[Federal Register Volume 59, Number 94 (Tuesday, May 17, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-11966]


[[Page Unknown]]

[Federal Register: May 17, 1994]


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DEPARTMENT OF COMMERCE
[C-357-001]

 

Leather Wearing Apparel From Argentina; Preliminary Results of 
Countervailing Duty Administrative Review

AGENCY: International Trade Administration/Import Administration 
Department of Commerce.

ACTION: Notice of Preliminary Results of Countervailing Duty 
Administrative Review.

SUMMARY: The Department of Commerce is conducting an administrative 
review of the countervailing duty order on leather wearing apparel from 
Argentina during the period January 1, 1991 through December 31, 1991. 
We preliminarily determine the total net subsidy to be zero for all 
companies during this review period. We invite interested parties to 
comment on these preliminary results.

EFFECTIVE DATE: May 17, 1994.

FOR FURTHER INFORMATION CONTACT: Sylvia Chadwick or Rick Herring, 
Office of Countervailing Compliance, International Trade 
Administration, U.S. Department of Commerce, Washington, DC 20230; 
telephone: (202) 482-2786.

SUPPLEMENTARY INFORMATION:

Background

    On March 5, 1992, the Department of Commerce (the Department) 
published in the Federal Register a notice of ``Opportunity to Request 
Administrative Review'' (57 FR 7910) of the countervailing duty order 
on leather wearing apparel (LWA) from Argentina (48 FR 11480; March 18, 
1983). On March 19, 1992, the Amalgamated Clothing and Textile Workers 
Union (ACTWU), requested an administrative review of the order. We 
published the notice of initiation on April 13, 1992 (57 FR 12798) 
covering the period January 1, 1991 through December 31, 1991. On April 
20, 1992, the government of Argentina (GOA) objected to ACTWU's 
request, alleging that ACTWU lacked standing as an interested party as 
defined under the law. The GOA neither submitted evidence nor presented 
any argument that ACTWU lacked standing. The Department determined that 
the ACTWU had standing to request a review pursuant to 19 CFR 
355.2(i)(4), as ``a certified or recognized union or group of workers 
which is representative of the industry or of sellers * * * in the 
United States of the like product produced in the United States.'' 
ACTWU had participated as an interested party in the original 
investigation and subsequent reviews of this case. For further 
discussion of the Department's position on the standing of ACTWU to 
request a review, see decision memorandum to Joseph A. Spetrini dated 
October 15, 1992; ``Interested Party'' Status of Domestic Party 
Concerning the Countervailing Duty Order on Leather Wearing Apparel 
from Argentina which is on file in the Central Records Unit (room B099 
of the Main Commerce Building).

Scope of Review

    Imports covered by this review are shipments of Argentine leather 
coats, jackets and other apparel including leather vests, pants and 
shorts for men, boys, women, girls and infants. Also included are outer 
shells and parts and pieces of leather wearing apparel. This 
merchandise is classifiable under item number 4203.10.40 of the 
Harmonized Tariff Schedule (HTS). The HTS item number is provided for 
convenience and Customs purposes. The written description remains 
dispositive.
    The review period is January 1, 1991 through December 31, 1991. 
This review involves one company, Comercio Internacional S.A.C.I.F.I.A. 
(Comercio), which accounts for virtually all exports to the U.S., and 
nine government programs.

Analysis of Programs

1. Rebate of Indirect Taxes (Reembolso)

    The Reembolso program provides a cumulative tax rebate paid upon 
export and is calculated as a percentage of the f.o.b. invoice price of 
the exported merchandise. As stated in Sec. 355.44(d)(4)(ii) of the 
Proposed Regulations (54 FR 23382), the Department will find that the 
entire amount of any such rebate is countervailable unless the 
following conditions are met: (1) the program operates for the purpose 
of rebating prior stage cumulative indirect taxes and/or import 
charges; (2) the government accurately ascertained the level of the 
rebate; and (3) the government reexamines its schedules periodically to 
reflect the amount of actual indirect taxes and/or import charges paid. 
In prior investigations and administrative reviews of the Argentine 
Reembolso program, the Department determined that these conditions have 
been met, and, as such, the entire amount of the rebate has not been 
countervailed (see, e.g., Leather Wearing Apparel from Argentina, Final 
Results of Countervailing Duty Administrative Review (56 FR 10410; 
March 12, 1991); Cold Rolled Carbon Steel Flat-rolled Products from 
Argentina, Final Results of Countervailing Duty Administrative Review 
(56 FR 28527; June 21, 1991); Oil Country Tubular Goods from Argentina, 
Final Results of Countervailing Duty Administrative Review (56 FR 
64493; December 10, 1991).
    However, once a rebate program meets this threshold, the Department 
must still determine in each case whether there is an overrebate; that 
is, the Department must still analyze whether the rebate for the 
subject merchandise exceeds the total amount of indirect taxes and 
import duties borne by inputs that are physically incorporated into the 
exported product. If the rebate exceeds the amount of allowable 
indirect taxes and import duties, the Department will, pursuant to 
Sec. 355.44(d)(4)(i) of the Proposed Regulations, find a 
countervailable benefit equal to the difference between the Reembolso 
rebate rate and the allowable rate determined by the Department (i.e., 
the overrebate).
    To determine whether there was an overrebate during the review 
period, the Department requested the Government of Argentina to provide 
information on any changes to the Reembolso program for Leather Wearing 
Apparel. According to the information provided by the Government of 
Argentina, on October 16, 1986, Decree 1555/86 modified the reembolso 
program and set precise and transparent guidelines to implement the 
refund of indirect taxes and import charges. The decree established 
three broad rebate levels covering all products and industry sectors. 
The rates for levels I, II and III were 10 percent, 12.5 percent, and 
15 percent, respectively. Based on the GOA's 1986 calculation of the 
tax incidence in the leather wearing apparel industry, this industry 
was classified in level II.
    The GOA suspended cash payment of rebates under the reembolso 
program in April 1989. Pursuant to the Emergency Economic Law dated 
September 25, 1989 (Law 23,697), the suspension of cash payments was 
continued for an additional 180 days. Rebates accrued during the 
suspension period were to be paid in export credit bonds. On March 4, 
1990, the entire program was suspended for 90 days by Decree 435/90. 
Decree 1930/90 suspended payments of the reembolso for an additional 
12-month period.
    Decree 612/91 dated April 10, 1991, reinstated cash payments of the 
indirect tax rebates and import charges and reduced the rate for the 
leather wearing apparel industry from 12.5 percent to 8.3 percent. 
Decree 1011/91 dated May 29, 1991, abolished Decree 1555/86 and 
incorporated the reduced rebate rates introduced by Decree 612/91. 
Therefore, during the period of review, rebates were suspended from 
January through April 10, 1991, and the rebate rate was 8.3 percent 
from April 11 through December 31, 1991.
    Based on the information provided in the questionnaire response, we 
calculated the allowable tax incidence for the subject merchandise 
based on the 1986 study which was in effect during the review period. 
We found that the rebate of taxes did not exceed the total amount of 
allowable cumulative indirect taxes and/or import charges paid on 
physically incorporated inputs, and prior stage indirect taxes levied 
on the exported product at the final stage of production. Therefore, we 
preliminarily determine that there was no benefit from this program 
during the review period.

2. Other Programs

    Based on the questionnaire responses, we preliminarily determine 
that the following programs were not used during the review period: (1) 
Drawback of customs duties on imported raw materials used in the 
manufacture of LWA; (2) income tax deduction under Decree 173/85; (3) 
income tax exemption on exported goods; (4) exemption from stamp-tax; 
(5) exemption from or rebate of tariff, tributes or taxes levied on 
goods imported under temporary import certificates; (6) exemption from 
value-added taxes on exported goods or reimbursement of value-added 
taxes on purchases of inputs; (7) pre- or post-export financing 
programs; and (8) benefits for exporting from the ports south of the 
Rio Colorado.

Preliminary Results of Review

    We preliminarily determine the total net subsidy to be zero during 
the period January 1, 1991 through December 31, 1991.
    If the final results of this review remain the same as these 
preliminary results, the Department intends to instruct the Customs 
Service not to assess countervailing duties on shipments of the subject 
merchandise from all companies, exported on or after January 1, 1991 
and on or before December 31, 1991. Further, as provided by section 
751(a)(1) of the Act, the Department will instruct Customs not to 
collect cash deposits on shipments of this merchandise from all 
companies entered or withdrawn from warehouse for consumption on or 
after the date of publication of the final results of this 
administrative review.
    Parties to this proceeding may request disclosure of the 
calculation methodology and interested parties may request a hearing 
not later than ten days after the date of publication of this notice. 
In accordance with 19 CFR 355.38(c)(1)(ii), interested parties may 
submit written arguments in case briefs on these preliminary results 
within 30 days of the date of publication of this notice. Rebuttal 
briefs, limited to arguments raised in case briefs, may be submitted 
seven days after the time limit for filing the case brief. Any hearing, 
if requested, will be held seven days after the scheduled date for 
submission of rebuttal briefs. Copies of case briefs and rebuttal 
briefs must be served on interested parties in accordance with 19 CFR 
355.38(e).
    Representatives of parties to the proceeding may request disclosure 
of proprietary information under administrative protective order no 
later than 10 days after the representative's client or employer 
becomes a party to the proceeding, but in no event later than the date 
the case briefs are due under 19 CFR 355.38.
    The Department will publish the final results of this 
administrative review, including the results of its analysis of issues 
raised in any case or rebuttal brief or at a hearing.
    This administrative review and notice are being published in 
accordance with section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 
19 CFR 355.22.

    Dated: May 10, 1994.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 94-11966 Filed 5-16-94; 8:45 am]
BILLING CODE 3510-DS-P