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- W338884397 abstract "Although the most dramatic processes of privatization now underway are those in the formerly socialist states of Eastern Europe and the late Soviet Union, the past decade has also seen a surge of privatizations in the world's market economies. From France to Canada to Japan, from New Zealand to the United Kingdom to Singapore, governments have divested themselves, fully or partially, of ownership in a variety of enterprises.(1) The privatization process naturally raises a number of domestic legal issues in the privatizing state,(2) but it also has implications for the treatment of the privatized firm (or its purchaser firm or any successor firms) under the countervailing duty (CVD) laws of other countries. The interplay between privatization and CVD laws occurs at two main points: the treatment of past subsidies to the enterprise, (whether they are extinguished by the transfer in ownership,) and the treatment of subsidies given in connection with the privatization process as incentives to private purchasers. Corollary considerations include the nature of the transfer (whether transferred by competitive bidding, public offering, or negotiated buyout) and the actual extent of privatization (whether the majority ownership and/or control passed out of the state's hands). Beginning with Line from Mexico(3) in 1989, the U.S. Department of Commerce (Commerce) haltingly began to evolve a methodology to analyze privatization-related issues in CVD investigations, most recently culminating in the methodology set forth in the General Issues Appendix, attached to the various 1993 Certain Steel Products determinations.(4) As will be shown, Commerce's several determinations in this area over the years have not been truly consistent. Given the continued global wave of privatizations, and the fact that many of these are in the strategic industrial sectors frequently involved in CVD cases, such as steel, the need has been great for Commerce to articulate a privatization methodology which is rational both legally and economically, a need Commerce finally recognized by issuing its General Issues Appendix but which may not truly have been satisfied by the methodology set out therein. Meanwhile, whatever methodology that Commerce ultimately adopts--and that withstands judicial review--may effectively favor or penalize certain methods of privatization, a factor future privatizing governments and purchasers of companies undergoing privatization will likely want to consider.(5) Moreover, it has sometimes been argued that any methodology (such as the current one) that holds that benefits pass through (fully or even partially) after privatization would conflict with the broader U.S. policy goal of encouraging privatization and the free market abroad which views such liberalization as ultimately beneficial for the world economy and U.S. producers. Given this policy, the argument goes, Commerce should shape its methodology to encourage as much as possible (or at least not discourage) foreign privatizations. In any event, Commerce's current methodology faces an uncertain future, having recently been overturned by Judge Carman of the Court of International Trade (CIT) in the twin decisions of Saarstahl, AG v. United States(6) and Inland Steel Bar Co. v. United States,(7) both currently under appeal to the Court of Appeals for the Federal Circuit (CAFC). Whether Commerce will acquiesce in Judge Carman's rulings (which favored respondents' approach to privatization), or will continue to apply the methodology set forth in the General Issues Appendix, remains to be seen,(8) and indeed the CIT will soon revisit the issue of privatization methodology in British Steel, plc v. United States,(9) currently before Judge DiCarlo, an appeal of the general issue of privatization from the Steel Products determinations. Since stare decisis does not bind CIT judges to follow prior CIT decisions,(10) it is possible that Judge diCarlo will not follow Saarstahl and Inland Steel. …" @default.
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- W338884397 date "1994-06-22" @default.
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- W338884397 title "Maybe You Can Take It with You, after All: Subsidies and Privatization under U.S. Countervailing Duty Law" @default.
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