Anti-dumping and Countervailing Program

Preliminary Determination - Corrosion-resistant Steel Sheet

OTTAWA, March 5, 2001

4218-11/CV92
4258-113/AD-1258

STATEMENT OF REASONS

Concerning the making of a preliminary determination with respect to

THE DUMPING OF CERTAIN CORROSION-RESISTANT STEEL SHEET ORIGINATING IN OR EXPORTED FROM THE PEOPLE'S REPUBLIC OF CHINA, INDIA, MALAYSIA, THE RUSSIAN FEDERATION, SOUTH AFRICA AND CHINESE TAIPEI

and the making of a preliminary determination with respect to

THE SUBSIDIZING OF CERTAIN CORROSION-RESISTANT STEEL SHEET ORIGINATING IN OR EXPORTED FROM INDIA

and the termination of the investigation with respect to

THE DUMPING OF CERTAIN CORROSION-RESISTANT STEEL SHEET ORIGINATING IN OR EXPORTED FROM PORTUGAL

DECISION

Pursuant to subsection 38(1) of the Special Import Measures Act, the Commissioner of Customs and Revenue has on this date made a preliminary determination concerning the dumping of certain corrosion-resistant steel sheet originating in or exported from the People's Republic of China, India, Malaysia, the Russian Federation, South Africa and Chinese Taipei and the subsidizing of certain corrosion-resistant steel sheet originating in or exported from India.

Also, pursuant to paragraph 35(2)(a) of the Special Import Measures Act, the Commissioner of Customs and Revenue has on this date terminated the dumping investigation concerning certain corrosion-resistant steel sheet originating in or exported from Portugal.

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

STATEMENT OF REASONS

SUMMARY

On December 4, 2000, the Commissioner of Customs and Revenue (Commissioner) initiated an investigation respecting the alleged injurious dumping into Canada of certain corrosion-resistant steel sheet originating in or exported from the People's Republic of China (China), India, Malaysia, Portugal, the Russian Federation (Russia), South Africa and Chinese Taipei, and the alleged injurious subsidizing of certain corrosion-resistant steel sheet originating in or exported from India. The investigation was initiated in response to a complaint filed by Dofasco Inc., of Hamilton, Ontario.

On receiving notice of the investigation, the Canadian International Trade Tribunal (Tribunal) started its preliminary injury inquiry. On February 2, 2001, the 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.

As a result of the preliminary investigation, the Commissioner is satisfied that the subject goods from China, India, Malaysia, Russia, South Africa and Chinese Taipei have been dumped, that the margins of dumping are not insignificant and that the volume of dumped goods is not negligible. The Commissioner is also satisfied that the subject goods from India have been subsidized, that the amounts of subsidy are not insignificant and that the volume of subsidized goods is not negligible. Accordingly, the Commissioner has made a preliminary determination of dumping and subsidizing in accordance with subsection 38(1) of the Special Import Measures Act (SIMA).

The investigation revealed that the actual and potential volume of dumped goods from Portugal was negligible. Accordingly, the Commissioner has terminated the dumping investigation with respect to Portugal in accordance with paragraph 35(2)(a) of SIMA.

INTERESTED PARTIES

Complainant

The complainant, Dofasco, is the largest producer of corrosion-resistant steel sheet in Canada. The other producers in Canada, Stelco Inc. of Hamilton, Ontario, Sorevco Inc. of Coteau du Lac, Quebec and Continuous Colour Coat Limited of Rexdale, Ontario, all have expressed their support for the complaint in letters to the Canada Customs and Revenue Agency (CCRA).

Exporters

The CCRA has identified 18 exporters of subject goods and 24 vendors of the subject goods during the period of investigation (January 1 to August 31, 2000).

Importers

The CCRA has identified 25 possible importers of subject goods during the period of investigation (January 1 to August 31, 2000).

BACKGROUND

The CCRA is currently enforcing an injury finding of the Tribunal concerning dumped corrosion-resistant steel sheet originating in or exported from Brazil, the Federal Republic of Germany, Japan, the Republic of Korea and the United States of America.

In the current investigation, the complaint was filed by Dofasco on October 13, 2000, following discussions and meetings with the CCRA.

On November 3, 2000, the CCRA informed Dofasco that the complaint was properly documented, notified the governments of the named countries that a properly documented complaint had been filed and provided the High Commissioner of India with the sections of the non-confidential version of the complaint that related to subsidies and the allegations of injury.

On December 4, 2000, the Commissioner initiated the investigation. On December 5, 2000, the Tribunal initiated a preliminary injury inquiry into whether the evidence disclosed a reasonable indication of injury, retardation or threat of injury caused by the dumping and subsidizing of the goods. On February 2, 2001, the Tribunal concluded that the evidence disclosed a reasonable indication that the alleged dumping and subsidizing have caused injury to the domestic industry.

PRODUCT INFORMATION

Definition

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

Flat-rolled steel sheet products of a thickness not exceeding 0.176 in. (4.47 mm), coated or plated with zinc or an alloy wherein zinc and iron are the predominant metals, excluding corrosion-resistant steel sheet products for use in the manufacture of passenger automobiles, buses, trucks, ambulances or hearses or chassis therefor, or parts, accessories or parts thereof, for which the proper Harmonized System tariff item is 9959.00.00, originating in or exported from the People's Republic of China, India, Malaysia, Portugal, the Russian Federation, South Africa and Chinese Taipei.

The products are commonly referred to as galvanized (free zinc coating) or galvannealed (zinc-iron alloy coating) steel sheet. The products include corrosion-resistant steel sheet in cut lengths and coils (wound successively in superimposed layers or spirally oscillated coils) whether the coating or plating is applied by the hot-dip galvanizing or electrogalvanizing process.

Corrosion-resistant steel sheet is usually produced from cold-rolled carbon steel sheet and sometimes from hot-rolled carbon steel sheet. However, minor additions of certain elements, such as titanium or boron, during the steel making process enable the steel to be classified as an alloy steel. Therefore, corrosion-resistant steel sheet produced from either carbon steel or alloy steel are included in the definition of subject goods.

For greater clarity, the following products do not form part of the product definition:

• Steel sheet that is coated or plated with zinc in combination with nickel, silicon or aluminum;
• Galvanized products that have been pre-painted or coated with other finishes, such as lacquers or varnishes; and,
• Galvanized armouring tape, which is narrow flat steel tape of 3 in. or less, that has been coated by a final operation with zinc by either the hot-dip galvanizing or the electrogalvanizing process so that all surfaces, including the edges, are coated.

General

The subject goods are normally made to two ASTM (American Society for Testing and Materials) specifications. One of the specifications determines the quality of the steel (chemical composition, minimum tolerance, dimensions, flatness, etc.) and the second specification determines the coating weight (minimum average coating mass-ounces per square foot or grams per square meter).

ASTM A653 is the most common specification for the subject corrosion-resistant steel sheet. The more common qualities of corrosion-resistant steel sheet include:

• Commercial Steel also termed Commercial Quality or Lock Forming Quality-is suitable for simple bending and moderate forming applications and in fabricating products where the materials are subject to machine locking forming;
• Helical Quality Culvert-is used to fabricate helical corrugated steel pipe also known as lock-formed spiral pipe or culverts;
• Forming Steel also termed Drawing Quality (DQ)-has a greater degree of ductility and is more consistent in performance than Commercial Steel;
• Deep Drawing Steel also termed Deep Drawing Quality-Special Killed (DDQSK)-is used in fabricating parts where the draw or formation is more difficult and where aging is a hazard; and
• Extra Deep Drawing Steel also termed Extra Deep Drawing Quality-Special Killed (EDDQSK)-is used for applications requiring extra deep drawing or severe forming.

Besides specifying the quality of the steel, the ASTM coating designation must be specified. Coating designations fall into three general categories:

1. in-ground applications (Z600/Z700);
2. exterior applications (G90/Z275); and,
3. less severe exterior applications and interior applications (G60/G001).

The most commonly ordered ASTM coating designation for galvanized is G90/Z275. However, both lighter coatings such as G01, G40, G60, and heavier coatings such as G115 and Z600 are ordered. Typical ASTM coating designations for galvanneal are A01/ZF001 and A25/ZF75.

Production Process

Corrosion-resistant steel sheet is usually produced from cold-rolled carbon steel sheet and sometimes from hot-rolled carbon steel sheet. The steel sheet to be galvanized is referred to as steel substrate. Two processes can be used to apply the coating to the steel substrate: The hot-dip galvanizing process and the electrogalvanizing process.

Hot-Dip Galvanizing Process

In the hot-dip galvanizing process, the steel substrate is cleaned and fed into a continuous annealing furnace where it is heated to the temperature necessary to develop the desired metallurgical properties of the final product. The substrate is then transferred to a molten zinc-coating bath. As the steel emerges from the bath, an air, nitrogen or steam wipe is used to control the thickness of the zinc coating. The galvanized steel is then cooled in a cooling tower.

In some cases, the galvanized steel is further processed into galvannealed steel sheet. For galvanealed sheet, the thickness of the zinc coating is reduced in the wipe stage. It then passes through a galvannealing furnace, where the heat combines the steel sheet with the zinc coating, giving the sheet a thin zinc-iron alloy coating. The thinner coating on galvannealed steel sheet results in a product that is easier to weld and paint than galvanized steel sheet.

Electrogalvanizing Process

In the electrogalvanizing process, as the charged steel passes through a plating bath, the opposite electrical charges cause the zinc solution to coat the steel. Cold-rolled steel coils are batch annealed in multi-stack furnaces or in off-line continuous annealing processes, often skin-passing on a temper mill, before being electrogalvanized with a thin coating of zinc.

Product Application

The corrosion-resistant steel sheet that is the subject of this complaint is commonly used in the production of farm buildings, grain bins, culverts, garden sheds, roofing material, siding, floor decks, roof decks, wall studs, drywall corner beads, doors, door frames, ducting (and other heating and cooling applications), flashing, hardware products and appliance components. Electrogalvanized products are also used in construction applications.

CLASSIFICATION OF IMPORTS

The subject corrosion-resistant steel sheet is properly classified under the following Harmonized System classification numbers:

7210.30.00.00
7212.20.00.00
7226.93.00.00
7210.49.00.10
7212.30.00.00
7226.94.00.00
7210.49.00.20
7225.91.00.00
7210.49.00.30
7225.92.00.00

THE CANADIAN INDUSTRY

There are four Canadian producers of corrosion-resistant steel sheet. Dofasco, Stelco Inc. and Sorevco Inc. produce corrosion-resistant steel sheet products using hot-dip galvanizing lines. Continuous Colour Coat Limited uses the electrogalvanizing process in producing corrosion-resistant steel sheet.

There have been no significant changes in the structure of the Canadian industry since the CCRA initiated this investigation.

THE CANADIAN MARKET

Corrosion-resistant steel sheet is sold directly to end users and through steel service centres/distributors across Canada. The service centres stock standard sizes for re-sale in smaller quantities to low volume end users, as well as offering custom cutting, slitting or inventory services.

In estimating apparent Canadian market of the goods, Dofasco provided data on the imports from all countries for 1996, 1997, 1998, 1999 and 2000 (based on the first 8 months). The estimates were compiled from Statistics Canada information and Department of Foreign Affairs and International Trade import permit records. Dofasco also provided an estimate of the domestic shipments of all Canadian producers.

To confirm the Canadian market information relating to domestically-produced goods, the CCRA obtained production information from each Canadian producer. The CCRA relied on Statistics Canada data, its own internal information system, customs documentation and importer and exporter submissions to determine the import portions of the Canadian market.

As a result of this analysis, the CCRA adjusted the apparent Canadian market estimates. Appendix 1 shows the imports into the Canadian market of corrosion-resistant steel sheet from all sources. The CCRA is unable to make public the actual domestic shipments for the period because of confidentiality concerns.

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 government of China was asked to provide information to determine whether the steel sector in China was operating under market economy conditions. In addition, information was requested from the government of India to determine whether the steel industry in India had benefited from countervailable subsidies. Exporters located in 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 released into Canada during the Period of Investigation of January 1 to August 31, 2000.

Responses to the requests for information were received from two exporters located in India, one in Malaysia, one in Portugal, one in Russia, one in South Africa, and from four exporters located in Chinese Taipei. In addition, a submission respecting subsidy programs was received from the government of India. No responses were received from exporters located in China or from the government of China.

Normal values are generally based on the domestic selling prices of the goods in the country of export or on the total cost of the goods plus an amount for profit.

The export price of goods shipped to Canada is generally the exporter's ex-factory selling price to the importer in Canada. 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 as a percentage of normal value.

Estimates of normal values, export prices, margins of dumping and amounts of subsidy are discussed below. For exporters that did not provide a complete response to the request for information, or did not permit verification of the information in a timely manner, the normal value of the goods has been estimated based on the export price of the goods plus an advance representing the highest estimated margin of dumping found for a cooperative exporter during the investigation, expressed as a percentage of the export price.

THE DUMPING INVESTIGATION

China

In previous investigations, China has been treated as a non-market economy, with the result that normal values for imports from China have been determined on the basis of sales of like goods in a third or surrogate country. In the last dumping investigation involving steel products from China, the government of China and two exporters located in China provided some information to the CCRA. However, the information was not complete, and additional information and clarifications were requested. The additional information was not provided, and normal values were determined by Ministerial specification on the basis of the average normal value determined for like goods in three surrogate countries.

In this investigation, information was requested from the government of China and the exporters located in China to determine whether economic reforms have progressed sufficiently such that it should no longer be considered to be operating in non-market economy conditions in the context of section 20 of SIMA. 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. No response was received from the government of China and no submissions were made by exporters located in China.

As a result, normal values were estimated on the basis of an advance over export price based on the highest estimated margin of dumping found for a cooperative exporter during the investigation. Export prices were estimated pursuant to section 24 of SIMA on the basis of the lesser of the exporter's selling price and the importer's purchase price.

During the period of investigation, 100 per cent of the subject goods imported into Canada from China were found to have been dumped. The estimated margin of dumping was 40.5 per cent when expressed as a percentage of normal value.

India

Submissions were received from two exporters located in India - Lloyds Steel Industries Ltd. (Lloyds), and Jindal Iron & Steel Co., Ltd. (Jindal).

Jindal: Subject goods exported to Canada from Jindal were produced at two production facilities - one located in Vasind and the other located in Tarapur. For purposes of the preliminary determination, only the goods exported to Canada from Vasind were reviewed. The majority of goods exported to Canada from Jindal were exported from the Vasind facility.

Normal Value - Jindal had sales of like goods in its domestic market. Normal values were estimated on the basis of the weighted average selling price of domestic sales of like goods to unassociated customers, pursuant to section 15 of SIMA. Adjustments to domestic selling prices were made to account for differences in quality pursuant to section 5 of the Special Import Measures Regulations (SIMR).

Export Price - Export prices were estimated pursuant to section 24 of SIMA on the basis of the lesser of the exporter's selling price and the importer's purchase price.

Margin of Dumping - All the goods reviewed were found to be dumped. The estimated weighted average margin of dumping was 26.1 per cent. The estimated margins ranged from 9.4 to 40.5 per cent.

Lloyds:

All subject goods exported to Canada from Lloyds were produced at Lloyds' production facility located in Wardha.

Normal Value - Lloyds had sales of like goods in its domestic market. Normal values were estimated on the basis of the weighted average selling price of domestic sales of like goods to unassociated customers, pursuant to section 15 of SIMA. Adjustments to domestic selling prices were made to account for differences in quality pursuant to section 5 of the SIMR.

Export Price - Export prices were estimated pursuant to section 24 of SIMA on the basis of the lesser of the exporter's selling price and the importer's purchase price.

Margin of Dumping - During the period of investigation, 100 per cent of the subject goods imported into Canada from Lloyds were found to have been dumped. The estimated weighted average margin of dumping was 17.1 per cent. The estimated margins ranged from 10.0 to 20.6 per cent.

Malaysia

A submission was received from Group Steel Corporation (M) Sdn. Bhd. (Group Steel). However, officials of Group Steel indicated to the CCRA that they could not accommodate on-site verification of the submission until early March, 2001. Since verification of the submission was not permitted before the making of the preliminary decision, the information in the submission was not taken into consideration in making the preliminary determination. The information will be reviewed prior to the making of the final decision in the investigation.

As a result, normal values were estimated on the basis of an advance over export price based on the highest estimated margin of dumping found for a cooperative exporter during the investigation. Export prices were estimated pursuant to section 24 of SIMA on the basis of the lesser of the exporter's selling price and the importer's purchase price.

During the period of investigation, 100 per cent of the subject goods imported into Canada from Malaysia were found to have been dumped. The estimated margin of dumping was 40.5 per cent when expressed as a percentage of normal value.

Portugal

A submission was received from Lusosider - Acos Planos, S.A. (Lusosider). Verification meetings were conducted at the company's premises in Lisbon, Portugal. All subject goods exported to Canada from Lusosider were exported from Lusosider's production facility located in Lisbon, Portugal.

Normal Value - Lusosider had sales of like goods in its domestic market. Normal values were estimated 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 qualitative differences pursuant to section 5, for domestic discounts pursuant to section 6, for delivery costs pursuant to section 7, and for differences in trade level pursuant to section 9.

Export Price - The subject goods exported to Canada by Lusosider were sold to an associated importer in Canada. For this reason, the CCRA tested the reliability of the export prices between the exporter and the associated importer and found them to be unreliable for SIMA purposes. Therefore, the export prices were estimated according to paragraph 25(1)(c) of SIMA based on the importer's resale prices of the goods to unassociated customers in Canada less all costs incurred in importing and selling the goods and an amount for profit. The amount for profit used was based on the profit made on sales by vendors at the same trade level in the Canadian market, pursuant to paragraph 22(c) of the SIMR.

Margin of Dumping - All the subject goods that were imported into Canada from Lusosider during the period of investigation were reviewed. Of the goods, 22.9 per cent were found to have been dumped. The estimated weighted average margin of dumping was 2.8 per cent. The estimated margins ranged from 0.8 to 9.2 per cent.

Russia

A submission was received from JSC Severstal (Severstal). However, the submission was received by the CCRA after the due date for filing of submissions. For this reason, the information in the submission was not taken into consideration in making the preliminary determination. The information will be reviewed prior to the making of the final decision in the investigation.

As a result, normal values were estimated on the basis of an advance over export price based on the highest estimated margin of dumping found for a cooperative exporter during the investigation. Export prices were estimated pursuant to section 24 of SIMA on the basis of the lesser of the exporter's selling price and the importer's purchase price.

During the period of investigation, 100 per cent of the subject goods imported into Canada from Russia were found to have been dumped. The estimated margin of dumping was 40.5 per cent when expressed as a percentage of normal value.

South Africa

A submission was received from Iscor Limited (Iscor). However, the submission was received by the CCRA after the due date for filing of submissions. For this reason, the information in the submission was not taken into consideration in making the preliminary determination. The information will be reviewed prior to the making of the final decision in the investigation.

As a result, normal values were estimated on the basis of an advance over export price based on the highest estimated margin of dumping found for a cooperative exporter during the investigation. Export prices were estimated pursuant to section 24 of SIMA on the basis of the lesser of the exporter's selling price and the importer's purchase price.

During the period of investigation, 100 per cent of the subject goods imported into Canada from South Africa were found to have been dumped. The estimated margin of dumping was 40.5 per cent when expressed as a percentage of normal value.

Chinese Taipei

Submissions were received from four exporters located in Chinese Taipei - Yieh Phui Enterprise Co. Ltd. (Yieh Phui), Sheng Yu Steel Co. Ltd. (Sysco), China Steel Corp. (CSC), and Kao Hsing Chang Iron & Steel Corporation (KHC).

Yieh Phui & Sysco:

Due to the Chinese New Year Holiday, Yieh Phui and Sysco were unable to schedule verification meetings until February, 2001. The meetings occurred from February 7 to 20, 2001. Consequently, there was insufficient time for the CCRA to analyze the information received at verification, and to use these companies' information to estimate normal values and margins of dumping.

Since Yieh Phui and Sysco did provide complete submissions on time, and did allow complete verification of the submissions prior to the preliminary determination, the use of the highest estimated margin of dumping to estimate normal values was not considered appropriate in this case.

As a result, normal values for Yieh Phui and Sysco were estimated using an advance over export price that was based on the weighted average margin of dumping for all exporters that had normal values estimated on the basis of their submission (i.e., all exporters that were not assigned the highest margin of dumping). Export prices were estimated pursuant to section 24 of SIMA on the basis of the lesser of the exporter's selling price and the importer's purchase price.

During the period of investigation, 100 per cent of the subject goods imported into Canada from Yieh Phui and Sysco were found to have been dumped. The estimated margin of dumping was 24.2 per cent when expressed as a percentage of normal value.

China Steel Corp:

Normal Value - CSC had sales of like goods in its domestic market. Normal values were estimated on the basis of the weighted average selling price of domestic sales of like goods to unassociated customers, pursuant to section 15 of SIMA. Adjustments to the domestic selling prices were made to account for differences in quality pursuant to section 5 of the SIMR.

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

Margin of Dumping - During the period of investigation, 87 per cent of the subject goods imported into Canada from CSC were found to have been dumped. The estimated weighted average margin of dumping was 4.4 per cent. The estimated margins ranged from 1.3 to 9.2 per cent.

Kao Hsing Chang Iron & Steel Corporation:

A submission was received from Kao Hsing Chang Iron & Steel Corporation (KHC). However, the submission was received by the CCRA after the due date for filing of submissions. For this reason, the information in the submission was not taken into consideration in making the preliminary determination. The information will be reviewed prior to the making of the final decision in the investigation.

As a result, normal values were estimated on the basis of an advance over export price based on the highest estimated margin of dumping found for a cooperative exporter during the investigation. Export prices were estimated pursuant to section 24 of SIMA on the basis of the lesser of the exporter's selling price and the importer's purchase price.

During the period of investigation, 100 per cent of the subject goods imported into Canada from KHC were found to have been dumped. The estimated margin of dumping was 40.5 per cent when expressed as a percentage of normal value.

Other Exporters

All other exporters of subject goods to Canada during the period of investigation did not provide a response to the CCRA's request for information. For imports from these exporters, normal values were estimated on the basis of an advance over export price based on the highest estimated margin of dumping found for a cooperative exporter during the investigation. Export prices were estimated pursuant to section 24 of SIMA on the basis of the lesser of the exporter's selling price and the importer's purchase price.

During the period of investigation, 100 per cent of the subject goods imported into Canada were found to have been dumped. The estimated margin of dumping was 40.5 per cent when expressed as a percentage of normal value.

Summary of Results - Dumping

Before making a preliminary determination of dumping, the Commissioner must be satisfied that the actual and potential volume of dumped goods is not negligible and that the estimated margins of dumping are not insignificant. If the volume of dumped goods from a country is less than three per cent of the total volume of like goods released into Canada from all countries during the period of investigation, the volume is considered to be negligible. As well, the estimated margin of dumping is considered to be insignificant if it is less than two per cent of the export price of the goods.

A review of imports for the period of investigation was carried out by the CCRA. Based on this review, import figures from the initiation have been revised. A further analysis of the imports will be undertaken for purposes of the final decision.

As demonstrated in Appendix 3, the volumes of dumped imports from China, India, Malaysia, Russia, South Africa and Chinese Taipei for the period of investigation are not negligible. In addition, as demonstrated in Appendix 2, the estimated margins of dumping are not insignificant as they are above the required two per cent level.

The volume of dumped goods from Portugal, 1,068 metric tonnes, is below the three per cent threshold, and is therefore negligible. SIMA requires that the Commissioner terminate the investigation with respect to Portugal under these circumstances.

THE SUBSIDY INVESTIGATION

The subsidy portion of the investigation covered all shipments of the subject goods originating in or exported from India and released into Canada during the period of investigation of January 1 to August 31, 2000. A Request for Information - Subsidy (Subsidy RFI) was sent to the government of India and to the possible exporters in India. Responses to the Subsidy RFI were received from the government of India and two exporters in India.

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. 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 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 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

Two of the three exporters of subject goods from India submitted information in response to the CCRA's Subsidy RFI, namely Lloyds Steel Industries Ltd. (Lloyds), and Jindal Iron & Steel Co., Ltd. (Jindal).

The following 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;
• Advance Licences;
• Special Import Licences;
• Export Promotion Capital Goods Licences;
• Export Packing Credit;
• Post-Shipment Export Financial Assistance;
• Loans From The Steel Development Fund;
• Tax Exemption For Export Profits.
• The CCRA's Subsidy RFI also requested information about other possible subsidy programs.
• Jindal Iron & Steel Co., Ltd.

It was preliminarily determined that Jindal has received countervailable benefits in respect of six of the eight alleged programs. Specific information cannot be disclosed because doing so would reveal confidential information, with the following exception. Jindal has not borrowed from the Steel Development Fund. The countervailed programs are all export subsidies because they are based on export performance.

Lloyds Steel Industries Ltd.

It was preliminarily determined that Lloyds has received countervailable benefits in respect of one of the eight alleged programs. Specific information cannot be disclosed because doing so would reveal confidential information, with the following exception. Lloyds has not borrowed from the Steel Development Fund. The countervailed program is an export subsidy because it is based on export performance.

Other Exporters

A third identified exporter located in India has not responded to the CCRA's Subsidy RFI. In the circumstances, the aggregate of the highest estimated amount of subsidy per program found in India was assigned to the goods exported from the third exporter.

Summary of Subsidy Results

The CCRA has preliminarily determined that:

• there is a financial contribution by the government of India that conferred a benefit to the exporters under the following programs:
• Duty Entitlement Pass Book,
• Advance Licences,
• Export Promotion Capital Goods Licences,
• Export Packing Credit,
• Post-Shipment Export Financial Assistance, and
• Tax Exemption For Export Profits;
• these programs are specific for the reason that they are prohibited subsidies in accordance with paragraph 2(7.2)(b) of SIMA;
• 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;
• the benefits received from these programs, in aggregate, represent on average 1,615 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; and
• 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. It also provides an explanation as to why the information received for one program identified indicates that it did not confer benefits to exporters.

DECISION

Based on the results of the preliminary investigation, the Commissioner is satisfied that the subject goods from China, India, Malaysia, Russia, South Africa and Chinese Taipei have been dumped, that the volume of dumped goods is not negligible, and that the estimated margins of dumping are not insignificant. The Commissioner is also satisfied that the subject goods from India have been subsidized, that the volume of subsidized goods is not negligible, and that the estimated amounts of subsidy are not insignificant.

Accordingly, on March 5, 2001, the Commissioner has made a preliminary determination of dumping and subsidizing pursuant to subsection 38(1) of SIMA.

The investigation also revealed that the actual and potential volume of dumped goods from Portugal was negligible. Accordingly, on March 5, 2001, the Commissioner has terminated the dumping investigation with respect to Portugal in accordance with paragraph 35(2)(a) of SIMA.

PROVISIONAL DUTY TO BE IMPOSED

In order to prevent further injury from dumped and subsidized imports, provisional duty will be applied to all subject goods imported into Canada from China, India, Malaysia, Russia, South Africa and Chinese Taipei on or after March 5, 2001, pursuant to subsection 8(1) of SIMA.

The duty to be collected during the provisional period is based on the estimated margins of dumping, expressed as a percentage of the export price of the goods and the estimated amounts of subsidy. Appendix 2 outlines the rates of provisional duty, based on the estimated margins of dumping, payable on subject goods imported on or after March 5, 2001. Appendix 4 outlines the amounts of provisional duty, based on the estimated amounts of subsidy, payable on the goods imported on or after March 5, 2001.

Where the provisional duty relates to both dumping and subsidizing, and the subsidy is deemed to be an export subsidy, the provisional duty payable on the subject goods imported into Canada is the full amount of subsidy and the portion of the margin of dumping that is not attributable to the export subsidy.

Provisional duty is payable by the importer and is normally applied on all subject imports until the day the Tribunal makes its final ruling on the injury matter. However, if the investigation is terminated by the CCRA or there is an undertaking arrangement, provisional duty will no longer be applied to the imported goods.

Importers are required to pay provisional duty in cash or by certified cheque. Alternatively, importers may post security equal to the amount payable.

Importers should contact their regional customs office if they require further information on the payment of provisional duty or the posting of security.

FUTURE ACTION

The CCRA

The CCRA will continue its investigation of the dumping and subsidizing. By June 4, 2001, the CCRA will make a final decision. If the margin of dumping or the amount of subsidy is insignificant, proceedings will be terminated in whole or in part, and any provisional duty paid or security posted will be returned to the importers, as appropriate.

The Canadian International Trade Tribunal

The Tribunal will now begin its full injury inquiry and conduct a public hearing into the question of injury. The Tribunal is required to issue its final decision not later than July 3, 2001.

If the Tribunal finds that the dumping and subsidizing has not caused injury or is not threatening injury, then proceedings will be terminated and all provisional duties collected will be refunded. If a decision of injury is made, anti-dumping and countervailing duty will be imposed on imports of the subject goods.

Retroactive Duty On Massive Importations

Under certain circumstances, anti-dumping and countervailing duties can be imposed retroactively on subject goods imported into Canada in the period starting on the day the investigation was initiated and ending on the day prior to the preliminary determination.

When the Tribunal conducts its inquiry on material injury to the Canadian industry, it may consider if dumped and subsidized goods which were imported close to, or after the initiation of the investigation, constitute a massive importation over a relatively short period of time and have caused injury to the Canadian industry. Should the Tribunal issue a finding that there was a massive importation of dumped and subsidized goods, which caused injury, imports of subject goods released by the CCRA on or after December 4, 2000, could be subject to anti-dumping and countervailing duties.

Undertakings

After a preliminary determination of dumping or subsidizing, the Commissioner may accept undertakings that eliminate the margin of dumping or the amount of subsidy of the goods, or that limit the amount of subsidy, or that eliminate the injury caused by the dumping or subsidizing. Acceptable undertakings must account for all or substantially all of the exports to Canada of the dumped and subsidized goods. If undertakings are accepted, the imposition of provisional duty will be suspended.

Exporters or the government of India could request that the CCRA complete its investigation and that the Tribunal complete its inquiry on the question of injury, notwithstanding the acceptance of undertakings. In view of the time needed for consideration of undertakings, written undertaking proposals should be made as early as possible, and no later than 60 days after the preliminary determination of dumping and subsidizing.

The legislation allows all interested parties to make representations concerning any undertaking proposals. The CCRA will maintain a list of interested parties and will notify them should an undertaking proposal be received. Persons wishing to be notified must provide their name, address, telephone, fax, or e-mail address, to one of the officers listed below. Interested parties may also consult the Internet website noted below for information on undertakings offered in this investigation. A notice will be posted on the website when an undertaking proposal is received. Interested parties have nine days from the date the undertaking offer is received to make representations.

Publication

Notice of this preliminary determination of dumping and subsidizing is being published in the Canada Gazette pursuant to paragraph 38(3)(a) of SIMA.

Notice of the termination of the dumping investigation with respect to Portugal is being published in the Canada Gazette pursuant to subparagraph 35(2)(b)(ii) 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. Ken McPhail or Mr. Michel Leclair as follows:

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

Telephone -
Ken McPhail: (613) 954-9530
Michel Leclair: (613) 954-7232

Telefax -
941-2612

e-mail -
ken.mcphail @ccra-adrc.gc.ca
michel.leclair@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

IMPORT VOLUMES

CERTAIN CORROSION-RESISTANT STEEL SHEET

Source Country	1996	1997		1998		1999		January 1 to August 31 2000
Metric Tonnes
China	410	5,626		6,257		5,861		7,609
India	20	13		0		6,105		15,981
Malaysia	0	0		0		15,435		13,605
Portugal	1,825	7,177		6,591		9,917		4,658
Russia	5,643	9,005		20,448		73,055		29,452
Chinese Taipei	1,202	5,358		12,679		39,608		31,842
South Africa	6,520	6,261		10,318		7,635		5,475
Total Named Countries	15,620	33,438		56,292		157,616		108,622
Total Other Countries	38,689	56,137		48,457		99,562		38,572
Total Imports	54,309	89,576		104,749		257,178		147,194
Share of Imports
China	0.8%		6.3%		6.0%	2.3%	5.2%
India	0%		0%		0%	2.4%	10.9%
Malaysia	0%		0%		0%	6.0%	9.2%
Portugal	3.4%		8.0%		6.3%	3.8%	3.2%
Russia	10.4%		10.0%		19.5%	28.4%	20.0%
Chinese Taipei	2.2%		6.0%		12.1%	15.4%	21.6%
South Africa	12.0%		7.0%		9.8%	3.0%	3.7%
Named Countries	28.8%		37.3%		53.7%	61.3%	73.8%
Other Countries	71.2%		62.7%		46.3%	38.7%	26.2%

Import data based on information provided by importers and exporters, Statistics Canada data, CCRA's internal information system, and customs documentation.

APPENDIX 2

SUMMARY OF PRELIMINARY DETERMINATION

ESTIMATED MARGINS OF DUMPING BY EXPORTER/COUNTRY

CERTAIN CORROSION-RESISTANT STEEL SHEET

(January 1 to August 31, 2000)

Country	% of Goods Dumped	Dumped Imports as Percent of Total Imports	Range of Margins of Dumping of Dumped Imports (% of Normal Value)	Weighted Average Margin of Dumping (% of Normal Value)	Provisional Duty Payable (% of Export Price)
China	100%	5.2%		40.5% (1)	68.1%
India:
Lloyds Steel Industries	100%		10.0 - 20.6%	17.1%	20.6% (3)
Jindal Iron and Steel	100%		9.4 - 40.5%	26.1%	35.3% (3)
Other	100%			40.5% (1)	68.1% (3)
Country Total/Average	100%	10.9%		24.8%
Malaysia	100%	9.4%		40.5% (1)	68.1%
Russia	100%	20.1%		40.5% (1)	68.1%
Chinese Taipei:
China Steel Corporation	87.0%		1.3 - 9.2%	4.4%	4.5%
Sheng Yu Steel Co.	100%			24.2% (2)	31.2%
Yieh Phui Enterprise	100%			24.2% (2)	31.2%
Other	100%			40.5% (1)	68.1%
Country Total/Average	99.9%	21.6%		26.7%
South Africa	100%	3.7%		40.5% (1)	68.1%
All Subject Countries	99.97%	71.4%		33.9%

Except where specific companies are named (i.e., Lloyds and Jindal of India and China Steel, Sheng Yu Steel and Yieh Phui of Chinese Taipei), the figures in the above table apply to all exporters from the named countries Margin of Dumping is expressed as a percentage of the total normal value of all goods reviewed (i.e. includes the normal value of the non-dumped goods).

1. Margin of dumping based on highest margin of dumping estimated for the Preliminary Determination
2. Margin of dumping based on weighted average margin of dumping estimated for the Preliminary Determination
3. Provisional 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.

APPENDIX 3

SUMMARY OF PRELIMINARY DETERMINATION

ESTIMATED VOLUMES OF DUMPING BY COUNTRY

CERTAIN CORROSION-RESISTANT STEEL SHEET

(January 1 to August 31, 2000)

Country	Total Imports (Metric Tonnes)	% of Goods Dumped	Total Imports Dumped (Metric Tonnes)	Dumped Imports as a Percent of Total Imports
China	7,609	100%	7,609	5.2%
India	15,981	100%	15,981	10.9%
Malaysia	13,605	100%	13,605	9.2%
Russia	29,452	100%	29,452	20.0%
Chinese Taipei	31,842	99.9%	31,811	21.6%
South Africa	5,475	100%	5,475	3.7%
Total - Named Counties	103,964	100%	103,933	70.6%
Total Imports - All Countries	147,194

Import data based on information provided by imports and exporters, Statistics Canada data, CCRA's internal information system, and customs documentation.

APPENDIX 4

SUMMARY OF PRELIMINARY DETERMINATION

ESTIMATED AMOUNTS OF SUBSIDY BY EXPORTER

CERTAIN CORROSION-RESISTANT STEEL SHEET

(January 1 to August 31, 2000)

INDIA	Percent of Goods Subsidized Imports as Percent of Total Imports	Amount of Subsidy (per Metric Tonne)	Provisional Duty Payable (Per Metric Tonne)
Lloyds Steel Industries	100%	3,326 rupees	3,326 rupees
Jindall Iron and Steel	100%	1,169 rupees	1,169 rupees
All Other Exporters	100%	4,495 rupees	4,495 rupees
Country Average	100%	1,615 rupees

APPENDIX 5

SUMMARY OF PRELIMINARY DETERMINATION

ESTIMATED VOLUMES OF SUBSIDIZED GOODS

CERTAIN CORROSION-RESISTANT STEEL SHEET

(January 1 to August 31, 2000)

Country	Total Imports (Metric Tonnes)	% of Goods Subsidized	Total Imports Subsidized (Metric Tonnes)	Subsidized Imports as a Percent of Total Imports
India	15,981	100%	15,981	10.9%
Total Imports - All Countries	147,194

Import data based on information provided by importers and exporters, Statistics Canada data, CCRA's internal information system and customs documentation.

APPENDIX 6

INDIA - SUBSIDY PROGRAMS

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

Excessive Duty Exemption under the Duty Entitlement Pass Book and Advance Licences

The Duty Entitlement Pass Book (DEPB) scheme and the Advance Licence (AL) scheme are basically drawback schemes. However, information received indicates that drawback was excessive.

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. The neutralization shall be provided by way of grant of duty credit against the export product." Paragraph 7.33 further states that DEPB "aims to provide the facility to eligible exporters to import inputs which are required for production."

The GOI explained that an Advance Licence is a type of duty-free licence under its

Duty Exemption Scheme. Advance Licences are granted to exporters, who must fulfill a certain export obligation, for the import of inputs which are physically incorporated in the exported product (making normal allowance for wastage), as well as catalysts, required for the manufacture of goods without payment of basic customs duty. For goods subject to additional customs duty (equivalent to excise duty paid on domestic purchases), exporters have the option of either being exempt from paying the additional customs duty or paying it and obtaining a subsequent credit. Unused Advance Licences may be sold after fulfillment of the export obligation.

Information obtained appears to indicate that the amount of import duty exempted with respect to exporter(s) using the DEPB and AL schemes was higher than the GOI's DEPB rate of 19 per cent, which is the GOI's standard import duty content for this product.

The GOI's financial contribution is established under paragraph 2(1.6)(b) of SIMA as the amount of duties not collected. The excess duty exemption constitutes a benefit to the exporter(s) in accordance with section 35.01(1) of the Special Import Measures Regulations (SIMR).

The excess duty exemption under the DEPB and AL schemes is a specific subsidy under paragraph 2(7.2)(b) of the SIMR 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 total excess DEPB and AL duty exemption received during the Period of Investigation (POI) has been distributed over the quantity of subject goods in order to determine the amount of subsidy.

Advance Licences Sold

Unused Advance Licences may be sold, and information was received from exporter(s) on the proceeds of such sales derived from ALs obtained with regard to exports of subject goods during the POI.

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 from the sale of unused ALs constitutes a benefit to exporter(s) in the form of a grant in accordance with section 27.1 of the SIMR.

The Advance Licence program is a specific subsidy under paragraph 2(7.1)(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 Advance Licence revenue received during the POI has been distributed over the quantity of subject goods in order to determine the amount of subsidy.

Export Promotion Capital Goods Licences

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

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

Only exporters are eligible for EPCG licences, thus 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 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 by which duties paid or exempted were lower than duties applicable at time of importation. The resultant duty savings were amortized over the estimated useful life of the imported capital equipment. The annualized duty savings were distributed over the quantity of exports of subject goods and other steel products exported in order to determine the amount of subsidy.

Export Packing Credit

The Export Packing Credit (EPC) is a program administered by the Reserve Bank of India (RBI). Under this program, banks extend working capital loans ("Packing Credit") to exporters, at ceiling rates set by the RBI, on a pre-shipment basis for such purposes as purchasing raw materials and processing, warehousing, packing, transporting and shipping goods. Exporter(s) provided information on EPC loans for 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 do any thing referred to in paragraph (a), which refers to 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 exporter(s) is the present value of the amount by which the interest paid on the EPC loans was lower than the interest that would have been payable on comparable loans from commercial banks, under SIMR 28. The amount was distributed over the quantity of the subject goods for which EPC loans were obtained to arrive at the amount of subsidy.

Post-Shipment Financial Assistance

The GOI's Post-Shipment Export Financing program is administered by the Reserve Bank of India (RBI). 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. Exporter(s) provided information on such loans for 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 do any thing referred to in paragraph (a), which refers to 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 exporter(s) is the present value of the amount by which the interest paid on these loans was lower than the interest that would have been payable on comparable loans from commercial banks, under SIMR 28. The amount was distributed over the quantity of the subject goods for which Post-Shipment Export Financing loans were obtained to arrive at the amount of subsidy.

Tax Exemption for Export Profits

Under section 80 HHC of the Indian Income Tax Act, exporters may deduct export profit when determining taxable income.

The GOI's financial contribution is established under paragraph 2(1.6)(b) of SIMA as amounts that would otherwise be owing and due to the Government are exempted.

The tax exemption on export profits constitutes 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.

The CCRA determined the amount of subsidy under SIMR 32 for exporter(s) who benefited from the program by multiplying the export profit deduction by the relevant tax rate and dividing this figure by the total quantity of the exports.

Special Import Licences

The GOI explained that Special Import Licences (SILs) are issued to certain categories of exporters to allow the importation of certain restricted goods. SILs do not relieve the 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 shall accrue on exports after

April 1, 2000, and that SILs as an instrument shall be abolished on March 31, 2001.

Proceeds obtained from the sale of unused Special Import Licences by exporter(s) were small amounts which were not material in terms of evaluating any countervailable benefit, and are not included in the overall amount of subsidy.

PROGRAM THAT WAS FOUND NOT TO HAVE CONFERRED A BENEFIT TO EXPORTERS

Steel Development Fund

The GOI advised that the Steel Development Fund is made up of past contributions from steel producers and only the contributing firms may borrow from this fund. None of the three exporters during the POI were contributors to this fund.