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Final Determination - Certain Hot-rolled Carbon Steel Sheet

OTTAWA, July 18, 2001 

4218-12/CV94
4258-114/AD1262

STATEMENT OF REASONS

Concerning the making of a final determination with respect to

THE DUMPING OF

CERTAIN FLAT HOT-ROLLED CARBON AND ALLOY STEEL SHEET AND STRIP, ORIGINATING IN OR EXPORTED FROM BRAZIL, BULGARIA, THE PEOPLE'S REPUBLIC OF CHINA, CHINESE TAIPEI, INDIA, THE REPUBLIC OF KOREA, THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA, NEW ZEALAND, SAUDI ARABIA, SOUTH AFRICA, UKRAINE AND THE FEDERAL REPUBLIC OF YUGOSLAVIA

and the making of a final determination with respect to

THE SUBSIDIZING OF CERTAIN FLAT HOT-ROLLED CARBON AND ALLOY STEEL SHEET AND STRIP ORIGINATING IN OR EXPORTED FROM INDIA

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 concerning the dumping of certain flat hot-rolled carbon and alloy steel sheet and strip, originating in or exported from Brazil, Bulgaria, the People's Republic of China, Chinese Taipei, India, the Republic of Korea, the Former Yugoslav Republic of Macedonia, New Zealand, Saudi Arabia, South Africa, Ukraine and the Federal Republic of Yugoslavia, as well as the subsidizing of certain flat hot-rolled carbon and alloy steel sheet and strip originating in or exported from India.

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

STATEMENT OF REASONS

Summary

On January 19, 2001, the Commissioner of Customs and Revenue (Commissioner) initiated an investigation respecting the alleged injurious dumping into Canada of certain flat hot-rolled carbon and alloy steel sheet and strip, originating in or exported from Brazil, Bulgaria, the People's Republic of China (China), Chinese Taipei, India, the Republic of Korea (Korea), the Former Yugoslav Republic of Macedonia (Macedonia), New Zealand, Saudi Arabia, South Africa, Thailand, Ukraine and the Federal Republic of Yugoslavia (Yugoslavia), and the alleged injurious subsidizing of certain flat hot-rolled carbon and alloy steel sheet and strip originating in or exported from India. The investigation was initiated in response to a complaint filed by Algoma Steel Inc. (Algoma) of Sault Ste. Marie, Ontario.

On March 20, 2001, the Canadian International Trade Tribunal (Tribunal) made a preliminary determination that the evidence disclosed a reasonable indication that the alleged dumping and subsidizing of the subject goods have caused injury to the domestic industry. The Canada Customs and Revenue Agency (CCRA) subsequently made a preliminary determination of dumping and subsidizing on April 19, 2001. On the same date, the Commissioner terminated the investigation with respect to Thailand, as subject goods from Thailand were not dumped.

Based on the results of the CCRA's investigation, the Commissioner is satisfied that the subject goods have been dumped and subsidized, and that the margins of dumping and the amounts of subsidy are not insignificant. Accordingly on July 18, 2001, 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).

The Tribunal's inquiry concerning the question of injury to the Canadian industry is continuing. Provisional duties for the subject goods originating in or exported from Brazil, Bulgaria, China, Chinese Taipei, India, Korea, Macedonia, New Zealand, Saudi Arabia, South Africa, Ukraine and Yugoslavia will continue to be assessed until the Tribunal issues its finding.

Interested Parties

Complainant

The complainant, Algoma, is one of five producers of flat hot-rolled carbon and alloy steel sheet and strip in Canada. The other producers are: Stelco Inc. (Stelco) of Hamilton, Ontario; Dofasco Inc. (Dofasco) of Hamilton, Ontario; IPSCO Inc. (IPSCO), of Regina, Saskatchewan; and Ispat Sidbec Inc. (Sidbec), of Montréal, Quebec; all of whom have expressed support for the complaint in letters to the CCRA.

Exporters

The CCRA has identified 21 exporters of subject goods and 11 vendors of the subject goods during the period of investigation, January 1 to September 30, 2000.

Importers

The CCRA's investigation revealed 47 importers of subject goods during the period of investigation.

Background

The CCRA is currently enforcing an injury finding of the Tribunal dated July 2, 1999, with respect to flat hot-rolled carbon and alloy steel sheet and strip from France, Romania, the Russian Federation and the Slovak Republic.

Algoma filed the present complaint on December 6, 2000, following several discussions and meetings with the CCRA. Letters of support for the complaint were received from the other four Canadian producers.

On December 20, 2000, the CCRA informed Algoma that the complaint was properly documented and notified the governments of the named countries that a properly documented complaint had been filed. The High Commission of India was provided with the sections of the non-confidential version of the complaint that related to subsidies and the allegations of injury.

On January 19, 2001, the Commissioner initiated the investigation and notified the Tribunal of that decision. On January 22, 2001, the Tribunal initiated a preliminary injury inquiry into whether the evidence disclosed a reasonable indication of injury or threat of injury caused by the dumping and subsidizing of the goods.

On March 20, 2001, the Tribunal concluded that the evidence disclosed a reasonable indication that the alleged dumping and subsidizing have caused injury to the domestic industry. On

April 19, 2001, the Commissioner made a preliminary determination of dumping and subsidizing with respect to the subject goods and provisional duties have been in place since that date. On the same date, the Commissioner terminated the investigation with respect to Thailand, as the subject goods from Thailand were not dumped.

Product Information

Definition

For the purpose of this investigation, the subject goods are defined as:

Flat hot-rolled carbon and alloy steel sheet and strip, including secondary or "non-prime" material, originating in or exported from Brazil, Bulgaria, the People's Republic of China, Chinese Taipei, India, the Republic of Korea, the Former Yugoslav Republic of Macedonia, New Zealand, Saudi Arabia, South Africa, Ukraine and the Federal Republic of Yugoslavia, in various widths from " (19 mm) and wider, and

  • for product in coil form, in thicknesses from 0.054" to 0.625" (1.37 mm to 15.875 mm) inclusive,
  • for product that is cut-to-length, in thicknesses from 0.054" up to but not including 0.187" (1.37 mm up to but not including 4.75 mm),
  • excluding flat-rolled stainless steel sheet and strip and flat hot-rolled, cut-to-length alloy steel products containing no less than 11.5 per cent manganese, in thicknesses from 3 mm to 4.75 mm.

Product Information

For the purpose of this investigation, hot-rolled carbon and alloy steel sheet products include strip and sheet, but do not include floor plate. Strip is usually produced in widths up to 12" (305 mm) inclusive. Sheet and floor plate are usually produced in widths over 12" (305 mm). Floor plate is hot finished in a final pass or passes to form a pattern on the surface of the sheet.

The subject goods are normally produced to a specification of the ASTM standard, some other international standard, or to a proprietary specification. ASTM specifications for flat hot-rolled carbon and alloy steel strip and sheet include, but are not limited to A505, A506, A507, A568, A569, A570, A606, A607, A621, A622, A635, A659, A715, A749, A907, A935, and A936.

Flat hot-rolled carbon steel sheet products are usually classified as either carbon-manganese or high strength low alloy (HSLA) steels and are available in several qualities and grades, which are usually reflected in ASTM or equivalent specifications or standards.

Alloy steel sheet products that are subject to this investigation are alloy steels, other than stainless steel, that contain by weight one or more of certain specified elements in minimum specified proportions. The notes to Chapter 72 of the Customs Tariff Schedule specify the elements and the minimum proportions.

Flat hot-rolled stainless steel sheet and strip, excluded from the product definition, is commercially and metallurgically distinct from carbon steel, being produced to a lower carbon and higher alloy content than the subject goods. Stainless steel contains, by weight, 1.2 per cent or less of carbon and 10.5 per cent or more of chromium, with or without other elements.

Production Process

While details may vary from mill to mill, the process by which flat hot-rolled carbon and alloy steel sheet products are produced is generally the same for all Canadian producers. The hot-rolled steel sheet is rolled on a continuous strip mill at temperatures above 1600F (870C) from an incoming hot slab up to 9 inches (229 mm) thick. This slab is progressively reduced to a sheet of the required thickness 0.625 inch (15.875 mm) or less. During hot rolling, surface oxide (scale) forms, which is not acceptable for some applications. This scale may be removed by acid pickling. After pickling, rinsing and drying, an oil can be applied as a temporary protection against rust. Edges are usually slit to remove minor edge imperfections and to provide closer width tolerances.

Product Application

Flat hot-rolled steel sheet products are used in the automotive industry in the manufacture of frames, bumpers, wheels and some power train components. In the construction industry, flat hot-rolled steel sheet products are used in the manufacturing of sheet piling and guard rails. In the pipe and tube producing industry, flat hot-rolled steel sheet products, known as "skelp", are used in the manufacturing of pipe and tubes. Significant quantities of the hot-rolled steel sheet products are also consumed by non-automotive stampers, steel fabricators and producers of agricultural and other machinery.

Classification of Imports

The Harmonized System classification numbers, under which subject flat hot-rolled steel sheet products may be classified, are listed in Appendix 1.

The Canadian Industry

There are five Canadian producers of the subject goods: Algoma, Stelco, Dofasco, IPSCO and Ispat Sidbec. There have been no significant changes in the structure of the Canadian industry since the CCRA initiated this investigation.

The Canadian Market

To determine the size of the Canadian market, the CCRA obtained production information from each Canadian producer and utilized available Statistics Canada data.

The CCRA substantiated the information on imports supplied by the complainant from its own internal information system, Facility for Information Retrieval Management (FIRM), customs entry documentation and importer and exporter submissions. Appendix 2 details the volume of dumped imports for the period of investigation.

Results of the Investigation

In conducting its investigation, the CCRA requested identified exporters and importers to provide sales and cost information necessary to determine the normal values and export prices of the subject goods. The governments of Bulgaria, China, Macedonia, Ukraine and Yugoslavia were asked to provide information to determine whether their steel sectors could be considered to be operating under market economy conditions or whether the conditions of section 20 of SIMA are applicable. Section 20 is applicable for the determination of normal values when the government of the country of export has a monopoly of its export trade and it substantially determines domestic prices in respect of the goods under investigation. When section 20 is applicable, normal values are generally determined on the basis of overall profitable domestic sales or the full cost of the goods plus an amount for profit in a surrogate country.

In addition, information was requested from the Government of India to determine whether the steel industry in India had benefited from countervailable subsidies. Exporters from India 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 sold or released into Canada during the Period of Investigation of January 1 to September 30, 2000, that originated in or were exported from the named countries.

Responses to the requests for information relating to dumping were received from three exporters located in Brazil, three in China, one in Chinese Taipei, four in India, one in Korea, one in Macedonia, one in New Zealand, two from South Africa and one in Ukraine. No responses were received from exporters located in Bulgaria, Saudi Arabia or Yugoslavia.

Concerning government responses, submissions were received from the Government of China, the Government of Macedonia and the Government of Ukraine. No responses were received from the Government of Bulgaria or the Government of Yugoslavia. In addition, a submission respecting subsidy programs was received from the Government of India.

Normal values are generally based on the domestic selling prices of the goods in the country of export or on the total cost of producing and selling the goods plus an amount for profit. In the absence of such data, the Minister of National Revenue must specify the manner for the determination of the normal values.

The export price of goods shipped to Canada is the lesser of the exporter's selling price or the importer's purchase price, less all costs, charges and expenses resulting from the exportation of the goods. Normally, the export price is the exporter's selling price.

When the export price is less than the normal value, the difference is the margin of dumping. In this section, margins of dumping are expressed both as a percentage of normal value and of export price.

The determination of normal values, export prices, margins of dumping and amounts of subsidy are discussed below. For exporters that did not cooperate or did not provide a complete response to the request for information, the normal values of the goods were determined by ministerial specification under section 29 of SIMA and are based on the export price of the goods advanced by 169 per cent. This advance is based on the highest margin of dumping, excluding anomalies, found in this investigation for a cooperative exporter, expressed as a percentage of the export price.

The Dumping Investigation

1. Brazil

Submissions were received from three exporters located in Brazil - Companhia Siderurgica National (CSN), Cia Siderurgica Paulista Cosipa (Cosipa) and Usiminas Siderurgicas de Minas Gerais S.A. (Usiminas). Verification meetings were held at CSN's premises in Volta Redonda from May 21 to May 25, 2001, at Cosipa's facilities in Cubatao from May 15 to May 18, 2001 and at Usiminas' premises in Bello Horizonte from May 28 to June 1, 2001.

1.1 CSN

Normal Value - CSN had sales of like goods in its domestic market. Normal values were determined on the basis of the weighted average selling price of domestic sales of like goods pursuant to section 15 of SIMA. Special Import Measure Regulations (SIMR) adjustments to domestic selling prices were made to account for qualitative differences pursuant to section 5(a), for delivery costs pursuant to section 7 and for taxes pursuant to section 10.

Export Price - As the goods were sold to unrelated importers in Canada, export prices were determined pursuant to section 24 of SIMA on the basis of the lesser of the exporter's selling price and the importer's purchase price. In all cases, the exporter's selling price was the lower of the two prices.

Margin of Dumping - For the goods sold or imported into Canada by CSN during the period of investigation, 95.4 per cent were found to have been dumped. The weighted average margin of dumping was 26.3 per cent when expressed as a percentage of normal value or 40.1 per cent when expressed as a percentage of export price.

1.2 Cosipa

Normal Value - Cosipa had sales of like goods in its domestic market. Normal values were determined on the basis of the weighted average selling price of domestic sales of like goods pursuant to section 15 of SIMA. SIMR adjustments to domestic selling prices were made to account for qualitative differences pursuant to section 5(a), for delivery costs pursuant to section 7 and for taxes pursuant to section 10.

Where there were insufficient acceptable sales of like goods in the domestic market, normal values were established pursuant to paragraph 19(b) of SIMA, on the basis of the cost of production of the goods, selling, administrative and all other costs, and a reasonable amount for profit. The profit amount was determined pursuant to paragraph 11(1)(b)(ii), using the overall profit from domestic sales of goods of the same general category.

Export Price - As the goods were sold to unrelated importers in Canada, export prices were determined pursuant to section 24 of SIMA on the basis of the lesser of the exporter's selling price and the importer's purchase price. In all cases, the exporter's selling price was the lower of the two prices.

Margin of Dumping - For the goods sold or imported into Canada by Cosipa during the period of investigation, 100 per cent were found to have been dumped. The weighted average margin of dumping was 4.7 per cent when expressed as a percentage of normal value or 5 per cent when expressed as a percentage of export price.

1.3 Usiminas

Normal Value - Usiminas had sales of like goods in its domestic market. Normal values were determined on the basis of the weighted average selling price of domestic sales of like goods pursuant to section 15 of SIMA. SIMR adjustments to domestic selling prices were made to account for qualitative differences pursuant to paragraph 5(a), for differences in payment terms pursuant to paragraph 5(d), for delivery costs pursuant to section 7 and for taxes pursuant to section 10.

Where there were insufficient acceptable sales of like goods in the domestic market, normal values were established pursuant to paragraph 19(b) of SIMA, on the basis of the cost of production of the goods, selling, administrative and all other costs, and a reasonable amount for profit. The profit amount was determined pursuant to paragraph 11(1)(b)(ii), using the overall profit from domestic sales of goods of the same general category.

Export Price - As the goods were sold to unrelated importers in Canada, export prices were determined pursuant to section 24 of SIMA on the basis of the lesser of the exporter's selling price and the importer's purchase price. In all cases, the exporter's selling price was the lower of the two prices.

Margin of Dumping - For the goods sold or imported into Canada by Usiminas during the period of investigation, 96.1 per cent were found to have been dumped. The weighted average margin of dumping was 8.3 per cent when expressed as a percentage of normal value or 9.3 per cent when expressed as a percentage of export price.

1.4 Country Summary

In summary, 96.5 per cent of the goods sold or imported into Canada from Brazil during the period of investigation were dumped by a weighted average margin of dumping of 11.2 per cent when expressed as a percentage of normal value or 14.6 per cent when expressed as a percentage of export price.

2. Bulgaria

At the time of initiation, the CCRA had evidence on file suggesting that Bulgaria was potentially a non-market economy. Requests for Information were sent to the government of Bulgaria and the Bulgarian exporter in order to obtain the information necessary to determine whether the conditions of section 20 of SIMA are applicable in respect of the steel sector.

Neither the government of Bulgaria nor the Bulgarian exporter or vendor of the subject goods responded to the CCRA's Request for Information. Accordingly, for purposes of the final decision, in the absence of sufficient information, the Commissioner cannot form an opinion as to whether section 20 of SIMA is applicable in determining the normal value of subject goods exported from Bulgaria.

As a result, normal values were determined pursuant to a ministerial specification under section 29 of SIMA based on the highest margin of dumping, excluding anomalies, determined for a cooperative exporter in this investigation.

Export prices were determined pursuant to a ministerial specification under section 29 of SIMA on the basis of the importer's declared purchase price.

During the period of investigation, 100 per cent of the subject goods sold or imported into Canada from Bulgaria were found to have been dumped. The margin of dumping was 62.9 per cent when expressed as a percentage of normal value or 169 per cent when expressed as a percentage of export price.

3. China

At the time of initiation, the CCRA had evidence on file suggesting that China was potentially a non-market economy. Requests for Information were sent to the government of China and the Chinese exporters in order to obtain the information necessary to determine whether the conditions of section 20 of SIMA are applicable in respect of the steel sector.

For purposes of this investigation both the government of China and three exporters, Benxi Iron and Steel Group Co. Ltd. (Benxi), Ansham Iron and Steel Group Corporation Company (Ansham) and Baoshan Iron and Steel Co. Ltd. (Baosteel) provided a detailed response to the CCRA's Request for Information. Following a review of these submissions as well as publicly available information, supplemental information was requested from both the Chinese government and exporters.

Based on the analysis of the responses received from the government and the three exporters and the publicly available information, the Commissioner is of the opinion that the steel sector in China is operating as a non-market economy and conditions of section 20 of SIMA are applicable in respect of the steel sector. In cases involving a non-market economy, the normal values are determined based on profitable selling prices or full costs of production and an amount for profit of goods sold domestically in a surrogate country with a market economy.

3.1 Ansham

Normal Values - The normal values for Ansham are based on the domestic sales of like goods in Brazil pursuant to section 20 of SIMA. SIMR adjustment to Brazilian domestic selling prices to account for differences in conditions of sale under section 5(d) were not applicable to China and were therefore not reflected in the section 20 normal value determination.

Export Prices - As the goods were sold to unrelated importers in Canada, export prices were determined pursuant to section 24 of SIMA on the basis of the of the lesser of the exporter's selling price and the importer's purchase price. In all cases, the exporter's selling price was the lower of the two prices.

Margins of Dumping - For goods sold or imported into Canada by Ansham during the period of investigation, 43.5 per cent were found to have been dumped. The weighted average margin of dumping was 10.4 per cent when expressed as a percentage of normal value or 11.5 per cent when expressed as a percentage of export price.

3.2 Baosteel

Normal Values - The normal values for Baosteel are based on the domestic sales of like goods in Brazil pursuant to section 20 of SIMA. SIMR adjustment to Brazilian domestic selling prices to account for differences in conditions of sale under section 5(d) are not applicable to China and were therefore not reflected in the section 20 normal value determination.

Export Prices - As the goods were sold to unrelated importers in Canada, export prices were determined pursuant to section 24 of SIMA on the basis of the of the lesser of the exporter's selling price and the importer's purchase price. In all cases, the exporter's selling price was the lower of the two prices.

Margins of Dumping - For goods sold or imported into Canada by Baosteel during the period of investigation, 59.5 per cent were found to have been dumped. The weighted average margin of dumping was 2.7 per cent when expressed as a percentage of normal value or 2.8 per cent when expressed as a percentage of export price.

3.3 Benxi

Normal Values - The normal values for Benxi are based on the domestic sales of like goods in Brazil pursuant to section 20 of SIMA. SIMR adjustment to Brazilian domestic selling prices to account for differences in conditions of sale under section 5(d) are not applicable to China and were therefore not reflected in the section 20 normal value determination.

Export Prices - As the goods were sold to unrelated importers in Canada, export prices were determined pursuant to section 24 of SIMA on the basis of the lesser of the exporter's selling price and the importer's purchase price. In all cases, the exporter's selling price was the lower of the two prices.

Margins of Dumping - For goods sold or imported into Canada by Benxi during the period of investigation, 100 per cent were found to have been dumped. The weighted average margin of dumping was 6.6 per cent when expressed as a percentage of normal value or 7.1 per cent when expressed as a percentage of export price.

3.4 Indirect Shipments

Chinese origin goods were also shipped indirectly to Canada through the United States and therefore subsection 30(2) of SIMA is applicable. In situations where goods are shipped indirectly to Canada, the CCRA is required to determine the normal value of the goods, in the country of origin and in the country of export. Where the normal value in the country of origin is higher than the normal value determined in the country of export then both normal value and export price will be determined as if the goods were shipped directly from the country of origin. In the case of China, the normal values from the country of export was the higher of the two. For details on normal value and export price calculations for subject goods shipped from the United States, refer to point 13.

3.5 Country Summary

In summary, 72.5 per cent of the goods sold or imported into Canada from China during the period of investigation were dumped by a weighted average margin of dumping of 7.7 per cent when expressed as a percentage of normal value or 8.6 per cent when expressed as a percentage of export price.

4. Chinese Taipei

A submission was received from one exporter located in Chinese Taipei - Yieh Loong Enterprise (Yieh Loong). Verification meetings were held at the company's premises in Kaohsiung from June 4 to June 7, 2001.

4.1 Yieh Loong

Normal Value - Yieh Loong had sales of like goods in its domestic market. Normal values were determined on the basis of the weighted average selling price of domestic sales of like goods pursuant to section 15 of SIMA. SIMR adjustments to domestic selling prices were made to account for quantity discounts pursuant to section 3, differences in quality pursuant to section 5(a) and delivery costs pursuant to section 7.

Where there were insufficient acceptable sales of like goods in the domestic market, normal values were established pursuant to paragraph 19(b) of SIMA, on the basis of the cost of production of the goods, selling, administrative and all other costs, and a reasonable amount for profit. The profit amount was determined pursuant to paragraph 11(1)(b)(ii), using the overall profit from domestic sales of goods of the same general category.

Export Price - As the goods were sold to unrelated importers in Canada, export prices were determined pursuant to section 24 of SIMA on the basis of the lesser of the exporter's selling price and the importer's purchase price. In all cases, the exporter's selling price was the lower of the two prices.

Margin of Dumping - During the period of investigation, 90.3 per cent of the subject goods that were sold or imported into Canada from Yieh Loong were found to have been dumped. The weighted average margin of dumping was 3.8 per cent when expressed as a percentage of normal value or 4 per cent when expressed as a percentage of export price.

4.2 Other Exporters

Other exporters located in Chinese Taipei did not respond to the CCRA's request for information.

For imports of subject goods from these exporters, normal values were therefore determined by ministerial specification under section 29 of SIMA and are based on the export price advanced by 169 per cent. This advance is based on the highest margin of dumping, excluding anomalies, found in this investigation for a cooperative exporter.

The export prices were also determined pursuant to a ministerial specification under section 29 of SIMA on the basis of the importers' purchase price.

During the period of investigation, 100 per cent of the subject goods sold or imported into Canada from such exporters were found to be dumped. The weighted average margin of dumping was 62.9 per cent when expressed as a percentage of normal value or 169 per cent when expressed as a percentage of export price.

4.3 Indirect Shipments

Goods originating in Chinese Taipei were also shipped indirectly to Canada through the United States and therefore subsection 30(2) of SIMA is applicable. In situations where goods are shipped indirectly to Canada, the CCRA is required to determine the normal value of the goods, in the country of origin and in the country of export. Where the normal value in the country of origin is higher than the normal value determined in the country of export then both normal value and export price will be determined as if the goods were shipped directly from the country of origin. In the case of Chinese Taipei, the normal values from the country of export was the higher of the two. For details on normal value and export price calculations for subject goods shipped from the United States, refer to point 13.

4.4 Country Summary

In summary, 99 per cent of the goods imported into Canada from Chinese Taipei during the period of investigation were dumped by a weighted average margin of dumping of 56.4 per cent when expressed as a percentage of normal value or 151.2 per cent when expressed as a percentage of export price.

5. India

Submissions were received from four exporters located in India - Essar Steel Ltd. (Essar), Jindal Vijayanagar Steel Ltd. (Jindal), Steel Authority of India Ltd. (SAIL) and Tata Iron and Steel Company Ltd. (Tata). The results for these exporters are based on an analysis of the information provided to the CCRA. On-site verification at the companies' premises was not undertaken for this investigation.

5.1 Essar

Normal Value - Essar had insufficient acceptable sales of like goods in the domestic market to allow the establishment of normal values under section 15 of SIMA. Normal values were therefore determined pursuant to paragraph 19(b) of SIMA, on the basis of the cost of production of the goods, selling, administrative and all other costs, and a reasonable amount for profit. The profit amount was determined pursuant to paragraph 11(1)(b)(ii), using the overall profit from domestic sales of goods of the same general category.

Export Price - As the goods were sold to unrelated importers in Canada, export prices were determined pursuant to section 24 of SIMA on the basis of the lesser of the exporter's selling price and the importer's purchase price. In all cases, the exporter's selling price was the lower of the two prices.

Margin of Dumping - For the goods sold or imported into Canada by Essar during the period of investigation, 100 per cent were found to have been dumped. The weighted average margin of dumping was 22.4 per cent when expressed as a percentage of normal value or 29.2 per cent when expressed as a percentage of export price.

5.2 Jindal

Normal Value - Where there were sufficient domestic sales of like goods, normal values were determined on the basis of the weighted average selling price of domestic sales of like goods to unassociated customers pursuant to section 15 of SIMA. SIMR adjustments to domestic selling prices were made to account for quantity discounts pursuant to section 3, differences in terms of payment pursuant to section 5(d), cash discounts pursuant to section 6, delivery costs pursuant to section 7 and duties pursuant to section 10.

Where there were insufficient acceptable sales of like goods in the domestic market, normal values were determined pursuant to paragraph 19(b) of SIMA on the basis of the cost of production of the goods, selling, administrative and all other costs, and a reasonable amount for profit. The profit amount was determined pursuant to paragraph 11(1)(b)(i), using the overall profit from domestic sales of like goods.

Export Price - As the goods were sold to unrelated importers in Canada, export prices were determined pursuant to section 24 of SIMA on the basis of the lesser of the exporter's selling price and the importer's purchase price. In all cases, the exporter's selling price was the lower of the two prices.

Margin of Dumping - For the goods sold or imported into Canada by Jindal during the period of investigation, 100 per cent were found to have been dumped. The weighted average margin of dumping was 29.6 per cent when expressed as a percentage of normal value or 42.2 per cent when expressed as a percentage of export price.

5.3 SAIL

SAIL's sales to Canada during the period of investigation originated from two mills - Bokaro and Salem.

Normal Value - The Bokaro mill had sales of like goods in its domestic market. Normal values were determined on the basis of the weighted average selling price of domestic sales of like goods pursuant to section 15 of SIMA. SIMR adjustments to domestic selling prices were made to account for quantity discounts pursuant to section 3, for cash discounts pursuant to section 6, for delivery costs pursuant to section 7, and for taxes and duties pursuant to section 10.

Normal values for goods shipped from the Salem plant could not be established under the provisions of either sections 15 or 19 of SIMA as SAIL did not provide costing information for these goods. Normal values for goods shipped from Salem were determined pursuant to a ministerial specification under section 29 of SIMA and are based on the highest margin of dumping, excluding anomalies, determined for a cooperating exporter in this investigation.

Export Price - As the goods were sold to unrelated importers in Canada, export prices were determined pursuant to section 24 of SIMA on the basis of the lesser of the exporter's selling price and the importer's purchase price. In all cases, the exporter's selling price was the lower of the two prices.

Margin of Dumping - For the goods sold or imported into Canada by SAIL during the period of investigation, 100 per cent were found to have been dumped. The weighted average margin of dumping for the Bokaro plant was 31.4 per cent when expressed as a percentage of normal value and 46 per cent when expressed as a percentage of export price. The weighted average margin of dumping for the Salem plant was 62.9 per cent when expressed as a percentage of normal value and 169 per cent when expressed as a percentage of export price.

5.4 Tata

The submission received from Tata was incomplete. As a result, normal values were determined pursuant to a ministerial specification under section 29 of SIMA based on the highest margin of dumping, excluding anomalies, determined for a cooperating exporter in this investigation.

Export prices were determined pursuant to a ministerial specification under section 29 of SIMA on the basis of the importer's purchase price.

Margin of Dumping - For the goods sold or imported into Canada by Tata during the period of investigation, 100 per cent were found to have been dumped. The weighted average margin of dumping was 62.9 per cent when expressed as a percentage of normal value or 169 per cent when expressed as a percentage of export price.

5.5 Indirect Shipments

Indian origin goods were also shipped indirectly to Canada through the United States and therefore subsection 30(2) of SIMA is applicable. In situations where goods are shipped indirectly to Canada, the CCRA is required to determine the normal value of the goods, in the country of origin and in the country of export. Where the normal value in the country of origin is higher than the normal value determined in the country of export then both normal value and export price will be determined as if the goods were shipped directly from the country of origin. In the case of India, the normal values from the country of export was the higher of the two. For details on normal value and export price calculations for subject goods shipped from the United States, refer to point 13.

5.6 Country Summary

In summary, 100 per cent of the goods sold or imported into Canada from India during the period of investigation were dumped by a weighted average margin of dumping of 34.2 per cent when expressed as a percentage of normal value or 62.3 per cent when expressed as a percentage of export price.

6. Korea

A submission was received from one exporter located in Korea - Pohang Iron & Steel Co. Ltd., (Posco). Verification meetings were held at the company's premises in Seoul and Kwangyang from June 11 to June 14, 2001.

6.1 Posco

Normal Value - Posco had profitable sales of like goods in its domestic market. Normal values in the majority of cases were determined on the basis of the weighted average selling price of domestic sales of like goods pursuant to section 15 of SIMA. SIMR adjustments to domestic selling prices were made to account for differences in payment terms pursuant to section 5(d), for delivery costs pursuant to section 7 and for duty drawback pursuant to section 10.

Where there were insufficient acceptable sales of like goods in the domestic market, normal values were determined pursuant to paragraph 19(b) of SIMA, on the basis of the cost of production of the goods, selling, administrative and all other costs, and a reasonable amount for profit. The profit amount was determined pursuant to paragraph 11(1)(b)(ii), using the overall profit from domestic sales of goods of the same general category.

Export Price - Since the importer in Canada, Daewoo Canada Ltd., is related to the vendor, Daewoo Corporation, the CCRA conducted a reliability test on the declared export prices. Export prices were determined under paragraph 24(a) on the basis of the exporter's selling price, less all costs, charges and expenses incurred in exporting the goods to Canada. Export prices were also determined under paragraph 25(1)(c) from the importer's resale price of the goods in Canada, less all costs incurred in exporting the goods to Canada, all costs incurred in selling the goods in Canada, and an amount for profit.

A comparison of the export prices determined under paragraph 24(a) and paragraph 25(1)(c) of SIMA revealed that the exporter's selling prices were reliable for purposes of determining the export price. Consequently, the export prices were determined under paragraph 24(a) of SIMA.

Margin of Dumping - For the goods sold or imported into Canada by Posco during the period of investigation, 100 per cent were found to have been dumped. The weighted average margin of dumping was 13.8 per cent when expressed as a percentage of normal value or 16.1 per cent when expressed as a percentage of export price.

6.2 Indirect Shipments

Korean origin goods were also shipped indirectly to Canada through the United States and therefore subsection 30(2) of SIMA is applicable. In situations where goods are shipped indirectly to Canada, the CCRA is required to determine the normal value of the goods, in the country of origin and in the country of export. Where the normal value in the country of origin is higher than the normal value determined in the country of export then both normal value and export price will be determined as if the goods were shipped directly from the country of origin. In the case of Korea, the normal values from the country of export was the higher of the two. For details on normal value and export price calculations for subject goods shipped from the United States, refer to point 13.

In addition to indirect shipments to Canada through the United States, Korean origin goods were also shipped indirectly to Canada through China and therefore subsection 30(2) of SIMA is applicable to those shipments in the same manner as described for the indirect shipments from the United States. In the case of Korea, the normal values from the country of export was the higher of the two.

The exporter that had shipped the subject goods of Korean origin from China to Canada did not provide a response to the CCRA's request for information. For such imports, normal values were determined by advancing the export price of the subject goods by 169 per cent pursuant to a ministerial specification pursuant to subsection 29(1) of SIMA.

Export prices were also determined pursuant to a ministerial specification under section 29 of SIMA on the basis of the importers' purchase price.

During the period of investigation, 100 per cent of the subject goods of Korean origin exported from the China and the United States were found to be dumped. The weighted average margin of dumping was 62.9 per cent, expressed as a percentage of normal value or 169 per cent when expressed as a percentage of export price.

6.3 Country Summary

In summary, 100 per cent of the goods sold or imported into Canada from Korea during the period of investigation were dumped by a weighted average margin of dumping of 24.7 per cent when expressed as a percentage of normal value or 50.1 per cent when expressed as a percentage of export price.

7. Macedonia

At the time of initiation, the CCRA had information on file suggesting that Macedonia was potentially a non-market economy. Requests for Information were sent to the Government of Macedonia and the Macedonian exporter in order to obtain the information necessary to determine whether the conditions of section 20 of SIMA are applicable in respect of the steel sector.

The government of Macedonia provided a response to the CCRA's Request for Information. The sole Macedonian exporter, R.Z. Valavnica za Lenti A.D., provided a response that was determined to be incomplete. The CCRA also reviewed publicly available information on the Maecdonian economy. CCRA's analysis of the responses received and the publicly available information revealed that the government of Macedonia does not have a monopoly or a substantial monopoly of its export trade in the steel sector. Therefore the Commissioner is of the opinion that the steel industry sector in Macedonia is operating as a market economy and section 20 of SIMA does not apply.

R.Z. Valavnica za Lenti A.D.

Normal Value - As the exporter failed to provide a complete submission, there is insufficient information to establish normal values under sections 15 and 19 of SIMA. Normal values were therefore determined pursuant to a ministerial specification under section 29 of SIMA based on the highest margin of dumping, excluding anomalies, determined for a cooperative exporter in this investigation.

Export Price - Export prices were determined pursuant to a ministerial specification under section 29 of SIMA on the basis of the importer's declared purchase price.

Margin of Dumping - During the period of investigation, 100 per cent of the subject goods sold or imported into Canada from R.Z. Valavnica za Lenti A.D. were found to have been dumped. The margin of dumping was 62.9 per cent when expressed as a percentage of normal value or 169 per cent when expressed as a percentage of export price.

8. New Zealand

A submission was received from the sole exporter located in New Zealand - BHP New Zealand Steel Ltd. (NZS). The results for NZS are based on an analysis of the information provided to the CCRA. On-site verification at the company's premises was not undertaken for this investigation.

Normal Value - NZS had sales of like goods in its domestic market for one of the grades sold to Canada. For this grade, normal values were determined on the basis of the weighted average selling price of domestic sales of like goods pursuant to section 15 of SIMA. SIMR adjustments to domestic selling prices were made to account for differences in payment terms pursuant to section 5(d), for delivery costs pursuant to section 7 and for taxes pursuant to section 10.

Where there were insufficient acceptable sales of like goods in the domestic market, normal values were determined pursuant to paragraph 19(b) of SIMA, on the basis of the cost of production of the goods, selling, administrative and all other costs, and a reasonable amount for profit. The profit amount was determined pursuant to paragraph 11(1)(b)(ii), using the overall profit from domestic sales of goods of the same general category.

Export Price -Export prices were determined pursuant to section 24 of SIMA on the basis of the lesser of the exporter's selling price and the importer's purchase price. In all cases, the exporter's selling price was the lower of the two prices.

Margin of Dumping - During the period of investigation 90.2 per cent of the subject goods sold or imported into Canada from NZS were found to have been dumped. The weighted average margin of dumping was 17.3 per cent when expressed as a percentage of normal value and 21.1 per cent when expressed as a percentage of export price.

9. Saudi Arabia

The only exporter, Saudi Iron and Steel Company (Hadeed) did not provide a response to the CCRA's Request for Information.

As a result, normal values were determined pursuant to a ministerial specification under section 29 of SIMA based on the highest margin of dumping, excluding anomalies, determined for a cooperative exporter in this investigation.

Export prices were determined pursuant to a ministerial specification under section 29 of SIMA on the basis of the importer's declared purchase price.

During the period of investigation, 100 per cent of the subject goods sold or imported to Canada from Saudi Arabia were found to have been dumped. The margin of dumping was 62.9 per cent when expressed as a percentage of normal value or 169 per cent when expressed as a percentage of export price.

10. South Africa

Submissions were received from two exporters located in South Africa - Iscor Limited (Iscor) and Highveld Steel and Vanadium Corp. Ltd. (Highveld). Verification meetings were conducted in South Africa at Iscor's premises in Vanderbjlpark and Highveld's premises in Witbank. These meetings occurred during the period of March 26 to April 13, 2001.

10.1 Highveld

Normal Value - Where there were sufficient domestic sales of like goods, normal values were determined on the basis of the weighted average selling price of domestic sales of like goods pursuant to section 15 of SIMA. SIMR adjustments to domestic selling prices were made to account for qualitative differences pursuant to section 5(a), cash discounts pursuant to section 6 and delivery costs pursuant to section 7.

Where there were insufficient acceptable sales of like goods in the domestic market, normal values were determined pursuant to paragraph 19(b) of SIMA on the basis of the cost of production of the goods, selling, administrative and all other costs, and a reasonable amount for profit. The profit amount was determined pursuant to paragraph 11(1)(b) of SIMR using the overall profit from domestic sales of like goods, or in their absence the overall profit from domestic sales of goods of the same general category.

Export Price - Export prices were determined pursuant to section 24 of SIMA on the basis of the lesser of the exporter's selling price and the importer's purchase price. In all cases, the exporter's selling price was the lower of the two prices.

Margin of Dumping - During the period of investigation, 100 per cent of the subject goods sold or imported into Canada from Highveld were found to be dumped. The weighted average margin of dumping was 19.5 per cent when expressed as a percentage of normal value or 24.3 per cent when expressed as a percentage of export price.

10.2 Iscor

Normal Value - Where there were sufficient domestic sales of like goods, normal values were determined on the basis of the weighted average selling price of domestic sales of like goods pursuant to section 15 of SIMA. SIMR adjustments to domestic selling prices were made to account for qualitative differences pursuant to section 5(a) and cash discounts pursuant to section 6.

Where there were insufficient acceptable sales of like goods in the domestic market, normal values were determined pursuant to paragraph 19(b) of SIMA on the basis of the cost of production of the goods, selling, administrative and all other costs, and a reasonable amount for profit. The profit amount was determined pursuant to paragraph 11(1)(b) of SIMR using the overall profit from domestic sales of like goods, or in their absence the overall profit from domestic sales of goods of the same general category.

Export Price - Export prices were determined pursuant to section 24 of SIMA on the basis of the lesser of the exporter's selling price and the importer's purchase price. In all cases, the exporter's selling price was the lower of the two prices.

Margin of Dumping - During the period of investigation, 95.4 per cent of the subject goods sold or imported into Canada from Iscor were found to be dumped. The weighted average margin of dumping was 36.9 per cent when expressed as a percentage of normal value or 62.7 per cent when expressed as a percentage of export price.

10.3 Country Summary

In summary, 97.2 per cent of the goods sold or imported into Canada from South Africa during the period of investigation were dumped by a weighted average margin of dumping of 30.2 per cent when expressed as a percentage of normal value or 47.9 per cent when expressed as a percentage of export price.

11. Ukraine

At the time of initiation, Requests for Information were sent to the government of Ukraine and the only Ukrainian exporter in order to obtain the information necessary to determine whether the conditions of section 20 of SIMA are applicable in respect of the steel sector.

The government of Ukraine provided a complete response to the CCRA's Request for Information. The response submitted by the sole exporter, Zaporizhstal Iron and Steel Works (Zaporizhstal) subsequent to the preliminary determination of dumping and subsidy was determined by the CCRA to be incomplete. Zaporizhstal was unable to identify the goods that were shipped to Canada as it sold the subject goods to vendors in other countries from whom the Canadian importers purchased the goods in question. No response to the CCRA's request for information was received from any of these vendors.

In a recent investigation by the CCRA concerning another steel product, concrete reinforcing bar (rebar), from several countries including Ukraine, the Commissioner formed the opinion that the government of Ukraine does not have a monopoly or substantial monopoly of its export trade in the steel sector and therefore section 20 of SIMA does not apply in the steel sector. Normal values may be determined under sections 15 or 19 of SIMA where the exporter has provided sufficient information. This decision was based on the analysis and verifications of the submissions from the Ukrainian government and the exporter involved in the rebar case.

Zaporizhstal

Normal Value - As Zaporizhstal failed to provide a complete submission, normal values were determined by ministerial specification under section 29 of SIMA and are based on the export price advanced by 169 per cent. This advance is based on the highest margin of dumping, excluding anomalies, found in this investigation for a co-operative exporter.

Export Price - Neither Zaporizhstal nor the vendors involved provided information on export prices. Therefore, the export prices were also determined pursuant to a ministerial specification under section 29 of SIMA on the basis of the importer's purchase price.

Margin of Dumping - During the period of investigation, 100 per cent of the subject goods sold or imported into Canada from Zaporizhstal were found to have been dumped. The weighted average margin of dumping was 62.9 per cent when expressed as a percentage of normal value or 169 per cent when expressed as a percentage of export price.

12. Yugoslavia

At the time of initiation, the CCRA had evidence on file suggesting that Yugoslavia was potentially a non-market economy. Requests for Information were sent to the government of Yugoslavia and the Yugoslavian exporter in order to obtain the information necessary to determine whether the conditions of section 20 of SIMA are applicable in respect of the steel sector.

Neither the government of Yugoslavia nor the sole Yugoslavian exporter of the subject goods responded to the CCRA's Request for Information. Accordingly, for purposes of the final decision, in the absence of sufficient information, the Commissioner cannot form an opinion as to whether section 20 of SIMA is applicable in determining the normal value of subject goods exported from Yugoslavia.

As a result, normal values were determined pursuant to a ministerial specification under section 29 of SIMA on the basis of an advance over export price of 62.9 per cent based on the highest margin of dumping found for a cooperative exporter during this investigation.

Export prices were determined pursuant to a ministerial specification under section 29 of SIMA on the basis of the importer's declared purchase price.

For the goods sold or imported into Canada from Yugoslavia during the period of investigation, 100 per cent were dumped by a weighted average margin of dumping of 62.9 per cent when expressed as a percentage of normal value or 169 per cent when expressed as a percentage of export price.

13. United States of America Exporters

None of the United States exporters that had shipped the subject goods to Canada provided a response to the CCRA's request for information. For imports from these exporters, normal values were determined by advancing the export price of the subject goods by 169 per cent pursuant to a ministerial specification pursuant to subsection 29(1) of SIMA.

Export prices were also determined pursuant to a ministerial specification under section 29 of SIMA on the basis of the importers' purchase price.

During the period of investigation, 100 per cent of the subject goods exported from the U.S. were found to be dumped. The weighted average margin of dumping was 62.9 per cent, expressed as a percentage of normal value or 169 per cent when expressed as a percentage of export price.

Summary of Results - Dumping

In making a final determination of dumping, the Commissioner must be satisfied that the goods have been dumped and that the margin of dumping is not insignificant. SIMA stipulates that a margin of dumping that is less than two per cent of the export price of the goods for each country is insignificant. As demonstrated in Appendix 2, the margin of dumping for each country is above the two per cent threshold level. The Commissioner is satisfied that the margins of dumping are not insignificant.

The Subsidy Investigation

The subsidy portion of the investigation covered all sales and shipments of the subject goods originating in or exported from India and released into Canada during the period of investigation of January 1 to September 30, 2000. A Request for Information - Subsidy (Subsidy RFI) was sent to the government of India and to the possible exporters in India at the time of the initiation of the investigation. Responses to the Subsidy RFI were received from the government of India and four exporters in India. Subsequent to the preliminary determination, supplementary information was received from three exporters and from the Government of India.

During the final phase of the subsidy investigation, a methodology for a price undertaking was proposed to the CCRA on behalf of the four exporters and the Government of India. The proposed methodology was not acceptable to the CCRA, but no subsequent offer of an undertaking was received.

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 anything 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. 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. 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 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, India is a developing country according to the Organization for Economic Co-operation and Development. 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 (Subsidies Agreement). This Article will require termination of the countervailing duty 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 Subsidies 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, India is subject to the three per cent level of subsidization as it is included in paragraph 11 of Article 27 as being a developing country Member referred to in Annex VII of the Subsidies Agreement.

Results of the Subsidy Investigation

Prior to the preliminary determination, all four exporters of subject goods from India submitted information in response to the CCRA's Subsidy RFI: Essar Steel Ltd. (Essar), Jindal Vijayanagar Steel Limited. (Jindal), Steel Authority of India Ltd. (SAIL) and Tata Iron and Steel Company Ltd. (Tata). However, the information received from Tata was not complete.

During the final phase of the investigation supplementary information was received from Essar, Jindal, and SAIL. No additional information was received from Tata.

All the programs named in the properly document complaint were 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 on persons engaged in the production, manufacture, growth, processing, purchase, distribution, transportation, sale, export or import of the subject goods:

  • Duty Entitlement Pass Book Scheme;
  • Advance Licences;
  • Special Import Licences;
  • Export Promotion Capital Goods Scheme;
  • Pre-Shipment Export Financial Assistance;
  • Post-Shipment Export Financial Assistance;
  • Loans from the Steel Development Fund;
  • Tax Exemption For Export Profits;
  • Loan Guarantees from the Government of India.

Summary of Subsidy Results

The CCRA has determined that the following programs constitute subsidies which are subject to countervailing duty measures on the basis that there is a financial contribution by the government of India that conferred a benefit to the exporters and which are specific for the reasons outlined below:

  • Duty Entitlement Pass Book Scheme,
  • Advance Licences,
  • Special Import Licences,
  • Export Promotion Capital Goods Scheme,
  • Pre-Shipment Export Financial Assistance,
  • Post-Shipment Export Financial Assistance,
  • Forgiveness of Loans from the Steel Development Fund, and
  • Forgiveness of Loans from the Government of India.

Programs 1. - 6. are specific subsidies under paragraph 2(7.2)(b) of SIMA for the reason that they are prohibited subsidies as defined in subsection 2(1) of SIMA, because they are contingent upon export performance.

Programs 7. and 8. constitute specific subsidies under paragraph 2(7.2)(a) of SIMA for the reason that they are limited to a particular enterprise.

As shown in Appendix 4, the benefits received from these programs, in aggregate, represent on average 1,402 rupees per metric tonne, which exceeds the three per cent threshold stipulated in Article 27.11 of the Subsidies Agreement concerning developing countries referred to in section 41.2 of SIMA.

As shown in Appendix 5, the volume of the subject goods exceeds the four per cent threshold stipulated in Article 27.10(b) of the Subsidies Agreement concerning developing countries referred to in section 41.2 of SIMA.

Appendix 6 contains the rationale used in determining why these programs result in countervailable subsidies in accordance with the legislation.

Results by Company

Essar

For the final decision, the CCRA requested additional information and clarification to confirm the amount of subsidy and to ascertain whether Essar had received actionable subsidies in respect of programs not noted in the preliminary determination.

Based on the information provided, the CCRA has determined that Essar received actionable subsidies in respect of the following programs:

  • Duty Entitlement Pass Book Scheme;
  • Advance Licences;
  • Export Promotion Capital Goods Scheme;
  • Pre-Shipment Export Financial Assistance.

These programs are prohibited subsidies because they are contingent on export performance. The amount of subsidy from the four programs was 1,104 rupees per metric tonne.

Jindal

For the final decision, the CCRA requested additional information and clarification to confirm the amount of subsidy and to ascertain whether Jindal had received actionable subsidies in respect of programs not noted in the preliminary determination.

Based on the information provided, the CCRA has determined that Jindal has received actionable subsidies in respect of the following programs:

  • Export Promotion Capital Goods Scheme;
  • Pre-Shipment Export Financial Assistance;
  • Post-Shipment Export Financial Assistance.

The programs are prohibited subsidies because they are contingent on export performance. The amount of subsidy from the three programs was 1,719 rupees per metric tonne.

SAIL

For the final decision, the CCRA requested additional information and clarification to confirm the amount of subsidy and to ascertain whether SAIL had received actionable subsidies in respect of programs not noted in the preliminary determination.

Based on the information provided, the CCRA has determined that SAIL has received actionable subsidies in respect of the following programs:

  • Duty Entitlement Pass Book Scheme;
  • Special Import Licences;
  • Export Promotion Capital Goods Scheme;
  • Pre-Shipment Export Financial Assistance;
  • Forgiveness of Loans from the Steel Development Fund;
  • Forgiveness of Loans from the Government of India.

The Duty Entitlement Pass Book Scheme, Special Import Licences and Pre-Shipment Export Financial Assistance programs are prohibited subsidies because they are contingent on export performance. The Forgiveness of Loans from the Steel Development Fund and the Government of India are specific because they are limited to a particular enterprise. The amount of subsidy from all these programs was 1,020 rupees per metric tonne.

Tata

For the final decision, the CCRA requested additional information and clarification to ascertain the amount of subsidy and determine whether Tata had received actionable subsidies in respect of programs not noted in the preliminary determination. Since the required supplementary information was not provided for certain programs, the amount of subsidy for those programs was determined using the highest amount found for other exporters.

The CCRA has determined that Tata received actionable subsidies in respect of the following programs:

  • Duty Entitlement Pass Book Scheme;
  • Advance Licences;
  • Special Import Licences;
  • Export Promotion Capital Goods Scheme;
  • Pre-Shipment Export Financial Assistance;
  • Post-Shipment Export Financial Assistance.

These programs are prohibited subsidies because they are contingent on export performance. The amount of subsidies from these programs was 2,746 rupees per metric tonne.

Decision

Based on the results of the investigation, the Commissioner is satisfied that the subject goods from Brazil, Bulgaria, China, Chinese Taipei, India, Korea, Macedonia, New Zealand,

Saudi Arabia, South Africa, Ukraine and Yugoslavia have been dumped and that the margins of dumping are not insignificant. The Commissioner is also satisfied that the subject goods from India have been subsidized and that the amounts of subsidy are not insignificant.

Accordingly, on July 18, 2001, the Commissioner has made a final determination of dumping and subsidizing pursuant to paragraph 41(1)(a) of SIMA.

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 August 17, 2001.

Subject goods imported during the provisional period will continue to be assessed provisional duty as determined at the time of the preliminary determination of dumping and subsidizing. The provisional period began on April 19, 2001, the date of the preliminary determination of dumping and subsidizing, 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, which is available on the CCRA internet web site at: www.cbsa-asfc.gc.ca/sima-lmsi/

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 duties payable on subject goods released from customs' possession during the provisional period pursuant to section 55 of SIMA. If the provisional duty was in excess of the final amount of anti-dumping and countervailing duties 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 equal to the margin of dumping and countervailing duty equal to the amount of the subsidy. If anti-dumping and countervailing duties are payable, such duties are hereby demanded pursuant to section 11 of SIMA.

Specific normal values and amounts of subsidy for the subject goods have been provided to the co-operating exporters for the final determination. Should the Tribunal make an injury finding, these normal values and amounts of subsidy will come into effect the day after the date of the injury finding. Where specific normal values have not been issued, anti-dumping duty at a rate of 169 per cent of the export price will be payable on imports of the subject goods. Where specific amounts of subsidy have not been issued, a countervailing duty amount of 3,150 rupees per metric tonne will be payable on imports of the subject goods from India.

In the case of India, both anti-dumping duty and countervailing duty may apply to the same goods. Under section 10 of SIMA, only the amount by which the margin of dumping exceeds the countervailing duty attributable to export subsidies will be levied as anti-dumping duty.

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 or from the CCRA's Web site at the address below. For further information, please contact Mr. Glen Robinson, Ms. Vera Hutzuliak or Mr. Jean-Louis Lapratte:

Mail -
Canada Customs and Revenue Agency
Anti-dumping and Countervailing Directorate
191 Laurier Avenue West, 16th Floor
Ottawa, Ontario
Canada
K1A 0L5

Telephone -
Glen Robinson (613) 954-7346
Vera Hutzuliak (613) 954-0689
Jean-Louis Lapratte (613) 954-7375

Telefax -
941-2612

e-mail -
glen.robinson@ccra-adrc.gc.ca
vera.hutzuliak@ccra-adrc.gc.ca
jean-louis.lapratte@ccra-adrc.gc.ca

Website -
www.cbsa-asfc.gc.ca/sima-lmsi/
www.cbsa-asfc.gc.ca/sima-lmsi/

R.A. Séguin
A/Director General
Anti-dumping and Countervailing Directorate

Appendix 1

Classification of Imports:

The subject flat hot-rolled steel sheet products may be classified under the following
Harmonized System classification numbers:

7208.25.10.10
7208.25.10.20
7208.25.10.30
7208.25.10.40
7208.25.90.10
7208.25.90.20
7208.25.90.30
7208.25.90.40
7208.26.10.10
7208.26.10.20
7208.26.10.30
7208.26.10.40
7208.26.90.10
7208.26.90.20
7208.26.90.30
7208.26.90.40
7208.27.10.10
7208.27.10.20
7208.27.10.30
7208.27.10.40
7208.27.90.10
7208.27.90.20
7208.27.90.30
7208.27.90.40
7208.36.00.10
7208.36.00.20
7208.36.00.30
7208.36.00.40
7208.37.10.10
7208.37.10.20
7208.37.10.30
7208.37.10.40
7208.37.90.10
7208.37.90.20
7208.37.90.30
7208.37.90.40 7208.38.10.10
7208.38.10.20
7208.38.10.30
7208.38.10.40
7208.38.90.10
7208.38.90.20
7208.38.90.30
7208.38.90.40
7208.39.00.10
7208.39.00.20
7208.39.00.30
7208.39.00.40 7208.53.00.10
7208.53.00.20
7208.53.00.30
7208.53.00.40
7208.54.00.10
7208.54.00.20
7208.54.00.30
7208.54.00.40
7208.90.00.00
7211.13.00.00
7211.14.00.90
7211.19.10.00
7211.19.90.10
7211.19.90.90
7211.90.10.00
7211.90.90.90
7225.20.00.91
7225.20.00.92
7225.30.10.00
7225.30.90.00
7225.40.10.10
7225.40.10.20
7225.40.10.30
7225.40.10.40
7225.40.20.10
7225.40.20.20
7225.40.20.30
7225.40.20.40
7225.40.90.11
7225.40.90.19
7225.40.90.21
7225.40.90.91
7225.40.90.92
7225.40.90.93
7225.40.90.94
7225.99.00.90
7226.20.00.91
7226.20.00.92 7226.91.10.00
7226.91.90.20
7226.91.90.30
7226.91.90.40
7226.91.90.90
7226.99.90.00

Appendix 2

SUMMARY OF FINAL DETERMINATION
VOLUMES OF DUMPING BY COUNTRY
FOR CERTAIN HOT-ROLLED STEEL SHEET AND STRIP

(January 1 to September 30, 2000)

 

 

Country

Total Goods Sold or Imported (Metric Tonnes)

% of Goods Dumped

Total Goods Dumped (Metric Tonnes)

Dumped Goods as a Percent of Total Goods

Brazil

24,189

96.5%

23,345

1.3%

Bulgaria

22,178

100%

22,178

1.3%

China

137,224

72.5%

99,472

5.7%

Chinese Taipei

153,917

99%

152,435

8.8%

India

243,471

100%

243,471

14%

Korea

66,429

100%

66,429

3.8%

Macedonia

10,899

100%

10,899

0.6%

New Zealand

20,839

90.2%

18,793

1.1%

Saudi Arabia

35,300

100%

35,300

2.0%

South Africa

37,631

97.2%

36,575

2.1%

Ukraine

22,111

100%

22,111

1.3%

Yugoslavia

30,455

100%

30,455

1.8%

Total - Named Counties

804,643

94.6%

761,463

43.8%

Total - All Countries

1,738,275

 

 

 

Import and sales data, for the period of investigation, is based on information provided by importers and exporters, Statistics Canada data, CCRA's internal information system and customs documentation.

Appendix  3

SUMMARY OF FINAL DETERMINATION
MARGINS OF DUMPING BY EXPORTER/COUNTRY
FOR CERTAIN HOT-ROLLED STEEL SHEET AND STRIP

(January 1 to September 30, 2000)



Country

% of Goods Dumped

Range of Margins of Dumping of Dumped Goods

(% of Normal Value)

Weighted Average Margin of Dumping

(% of Normal Value)

Weighted Average Margin of Dumping

(% of Export Price)

Brazil:

Cia Siderurgica National

95.4%

1.7% - 49.4%

26.3%

40.1%

Cia Siderurgica Paulista
Cosipa

100%

0.6 % - 10%

4.7%

5%

Usiminas Siderurgicas de
Minas Gerais SA

96.1%

0.3% - 23.3%

8.3%

9.3%

Country Total/Average

96.5%

 

11.2%

14.6%

Bulgaria:

All Exporters

100%

62.9%

62.9% (1)

169%

Country Total/Average

100%

 

62.9%

169%

China:

Benxi Iron and Steel

100%

4.8% - 10.5%

6.6%

7.1%

Ansham Iron and Steel

43.5%

12.6% - 25.7%

10.4%

11.5%

Baoshan Iron and Steel

59.5%

0.2% - 17.8%

2.7%

2.8%

Other Exporters

100%

62.9%

62.9%(1)

169%

Country Total/Average

72.5%

 

7.7%

8.6%

Chinese Taipei:

Yieh Loong

90.3%

0.5% - 8.3 %

3.8%

4%

Other Exporters

100%

62.9%

62.9%(1)

169%

Country Total/Average

99%

 

56.4%

151.2%

India:

Essar Steel

100%

11.9% - 40.9%

22.4%

29.2% (2)

Jindal Vijayanagar Steel

100%

18.4% - 39.6%

29.6%

42.2% (2)

Steel Authority - Bokaro

100%

16.1% - 39.3%

31.4%

46% (2)

Steel Authority - Salem

100%

62.9%

62.9% (1)

169% (2)

Tata Iron and Steel

100%

62.9%

62.9% (1)

169% (2)

Other Exporters

100%

62.9%

62.9% (1)

169% (2)

Country Total/Average

100%

 

34.2%

62.3%

Korea:

Pohang Iron & Steel

100%

4.5% - 30.5%

13.8%

16.1%

Other Exporters

100%

62.9%

62.9% (1)

169%

Country Total/Average

100%

 

24.7%

50.1%

Margin of Dumping is expressed as a percentage of the total normal value of all goods reviewed, dumped and non-dumped.

(1) Margin of dumping based on highest margin of dumping found for the Final Determination
(2)
Duty payable at time of release from Customs will be the full amount of the subsidy, plus that portion of the margin of dumping that is not attributable to an export subsidy.
(3)
Except where specific companies are named the figures in the above table apply to all exporters from the named countries.



Country

% of Goods Dumped

Range of Margins of Dumping of Dumped Goods

(% of Normal Value)

Weighted Average Margin of Dumping

(% of Normal Value)

Weighted Average Margin of Dumping

(% of Export Price)

Macedonia:

Valavnica za Lenti

100%

62.9%

62.9% (1)

169%

Country Total/Average

100%

 

62.9%

169%

New Zealand:

New Zealand Steel

90.2%

0.2% - 42.4%

17.3%

21.1%

Country Total/Average

90.2%

 

17.3%

21.1%

Saudi Arabia:

Saudi Iron and Steel

100%

62.9%

62.9% (1)

169%

Country Total/Average

100%

 

62.9%

169%

South Africa:

Iscor Limited

95.4%

10.2% - 62.9%

36.9%

62.7%

Highveld

100%

10.2% - 28.8%

19.5%

24.3%

Country Total/Average

97.2%

 

30.2%

47.9%

Ukraine:

Zaporizhstal

100%

62.9%

62.9% (1)

169%

Country Total/Average

100%

 

62.9%

169%

Yugoslavia:

All Exporters

100%

62.9%

62.9% (1)

169%

Country Total/Average

100%

 

62.9%

169%

All Other Exporters of Subject Goods (3)

100%

62.9%

62.9% (1)

169%

All Subject Countries

94.5%

 

36.1%

 

Margin of Dumping is expressed as a percentage of the total normal value of all goods reviewed, dumped and non-dumped.

(1) Margin of dumping based on highest margin of dumping found for the Final Determination
(2)
Duty payable at time of release from Customs will be the full amount of the subsidy, plus that portion of the margin of dumping that is not attributable to an export subsidy.
(3)
Except where specific companies are named the figures in the above table apply to all exporters from the named countries.

Appendix 4

SUMMARY OF FINAL DETERMINATION
AMOUNTS OF SUBSIDY BY EXPORTER
CERTAIN HOT-ROLLED STEEL SHEET AND STRIP

(January 1 to September 30, 2000)

INDIA

Percent of Subsidized Goods as Percent of Total Goods

Amount of Subsidy (per Metric Tonne)

Countervailing Duty

(Per Metric Tonne)

Essar Steel Ltd.

100%

1,104 rupees

1,104 rupees

Jindal Vijayanagar Steel

100%

1,719 rupees

1,719 rupees

Steel Authority of India

100%

1,020 rupees

1,020 rupees

Tata Iron and Steel

100%

2,746 rupees

2,746 rupees

All Other Exporters

100%

3,150 rupees

3,150 rupees

Country Average*

100%

1,402 rupees

 

*The benefits received from these programs, in aggregate, represent on average 1,402 rupees per metric tonne, which exceeds the three per cent threshold stipulated in Article 27.11 of the Subsidies Agreement concerning developing countries referred to in section 41.2 of SIMA.

Appendix 5

SUMMARY OF FINAL DETERMINATION
VOLUMES OF SUBSIDIZED GOODS
CERTAIN HOT-ROLLED STEEL SHEET AND STRIP

(January 1 to September 30, 2000)

Country

Total Goods (Metric Tonnes)

% of Goods Subsidized

Total Goods Subsidized (Metric Tonnes)

Subsidized Goods as a Percent of Total Goods

India

243,471

100%

243,471

14%

Total - All Countries

1,738,275

 

 

 

Import and sales data, for the period of investigation, is based on information provided by importers and exporters, Statistics Canada data, CCRA's internal information system and customs documentation.

Appendix 6

INDIAN SUBSIDY PROGRAMS THAT WERE FOUND TO EXIST AND
THAT WERE FOUND TO HAVE CONFERRED A BENEFIT

Duty Entitlement Pass Book Scheme and Advance Licence Scheme

A. Excessive Duty Exemption under the Duty Entitlement Pass Book and Advance Licence Schemes

The Government of India's Duty Entitlement Pass Book (DEPB) and Advance Licence (AL) schemes are essentially duty drawback programs. However, information received by the CCRA indicates that in certain cases exporters received excessive duty exemption or drawback, or exemption for ineligible goods.

It is stated in the Government of India's (GoI) "Export and Import Policy", at paragraph 7.25, that the objective of the DEPB Scheme is "to neutralize the incidence of basic customs duty and surcharge thereof on the import content of the export product." This neutralization is provided to the exporter by granting import duty, or DEPB, credits against the exported product. The GoI establishes the duty credit rates based on its "Standard Input-Output Norms" (SIONs), which list for any given exported product, the type and quantity of goods that may be imported for use in the production of this finished exported end-product. Any DEPB credits not used by the exporter to import inputs duty-free may be sold in the open market.

The Advance Licence is another type of duty-free program administered under India's Duty Exemption Scheme. Under the Advance Licensing program, the GOI allows duty-free inputs, subject to their use in the exported product and fulfillment of a corresponding export obligation. Until April 1, 2000, unused Advance Licences could be sold after fulfillment of the export obligation.

It is the position of the GoI that both the DEPB and Advance Licence programs are permissible drawback programs under the WTO Agreement on Subsidies and Countervailing Measures. However, based on its review of the submissions provided by the exporters, the CCRA has determined that in certain cases exporters received excessive duty exemption or drawback or exemption for ineligible goods. The CCRA notes that section 2 of SIMA includes, in its definition of subsidy, duty exemption on imports other than energy, fuel, oil or catalysts consumed in the production of exports, or duty exemption on goods incorporated into the finished exported product.

The GoI's financial contribution under the DEPB and AL schemes is established under paragraph 2(1.6)(b) of SIMA as the amount of duties not collected. The excess duty exemption is a specific subsidy under paragraph 2(7.2)(b) of the SIMA for the reason that it is a prohibited subsidy as defined in subsection 2(1) of SIMA, because it is contingent upon export performance.

B. Sales of Advance Licences and DEPB Credits

The CCRA received information from exporters on the proceeds received from sales of unused ALs and DEPB credits during the PoI.

The GoI asserts that the sale of the credits does not alter the nature of the DEPB and Advance Licence programs as valid substitution drawback programs. It is the opinion of the GoI that the sale of the credits is simply another method of indirectly exempting duties on inputs.

The CCRA maintains that AL or DEPB credits that are sold are not used in duty exemption programs allowable under SIMA, and that revenue from the sale of unused ALs and DEPB credits, therefore, constitutes a subsidy. The GoI's financial contribution in this regard is established under paragraph 2(1.6)(c) of SIMA as the provision of goods or services other than general governmental infrastructure. The revenue earned from these sales confers a benefit on the exporter.

Proceeds from the sale of Advance Licences and DEPB credits are specific subsidies under paragraph 2(7.2)(b) for the reason that they are prohibited subsidies as defined in subsection 2(1) of SIMA, because they are contingent upon export performance.

The amount of subsidy in respect of the sales of AL's and DEPB credits was calculated in accordance with section 27.1 of the SIMR by treating the revenues from these sales as grants. These amounts were allocated to the total quantity of subsidized goods to which the grants are applicable.

Special Import Licences

Special Import Licences (SILs) are issued to certain categories of exporters to allow the importation of selected restricted goods. They do not relieve exporters from payment of import duties; however unused SILs may be sold to other companies who wish to import restricted goods. The GoI has advised that no SIL benefits were accrued on exports made after April 1, 2000, and that SILs as an instrument were abolished on March 31, 2001.

The CCRA does not view the granting of SILs for importation of restricted goods as conferring an actionable benefit. However the CCRA does consider that revenue earned from the sale of SILs constitutes a subsidy. The GoI's financial contribution is established under paragraph 2(1.6)(c) of SIMA as the provision of goods or services other than general governmental infrastructure. The revenue earned from these sales confers a benefit on the exporter.

Revenue from the sale of SILs is a specific subsidy under paragraph 2(7.2)(b) for the reason that it is a prohibited subsidy as defined in subsection 2(1) of SIMA, because it is contingent upon export performance.

The amount of subsidy in respect of the sales of SIL's was calculated in accordance with section 27.1 of the SIMR by treating the revenues from these sales as a grant. These amounts were allocated to the total quantity of subsidized goods to which the grant is applicable.

Export Promotion Capital Goods Scheme

The GoI's Export Promotion Capital Goods (EPCG) scheme allows exporters to import capital equipment and components at reduced or nil import duties. Exporters provided information on capital equipment and components imported under this scheme.

The GoI's financial contribution under the EPCG scheme is established under paragraph 2(1.6)(b) of SIMA as the amount of duties not collected. The benefit to exporters is the amount of duty savings received under this program.

Only exporters are eligible for EPCG licences. Therefore, the EPCG scheme provides a specific subsidy under paragraph 2(7.2)(b) of SIMA for the reason that it is a prohibited subsidy as defined in subsection 2(1) of SIMA, because it is contingent on export performance.

Under section 27.1(2) of the SIMR, the amount of subsidy received, in respect of any amount owing and due to government that is deducted, is to be treated as a grant under section 27. Accordingly, the amount of subsidy was calculated as the difference between the duties applicable at time of importation and those actually paid. The resultant duty savings were then amortized over the estimated useful life of the imported capital equipment, as determined by the depreciation rates used in the exporters' financial statements.

Pre-Shipment Export Financial Assistance

Also known as the Export Packing Credit (EPC), Pre-Shipment Export Financial Assistance is offered to exporters under a program administered by the Reserve Bank of India (RBI). Under this program, banks extend pre-shipment working capital loans at ceiling rates set by the RBI, for such purposes as purchasing raw materials, as well as processing, warehousing, packing, transporting and shipping goods for export. Exporters provided information on EPC loans obtained with respect to subject goods exported to Canada.

The GoI's financial contribution is established under paragraph 2(1.6)(d) of SIMA, where the Government permits or directs a non-governmental body to carry out anything referred to in paragraph 2(1.6)(a). This latter paragraph cites practices of the Government involving the direct transfer of funds.

EPC loans constitute a specific subsidy under paragraph 2(7.2)(b) of SIMA. The subsidy is specific for the reason that it is a prohibited subsidy as defined in subsection 2(1) of SIMA, because it is contingent on export performance.

The benefit to exporters was calculated in accordance with section 28 of the SIMR, as the amount by which the interest paid on the EPC loans was lower than the interest that would have been payable for comparable commercial loans. To calculate an amount for subsidy, this benefit was distributed over the quantity of subject goods for which exporters had availed themselves of EPC loans.

Post-Shipment Export Financial Assistance

The Reserve Bank of India (RBI) also administers the GoI's Post-Shipment Export Financing program. Under this program, banks extend loans to exporters at ceiling rates set by the RBI, for the period from the shipment of the exported goods until the date of realization of export proceeds. Exporters provided information on post-shipment loans obtained respecting subject goods exported to Canada.

The GoI's financial contribution is established under paragraph 2(1.6)(d) of SIMA, where the Government permits or directs a non-governmental body to carry out anything referred to in paragraph 2(1.6)(a). This latter paragraph cites practices of the Government involving the direct transfer of funds.

Post-Shipment Export Financing loans constitute a specific subsidy under paragraph 2(7.2)(b) of SIMA. The subsidy is specific for the reason that it is a prohibited subsidy as defined in subsection 2(1) of SIMA, because it is contingent on export performance.

The benefit to exporters was calculated in accordance with section 28 of the SIMR, as the amount by which the interest paid on the post-shipment loans was lower than the interest that would have been payable for comparable commercial loans. To calculate an amount for subsidy, this benefit was distributed over the quantity of subject goods for which exporters had availed themselves of post-shipment loans.

Forgiveness of Loans from the Steel Development Fund and the Government of India

The Steel Development Fund (SDF) was established through GoI legislation in 1978 to assist in the financing of programs such as plant modernization or research and development. The SDF is funded by past mandatory contributions from India's integrated steel producers, who collected an extra levy on their sales with which they then contributed to the fund. A Managing Committee that includes senior functionaries of the GoI administers the SDF.

Under a restructuring package approved by the GoI during the period of investigation, certain SDF and GoI loans to the Steel Authority of India (SAIL), an exporter of subject goods, were forgiven. The CCRA is satisfied that the GoI was involved in decisions to waive the principal and interest applicable to these loans.

The GoI's financial contribution respecting forgiveness of the GoI loan is established under paragraph 2(1.6)(b) of SIMA as the amount owing and due to the government, which is forgiven.

The GoI's financial contribution respecting forgiveness of the SDF loan is established under paragraph 2(1.6)(d) of SIMA, where the Government permits or directs a non-governmental body to carry out anything referred to in paragraph 2(1.6)(b) of SIMA.

The Forgiveness of Loans from the Steel Development Fund and Forgiveness of Loans from the Government of India constitute specific subsidies under paragraph 2(7.2)(a) of SIMA because they are limited to a particular enterprise.

Under section 27.1(2) of the SIMR, the amount of subsidy received, in respect of any amount owing and due to government that is forgiven, is to be treated as a grant under section 27. For the final determination the CCRA has calculated an amount of subsidy in accordance with paragraph 27(c) of the SIMR and has allocated this amount to the total quantity of subsidized goods to which the grant is applicable.