*****

COMMISSION RECOMMENDATION No 375/83/ECSC

of 14 February 1983

imposing a definitive countervailing duty on imports of certain sheets and plates, of iron or steel, originating in Brazil and suspending the application of this duty

THE COMMISSION OF THE EUROPEAN

COMMUNITIES,

Having regard to the Treaty establishing the European Coal and Steel Community,

Having regard to Commission recommendation No 3018/79/ECSC of 21 December 1979 on protection against dumped or subsidized imports from countries not members of the European Coal and Steel Community (1), as last amended by recommendation No 3025/82/ECSC (2), and in particular Article 12 thereof,

After consultations within the Advisory Committee as provided for under the above recommendation,

Whereas in March 1982 the Commission received a complaint, lodged by the Walzstahl-Vereinigung, Duesseldorf, on behalf of almost all Community producers of sheets and plates, of iron or steel, hot-rolled or cold-rolled, of a thickness of less than 3 mm; whereas the complaint contained evidence of subsidies being paid on the production or export of the like products originating in Brazil, and of material injury resulting therefrom, particularly in the Federal Republic of Germany.

Whereas the information supplied provided sufficient evidence to justify initiating a proceeding; whereas the Commission accordingly, after consultation with the Brazilian authorities, announced, by a notice published in the Official Journal of the European Communities (3), the initiation of a proceeding concerning imports of certain sheets and plates, of iron or steel, originating in Brazil, and commenced an investigation of the matter at Community level;

Whereas the Commission officially so advised the exporters and importers known to be concerned, as well as the representatives of the exporting country and the complainants;

Whereas the Commission gave the Brazilian Government and the parties directly concerned the opportunity to make known their views in writing and to be heard orally; whereas all exporters and the Brazilian Government have taken this opportunity;

Whereas, in order to arrive at a determination of the subsidies involved, the Commission sought to obtain and verify all information which it deemed to be necessary; whereas the Commission carried out inspections at the premises of all three Brazilian exporters Cosipa, S茫o Paulo, CSN, Rio de Janeiro and Usiminas, Belo Horizonte; whereas the Commission also sought information from the Brazilian authorities and verified the information supplied by them at the Ministry of Finance in Rio de Janeiro;

Whereas the Commission chose 1 June 1981 to 31 May 1982 as the reference period for its investigation of subsidization;

Whereas the Commission determined that the Brazilian exports under consideration have benefited from subsidies with regard to the IPI export credit premium, preferential working capital financing under resolution 674 and the CDI investment programme;

Whereas the IPI export credit premium and the supply of preferential working capital under resolution 674 are contingent on export performance while the benefits of the CDI programme are available irrespective of exports;

Whereas the IPI export credit premium has been paid by the Brazilian Government to all the companies concerned; whereas this premium, the nominal rate of which was 15 % until 30 March 1982 and 14 % after that date, has been calculated on the basis of an adjusted fob invoice price taking account of elements like for example commissions paid to agents and the input factor of imported material; whereas the premium received by each company has been allocated as closely as possible to the total fob value of the products under consideration which were exported to the Community during the investigation period; whereas the subsidy effect thus calculated is 12,95 % for Cosipa, 11,04 % for CSN and 4,65 % for Usiminas;

Whereas, with regard to preferential working capital financing made available by the Central Bank of Brazil under resolution 674, all three companies have benefited from the provision of such working capital at a rate of 40 % per annum; whereas at the same time the comparable commercial rate available to them was 68 % while the Treasury bill rate (ORTN), which is equivalent to the cost of short-term money to the Brazilian Government, was even higher; whereas the Commission calculated the subsidy effect of this

programme during the investigation period by subtracting the amount of the interest payable on the preferential loans during that period from the amount of interest which would have been payable had the loans been granted at the normal commercial rate; whereas this difference has been allocated to the total fob value of exports during the investigation period; whereas the subsidy effect thus calculated is 1,38 % for Cosipa, 3,56 % for CSN and 0,29 % for Usiminas;

Whereas the CDI investment programme, under certain circumstances, grants duty-free treatment and an exemption from IPI tax on imported machinery; whereas the total amount of import duty and IPI tax saved by Cosipa and Usiminas since 1971, when they first benefited from this programme, has been allocated over a period of 15 years which is the usual depreciation period for capital goods in Brazil; whereas the amounts thus obtained correspond to 0,44 % of Cosipa's and 0,16 % of Usiminas' total domestic and export fob sales value in 1981; whereas CSN only disclosed those savings under the CDI programme which accrued in 1981, but has admitted benefiting from this programme prior to that time; whereas the Commission considered it appropriate, therefore, to allocate the entire 1981 amount to the fob value of all sales made in that year; whereas the subsidy effect thus calculated for CSN is 2,88 %;

Whereas the aggregate effect of the export subsidies determined to have been granted was 11,94 %, equivalent to 35,62 ECU per tonne while the CDI investment programme had an aggregate effect of 1,11 %, equivalent to 3,31 ECU per tonne;

Whereas, in the context of its anti-dumping investigation concerning imports of like products originating in Brazil, the Commission has determined that imports of cold-rolled coils and sheets, of a thickness of less than 3 mm, originating in Brazil have been causing material injury to a Community industry; whereas the facts and considerations which led the Commission to this conclusion are set out in Commission recommendation No 2975/82/ECSC of 8 November 1982 imposing a definitive anti-dumping duty on imports of certain sheets and plates, of iron or steel, originating in Brazil (1); whereas, based on the same facts and considerations, the Commission now determines that subsidized imports of cold-rolled coils and sheets originating in Brazil have caused material injury to the Community industry concerned;

Whereas, in the serious conditions experienced by the Community steel industry, the interests of the Community call for the imposition of a definitive countervailing duty; whereas, having regard to the injury caused, it is appropriate that the amount of the duty should be equal to the cumulative effect of the subsidies found to exist on the export prices;

Whereas, under Community law, no product shall be subject to both anti-dumping and countervailing duties for the purpose of dealing with one and the same situation arising from dumping or from subsidization, that is the sale of products for export at a price lower than the comparable price paid or payable for the like product when sold on the domestic market;

Whereas, under these circumstances, it is appropriate to suspend the application of the countervailing duty to the extent that it offsets the effect of the export subsidies; whereas, having regard to the extent of protection afforded to the Community industry by the anti-dumping duty already in force, it is also appropriate for the time being to suspend the countervailing duty to the extent of the effect of the CDI programme on export prices;

Whereas, with regard to Brazilian exports of hot-rolled sheets, the Commission, for the reasons given in recommendation No 2975/82/ECSC, has determined that at this time the Community's interests do not call for protective action,

MAKES THE FOLLOWING RECOMMENDATION:

Article 1

1. A definitive countervailing duty is hereby imposed on sheets and plates, of iron or steel, not further worked than cold-rolled, of a thickness of less than 3 mm, falling within subheadings 73.13 B II b) and c) of the Common Customs Tariff and corresponding to NIMEXE codes 73.13-43, 45, 47 and 49, originating in Brazil.

2. The amount of the duty shall be 38,93 ECU per 1 000 kilograms net.

3. The provisions in force concerning customs duties shall apply for the application of the duty.

Article 2

The application of the countervailing duty imposed by Article 1 is hereby suspended.

Article 3

The anti-subsidy proceeding concerning sheets and plates, of iron or steel, not further worked than hot-rolled, of a thickness of less than 3 mm, is hereby terminated.

Article 4

This recommendation shall enter into force on the day following its publication in the Official Journal of the European Communities.

Done at Brussels, 14 February 1983.

For the Commission

脡tienne DAVIGNON

Vice-President

(1) OJ No L 339, 31. 12. 1979, p. 15.

(2) OJ No L 317, 13. 11. 1982, p. 17.

(3) OJ No C 146, 10. 6. 1982, p. 4.

(1) OJ No L 312, 9. 11. 1982, p. 10.