[Federal Register Volume 59, Number 217 (Thursday, November 10, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-27918]


[[Page Unknown]]

[Federal Register: November 10, 1994]


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DEPARTMENT OF COMMERCE
[C-201-003]

 

Ceramic Tile from Mexico; Preliminary Results of Countervailing 
Duty Administrative Review

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

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

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SUMMARY: The Department of Commerce (the Department) is conducting an 
administrative review of the countervailing duty order on ceramic tile 
from Mexico. The review period is January 1, 1992 through December 31, 
1992. We preliminarily determine the total bounty or grant to be zero 
or de minimis for 32 companies, and 2.55 percent ad valorem for all 
other companies during this review period. In accordance with 19 CFR 
355.7, any rate less than 0.5 percent ad valorem is de minimis. We 
invite interested parties to comment on these preliminary results.

EFFECTIVE DATE: November 10, 1994.

FOR FURTHER INFORMATION CONTACT: Gayle Longest or Kelly Parkhill, 
Office of Countervailing Compliance, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202) 
482-2786.

SUPPLEMENTARY INFORMATION:

Background

    On April 28, 1993, the Department published a notice of 
``Opportunity to Request Administrative Review'' (58 FR 25802) of the 
countervailing duty order on ceramic tile from Mexico. We received a 
request for review from Ceramica Regiomontana, S.A., (Ceramica) a 
Mexican exporter of the subject merchandise. We initiated the review on 
June 25, 1993 (58 FR 34414). The review period is January 1, 1992 
through December 31, 1992. This review involves 33 companies and 10 
programs.
    On February 7, 1994, the Government of Mexico submitted a request 
for partial revocation for 14 companies with their questionnaire 
response. According to 19 CFR 355.25(b)(3), a request for revocation 
can only be submitted in the fifth and subsequent anniversary months of 
an order. Since the anniversary month for the review period January 1, 
1992 through December 31, 1992 is May 1993, and the request was 
submitted on February 7, 1994, the request was untimely. Therefore, the 
Department is unable to consider partial revocation for these 14 
companies in this administrative review.
    The Department is conducting this review in accordance with section 
751 of the Tariff Act of 1930 (the Act), as amended. The final results 
of the last administrative review of this order were published in the 
Federal Register on January 19, 1994 (59 FR 2823).

Scope of Review

    Imports covered by this review are shipments of Mexican ceramic 
tile, including non-mosaic, glazed, and unglazed ceramic floor and wall 
tile. During the review period, such merchandise was classifiable under 
the Harmonized Tariff Schedule (HTS) item numbers 6907.10.0000, 
6907.90.0000, 6908.10.0000, and 6908.90.0000. The HTS item numbers are 
provided for convenience and Customs purposes. The written description 
remains dispositive.

Calculation Methodology for Assessment and Cash Deposit Purposes

    In calculating the benefits received during the review period, we 
followed the methodology described in the preamble to 19 CFR 355.20(d) 
(53 FR 52306, and 52325; December 27, 1988). We calculated a country-
wide rate, weight-averaging the benefits received by the 33 companies 
subject to review to determine the overall subsidy from all programs 
benefitting exports of the subject merchandise to the United States. In 
weight-averaging the benefits, we used each firm's share of exports to 
the United States as weights.
    Because the overall weighted-average country-wide rate was above de 
minimis, as defined by 19 CFR 355.7, we proceeded to the next step in 
our analysis and examined the ad valorem rate we had calculated for 
each company for all programs combined, to determine whether individual 
company rates differed significantly from the weighted-average country-
wide rate. Thirty-two companies received aggregate benefits which were 
zero or de minimis (significantly different within the meaning of 19 
CFR 355.22(d)(3)(ii)). Therefore, these companies were treated 
separately for assessment and cash deposit purposes.
    Ceramica's rate was not significantly different from the weighted-
average country-wide rate. Since Ceramica was the only company 
receiving subsidies greater than de minimis, the all other rate was 
calculated based on the unweighted aggregate benefits that Ceramic 
received from all countervailing programs.

Analysis of Programs

(1) BANCOMEXT Financing for Exporters

    Effective January 1, 1990, the Mexican Treasury Department 
eliminated the Fondo para el Fomento de las Exportaciones de Productos 
Manufacturados (FOMEX) loan program and transferred the FOMEX trust to 
the Banco Nacional de Comercio Exterior, S.N.C. (BANCOMEXT). BANCOMEXT 
offers short-term financing to producers or trading companies engaged 
in export activities; any company generating foreign currency through 
exports is eligible for financing under this program. The BANCOMEXT 
program operates much like its predecessor, FOMEX. BANCOMEXT provides 
two types of financing, both in U.S. dollars, to exporters: working 
capital loans (pre-export loans), and loans for export sales (export 
loans). In addition, BANCOMEXT may provide financing to foreign buyers 
of Mexican goods and services.
    The Department has previously found this program to confer an 
export subsidy to the extent that the loans are provided at 
preferential terms (See Ceramic Tile From Mexico; Preliminary Results 
of Countervailing Duty Review (57 FR 5997; February 19, 1992) and 
Ceramic Tile From Mexico; Final Results of Countervailing Duty Review 
(57 FR 24247; June 8, 1992)). In this review the Government of Mexico 
provided no new information or evidence of changed circumstances that 
would lead the Department to alter that determination.
    We found that the annual interest rates that BANCOMEXT charged to 
borrowers for certain loans on which interest payments were due during 
the review period were lower than commercial rates. The BANCOMEXT 
dollar-denominated loans under review were granted at annual interest 
rates ranging from 7.1 percent to 9.8 percent. As discussed in Certain 
Steel Products from Mexico; Final Countervailing Duty Determination (58 
FR 37357; July 9, 1993), because loans are funded by BANCOMEXT through 
commercial banks in dollars and indexed to dollars for repayment, we 
used a dollar benchmark. As the benchmark for BANCOMEXT pre-export and 
export dollar-denominated loans granted in 1992, we used the average of 
the quarterly weighted-average effective interest rates published in 
the Federal Reserve Bulletin, which resulted in an annual benchmark of 
7.18 percent in 1992.
    We consider the benefits from short-term loans to occur at the time 
the interest is paid. Because interest on BANCOMEXT pre-export loans is 
paid at maturity, we calculated benefits based on loans that matured 
during the review period; these were obtained between March 1992 and 
May 1992. Interest on BANCOMEXT export loans is paid in advance; we 
therefore calculated benefits based on BANCOMEXT loans received during 
the review period.
    Two exporters of ceramic tile products used BANCOMEXT pre-export 
and export financing. Because we found that the exporters were able to 
tie their BANCOMEXT loans to specific sales, we measured the benefit 
only from the BANCOMEXT loans tied to sales of the subject merchandise 
to the United States. To determine the benefit for each exporter, we 
multiplied the difference between the interest rate charged to 
exporters for these loans and the benchmark interest rate by the 
outstanding principal and then multiplied this amount by the term of 
the loan divided by 365. Because one company's monthly sales figures 
are indexed to account for inflation, we adjusted that company's 
benefit amounts to be on the same terms as the sales figures. On this 
basis, we preliminarily determine the benefit from this program to be 
0.01 percent ad valorem for Internacional de Ceramica and zero for all 
other companies listed in the preliminary results of review section of 
this notice.

(2) PITEX

    The Program for Temporary Importation of Products used in the 
Production of Exports (PITEX) was established by a decree published in 
the Diario Oficial on May 9, 1985, and amended in the Diario Oficial on 
September 19, 1986, and May 3, 1990. The program is jointly 
administered by the Ministry of Commerce and Industrial Development 
(SECOFI) and the Customs Administration. Under PITEX, exporters with a 
proven export record may receive authorization to temporarily import 
products to be used in the production of exports for up to five years 
without having to pay the import duties normally imposed on those 
imports. PITEX allows for the exemption of import duties for the 
following categories of merchandise used in export production: raw 
materials, packing materials, fuels and lubricants, machinery used to 
manufacture products for export, and spare parts and other machinery. 
The importer must post a bond or other security to guarantee the 
reexportation of the temporary imports. Because it is only available to 
exporters, the Department previously found in Certain Textile Mill 
Products From Mexico; Final Results of Countervailing Duty 
Administrative Review (56 FR 50859; October 9, 1991) and Ceramic Tile 
From Mexico; Final Results of Countervailing Duty Administrative Review 
(57 FR 24247; June 8, 1992) that PITEX provides countervailable 
benefits to the extent that it provides duty exemptions on imports of 
merchandise not physically incorporated into exported products. The 
Government of Mexico provided no new information or evidence of changed 
circumstances that would lead the Department to alter that 
determination.
    During the review period, Ceramica used the PITEX program for 
imports of machinery and spare parts which are not physically 
incorporated into exported products. To calculate the benefit from this 
program, we calculated the duties that should have been paid on the 
non-physically incorporated items that were imported under the PITEX 
program during the review period. We then divided that amount by the 
company's total exports. On this basis, we preliminarily determine the 
benefit from this program to be zero for the 32 companies listed in the 
preliminary results of review section of this notice and 2.55 percent 
ad valorem for all other companies.

(3) Other Programs

    We also examined the following programs and preliminarily determine 
that exporters of the subject merchandise did not use them during the 
review period:
    (A) Other BANCOMEXT preferential financing;
    (B) Other Dollar-Denominated Financing Programs;
    (C) Fiscal Promotion Certificates (CEPROFI);
    (D) Import duty reductions and exemptions;
    (E) State tax incentives;
    (F) Article 15 Loans;
    (G) NAFINSA FONEI-type financing; and
    (H) NAFINSA FOGAIN-type financing.

Preliminary Results of Review

    We preliminarily determine that the following 32 companies received 
zero or de minimis benefits during the 1992 review period. In 
accordance with 19 CFR 355.7, any rate less than 0.5 percent ad valorem 
is de minimis.
    (1) Adrian Sifuentes Jimenez.
    (2) Agustin Cedillo Ruiz.
    (3) Alejandro Estrada Silva.
    (4) Apolonio Arias Vasquez.
    (5) Arturo Leija Lucio.
    (6) Aurelio Cedillo Ruiz.
    (7) Azuelejos Decorativos Carrillo, S.A.
    (8) Efrain Medina Carrillo.
    (9) Emilio Pacheco.
    (10) Faustino Nuncio Silva.
    (11) Ima Regiomontana, S.A. de C.V.
    (12) Industrias Intercontinental, S.A. de C.V.
    (13) Internacional de Ceramica, S.A. de C.V.
    (14) Javier Leija Lucio.
    (15) Jesus Gallegos Olivares.
    (16) Jesus Jimenez Lucio.
    (17) Jose Arellano Valdez.
    (18) Jose Dolores Hernandez.
    (19) Jose Silva Romero.
    (20) Juan Cortex Coronel.
    (21) Leopoldo Montiel Rincon.
    (22) Luis Najera Flores.
    (23) Luis Paulino Flores.
    (24) Norberto Cuellar Zuniga.
    (25) O.H. Internacional, S.A. de C.V.
    (26) Pedro Lopez Alonso.
    (27) Raul Leija.
    (28) Recubrimientos Mezquital, S.A. de C.V.
    (29) Ricardo Berrones.
    (30) Taller de Azuelejos Coloniales.
    (31) Vicente Jalomo Reyna.
    (32) Zenon Cortez Coronel.
    In addition, we preliminarily determine the total bounty or grant 
to be 2.55 percent ad valorem for all other companies during the period 
January 1, 1992 through December 31, 1992.
    If the final results of this review remain the same as these 
preliminary results, the Department intends to instruct the Customs 
Service to liquidate, without regard to countervailing duties, 
shipments of this merchandise from Mexico exported by the 32 companies 
listed above for the period on or after January 1, 1992, and on or 
before December 31, 1992, and to assess countervailing duties of 2.55 
percent of the f.o.b. invoice price of shipments from all other 
companies for the same period.
    Parties to the proceeding may request disclosure of the calculation 
methodology and interested parties may request a hearing not later than 
10 days after the date of publication of this notice. Pursuant to 19 
CFR 355.38(c), interested parties may submit written arguments in case 
briefs on these preliminary results within 30 days of the date of 
publication. 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.
    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 in accordance with 
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 355.22.

    Dated: November 4, 1994.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 94-27918 Filed 11-9-94; 8:45 am]
BILLING CODE 3510-DS-P