Dianjaya Steel
The information received from Gunawan prior to the preliminary determination was analyzed for purposes of the final determination. This analysis has revealed that critical information relating to a program identified by the Government of Indonesia in its response to the CCRA was not made available by Gunawan at the verification meetings despite the fact that the CCRA asked very specific questions relating to this program. Subsequent to the preliminary determination and only after repeated requests, Gunawan admitted participation in this program.
The fact that information relating to this program was not provided to the CCRA at verification prevented the CCRA from conducting a proper verification of benefits that were received by Gunawan with respect to this program. In addition, the failure of Gunawan to provide this information has called into question other subsidy information that has been provided by Gunawan. Consequently, the CCRA has found it necessary to determine the amount of subsidy according to ministerial specification pursuant to subsection 30.4(2) of SIMA. In this regard, the amount of subsidy is equal to 1,166,167 rupiah per metric tonne which is the amount by which the export price of the goods was lower than the weighted average cost as estimated by the complainants at the time of initiation.
During the investigation, additional imports of subject goods from Gunawan were identified that were not included in the preliminary estimate of the amount of subsidy. The amounts of subsidy determined for these goods were greater on a per metric tonne basis than the amount estimated for the goods previously identified. As a result, the amount of subsidy increased significantly from the amount estimated at the preliminary determination.
Overall level of subsidies
The amount of subsidy for Gunawan and Krakatau exceeds the three per cent threshold stipulated in Article 27.11 of the Agreement on Subsidies and Countervailing Measures concerning developing countries referred to in section 41.2 of the Act.
THAILAND
LPN Plate Mill Public Co. Ltd.
The Government of Thailand (GoT) and LPN, the only known exporter of subject goods in Thailand, provided responses to the subsidy request for information. Verification meetings were conducted at the premises of the GoT and LPN. At the time of the preliminary determination, the CCRA found that the GoT conferred a benefit to LPN from the following programs:
- Loans From Banks Owned, Controlled, Or Influenced By The Royal Thailand Government;
- Export Packing Credits; and
- Duty Exemptions On Imports Of Machinery Under the Investment Promotion Act.
The GoT was advised that additional information would be required before the CCRA could make a final determination concerning these programs.
In addition the GoT was informed that there was insufficient information to make an assessment on whether five other programs had conferred a benefit, and that additional information would be sought from LPN and the GoT.
On February 29, 2000, the GoT was advised of all the information that remained outstanding and was informed why the information was required. The GoT provided some of the outstanding information on the deadline date of March 24, 2000. On April 13, 2000, the GoT was advised of the information that still remained outstanding. Subsequently, the GoT provided explanations as to why it believed that preferential loans like those received by LPN were generally available to all sectors. However this information did not permit the CCRA to determine if the subsidy was specific.
The GoT has provided information to the CCRA which documents that the duty rates paid by LPN on its imports of certain machinery were generally available to all industries. In addition, information received from LPN after the preliminary determination has confirmed that LPN did not receive loans from the Industrial Finance Corporation and the Thai Export-Import Bank that were forgiven by these financial institutions prior to the Period of Investigation.
However, the GoT has not provided sufficient information to enable the CCRA to determine whether:
- preferential loans with terms and conditions like those received by LPN:
- are generally available to all sectors,
- have been used predominantly by a particular enterprise, or
- disproportionately large amounts of loans have been granted to a limited number of enterprises.
- LPN has benefited from preferential export insurance rates under the Export Insurance Program; and
- LPN has benefited from programs available to industries in Export Processing Zones and Industrial Estates.
Consequently, the CCRA has determined that sufficient information has not been provided to determine an amount of subsidy in the prescribed manner for subject goods exported by LPN. Therefore, the amount of subsidy has been determined according to ministerial specification pursuant to subsection 30.4(2) of SIMA. The amount of subsidy is equal to 1860 baht per metric tonne which is the amount by which the export price of the goods was lower than the weighted average costs as estimated by the complainants at the time of the initiation, less the amount of subsidy attributable to the duty reduction program which has been found not to be actionable. This amount of subsidy exceeds the two per cent threshold stipulated in Article 27.10(a) of the Agreement on Subsidies and Countervailing Measures concerning developing countries referred to in section 41.2 of the Act.
SUMMARY OF RESULTS (subsidies - ALL COUNTRIES)
Appendix 7 provides the amounts of subsidy for all exporters of subject goods. Appendix 8 provides the volume of subsidized imports of subject goods during the POI. Results indicate that all three countries, India, Indonesia and Thailand, have each a volume of subsidized goods that exceeds the negligibility threshold, that is, exceeds four per cent of the total volume of goods that are released into Canada from all countries and that are of the same description as the like goods.
DECISION
On this date, pursuant to paragraph 41(1)(a) of SIMA, a final determination of dumping was made with respect to certain hot-rolled carbon steel plate originating in or exported from Brazil, Finland, India, Indonesia, Thailand and Ukraine and a final determination of subsidizing was made with respect to the same goods originating in or exported from India, Indonesia and Thailand.
In making this decision, the Commissioner is satisfied that the subject goods have been dumped and subsidized, that the margin of dumping and amounts of subsidy are not insignificant and that the volume of dumped and subsidized goods is not negligible.
Clause 41(1)(a)(iv)(C) of SIMA, requires that the Commissioner specify where there is a prohibited subsidy on the goods and the amount of the prohibited subsidy. In this case, the Government of India's Duty Entitlement Pass Book, Advance Licence, Special Import Licence, Export Promotion Capital Goods and Export Packing Credit schemes, being export subsidies, have been specified as prohibited subsidies and the amounts of subsidy have been specified.
FUTURE ACTION
The Canadian International Trade Tribunal's inquiry concerning the question of injury to production in Canada is continuing. The Tribunal will issue its finding by June 27, 2000.
Subject goods imported during the provisional period will continue to be assessed provisional duty as determined at the time of the preliminary determination. The provisional period began on February 28, 2000, the date of the preliminary determination, and will end on the date the Tribunal issues its finding. For further details on the application of provisional duties, refer to the Statement of Reasons issued at the time of the preliminary determination of the investigation which is available on the CCRA internet web site at: www.cbsa-asfc.gc.ca/sima-lmsi/menu-eng.html.
If the Tribunal finds that the dumped and subsidized goods have not caused injury and do not threaten to cause injury, all proceedings relating to this investigation will be terminated. In such a case, all provisional duty or security posted by importers will be returned and future imports will not be subject to anti-dumping or countervailing duties.
If the Tribunal finds that the dumped and subsidized goods have caused injury, the CCRA will finalize the anti-dumping and countervailing duty payable on subject goods released from customs' possession during the provisional period pursuant to section 55 of SIMA. If the provisional duty paid is in excess of the final amount of anti-dumping and countervailing duty payable, the excess duty paid will be refunded. Imports released from customs' possession after the date of the Tribunal's finding will be subject to anti-dumping duty and countervailing duty equal to the margin of dumping or amount of subsidizing. If anti-dumping duty or countervailing duty is payable, such duty is hereby demanded pursuant to section 11 of SIMA.
If the Tribunal finds that the dumped and subsidized goods threaten to cause injury, all provisional duty paid or security posted by importers will be returned. However, imports released from customs' possession after the date of the Tribunal's finding will be subject to
anti-dumping duty and countervailing duty equal to the margin of dumping or amount of subsidizing. If anti-dumping duty or countervailing duty is payable, such duty is hereby demanded pursuant to section 11 of SIMA.
In relation to the dumping portion of this investigation, specific normal values for the subject goods have been provided to the co-operating exporters for the final determination. These values will come into effect the day after the Tribunal's injury finding. Where specific normal values have not been issued, anti-dumping duty at a rate of 135.8 per cent of the export price will be payable on imports of the subject goods. To avoid the application of such an advance on export prices on their future shipments of the subject goods, exporters can submit to the CCRA information required to permit the establishment of specific normal values for these products.
With respect to the subsidizing portion of this investigation, a specific amount of subsidy was determined for the co-operating exporter in India (SAIL). For all other exporters, the amount of subsidy will be equal to amounts specified pursuant to a ministerial specification. Exporters and their respective governments can avoid application of such a specified amount by furnishing the CCRA with the information required to determine specific amounts of subsidy.
If the Tribunal finds that injury is likely to be caused by further dumped and subsidized imports and if the export prices of the imported goods are lower that their corresponding normal values, anti-dumping and countervailing duties will be collected. As provided in section 10 of SIMA, where both anti-dumping and countervailing duties are to be collected on goods imported into Canada and the margin of dumping is wholly or partly attributable to an export subsidy, only that portion of the anti-dumping duty which exceeds the amount of the export subsidy is payable.
PUBLICATION
Notice of this final determination is being published in the Canada Gazette pursuant to paragraph 41(3)(a) of SIMA.
INFORMATION
This Statement of Reasons has been provided to persons directly interested in these proceedings. A free copy may be obtained upon request by writing to Anti-dumping and Countervailing Directorate, Canada Customs and Revenue Agency, 191 Laurier Avenue West, Ottawa, Ontario, Canada, K1A 0L5 or from the internet site: www.ccra-adrc.gc.ca/sima. For further information, please contact the following officers by fax at (613) 941-2612,
| Name |
by telephone at |
by E-Mail at |
|---|---|---|
|
Terry Huzarski |
(613) 954-7412 |
terry.huzarski@ccra-adrc.rc.gc.ca |
|
Vincent Gaudreau |
(613) 954-7262 |
vincent.gaudreau@ccra-adrc.gc.ca |
|
Michel Leclair |
(613) 954-7232 |
michel.leclair@ccra-adrc.gc.ca |
|
Ken McPhail |
(613) 954-9530 |
ken.mcphail@ccra-adrc.gc.ca |
R.A. Séguin
A/Director General
Anti-dumping and Countervailing Directorate
APPENDIX 1
EXPORTERS (PRODUCERS)
BRAZIL
Companhia Siderurgica Paulista - COSIPA
Av. Do Cafe, 277 - Torre B 80 Andar
Vila Guarani
Sao Paulo - SP
CEP: 04311-000
Brazil
Usinas Siderurgicas De Minas Gerais S.A. - USIMINAS
Rua Prof. José Vieira De Mendonça, 3.011
Engenho Nogueira CEP - 31310-260
Belo Horizonte - M.G.
Minas Gerais
Brazil
FINLAND
Rautaruukki Oy Steel
Raahe Steel Works
P.O. Box 93, SF-92170 Raahe
Harvialantia 420 Hameenlinna
FIN-92101
Finland
INDIA
Steel Authority of India Limited
13th Floor, Hindustan Times House
18-20 Kasturba Gandhi Marg
New Dehli 110 001
India
INDONESIA
PT Gunawan Dianjaya Steel
JL. Margomulyo 29A, Tandes
Surabaya, Jatim 60183
Indonesia
PT Krakatau Steel
Wisma Baja
Jolan Gatot Subroto Kav. 54
P.O. Box 1174
Jakarta, Selatan
Jakarta 12950
Indonesia
THAILAND
LPN Plate Mill Public Co., Ltd.
199/9 Moo 4 Suksawad Rd.
Pakklongbangplakod
Prasamutjedee, Samutprakarn 10290
Thailand
UKRAINE
Alchevsky Iron & Steel Works
4 Shmit Street
Alchevsk 349102
Lugansk Region
Ukraine
Mariupol Iron & Steel Works (Ilyich)
1 Levchenko Street
Mariupol 341 004
Donetsk Region
Ukraine
Azovstahl Iron & Steel Works
1, Leporsky Street, GSP - 211
Mariupol 341 000
Donetsk Region
Ukraine
APPENDIX 2
OTHER PARTIES (VENDORS/AGENTS)
(BY COUNTRY OF ORIGIN)
BRAZIL
Cosipa Overseas Ltd.
Av. Do Cafe, 277 - Torre B 8 Andar
Sao Paulo - SP
CEP: 04311-000
Brazil
Transcoil International Ltd.
Aeulestrasse, 5
FL-9490 Vaduz
Liechtenstein
Macsteel International USA Corp.
105 Corporate Park Drive
White Plains, New York 10804
USA
FINLAND
American Alloy Steel, Inc.
7721 Pinemont
P.O. Box 40469
Houston, Texas 77240-0469
USA
Stemcor USA Inc.
350 Fifth Avenue, Suite 7815
Empire State Building
New York, New York 10118
USA
Dikema Constructiestaal BV
Haven 2665
Eemhavenweg 70
3089 KH Rotterdam
The Netherlands
INDIA
Canam Steel Corp.
140 South Ellis Road
Jacksonville, Florida 32254
USA
TradeArbed Export SA
19, Avenue de la Liberté
L-2930
Luxembourg
Salzgitter/Preussag Handel GmbH
Hans-Hermann Söhler
Schwannstr. 12, 40476 Düsseldorf
Postfach 30 09 43
Germany
TradeArbed Inc.
825 Third Avenue
New York, NY 10022
USA
INDONESIA
Ferrostaal Ag
Hohenzollernstr. 24
D-45128 Essen
Germany
Marubeni America Corporation
350 South Grand Avenue, #2200
Los Angeles, California 90071
USA
Itochu Steel Asia Pte., Ltd.
9 Rafffles Place, No. 41-01
Republic Plaza
Singapore 048619
THAILAND
Balli Steel plc
5 Stanhope Gate
London W1Y 5LA
United Kingdom
Fedmet Corporation
3050 Post Oak Blvd.
Suite 1350
Houston, Texas 77056
USA
Balli North America Inc.
Suite 340, 16945 Northchase
Houston, Texas 77060
USA
Novosteel SA
P.O. Box 1106
2006 Neuchatel
Switzerland
UKRAINE
American Alloy Steel, Inc.
7721 Pinemont
P.O. Box 40469
Houston, Texas 77240-0469
USA
Klockner Steel Trade GmbH
Neudorfer Str. 3-5, D-47057 Duisberg
Postfach 10 08 51-D47008 Duisberg
Germany
Canam Steel Corp.
140 South Ellis Road
Jacksonville, Florida 32254
USA
Krupp Hoesch Stahlexport GmbH
Thedor-Althoff-SIN-1
45133 Essen, Postfach 101954
Germany
D.F.O.
Babcock & Wilcox
1200 19th Street, SW
Paris, Texas 75460
USA
Salzgitter/Preussag Handel GmbH
Hans-Hermann Söhler
Schwannstr. 12, 40476 Düsseldorf
Postfach 30 09 43, 40409 Dusseldorf
Germany
Industristal AS
Postboks 31
No-3992 Langesund
Norway
SPS Steel Plate & Sections Ltd.
Island House, 2, Fazeley Street
Birmingham B5 5JP
United Kingdom
APPENDIX 3
IMPORTERS
Babcock & Wilcox Canada Ltd.
581 Coronation Blvd.
Cambridge, Ontario
N1R 5V3
M & M Offshore Ltd,
456 Logy Bay Road
P.O. Box 9558
St. John's, Newfoundland
A1A 2Y4
Barzelex Inc.
1350 Sherbrooke Street West
Suite 1150
Montréal, Québec
H3G 1J1
Niagarasteel Service Center
23 Smith St.
P.O. Box 730
St. Catharines, Ontario
L2R 6Y6
Canadian Erectors Ltd.
P.O. Box 730
23 Smith Street
St. Catharines, Ontario
L2R 6Y6
Olbert Metal Sales Ltd.
989 Derry Rd. East
Suite 305
Mississauga, Ontario
L5T 2J8
Dollard Steel Co.
6600 Boul. Decarie
Bur. 310
Montréal, Québec
H3X 2K4
Salzgitter Trade, Inc.
1444 - 1333 W Broadway
Vancouver, British Columbia
V6H 4C1
Ferrostaal Metals Ltd.
390 Brant Street., Suite 301
Burlington, Ontario
L7R 4J4
Shelley Machine & Marine Inc.
649 McGregor Road
P.O. Box 2163
Sarnia, Ontario
N7T 7L7
Francosteel Canada Inc.
5890 Monkland Avenue, 303
Montréal, Québec
H4A 1G2
St John's Dockyard Ltd.
No. 475 Water Street
St. John's, Newfoundland
A1E 6B5
Friede Goldman Newfoundland Ltd.
66-77 Ville Marine Drive
P.O. Box 262
Marystown, Newfoundland
A0E 2M0
Thyssen Canada Ltd.
425 - 2560 Matheson Blvd.
Mississauga, Ontario
L4W 4Y9
Itochu Canada Ltd.
World Trade Centre
770 - 999 Canada Place
Vancouver, British Columbia
V6C 3C1
TradeArbed Canada
390 Brant Street
Suite 601
Burlington, Ontario
L7R 4J4
Industries Davie Inc.
22 George D. Davie
Lévis, Québec
G6V 6N7
Usinor Canada Inc.
2, Place Alexis Nihon
Suite 610
Westmount, Québec.
H3Z 3C1
Klockner Steel Trade Corp.
10 Milner Business Cr., Suite 512
Scarborough, Ontario
M1B 3C6
Wilkinson Steel-Metals
9525 - 60th Avenue
Edmonton, Alberta
T6E 0C3
Les Aciers Canam
C.P. 130
St-Gedeon de Beauce, Québec
G0M 1T0
Wirth Ltd.
1 Westmount Square
Suite 200
Montréal, Québec
H3Z 2P9
Macsteel International (Canada) Ltd.
1210-21331 Gordon Way
Richmond, British Columbia
V6W 1J9
APPENDIX 4
APPARENT CANADIAN MARKET (NET TONS)
CERTAIN HOT-ROLLED CARBON STEEL PLATE
|
1997 |
1998 |
POI |
|
|---|---|---|---|
|
Domestic Shipments (1) |
601,067 |
537,149 |
499,338 |
|
IMPORTS (2): |
|
|
|
|
TOTAL MARKET |
772,236 |
923,925 |
837,579 |
|
MARKET SHARES: |
|
|
|
Sources:
- Domestic data based on information from Canadian producers.
- Import data based on information from the CCRA's internal information system. This data has been reconciled with information received from exporters, vendors and importers, where possible.
APPENDIX 5
MARGINS OF DUMPING BY COUNTRY/EXPORTER
CERTAIN HOT-ROLLED CARBON STEEL PLATE
(July 1, 1998 to June 30, 1999)
|
Country/Exporter |
Quantity of Goods Dumped |
Margin of Dumping Range |
Weighted Average Margin of Dumping |
|---|---|---|---|
|
Brazil: |
|
|
|
|
Finland: |
|
|
|
|
India: |
|
|
|
|
Indonesia: |
|
|
|
|
Thailand: |
|
|
|
|
Ukraine: |
|
|
|
|
All countries: |
97.6% |
39.6% |
NOTES:
(1) Expressed as a percentage of normal value for the dumped goods.
(2) Expressed as a percentage of total normal value for all imported goods.
APPENDIX 6
IMPORT VOLUMES DUMPING
CERTAIN HOT-ROLLED CARBON STEEL PLATE
(July 1, 1998 to June 30, 1999)
|
Country of Export/Origin |
Total Volume Imported |
Per cent of Total Imports |
Total Volume Dumped |
Dumped Imports as a Per Cent of Total Imports |
|---|---|---|---|---|
|
Brazil |
13,438 |
4.0% |
13,438 |
4.0% |
Sources:
- CCRA's internal information systems.
- Customs entries.
- Importer and exporter submissions.
APPENDIX 7
AMOUNTS OF SUBSIDY BY COUNTRY/EXPORTER
CERTAIN HOT-ROLLED CARBON STEEL PLATE
(July 1, 1998 to June 30, 1999)
|
Country of Origin/Exporter |
Quantity of Goods Subsidized |
Amount of Subsidy (Per Metric Tonne) |
|---|---|---|
|
India: |
|
|
|
Indonesia: |
|
|
|
Thailand: |
|
|
APPENDIX 8
IMPORT VOLUMES SUBSIDY
CERTAIN HOT-ROLLED CARBON STEEL PLATE
(July 1, 1998 to June 30, 1999)
|
Country of Export/Origin |
Total Volume Imported |
Per cent of Total Imports |
Total Volume Subsidized |
Subsidized Imports as a Per Cent of Total Imports |
|---|---|---|---|---|
|
India Indonesia Thailand Total - Named Countries Total - Other Countries TOTAL IMPORTS |
24,382 57,155 17,637 99,174 239,130 338,304 |
7.2% 16.9% 5.2% 29.3% 70.7% 100% |
24,382 57,155 17,637 99,174 |
7.2% 16.9% 5.2% 29.3% |
