[Federal Register Volume 60, Number 50 (Wednesday, March 15, 1995)]
[Notices]
[Pages 13961-13963]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-6400]



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DEPARTMENT OF COMMERCE
[C-549-811]


Final Negative Countervailing Duty Determination: Disposable 
Pocket Lighters From Thailand

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

EFFECTIVE DATE: March 15, 1995.

FOR FURTHER INFORMATION CONTACT: Elizabeth A. Graham, Office of 
Countervailing Investigations, Import Administration, U.S. Department 
of Commerce, Room 3099, 14th Street and Constitution Avenue, N.W., 
Washington, D.C. 20230; telephone (202) 482-4105.
    Final Determination. The Department of Commerce (``the 
Department'') determines that no benefits which constitute subsidies 
within the meaning of section 701 of the Tariff Act of 1930, as amended 
(``the Act''), are being provided to manufacturers, producers, or 
exporters in Thailand of disposable pocket lighters.

Case History

    Since the publication of the preliminary determination in the 
Federal Register, 59 FR 40525 (August 9, 1994), the following events 
have occurred.
    On September 13, 1994, at petitioner's request, we extended the 
final determination in this investigation to coincide with the final 
determination in the companion antidumping investigation (59 FR 46961).
    On November 3, 1994, respondents requested that the Department 
postpone the final antidumping and countervailing duty determinations. 
Therefore, on November 16, 1994, the Department published in the 
Federal Register a notice postponing the final antidumping and 
countervailing duty determinations until no later than March 8, 1995 
(59 FR 59211).
    We conducted verification of the responses submitted on behalf of 
the Government of Thailand (GOT) and Thai Merry Co., Ltd. (Thai Merry) 
from October 17-18, and on October 28, 1994, respectively. We received 
case briefs on February 23, 1995, from petitioner and respondent, and 
received a rebuttal brief from respondent on March 1, 1995.

Scope of Investigation

    The products covered by this investigation are disposable pocket 
lighters, whether or not refillable, whose fuel is butane, isobutane, 
propane, or other liquified hydrocarbon, or a mixture containing any of 
these, whose vapor pressure at 75 degrees fahrenheit (24 degrees 
Celsius) exceeds a gauge pressure of 15 pounds per square inch. Non-
refillable pocket lighters are imported under subheading 9613.10.0000 
of the Harmonized Tariff Schedule of the United States (``HTSUS''). 
Refillable, disposable pocket lighters would be imported under 
subheading 9613.220.0000. Although the HTSUS subheadings are provided 
for convenience and Customs purposes, our written description of the 
scope of this proceeding is dispositive.

Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the statute and to the 
Department's regulations are references to the provisions as they 
existed on December 31, 1994.
    References to the Countervailing Duties: Notice of Proposed 
Rulemaking and Request for Public Comments, 54 FR 23366 (May 31, 1989) 
(Proposed Regulations), which were withdrawn on January 3, 1995 (60 FR 
80), are provided solely for further explanation of the Department's 
CVD practice. The subject matter of these regulations is being 
considered in connection with an ongoing rulemaking proceeding which, 
among other things, is intended to conform the Department's regulations 
to the Uruguay Round Agreements Act.

Injury Test

    Although Thailand is not a ``country under the Agreement'' within 
the meaning of section 701(b) of the Tariff [[Page 13962]] Act of 1930, 
as amended (``the Act''), the merchandise being investigated is non-
dutiable under the Generalized System of Preferences and Thailand is a 
contracting party to the General Agreement on Tariffs and Trade. 
Thailand, therefore, is entitled to an injury test on imports of the 
subject merchandise pursuant to section 303(a)(2) of the Act. On June 
20, 1994, the ITC preliminarily determined that imports of the subject 
merchandise from Thailand materially injure, or threaten material 
injury to, a U.S. industry.
Period of Investigation

    For purposes of this final determination, the period for which we 
are measuring bounties or grants (the period of investigation 
(``POI'')) is calendar year 1993.

Analysis of Programs

    Based upon our analysis of the petition, the responses to our 
questionnaires, verification and comments made by interested parties, 
we determine the following:

A. Programs Determined to be Countervailable

1. Section 31 of the Investment Promotion Act
    The Investment Promotion Act of 1977 (``IPA'') provides incentives 
for investment to promote the development of the Thai economy. The IPA 
authorizes an array of tax exemptions and exclusions. The IPA is 
administered by the Board of Investment (BOI) through promotion 
certificates. These certificates list the various sections of the IPA 
under which a company is eligible to receive benefits.
    Under section 31, companies may obtain a three-to-eight year 
exemption from payment of corporate income tax on profits derived from 
promoted activities, as well as deductions from net profits for losses 
incurred during the tax exemption period. The 1977 IPA Act has been 
amended several times and, in 1991, the GOT passed the Investment 
Promotion Act No. 2 of 1991. This 1991 Act was the law in effect during 
the POI. Section 16 of this law states that eligible activities for 
this exemption include `` * * * activities which involve production for 
export.''
    We verified that Thai Merry applied for and received section 31 
income tax exemptions during the POI. The approval certificate received 
by Thai Merry for participation in this program states that ``the 
company has received a promoted status in the business for production 
of gas lighters for export.''
    Because Thai Merry received these benefits for exported lighters, 
we determine that this program confers an export bounty or grant. To 
calculate the benefit for the POI, we divided the tax savings by the 
total value of export sales, pursuant to 355.47(c)(1)(ii) of the 
Proposed Regulations (Countervailing Duties: Notice of Proposed 
Rulemaking and Request for Public Comments, 54 FR 23366 (May 31, 
1989)). On this basis, we calculated a net bounty or grant of 0.23 
percent ad valorem.
    Because this is the only countervailable program and the rate is de 
minimis, pursuant to 19 CFR 355.7 (1994), we determine that no benefits 
which constitute bounties or grants within the meaning of the 
countervailing duty law are being provided to manufacturers, producers, 
or exporters of disposable pocket lighters in Thailand.

B. Programs Determined to be Not Used

    We established at verification that the following programs were not 
used during the POI.

A. Industrial Estates/Export Processing Zones
B. Preferential Short-term Loans Under the Export Packing Credit 
Program
C. Tax and Duty Exemptions Under the Investment Promotion Act (sections 
28, 33, 34, 36(1), 36(2), 36(3) and 36(4)
D. Tax Certificates for Exporters
E. Rediscount of Industrial Bills
F. International Trade Promotion Fund

Interested Party Comments

    Comment 1: Petitioner asserts that the Department should 
countervail government subsidies provided to two plants which provide 
assembly services under subcontract to Thai Merry. These assembly 
plants are not owned by Thai Merry, although the materials processed in 
these facilities are the property of Thai Merry. These assembly plants 
were discussed in the course of the antidumping (AD) verification, not 
in the CVD verification. Petitioner believes that because one of these 
plants assembles safety-lock lighters, which are only sold in the 
United States, the facility may be benefitting from being located in an 
export processing zone. Petitioner asserts that unless respondent can 
provide proof that these facilities are not located in an export 
processing zone, the Department should presume that these plants 
receive subsidies and that Thai Merry benefits from such subsidies, and 
should apply a countervailing duty rate to Thai Merry based on BIA.
    Respondent contends that petitioner's brief should be rejected due 
to the inclusion of arguments based on information not on the record of 
the CVD investigation. (The fact that Thai Merry subcontracted some 
assembly operations to unrelated firms was only raised in the AD 
investigation.)
    Respondent emphasizes that the Department verified that Thai Merry 
is not located in an export processing zone and that the company did 
not benefit from this program during the POI. Additionally, respondent 
asserts that since the Department chose not to verify the location of 
the subcontractor's assembly plants in connection with the CVD 
verification, it would be unfair to assign a margin to Thai Merry based 
on BIA.
    DOC Position: We consider petitioner's allegation untimely and, 
therefore, have not considered its allegation in this investigation. 
Pursuant to Sec. 353.31(c)(i) of the Proposed Regulations, ``the 
Secretary will not consider any subsidy allegation submitted by the 
petitioner or other interested party, as defined in paragraph (i)(3), 
(i)(4), (i)(5), or (i)(6) of section 355.2, later than: (i) In an 
investigation, 40 days prior to the scheduled date of the Secretary's 
preliminary determination.'' Petitioner first alleged that subsidies 
could have been provided to Thai Merry's unrelated assembly plants in 
its case briefs, 13 days prior to the final determination.
    We further note that section 355.39 of the Proposed Regulations 
does not apply in this case. Section 355.39 provides that if ``the 
Secretary discovers a practice which appears to provide a subsidy with 
respect to the merchandise and the practice was not alleged or examined 
in the proceeding, the Secretary will examine the practice if the 
Secretary concludes that sufficient time remains before the scheduled 
date for the Secretary's final determination or final results of 
review.'' In the context of the companion AD investigation, the 
Department verified that Thai Merry subcontracts certain of its 
assembly operations. The Department then verified the location and 
function of these plants, and the fact that Thai Merry did not own 
these assembly plants. However, in the context of this proceeding, we 
did not discover ``a practice which appears to provide a subsidy.'' 
Therefore, the Department would not have been obligated to conduct an 
examination of the situation, even had there been ``sufficient time'' 
to do so.
    We agree with respondents that it is inappropriate to apply BIA to 
Thai Merry based on an unsupported allegation that subsidies may have 
been granted to the assembly plants owned by its unrelated 
subcontractor(s). Petitioner has not made a sufficiently 
[[Page 13963]] detailed allegation either that the assembly plants 
received countervailable benefits, or how such countervailable benefits 
might be accruing to Thai Merry through either of these plants.
    Petitioner has acknowledged that these assembly plants are not 
owned by Thai Merry. Petitioner has provided no argument as to why the 
Department should countervail alleged subsidies provided to an 
unrelated subcontractor of a company under investigation. Therefore, we 
conclude that Thai Merry did not benefit from this program.

Verification

    In accordance with section 776(b) of the Act, we verified the 
information used in making our final determination. We followed 
standard verification procedures, including meeting with government and 
company officials, examination of relevant accounting records and 
examination of original source documents. Our verification results are 
outlined in detail in the public versions of the verification reports, 
which are on file in the Central Records Unit (Room B-099 of the Main 
Commerce Building).

ITC Notification

    In accordance with section 705(d) of the Act, we will notify the 
ITC of our determination. Since we have determined that no bounties or 
grants are being provided to manufacturers, producers or exporters of 
disposable pocket lighters in Thailand, the investigation will be 
terminated upon publication of this notice in the Federal Register. 
Hence, the ITC is not required to make a final injury determination 
with respect to this countervailing duty proceeding.

Return of Destruction of Proprietary Information

    This notice serves as the only reminder to parties subject to 
Administrative Protective Order (APO) of their responsibility 
concerning the return or destruction of proprietary information 
disclosed under APO in accordance with 19 CFR 355.34(d). Failure to 
comply is a violation of the APO.
    This determination is published pursuant to section 705(d) of the 
Act and 19 CFR 355.20(a)(4).

    Dated: March 8, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-6400 Filed 3-14-95; 8:45 am]
BILLING CODE 3510-DS-P