Full opinion text
MALETZ, Judge: Introduction Plaintiffs are domestic manufacturers and wholesalers of float glass. In 1974 they filed with the Commissioner of Customs a petition under 19 U.S.C. § 1303, alleging that bounties or grants were being paid or bestowed, directly or indirectly, upon the manufacture or production of float glass in Italy or upon the exportation of float glass from Italy. Included among the alleged bounties or grants described in plaintiffs’ petition were certain benefits received by float glass manufacturers in Italy under various regional development programs administered by the Italian Government, including investment grants, low-interest rate financing, and the reduction of the contribution to state welfare organizations by the float glass manufacturers. These benefits were more than de minimis, and were paid in respect of expenditures incurred by float glass producers in the creation or expansion of float glass production facilities in certain regions of Italy. Thereupon, the Secretary of the Treasury conducted an investigation and published, on July 3, 1975, a “Notice of Preliminary Countervailing Duty Determination” in the Federal Register which read in part (40 Fed.Reg. 28105): On the basis of an investigation conducted pursuant to § 159.47(c) Customs regulations (19 C.F.R. 159.47(c)), it has tentatively been determined that benefits have been received under various programs maintained by the Italian Government. These include Government assistance in the form of investments [sic] grants, low-interest rate financing, and other incentives for facilities located in economically depressed areas, as well as preferential financing available outside the economically depressed areas. Benefits derived from programs such as those which are the subject of this investigation can, in some circumstances, constitute bounties or grants within the meaning of the law. Since the information thus far made available concerning these programs has not been sufficient to permit a thorough analysis of their nature and effect, it has been determined preliminarily that imports of float glass from Italy benefit from the payment or bestowal of a bounty or grant directly or indirectly, within the meaning of the [sic] section 303 of the Tariff Act of 1930, as amended, by reason of the incentive programs mentioned above. Thereafter, an “Amendment to Notices of Preliminary Countervailing Duty Determinations” was published on August 15, 1975 (40 Fed.Reg. 34423), extending the time within which the public could make submissions. On January 7, 1976, the Treasury Department published in the Federal Register a “Notice of Final Countervailing Duty Determination” which provided (41 Fed.Reg. 1274): After consideration of all information received, it has been determined that imports of float glass from Societa Italiana Vetro, S.p.A. and Fabbrica Pisana, S.p.A. benefit from the payment or bestowal of bounties or grants within the meaning of section 303 of the Tariff Act of 1930, as amended (19 U.S.C. 1303) by reason of various incentive programs including investment grants, special tax reductions, low-interest rate financing and the reduction of the contribution to state welfare organizations by the float glass manufacturers. It aso [sic] has been determined that float glass produced by Verrera di Vernante, S.p.A. does not benefit from the payment or bestowal of bounties or grants. Accordingly, notice is hereby given that float glass imported directly or indirectly from Italy produced by Societa Italiana Vetro, S.p.A. (SIV) and Fabbrica Pisana, S.p.A. (Pisana), entered or withdrawn from warehouse for consumption on or after January 7, 1976, will be subject to payment of countervailing duties equal to the net amount of any bounty or grant determined or estimated to have been paid or bestowed. This determination is based on the best information available, since the three firms named above have declined to provide any detailed information’regarding the benefits they have received under these programs. In accordance with section 303, until further notice the net amount of such bounties or grants under the information presently available has been estimated to be 10% ad valorem for float glass produced by Societa Italiana Vetro, S.p.A. and Fabbrica Pisana, S.p.A. Declarations of the net amount of the bounties or grants ascertained and determined, or estimated, to have been paid, directly or indirectly, upon the manufacture, production, or exportation of float glass from Italy manufactured by SIV and Pisana will be published subsequently in the Federal Register. Effective on January 7, 1976, and until further notice, upon entry for consumption or withdrawal from warehouse for consumption of such dutiable float glass from Italy manufactured by SIV and Pisana imported directly or indirectly from Italy which benefits from such bounties or grants, there shall be collected, in addition to any other duties estimated or determined to be due, countervailing duties in the amount ascertained in accordance with the above declaration. The liquidation of all entries for consumption or withdrawals from warehouse for consumption of such dutiable float glass from Italy manufactured by SIV and Pisana imported directly or indirectly from Italy which benefits from such bounties or grants and is subject to the order shall be suspended pending declarations of the net amounts of the bounties or grants paid or bestowed. A deposit of the estimated countervailing duty, in the amount of 10% ad valorem for float glass from Italy manufactured by SIV and Pisana shall be required at the time of entry for consumption or withdrawal from warehouse for consumption. Following the publication of this countervailing duty determination, the Secretary of the Treasury or his delegate, without having given any notice to the plaintiffs or to the public, engaged in a series of communications with representatives of the Italian Government to elicit information from the Italian Government which would have enabled the Secretary of the Treasury or his delegate to consider further whether bounties or grants were received by Societa Italiana Vetro, S.p.A. (SIV). On March 8, 1977, without any advance notice having been given to the plaintiffs or to the public, a notice was published by the Treasury Department in the Federal Register, ,42 Fed.Reg. 13016-17, T.D. 77-77, which modified the countervailing duty determination of January 7, 1976, by excluding therefrom float glass from Italy produced by SIV. The notice stated in pertinent part: Because SIV and Pisana declined to provide any detailed information prior to the aforementioned determination regarding the benefits each received, the determination was based on the best information available, and the net amount of the bounties or grants was estimated at 10 percent ad valorem for float glass produced by both companies. Effective on January 7, 1976, liquidation was suspended of all entries for consumption or withdrawals from warehouse for consumption of such dutiable float glass produced by SIV and Pisana imported directly or indirectly from Italy which benefits from such bounties or grants. Information has now been received with respect to SIV which permits a more complete analysis of the alleged bounties and grants. Under various regional development programs administered by the Government of Italy, it now appears that an investment grant, preferential financing and a reduction in the required contribution to the state welfare organization have been given to SIV. No special tax reductions have been utilized by SIV. The Italian Government has advised the Treasury Department that the benefits received by SIV have the effect of offsetting disadvantages which would discourage SIV from moving to and expanding in less prosperous regions. Inasmuch as SIV sells a preponderance of its production in the European Community — more than 97 percent in 1975 — the level of its exports outside the European Community is a small percentage of its production, and the amount of assistance provided by the government programs to SIV totaled less than three percent of the value of float glass it produced, those benefits are not regarded as bounties or grants within the meaning of section 303 of the Tariff Act of 1930, as amended (19 U.S.C. 1303). For the reasons stated above, it is hereby determined that no bounty or grant is being, or has been, paid or bestowed directly or indirectly, upon the manufacture, production or exportation of float glass from Italy produced by Societa Italiana Vetro, S.p.A. within the meaning of section 303, Tariff Act of 1930, as amended (19 U.S.C. 1303), and T.D. 76-9 is hereby modified so as to exclude float glass from Italy produced by SIV. Accordingly, it has been ascertained, determined or estimated and hereby declared, that the net amount of the bounty or grant paid or bestowed upon the subject merchandise produced by SIV is 0 percent ad valorem, and no countervailing duties will be collected upon the liquidation of entries of the subject merchandise for consumption or withdrawals from warehouse for consumption for the period January 7,1976, through the date of publication of this notice in the Federal Register. Furthermore, the order to suspend liquidation of all entries for consumption or withdrawals from warehouse for consumption of the subject merchandise produced by SIV, is hereby revoked. Pursuant to 19 U.S.C. § 1516(d), plaintiffs, American manufacturers and wholesalers of the same class or kind as the merchandise the subject of the Secretary of the Treasury’s negative countervailing duty determination regarding float glass from Italy produced by SIV, filed, on March 25, 1977, a timely notice of their desire to contest that determination. On May 13, 1977, the Secretary of the Treasury caused publication of plaintiffs’ notice to be made in the Federal Register, 42 Fed.Reg. 24347-48 (1977), and on May 31,1977, plaintiffs instituted the present action. The Statutes The statutes relevant to the action are as follows: Section 303 of the Tariff Act of 1930, as amended by section 331 of the Trade Act of 1974, 88 Stat. 2049 (19 U.S.C. § 1303): Countervailing duties — Levy of countervailing duties. (a)(1) Whenever any country, dependency, colony, province, or other subdivision of government, person, partnership, association, cartel, or corporation, shall pay or bestow, directly or indirectly, any bounty or grant upon the manufacture or production or export of any article or merchandise manufactured or produced in such country, dependency, colony, province, or other political subdivision of government, then upon the importation of such article or merchandise into the United States, whether the same shall be imported directly from the country of production or otherwise, and whether such article or merchandise is imported in the same condition as when exported from the country of production or has been changed in condition by remanufacture or otherwise, there shall be levied and paid, in all such cases, in addition to any duties otherwise imposed, a duty equal to the net amount of such bounty or grant, however the same be paid or bestowed. ****** (3) In the case of any imported article or merchandise as to which the Secretary of the Treasury (hereafter in this section referred to as the “Secretary”) has not determined whether or not any bounty or grant is being paid or bestowed— (A) upon the filing of a petition by any person setting forth his belief that a bounty or grant is being paid or bestowed, and the reasons therefor, or (B) whenever the Secretary concludes, from information presented to him or to any person to whom authority under this section has been delegated, that a formal investigation is warranted into the question of whether a bounty or grant is being paid or bestowed, the Secretary shall initiate a formal investigation to determine whether or not any bounty or grant is being paid or bestowed and shall publish in the Federal Register notice of the initiation of such investigation. (4) Within six months from the date on which a petition is filed under paragraph (3)(A) or on which notice is published of an investigation initiated under paragraph (3)(B), the Secretary shall make a preliminary determination, and within twelve months from such date shall make a final determination, as to whether or not any bounty or grant is being paid or bestowed. (5) The Secretary shall from time to time ascertain and determine, or estimate, the net amount of each such bounty or grant, and shall declare the net amount so determined or estimated. ****** Section 516 of the Tariff Act of 1930, as amended by section 321(f)(1) of the Trade Act of 1974, 88 Stat. 2048 (19 U.S.C. § 1516): Petitions by American Manufacturers, Producers, or Wholesalers * * * ****** (d) Contest of Secretary’s determination that foreign merchandise is not being sold in United States at less than fair value or that bounty or grant is not being paid. Within 30 days after a determination by the Secretary— (1) under section 160 of this title, that a class or kind of foreign merchandise is not being, nor likely to be sold in the United States at less than its fair value, or (2) under section 1303 of this title that a bounty or grant is not being paid or bestowed, an American manufacturer, producer, or wholesaler of merchandise of the same class or kind as that described in such determination may file with the Secretary a written notice of a desire to contest such determination. Upon receipt of such notice the Secretary shall cause publication to be made thereof and of such manufacturer’s, producer’s or wholesaler’s desire to contest the determination. Within 30 days after such publication, such manufacturer, producer, or wholesaler may commence an action in the United States Customs Court contesting such determination. ****** Section 1582 of Title 28, 28 U.S.C. § 1582 (1970): Jurisdiction of the Customs Court ****** (b) The Customs Court shall have exr elusive jurisdiction of civil actions brought by American manufacturers, producers, or wholesalers pursuant to section 516 of the Tariff Act of 1930, as amended. Question The question presented is whether the bestowal by the Italian Government, under various so-called regional development programs, of certain pecuniary benefits, which are more than de minimis in magnitude, upon the manufacture or production of float glass in Italy by SIV constitutes the payment or bestowal of bounties or grants within the meaning of section 303 of the Tariff Act of 1930, as amended (19 U.S.C. § 1303). The Facts The essential facts — which are not in dispute — show that the benefits alleged to be bounties or grants in this action were conferred under a regional development program administered by the Italian Government. Italian Law No. 646 of August 10, 1950 established a plan for developing the industry and commerce of southern Italy, known as the Mezzogiorno, which has been economically and socially depressed for centuries. That law was modified by Italian Law No. 853 of October 6, 1971, which provided various programs of economic assistance. Administration and financing of these programs are handled through a number of financial institutions, such as the Cassa per il Mezzogiorno (Cassa), ISVEIMER (Instituto per lo Sviluppo Economica dell’Italia Merdidionale), IRFIS (Instituto Regionale per il Finanziamento alie Industrie in Sicilia), CIS (Crédito Industríale Sardo), and the large ■ regional commercial banks. Through these regional development programs, three types of benefits were provided for a float glass facility SIV established in 1974 in San Salvo, Italy which is located in the Mezzogiorno. These benefits were as follows: 1. Investment grant. The Cassa is authorized to make capital grants toward the creation of new industrial establishments. The size of the grant is dependent upon the amount of the fixed investment involved. For investments up to 1.5 billion lire (I.L.), a grant of 35% (45% for facilities in certain designated areas) is available for construction, renovation, conversion, transformation, reactivation, and enlargement of industrial facilities. For investments from 1.5 to 5.0 billion lire, available capital grants range from 15% to 20%, and for investments over 5.0 billion lire, they range from 7% to 12%. All three of the above classes can receive additional grants up to 5% of fixed investment for construction of certain infrastructure projects or for training programs, and additional grants up to 10% for purchase of machinery and equipment manufactured in the Mezzogiorno. Pursuant to this authorization, SIV applied for, and received sometime in mid-1976, a grant from the Cassa for its San Salvo facility. 2. Preferential financing. Under Italy’s regional development program, reduced rate, medium term loans are available for the creation of new industrial establishments. The maximum amount of any loan is dependent on the size of the investment. Investments of up to 1.5 billion lire are eligible for loans up to 35% of the cost of fixed equipment and inventories of raw or semi-finished materials. Loans from 35% to 50% are available for investments of more than 5.0 billion lire. Loans for new plants are for 15 years and those for expansion, renewal, transformation, or reactivation of existing plants are for 10 years. SIV received a 10-year loan at 7.5% interest from IMI (Instituto Mobiliare Italiano) for its San Salvo facility. The commercial rate at that time for 'comparable loans was 10.5%. 3. Reduction in the required contribution to the state welfare organization. Through the end of 1980, industries which establish new facilities in the Mezzogiorno are entitled to a reduced contribution to INPS (the state-run welfare organization). The contribution of qualified enterprises is limited to 30% of salaries paid and 16% to 20% of total labor cost. The Italian Government indicated that SIV’s labor cost savings from this benefit are 11.7%. The parties agree that the benefits received by SIV, as described above, upon the manufacture or production of float glass were more than de minimis. The record also shows that at the time of the issuance of notice of final rate and modification of the countervailing duty order with respect to float glass from Italy, the Treasury Department had before it information which indicated (1) that the benefits in question had a value of “less than three percent” (i. e., 2.47 percent) of the value of float glass produced by SIV; (2) that in 1975, SIV’s exports were 18.6 percent of production; (3) that in 1975, SIV sold more than 97 percent of its production in the European Community; and (4) that in 1975 SIV exported approximately three percent of its production outside of the European Community. OPINION Against this background, plaintiffs contend that the foregoing Italian regional development programs clearly result in the payment or bestowal of bounties or grants upon the manufacture or production of float glass in Italy within the meaning of section 303 of the Tariff Act of 1930, as amended. Defendant, on the other hand, argues that section 303 was intended to reach only those programs which distort international trade and that plaintiffs have failed to demonstrate that the alleged bounties or grants possess these requisite effects. For the reasons that follow, it is concluded that these Italian regional development programs result in the payment of bounties or grants upon the manufacture or production of float glass in Italy within the contemplation of section 303 and that defendant’s argument is lacking in merit. At the outset, it is to be observed that the language of section 303 is mandatory. Thus, whenever a bounty or grant has been conferred, the Secretary must impose countervailing duties. In this connection, the first countervailing duty law of general application was enacted as section 5 of the Tariff Act of 1897, 30 Stat. 151, 205, and provided: Sec. 5. That whenever any country, dependency, or colony shall pay or bestow, directly or indirectly, any bounty or grant upon the exportation of any article or merchandise from such country, dependency, or colony, and such article or merchandise is dutiable under the provisions of this Act, then upon the importation of any such article or merchandise into the United States, whether the same shall be imported directly from the country of production or otherwise, and whether such article or merchandise is imported in the same condition as when exported from the country of production or has been changed in condition by re-manufacture or otherwise, there shall be levied and paid, in all such cases, in addition to the duties otherwise imposed by this Act, an additional duty equal to the net amount of such bounty or grant, however the same be paid or bestowed. The net amount of all such bounties or grants shall be from time to time ascertained, determined, and declared by the Secretary of the Treasury, who shall make all needful regulations for the identification of such articles and merchandise and for the assessment and collection of such additional duties. [Emphasis added.] The law was reenacted, virtually without change, in 1909 (section 6 of the Tariff Act of 1909, 36 Stat. 11, 85) and in 1913 (section IV, paragraph E of the Tariff Act of 1913, 38 Stat. 114, 193). In 1922, the statute was expanded to cover bounties or grants upon manufacture or production, as well as bounties or grants upon export. Section 303 of the Tariff Act of 1922, 42 Stat. 935. The 1922 version was reenacted in 1930, without changes that are relevant here (section 303 of the Tariff Act of 1930, 46 Stat. 687) and in 1975 (section 331(a) of the Trade Act of 1974, 88 Stat. 2049). To summarize, the countervailing duty provision in the Tariff Act of 1897, was basically similar to the present section 303 save for one essential feature: The provi- . sion in the 1897 act applied only to bounties or grants upon exportation, whereas the present statute — stemming from the 1922 amendment — is applicable not only to bounties or grants upon exportation but also to bounties or grants upon manufacture or production. See Zenith, supra, 437 U.S. at 461, n. 18, 98 S.Ct. 2441. The Downs and Nicholas Cases Prior to the 1922 amendment, two significant cases were decided with respect to the then existing law, namely, Downs v. United States, 4 Treas.Dec. 405, T.D. 22984, G.A. 4912 (1901), aff’d, 113 F. 114 (4th Cir. 1902), aff’d, 187 U.S. 496, 23 S.Ct. 222, 47 L.Ed. 275 (1903) and Nicholas & Co. v. United States, 29 Treas.Dec. 59, T.D. 35595 (1915), aff’d, 7 Cust.Ct.Appls. 97, T.D. 36426 (1916), aff’d, 249 U.S. 34, 39 S.Ct. 218, 63 L.Ed. 461 (1919). Downs involved an elaborate scheme of the Russian Government to control the marketing of sugar. Under this scheme, a limited portion of a refiner’s production was labelled as “free” sugar and could be sold subject to an excise tax of 1.75 rubles per pood. A greater portion of the refiner’s production was labelled as “surplus” sugar and could be sold on the domestic market only upon payment not only of the excise tax of 1.75 rubles per pood, but of an additional tax of 1.75 rubles per pood, or a total of 3.50 rubles per pood. If the refiner exported sugar, he received not only a rebate of the excise tax he would have had to pay if he sold domestically, he also received a certificate allowing him to sell an amount of “surplus” sugar equal to the amount of sugar exported as “free” sugar, thus avoiding payment of the additional excise tax. Alternatively, this certificate could be sold to other domestic sugar refiners. Based on this factual setting, the courts in Downs held that the combination of the exemption with the certificates was an export bounty within the meaning of the 1897 statute. See Zenith, supra, 437 U.S. at 459-462, 98 S.Ct. 2441. With respect to the meaning of the terms “bounty” and “grant,” the following statements of the Fourth Circuit in Downs —which adopted the decision of the Board of General Appraisers — are pertinent (113 F. at 147): The word “bounty,” in its ordinary signification, may be defined to be “an additional benefit conferred upon, or a compensation paid to, a class of persons.” 1 Bouv. Law Dict. (Ed.1897) p. 260. * * * * * * It is important to observe, in the consideration of this subject, that section 5 of the tariff act of 1897, under which this case arises, does not use the word “bounty” in any narrow or technical meaning. It embraces “any bounty or grant” bestowed or conferred by the government, whether directly or indirectly. The word “grant” is more comprehensive in meaning than the term “bounty”. It implies the conferring by the sovereign power of some valuable privilege, franchise, or other right of like character, upon a corporation, person, or class of persons. * * * It is to be noted that in Downs, as the Supreme Court stated, “the main argument of the * * * [importer] * * * [was] addressed to the proposition that this bounty is paid, not upon exportation, but upon production.” 187 U.S. at 512, 23 S.Ct. at 227. Addressing itself to this contention, the Court declared (187 U.S. at 512-3, 23 S.Ct. at 227-228): The answer to this is that every bounty upon exportation must, to a certain extent, operate as a bounty upon production, since nothing can be exported which is not produced, and hence a bounty upon exportation, by creating a foreign demand, stimulates an increased production to the extent of such demand. Conversely, a bounty upon production operates to a certain extent as a bounty upon exportation,, since it opens to the manufacturer a foreign market for his merchandise produced in excess of the demand at home. A protective tariff is the most familiar instance of this, since it enables the manufacturer to export the surplus for which there is no demand at home. If there were no tariff at all, and the expense of producing a certain article at home were materially greater than the expense of producing the same article abroad, there would be none produced, and, of course, none to export. But with the aid of such tariff production would be stimulated, and might become so much greater than the home demand, that a manufacturer would look to foreign markets for his surplus. In the case of Russian sugar the effect of the import duties is much enhanced by the fact that, the supply of free sugar from the home market being limited, the selling price is very remunerative, and each producer has therefore an interest in placing as much sugar as he can on the home market; and as the total amount of free sugar is distributed among all the manufactories in proportion to their entire production, it may become to their interest to export their surplus even at a loss, if such loss can be compensated by the profits on sugar sold in the home market. This would not make the tariff a bounty upon exportation, but a mere incident to its operation upon production. But, if a preference be given to merchandise exported over that sold in the home market, by the remission of an excise tax, the effect would be the same as if all such merchandise were taxed, and a drawback repaid to the manufacturer upon so much as he exported. If the additional bounty paid by Russia upon exported sugar were the result of a high protective tariff upon foreign sugar, and a further enhancement of prices by a limitation of the amount of free sugar, put upon the market, we should regard the effect of such regulations as being simply a bounty upon production, although it might incidentally and remotely foster an increased exportation of sugar; but where in addition to that these regulations exempt sugar exported from excise taxation altogether, we think it clearly falls within the definition of an indirect bounty upon exportation. In the Nicholas case the British Government exempted exporters of spirits from paying certain domestic excise taxes and also made an allowance to such exporters of 3d. or 5d. per gallon, depending on the spirits exported. The Board of General Appraisers, the Court of Customs Appeals and the Supreme Court all agreed that this program constituted a bounty or grant within the meaning of the countervailing duty statute. In this connection, the Board emphasized that it is only the effect and not the purpose of a foreign statute that may be inquired into by the courts. Thus, as the Board made clear, if the effect of any such law is to bestow a bounty or grant upon the exporter of merchandise to the United States, then a countervailing duty must be assessed. Specifically, the Board observed (29 Treas.Dec. at 61-62): The policy or purpose of the British law is not a subject with which we can deal. In the wisdom of the British lawmakers the complicated provisions of this statute were doubtless deemed necessary and advisable to safeguard their revenues, and whether the purpose of these provisions was to create a bounty or grant upon the export of spirits like those in question is not a matter into which we may inquire. Our inquiry is: Is such the effect of this statute and its administration ? [Emphasis added.] ****** * * * In the act of 1897, where the provision here under consideration first appears, this policy of protection was affirmatively stated in the title. While we may not inquire into the purposes but only the effect of a foreign law, in determining the meaning of a statute of the United States which it is our function to construe, we may with perfect propriety look to its purpose. Section 5 of the act of 1897 is undoubtedly a part of the national policy as declared in the title of the law “to encourage the industries of the United States.” Its purpose was to prevent an unequal competition in our domestic market with the products of other countries, and in determining its application to any state of facts this policy should be kept in mind, for its reenactment by Congress without any change of verbiage indicates the adoption of the same general policy to this extent at least. [Emphasis added.] The Court of Customs Appeals also made it clear that the countervailing duty statute was concerned with results or effects and not purposes or intentions. Nicholas & Co. v. United States, 7 Ct.Cust.Appls. 97, 106, 107, 108, 109, 113, aff’d, 249 U.S. 34, 39 S.Ct. 218, 63 L.Ed. 461 (1919). Of particular interest are the following remarks of the court (7 Ct.Cust.Appls. at 106-107): s There is nothing obscure, abstruse, mystic, or even ambiguous about this language, which has been, as to the particular words, a part of all our tariff acts from 1897 to and including the present act. Section 5, tariff act of 1897 (30 Stat.L., 151), section 6, tariff act of 1909 (36 Stat.L., 11), paragraph E of section 4, tariff act of 1913 (38 Stat.L., 114). Its plain, explicit, and unequivocal purpose is: Whenever a foreign power or dependency or any political subdivision of a government shall give any aid or advantage to exporters of goods imported into this country therefrom whereby they may be sold for less in competition with our domestic goods, to that extent by this paragraph the duties fixed in the schedule of the act are increased. It was a result Congress was seeking to equalize regardless of whatever name or in whatever manner or form or for whatever purpose it was done. The statute interprets itself as a member of an act calculated to maintain an accorded protection, incidental or otherwise, as against payments or grants of any kind by foreign powers, resulting in an equalization thereof to any extent directly or indirectly. Wherefore, in obedience to that obvious purpose, the court does not feel at liberty to adopt any constrained or technical definitions of the words “bounty” or “grant” suggested but to vouchsafe the paragraph a meaning, well within its language, that will best effectuate the unquestioned congressional purpose. [Emphasis in original.] A great portion of the briefs and record is devoted to an effort to show these payments to exporters of spirits by the United Kingdom to be an equivalent of certain extra costs attending the excise collections. “In consideration of the loss and hindrance caused by excise regulations.” ****** The fact that the payment made by the foreign government was estimated or calculated upon a certain basis or in consideration of extra burdens imposed by domestic excise laws, or for any other reason of domestic government or policy commending itself to the wisdom of Parliament, is not controlling in our courts. The sole inquiry is, do the results of such acts stimulate exportation or give a special advantage by affording aid from the public treasury whereby such goods may when exported be sold in competition with ours for less. * * * [Emphasis added.] * * * If it be true that the excise system delineated intentionally or accidentally results in “an advantage to exporters of spirits to this country from the United Kingdom of Great Britain, which directly or indirectly is borne by the public treasury,” or affords “a premium in like manner given or paid to encourage any branch of industry or manufactures,” likewise exporting, such falls within this paragraph. Downs v. United States (187 U.S. 496, 502 [23 S.Ct. 222, 47 L.Ed. 275]). And, it matters not, nor is it made by Congress an exception thereto, that it is an incidental, indirect, or unintended result of the British Government’s endeavoring to in part repay or compensate its manufacturers and distillers for a burdensome excise system. The courts are concerned with results and not intentions. [Emphasis in original.] The following additional comments by the court in Nicholas are also pertinent (7 Ct.Cust.Appls. at 113-114): Whatever may have been the purpose or consideration of the payment made upon exportation of these spirits, the incontrovertible fact is present that it necessarily encouraged their exportation and enabled the exporter to sell them at a proportionately less price in competition with the goods of this country. It is a payment directly to the exporter for and upon exportation and the entry of said goods in our body commerce. The doctrine of the case, therefore, may be paraphrased from the language of the Supreme Court in Allen v. Smith [173 U.S. 389, 402, 19 S.Ct. 446, 43 L.Ed. 741 (1899)], * * * : Whether allowed in consideration of services rendered or to be rendered, or with the object of a public interest to be obtained, production or manufacture to be stimulated, or a moral obligation to be recognized, it is a bounty. The Supreme Court in Nicholas similarly concluded that notwithstanding that such allowances may be intended merely as compensation for distillers for costs due to British excise regulations and are not confined to cases of exportation, they are, as applied to exports, governmental payments — namely “grants” — made only upon exportation, which, by lessening the burden of British taxation, enable the spirits to be sold more cheaply here than át home — the situation against which the countervailing duty statute was intended to provide. Nicholas & Co. v. United States, 249 U.S. 34, 39 S.Ct. 218, 63 L.Ed. 461 (1919). The Court stated (id. at 39, 39 S.Ct. at 220): * * * The statute was addressed to a condition and its words must be considered as intending to define it, and all of them — “grant” as well as “bounty”— must be given effect. If the word “bounty” has a limited sense the word “grant” has not. A word of broader significance than “grant” could not have been used. Like its synonyms “give” and “bestow,” it expresses a concession, the conferring of something by one person upon another. And if the “something” be conferred by a country “upon the exportation of any article or merchandise” a countervailing duty is required by Paragraph E. There can be, therefore, but one inquiry: Was something — bounty or grant — paid or bestowed upon the exportation of spirits? * * * Following the extremely broad reading given to the countervailing duty law by the Supreme Court in Nicholas and Downs, Congress undertook, in 1922, to broaden the statute even further by providing for the imposition of countervailing duties against imported merchandise upon which there had been conferred bounties or grants upon manufacture or production. The line drawn between bounties or grants upon export and bounties or grants upon production, described by the Supreme Court in Downs, was removed, and all such bounties or grants were covered by the Act. As noted previously, the text of the 1922 statute was reenacted without substantial change in 1930 (section 303 of the Tariff Act of 1930, 46 Stat. 687), and in 1975 (section 331(a) of the Trade Act of 1974, 88 Stat. 2049). Against the plain language of the statute and the comprehensive judicial discussions of the predecessor provisions involving export bounties, we turn to the Italian programs in question. Unquestionably, the effect of these programs has been to reduce SIV’s cost of producing float glass. And whether the reduction in cost is occasioned by direct cash payments, or by an act of government reducing labor cost, capital cost, or the cost of any other factor of production is of no consequence. For if a benefit or advantage is received in connection with the production of merchandise, that benefit or advantage is a bounty or grant on production. And to the extent that such bountied merchandise is exported to the United States, it comes squarely within our countervailing duty law- — section 303. The Secretary of the Treasury’s Reasons for Issuing a Negative Countervailing Duty Determination As set forth above, the Secretary of the Treasury refused to issue a countervailing duty determination for the following stated reasons (42 Fed.Reg. 13016-17, March 8, 1977, T.D. 77-77): Information has now been received with respect to SIV which permits a more complete analysis of the alleged bounties and grants. Under various regional development programs administered by the Government of Italy, it now appears that an investment grant, preferential financing and a reduction in the required contribution to the state welfare organization have been given to SIV. No special tax reductions have been utilized by SIV. The Italian Government has advised the Treasury Department that the benefits received by SIV have the effect of offsetting disadvantages which would discourage SIV from moving to and expanding in less prosperous regions. Inasmuch as SIV sells a preponderance of its production in the European community — more than 97 percent in 1975 — the level of its exports outside the European Community is a small percentage of its production, and the amount of assistance provided by the government programs to SIV totaled less than three percent of the value of float glass it produced, those benefits are not regarded as bounties or grants within the meaning of section 303 of the Tariff Act of 1930, as amended (19 U.S.C. § 1303). [Emphasis added.] The foregoing explanation was enlarged by defendant in response to plaintiffs’ interrogatory no. 23. In its response, defendant stated: On May 31, 1974, in accordance with 19 C.F.R. § 16.24(b) (1974), a petition was submitted to the Treasury Department alleging that bounties or grants had been paid or bestowed, within the contemplation of 19 U.S.C. § 1303, on float glass manufactured or produced in Italy. See 40 Fed.Reg. 2718 (1975). Accordingly, it became necessary for the Secretary of the Treasury to conduct an administrative investigation into the allegations, and such an investigation was conducted in accordance with 19 C.F.R. § 159.47(c) (1975). It was ascertained that, in fact, benefits had been given to two producers of float glass in Italy (one being SIV). It was further ascertained that those benefits were afforded pursuant to regional development programs administered by the Government of Italy. The Italian Government advised Treasury that the various regional development programs in question were designed to accomplish certain domestic economic and social goals by offsetting disadvantages which would otherwise discourage industry from moving into and expanding in less prosperous regions. Further, the Italian Government advised that the programs were not designed to favor exports. It was necessary for Treasury to analyze various relevant factors to determine whether the benefits in question were bounties or grants within the contemplation of 19 U.S.C. 1303. This analysis was designed to ascertain the nature and extent of the consequences of the benefit programs involved, /. e., the economic affects [sic]. In this case, the factors considered by Treasury were: 1) the ad valorem size of the benefits afforded; and 2) the extent to which the product receiving the benefits entered international commerce. In applying these factors, Treasury considered and ascertained the following (42 Fed.Reg. 13016 (1977)): The Italian Government has advised the Treasury Department that the benefits received by SIV have the effect of offsetting disadvantages which would discourage SIV from moving to and expanding in less prosperous regions. Inasmuch as SIV sells a preponderance of its production in the European Community — more than 97 percent in 1975 —the level of its exports outside the European Community is a small percentage of its production, and the amount of assistance provided by the government programs to SIV totaled less than three percent of the value of float glass it produced * * * The determination made in T.D. 77-77 (42 F.R. 13016) that the benefits described in response to interrogatory 18 did not constitute a bounty or grant within the meaning of section 303 of the Tariff Act of 1930, as amended (19 U.S.C. 1303) was made in view of the above considerations and factual findings. As explained above, Treasury’s findings that (a) SIV sells a preponderance of its production in the European Community, (b) the amount of the assist provided by the Italian Government to SIV produced, [sic] and (c) the subject benefits have the effect of offsetting disadvantages which would discourage SIV from moving to and expanding in less prosperous regions, were all considered in making the determination set forth in T.D. 77-77. In the absence of a finding that the benefits distorted international trade, it was determined that no bounties or grants had in fact been paid within the scope of -19 U.S.C. 1303, accordingly, in the absence of a bounty or grant, a zero rate was declared. The Secretary of the Treasury’s Reasons for not Countervailing Lack Validity For the reasons set out below, none of the reasons set forth by the Secretary as reasons for refusing to issue a countervailing duty determination has legal validity. In the first place, as is made clear in the Nicholas case, the alleged purpose of the Italian Government in conferring grants upon manufacture or production is entirely irrelevant. The question rather is what is the effect or result of a particular program. In that circumstance, in treating the grants in question as not being grants upon manufacture or production because of certain alleged purposes of the Italian Government for the grants, the Treasury Department acted contrary to the statutory mandate both as written and construed by the courts. A second factor considered by the Treasury Department — the ad valorem size of the benefits afforded — likewise cannot justify the failure to issue a countervailing determination. On this aspect, it is noted that the Treasury Department determined that the subject benefits had a value of 2.47 percent of the value of float glass produced by SIV which is concededly more than de minimis. Yet in the countervailing duty case of Certain Handbags from the Republic of China, Treasury acknowledged that a benefit equalling 0.8 percent ad valorem was greater than de minimis and therefore eountervailable. 42 Fed.Reg. 28531 (1977). Further, in the countervailing duty case of Certain Fasteners from Japan, Treasury considered benefits of 0.20 percent ad valorem to be “more than de minimis and therefore constituting bounties or grants,” because that amount was significant when compared to the relevant ad valorem rate of duty equivalents — i. e., 0.75 percent ad valorem and 0.25 percent ad valorem. 42 Fed.Reg. 23146-47 (1977). When the ad valorem size of the benefit in the present case as determined by the Treasury Department (2.47 percent) is compared to the average ad valorem rate of duty equivalent for the principal TSUSA category (item 543.-2770) of float glass imported from Italy in 1975 (6.9 percent), the benefit is even more significant, having a ratio to the duty rate of 35.8 percent (2.47:6.9). It is thus clear that the grants here involved were of such sufficient magnitude that they should have been countervailed. The third factor stated to have been considered by the Treasury Department is the extent to which the products receiving the benefits entered international commerce. However, the level of exports is not determinative of whether there is a bounty or grant. There is no question but that the ad valorem size of the subject benefits conferred, as determined by the Treasury Department, was the same for every unit of float glass sold by SIV, whether one percent or 100 percent of saleable production was exported from Italy. Furthermore, it is clear that had the subject benefits been determined by the Treasury Department to have been countervailable bounties or grants, countervailing duties in an amount equal to the benefits as determined by Treasury would have been assessed on every unit of float glass, produced by SIV, imported from Italy into the United States, regardless of the percentage of that company’s production that was exported to the United States, or to anywhere else. Viewed thusly, the level of exports cannot be determinative of whether there is a bounty or grant. The fact is that every unit of Italian float glass, produced by SIV, imported into the United States has been benefited by an equal amount, as a result of grants (which are more than de minimis). And in that situation, the countervailing duty law requires that such benefits on each unit of float glass imported from Italy and produced by SIV be offset. It is also to be noted that according to the Treasury Department’s determination, the level of SIV’s “exports outside the European Community is a small percentage of its production.” 42 Fed.Reg. 13016-17 (1977). [Emphasis added.] Similarly in the case of Float Glass from Belgium (41 Fed.Reg. 1299 (1976)) Treasury used as a criterion the level of exports to countries outside the European Community. By contrast, in the cases of Float Glass from the United Kingdom (40 Fed.Reg. 27499 and 40 Fed.Reg. 59227 (1975)) and Float Glass from West Germany (41 Fed.Reg. 1300 (1976)) the Treasury Department used a different criterion, i. e., the level of total exports. Thus, notwithstanding that defendant asserted that one of the factors considered by Treasury in reaching its negative determination was “the extent to which the product receiving the benefits entered international commerce,” Treasury disregarded Italian float glass produced by SIV which was exported in international commerce to other members of the European Community- The short of the matter is that neither criterion — level of total exports or level of exports outside the European Community— is any criterion at all — i. e., not one of the factors which Congress deemed relevant in administering the countervailing duty law. However, should that factor which Treasury considered in other cases, and which defendant stated was considered here, be applied, there can be no doubt that as a factual matter the level of exports here— which is admittedly 18.6 percent of production in 1975 — is certainly greater than de minimis. In summary, the Treasury Department has failed to justify its refusal to countervail the subject grants bestowed on the manufacture of Italian float glass produced by SIV. Its entire analysis has been vitiated by its consideration of an irrelevancy— viz., the alleged purpose of the Italian regional development programs. Moreover, the special “factors” which Treasury proceeded to consider, in view of the alleged domestic purpose of the Italian programs are not only irrelevant, they fail to support Treasury’s analysis. For the “ad valorem size of the benefits” is admittedly greater than de minimis and the “extent to which the product receiving the benefits entered international commerce” (which is also greater than de minimis) in no way affects the value of the benefit conferred on every unit sold. Thus, no valid reason has been given for not countervailing the substantial grants involved herein. What is more, assuming arguendo that these special factors are relevant, the record establishes without contradiction that the Treasury Department has no standards whatever as to the size of the benefits necessary for issuance of a countervailing duty determination or as to what extent the product receiving the benefits must enter international commerce before a countervailing duty determination is made. Instead, as was made clear in oral argument, the Treasury Department implements these factors on a case-by-case basis without benefit of standards, guidelines or yardsticks (tr. 86-89). Were the court to place its stamp of approval on the exercise of such virtually unfettered discretion by the Secretary in derogation of the Congressional mandate, there would be a complete abdication of judicial responsibility. The countervailing duty statute does not fluctuate from case to case, encompassing grants upon production in some instances, while for ineffable reasons, excluding such grants in others. On the contrary, the Secretary of the Treasury has been directed to offset the effect of bounties or grants bestowed upon the production of goods which are exported to our shores. Once he determines that such bounties or grants have been bestowed, his inquiry must cease and he has an absolute duty to countervail (or invoke the temporary waiver authority under 19 U.S.C. § 1303(d) if such authority is in effect). The Legislative History and the Contemporaneous and Consistent Interpretation of the Countervailing Duty Statute by the Treasury Department Show that Congress Did Not Intend to Limit Countervailable Bounties or Grants to Benefits which Promote Exports Defendant contends that the countervailing duty law was intended to reach only those bounties or grants which distort trade, i. e., promote exports. Its argument is based on its perception of the*legislative history, case law, and the Secretary’s present interpretation which, it says, is entitled to great weight. However, for the reasons set out below, the argument is without merit. As previously discussed, it was not until 1922 that the countervailing duty law provided for bounties or grants bestowed upon manufacture or production. Thus defendant’s excessive comments on the history of the Tariff Acts of 1890, 1894 and 1897 — all of which were restricted to bounties or grants on exportation — are irrelevant. On the other hand, the Tariff Act of 1922 was not restricted to export bounties. This is evident from the statutory language: “That whenever any country, dependency, colony, province, or other political subdivision of government, person, partnership, association, cartel, or corporation shall pay or bestow, directly or indirectly, any bounty or grant upon the manufacture or production or export * * *.” 42 Stat. 935 [emphasis added]. In introducing the amendatory language on the House floor, Congressman Hawley, floor manager of the bill, stated (61 Cong.Rec. 4132 (1921)): Mr. Chairman, this amendment simply affects the export from foreign countries of commodities made under a bounty, so that whether they are made for use in that country nominally and then exported, or made for purposes of export, the conditions will apply to them the same in both cases. ****** This provision printed in the act, I think, is practically the current law. But there have been, for instance, jams and jellies manufactured in Australia and other parts of the Southern Hemisphere, where a bounty has been given on the manufacture, as if for consumption in that'country, and then afterwards the products were exported. Now, if there is a bounty given for goods manufactured for export, then the terms of this paragraph apply. These amendments were drafted by the Customs Division of the Treasury Department, so that when the goods are manufactured for export or manufactured for home consumption and then exported, the regulations in this paragraph shall apply. [Emphasis added.] Congressman Hawley’s remark thus made clear that the 1922 amendment providing for bounties or grants upon manufacture or production was intended to reach goods whether manufactured for export or manufactured for home consumption and then exported. In other words, it is apparent that Congress wished to countervail products imported into the United States which received bounties or grants upon their manufacture or production, regardless of the intended destination of the products at the time of their manufacture or production. Indeed, the Secretary of the Treasury so interpreted the statute. See T.D. 39722 (1923) and T.D. 40001 (1924), involving “Australian bounty on manufacture of fencing wire, galvanized sheets, traction engines, and wire netting.” It should be noted that on several occasions while T.D. 40001 was in force, Treasury, became aware of the absence of imports of products embraced by T.D. 40001, and further was informed by letter dated December 4, 1937 from the Assistant Secretary of State to the Secretary of the Treasury of the following: These bounties on wire netting and tractors are for the object of encouraging production in Australia for the domestic market without recourse tb the imposition of protective tariff duties against competitive imported articles and a consequential raising of prices to agriculturalists. There is no question of encouraging production for export and at the present time tractors to the value of $750,000 are being imported from the United States. [Emphasis added.] Notwithstanding these considerations, Treasury issued a further amendatory countervailing duty order in 1932 to take into account the increased Australian bounty (T.D. 45384 (1932)), and did not revoke the countervailing duty order until 1949 (T.D. 52350 (1949)), at which time it determined, based on information from the Department of State, that no bounties or grants were being paid or bestowed. Relevant also are two countervailing duty orders covering Canadian cheese, T.D. 50093 (1940) and T.D. 53182 (1953). With respect to these orders, in a memorandum to the files, dated May 28, 1964, former Deputy Assistant Secretary of the Treasury Hendrick reported about a meeting he attended at the Department of Agriculture at which he stated, among other things: * * * [O]ur General Counsel’s office was working on a theory that a payment in respect of a particular product made by a government for a purpose other than stimulating exports to the United States could be considered outside the scope of the countervailing duty law provided that there was no substantial increase in exports to the United States attributable to the payment. I noted that this theory appeared inconsistent with the 1940 order relating to Canadian cheddar cheese and the similar 1953 order relating to Canadian blue vein cheese. * * * It is important to add that these two countervailing duty orders — T.D. 50093 and T.D. 53182 — were issued without regard to any “trade effects” and notwithstanding that the production bounties involved therein were not export-inducing. Indeed, in response to a letter dated August 16, 1939 from an importer — the National Biscuit Company — stating that the purpose of the Canadian payments countervailed in T.D. 50093 was not for the purpose of subsidizing exports but to encourage the production of a better grade of cheese, Assistant Deputy Commissioner of Customs Griffith replied by letter dated August 26, 1939 in which, among othir things, he emphasized that the countervailing duty statute reached bounties or grants upon production — not just exports. Thus in his letter Mr. Griffith stated in part: * * * Enclosed for your information is a reprint of section 303 of the Tariff Act of 1930 from which it will be observed that whenever a bounty or grant is paid or bestowed, directly or indirectly, upon the manufacture or production or export of any article or merchandise which is dutiable under the provisions of the tariff act, there shall be levied and paid upon such article or merchandise, when imported into the United States, an additional duty equal to the net amount of such bounty or grant. [Emphasis in original.] Further with respect to T.D. 53182, the American Embassy in Canada advised the Department of State in 1952 that the cheese in question was produced solely by Benedict Fathers in a monastery and that total production was consumed in Canada. But notwithstanding the fact that the government recognized in 1952 and again in 1964 (at the time of Deputy Assistant Secretary Hendrick’s memorandum) that imports of cheese subject to the two countervailing duty orders (T.D. 50093 and T.D. 53182) were minimal, it was not until after Treasury had been informed in 1968 of the termination of the Canadian payments to cheese producers that Treasury discontinued the countervailing duty orders in question. T.D. 68-147 (1968). The Waiver Authority Provided by the Trade Act of 1974 Additionally, defendant argues that the waiver authority (19 U.S.C. § 1303(d)(2)) added by the Trade Act of 1974, 88 Stat. 1978 (1975), demonstrates that Congress intended the countervailing duty statute to reach only those bounties or grants that have an adverse effect on international trade. The argument is completely untenable. 19 U.S.C. § 1303(d) reads as follows: Temporary provision while negotiations are in progress (d)(1) It is the sense of the Congress that the President, to the extent practicable and consistent with United States interests, seek through negotiations the establishment of intentionally agreed rules and procedures governing the use of subsidies (and other export incentives) and the application of countervailing duties. (2) If, after seeking information and advice from such agencies as he may deem appropriate, the Secretary of the Treasury determines, at any time during the four-year period beginning on January 3, 1975, that— (A) adequate steps have been taken to reduce substantially or eliminate during such period the adverse effect of a bounty or grant which he has determined is being paid or bestowed with respect to any article or merchandise; (B) there is a reasonable prospect that, under section 2112 of this title, successful trade agreements will be entered into with foreign countries or instrumentalities providing for the reduction or elimination of barriers to or other distortions of international trade; and (C) the imposition of the additional duty under this section with respect to such article or merchandise would be likely to seriously jeopardize the satisfactory completion of such negotiations; the imposition of the additional duty under this section with respect to such article or merchandise shall not be required during the remainder of such four-year period. This paragraph shall not apply with respect to any case involving non-rubber footwear pending on January 3, 1975, until and unless agreements which temporize imports of non-rubber footwear become effective. (3) The determination of the Secretary under paragraph (2) may be revoked by him, in his discretion, at any time, and any determination made under such paragraph shall be r