[Federal Register Volume 59, Number 58 (Friday, March 25, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-7124]


[[Page Unknown]]

[Federal Register: March 25, 1994]


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DEPARTMENT OF COMMERCE
[C-533-812, C-508-808]

 

Initiation of Countervailing Duty Investigations: Certain Carbon 
Steel Butt-Weld Pipe Fittings From India and Israel

AGENCY: Import Administration, International Trade Administration, 
Commerce.

EFFECTIVE DATE: March 25, 1994.

FOR FURTHER INFORMATION CONTACT: Julie Anne Osgood (India) or Elizabeth 
Graham (Israel), Office of Countervailing Investigations, Import 
Administration, U.S. Department of Commerce, Washington, DC 20230; 
telephone (202) 482-0167 and 482-4105.

The Petition

    On February 28, 1994, we received petitions in proper form filed by 
the U.S. Fittings Group on behalf of the United States carbon steel 
butt-weld pipe fittings (``pipe fittings'') industry. In accordance 
with 19 CFR 355.12, petitioner alleges that manufacturers, producers, 
or exporters of the subject merchandise in India and Israel receive 
subsidies within the meaning of section 701 of the Tariff Act of 1930, 
as amended (``the Act'').

Injury Test

    India and Israel are each a ``country under the Agreement'' within 
the meaning of section 701(b) of the Act. Therefore, Title VII of the 
Act applies to these investigations. Accordingly, the U.S. 
International Trade Commission (``ITC'') must determine whether imports 
of the subject merchandise from India and Israel materially injure, or 
threaten material injury to, a U.S. industry.

Standing

    Petitioner has stated that it is an interested party, as defined in 
section 771(9)(E) of the Act, and that it has filed the petitions on 
behalf of the U.S. industry producing the merchandise subject to these 
investigations. If any interested party, as described under paragraphs 
(C), (D), (E), or (F) of section 771(9) of the Act, wishes to register 
support for, or opposition to, this petition, such party should file a 
written notification with the Assistant Secretary for Import 
Administration, in accordance with 19 CFR 355.31.

Scope of Investigation

    The products covered by these investigations are certain carbon 
steel butt-weld pipe fittings having an inside diameter of less than 
fourteen inches (355 millimeters), imported in either finished or 
unfinished condition. Pipe fittings are forged steel products used to 
join pipe sections in piping systems where conditions require 
permanent, welded connections, as distinguished from fittings based on 
other methods of fastening (e.g., threaded, grooved, or bolted 
fittings). Pipe fittings come in several basic shapes: ``elbows'', 
``tees'', ``caps'', and ``reducers.'' The edges of finished pipe 
fittings are beveled, so that when a fitting is placed against the end 
of a pipe (the ends of which have also been beveled), a shallow channel 
is created to accommodate the ``bead'' of the weld which joins the 
fitting to the pipe. These pipe fittings are currently classifiable 
under subheading 7307.93.3000 of the Harmonized Tariff Schedule of the 
United States (``HTSUS''). Although the HTSUS subheading is provided 
for convenience and customs purposes, our written description of the 
scope of these proceedings is dispositive.

Initiation of Investigations

    The Department has examined the petitions on pipe fittings from 
India and Israel and found that they comply with the requirements of 
section 702(b) of the Act and 19 CFR 355.12. Therefore, in accordance 
with section 702(c) of the Act and 19 CFR 355.13 (a) and (b), we are 
initiating countervailing duty investigations to determine whether 
manufacturers, producers or exporters of pipe fittings in India and 
Israel receive countervailable subsidies. The following programs are 
included in our investigations.

India

1. Rebates Under the International Price Reimbursement Scheme
2. Pre-Shipment Export Loans
3. Post-Shipment Export Loans
4. Advances Licenses
5. Use and Sale of Additional Licenses
6. Sale of Replenishment Licenses
7. Income Tax Deductions Under Section 80HHC
8. Market Development Assistant Grants
9. Export-Promotion, Capital Goods Scheme
10. Benefits for 100 Percent Export-Oriented Units
11. Benefits Provided by Export-Processing Zones

    We are not including the following programs which are alleged to be 
benefitting producers of the subject merchandise in India. (For a more 
detailed discussion, see the Memorandum to Barbara R. Stafford from 
Team dated March 21, 1994, on file in the Central Records Unit of the 
Main Commerce Building.)

1. Regional Incentives

    Petitioner alleges that new projects and industries in ``backward'' 
states may be eligible for subsidies from the Government of India 
(``GOI'') or the state government. According to petitioner, the 
subsidies include federal and state tax benefits and fixed-capital 
investment subsidies. However, petitioner has not provided any 
information that the producers of pipe fittings are located in these 
``backward'' states.

Rebates Under the Cash Compensatory Support Program

    The Cash Compensatory Support Program (``CCS'') was established in 
1966 by the GOI to rebate indirect taxes on exported merchandise. 
Petitioner argues that although the GOI suspended the program effective 
July 3, 1991, producers/exporters of pipe fittings may be receiving 
residual benefits.
    We verified in the 1990 Administrative Review of the Countervailing 
Duty Order on Certain Iron-Metal Castings from India that the GOI 
terminated cash rebates on exports made after July 2, 1991 (see the 
December 13, 1993 government verification report on file in Room B-099 
of the Main Commerce Building).
    Because we consider the countervailable benefit from this program 
to occur at the time the benefit is earned, i.e., at the time of 
export, and not when a company applies for or receives the benefit (see 
section 355.48(b)(7) of the Department's proposed regulations in 
Countervailing Duties; notice of proposed rulemaking and Request for 
Public Comments, 54 FR 23366 (May 31, 1989); and Final Affirmative 
Countervailing Duty Determination: Steel Wire Rope from India, 56 FR 
46292, 46294 (September 11, 1991)), the producers of pipe fittings 
could not have benefitted from this program during the period of 
investigation.

3. Reduced Freight Rates

    Petitioner alleges that the cost of delivery for steel is reduced 
for customers located in remote areas of India. However, petitioner has 
not provided sufficient information concerning the nature of this 
program or information indicating that the producers of pipe fittings 
are located in ``remote areas.''

Israel

1. Grants under the Encouragement of Capital Investments Law of 1959 
(``ECIL'')
2. Other Benefits Under ECIL
    a. Section 42--Preferential Accelerated Depreciation
    b. Section 46--Tax Benefits
    c. Section 24--Preferential Loans
    d. Interest Subsidy Payments
3. Long-Term Industrial Development Loans
4. Exchange Rate Risk Insurance Scheme
5. Labor Training Grants
6. Industrial Research and Development Grants
7. Special Export Financing Loans
8. Export Incentives
    a. Exception from wharfage fee and indirect taxes
    b. Provision of funds for transportation of goods to Eilat Harbor

    We are not including the following programs which are alleged to be 
benefitting producers of the subject merchandise in Israel. (For a more 
detailed discussion, see the Memorandum to Barbara R. Stafford from 
Team dated March 14, 1994, on file in the Central Records Unit of the 
Main Commerce Building.)

1. Partial Tax Exemption Under ECIL

    Petitioner alleged that manufacturers of pipe fittings may have 
received partial tax exemptions under ECIL. However, this program was 
determined in a previous case to be terminated. See Final Affirmative 
Countervailing Duty Determination of Oil Country Tubular Goods from 
Israel, 52 FR 1649 (January 15, 1987). Petitioner provided no new 
information to indicate that residual benefits are being received or 
that the program has been re-enacted.

2. Equity Maintenance Allowances

    Petitioner alleged that manufacturers of pipe fittings may have 
received benefits under this program. However, petitioner does not 
describe the nature of the benefits provided under this program, nor 
indicate why it believes that manufacturers of pipe fittings may have 
benefitted from the program.

ITC Notification

    Pursuant to Section 702(d) of the Act, we have notified the ITC of 
these initiations.

Preliminary Determinations by the ITC

    The ITC will determine by April 14, 1994, whether there is a 
reasonable indication that a United States industry is being materially 
injured, or threatened with material injury, by reason of imports from 
India and Israel. Any ITC determination which is negative will result 
in the respective investigation being terminated; otherwise, the 
investigations will proceed according to statutory and regulatory time 
limits.
    This notice is published pursuant to 702(c)(2) of the Act and 19 
CFR 355.13(b).

    Dated: March 21, 1994.
Paul L. Joffe,
Acting Assistant Secretary for Import Administration.
[FR Doc. 94-7124 Filed 3-24-94; 8:45 am]
BILLING CODE 3510-DS-P