[Federal Register Volume 60, Number 66 (Thursday, April 6, 1995)]
[Notices]
[Pages 17515-17520]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-8513]



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DEPARTMENT OF COMMERCE
[C-557-806]


Extruded Rubber Thread From Malaysia; Final Results of 
Countervailing Duty Administrative Review

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

ACTION: Notice of final results of countervailing duty administrative 
review.

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SUMMARY: On September 8, 1994, the Department of Commerce (the 
Department) published the preliminary results of its administrative 
review of the countervailing duty order on extruded rubber thread from 
Malaysia. We have now completed this review and determine the bounty or 
grant during the period January 1, 1992 through December 31, 1992 to be 
3.30 percent ad valorem for all companies.

EFFECTIVE DATE: April 6, 1995.

FOR FURTHER INFORMATION CONTACT: Lorenza Olivas or Chris Jimenez, 
Office of Countervailing Compliance, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue NW., Washington, D.C. 20230; telephone: 
(202) 482-2786.

SUPPLEMENTARY INFORMATION:

Background

    On September 8, 1994, the Department published in the Federal 
[[Page 17516]] Register (59 FR 46392) the preliminary results of its 
administrative review of the countervailing duty order on extruded 
rubber thread from Malaysia (57 FR 38472; August 25, 1992). The 
Department has now completed this review in accordance with section 751 
of the Tariff Act of 1930, as amended (the Act).
    We invited interested parties to comment on the preliminary 
results. We received written comments from the Government of Malaysia 
(GOM), respondent, and North American Rubber Thread, petitioner.
    The period of review is January 1, 1992 through December 31, 1992 
and affects entries made on or after March 31, 1992 and before April 
28, 1992, and all entries made on or after August 25, 1992 through 
December 31, 1992. For an explanation of entries covered, see the 
``Final Results of Review'' section of this notice.
    This review involves four companies: Heveafil Sdn. Bhd. (Heveafil), 
Filmax Sdn. Bhd. (Filmax), Rubberflex Sdn. Bhd. (Rubberflex), and 
Filati Lastex Elastofibre Sdn. Bhd. (Filati). The review covers the 
following programs:
    (1) Pioneer Status.
    (2) Export Credit Refinancing (ECR).
    (3) Abatement of Income Tax Based on the Ratio of Export Sales to 
Total Sales.
    (4) Abatement of Five Percent of the Value of Indigenous Malaysian 
Materials Used in Exports.
    (5) Industrial Building Allowance.
    (6) Double Deduction for Export Promotion Expenses.
    (7) Rubber Discount Scheme.
    (8) Investment Tax Allowance.
    (9) Abatement of Five Percent of Taxable Income Due to Location in 
a Promoted Industrial Area.
    (10) Allowance of a Percentage of Net Taxable Income Based on the 
F.O.B. Value of Export Sales.
    (11) Double Deduction of Export Credit Insurance Payments.
    (12) Abatement of Taxable Income of Five Percent of Adjusted Income 
of Companies Due to Capital Participation and Employment Policy 
Adherence.
    (13) Preferential Financing for Bumiputras.
    After consideration of the GOM's comments on the preliminary 
results of review, the Department has recalculated the cash deposit to 
account for the elimination of the Abatement of Five Percent of the 
Value of Indigenous Malaysian Materials Used in Exports Program. In 
addition, the Department recalculated the post-shipment financing 
benefits to account for its inadvertent omission of certain 
transactions. Accordingly, the Department determines the total bounty 
or grant from all programs under review to be 3.30 percent ad valorem 
for all companies.

Scope of Review

    Imports covered by this review are shipments of extruded rubber 
thread from Malaysia. Extruded rubber thread is defined as vulcanized 
rubber thread obtained by extrusion of stable or concentrated natural 
rubber latex of any cross sectional shape, measuring from 0.18 mm, 
which is 0.007 inch or 140 gauge, to 1.42 mm, which is 0.056 inch or 18 
gauge, in diameter. During the review period, such merchandise was 
classifiable under item number 4007.00.00 of the Harmonized Tariff 
Schedule (HTS). The HTS item number is provided for convenience and 
Customs purposes. The written description remains dispositive.

Calculation of Country-Wide Rate

    We calculated the bounty or grant on a country-wide basis by first 
calculating the bounty or grant for each company subject to the 
administrative review. We then weight-averaged the bounty or grant 
received by each company using as the weight its share of total 
Malaysian extruded rubber thread exports to the United States, 
including all companies, even those with de minimis or zero bounties or 
grants. We then summed the individual companies' weight-averaged 
bounties or grants to determine the bounty or grant from all programs 
benefitting extruded rubber thread exports to the United States. Since 
the country-wide rate calculated using this methodology was above de 
minimis, as defined by 19 CFR 355.7 (1994), we proceeded to the next 
step and examined the total bounty or grant calculated for each company 
to determine whether individual company bounty or grant differed 
significantly from the weighted-average country-wide rate, pursuant to 
19 CFR 355.22(d)(3). In calculating the individual company rates 
described above, only one rate was calculated for Heveafil and Filmax 
because Heveafil and Filmax were related parties.
    None of the companies received aggregate bounties or grants which 
were significantly different within the meaning of 19 CFR 
355.22(d)(3)(i). Therefore, the country-wide rate is based on the 
weighted-average aggregate bounties or grants received by the companies 
subject to this review.

Analysis of Comments

    Comment 1: The GOM alleges that the Department initiated the 
original investigation pursuant to Section 303(a)(2) of the Act, and, 
therefore, the Department can impose countervailing duties under this 
section only if there is an injury determination by the International 
Trade Commission (ITC). (The ITC discontinued its injury determination 
under Section 303(a)(2) because the duty-free status of rubber thread 
from Malaysia was terminated.) The GOM contends that without an injury 
determination, the Department had no authority to issue a 
countervailing duty order and to require the bonds or cash deposits. 
The GOM further maintains that the Department cannot simply transfer 
the jurisdiction for an investigation from Section 303(a)(2) to Section 
303(a)(1) without issuing a public notice that it intends to proceed 
with the investigation under a different statutory provision. See, 
Certain Textile Mill Products and Apparel from Turkey (50 FR 9817; 
March 12, 1987); Certain Textile Mill Products and Apparel from the 
Philippines (50 FR 1195; March 26, 1985) and Certain Textile Mill 
Products and Apparel from Indonesia (50 FR 9861; March 12, 1985). 
Furthermore, because there was no initiation notice or a preliminary 
determination under section 303(a)(1), a final determination under that 
section was not appropriate. If Commerce wanted to proceed with the 
investigation, it was required to re-initiate under the appropriate 
provision.
    Petitioner argues that the Department has previously rejected the 
GOM's claims and, therefore, they merit no more consideration.
    Department's Position: The GOM's challenge to the Department's 
authority to issue the order is untimely. Challenges to the issuance of 
an order must be filed within 30 days of the date the order is 
published. The countervailing duty order on extruded rubber thread from 
Malaysia was published on August 25, 1992. The GOM voluntarily withdrew 
a timely-filed complaint challenging the order on these same grounds. 
The GOM's attempt to reverse that challenge in this proceeding is 
untimely.
    Comment 2: The GOM contends that the Department overstated the 
benefit received under the ECR program in its administrative review. 
The GOM argues that the Department must use the ``cost of funds'' to 
the government as the benchmark as required by item ``k'' of the 
Illustrative List of Export Subsidies annexed to the Subsidies Code, 
and the appropriate ``cost of funds'' is the 90-day rate for government 
bonds. The GOM asserts that if the Department instead uses the cost to 
the recipient as a benchmark, it should continue its past practice and 
use the bankers' [[Page 17517]] acceptances (BA) rates because they are 
identical to ECR financing in terms of risk, maturity and purpose. The 
GOM further contends that the Department should interpret the 
``predominant'' form of financing as the most comparable form of 
financing. It asserts that it makes no sense to compare trade financing 
to other financing such as short-term loans and overdrafts. 
Furthermore, if the Department uses the weighted-average of commercial 
rates, it should account for the differences in the terms of financing.
    Petitioner argues that it is the Department's practice to use the 
national average short-term borrowing rate. It further argues that 
companies cannot borrow at the government borrowing rate; therefore, 
``cost of funds'' to the government is an improper benchmark.
    Department's Position: We disagree with the GOM. The Illustrative 
List identifies common forms of export subsidies but does not 
necessarily instruct the Department how to value them. The Department 
has a longstanding practice of valuing the benefit to the recipient 
rather than the cost to the government for the purpose of calculating 
countervailing duty rates.
    The Department's practice is to use the rate for the predominant 
form of short-term financing in the country under review as the 
benchmark for short-term loans. See, Countervailing Duties; Notice of 
Proposed Rulemaking and Request for Public Comments (59 FR 23380; May 
31, 1989) (Proposed Rules). Where there is no single predominant source 
of short-term financing in the country in question, the Department may 
use a benchmark composed of the interest rates for two or more sources 
of short-term financing in the country in question. See, Final 
Affirmative Countervailing Duty Determination and Countervailing Duty 
Order: Steel Wire Rope from Thailand (56 FR 46299; September 11, 1991). 
BAs constitute an extremely small percentage of short-term financing in 
Malaysia and, therefore, it would be inappropriate to use the BA rates 
as a benchmark.
    At verification, the GOM provided the Bank Negara Malaysia 
Quarterly Bulletin, which lists the commercial bank base lending (BLR) 
rates prevailing during the review period. The rates ranged from 9.97 
percent to 10.29 percent. According to commercial bank officials, the 
banks add a 1.00 to 2.00 percent spread to the BLR.
    Therefore, we have determined that it is appropriate to continue to 
use the average of the commercial BLR rates published in Bank Negara 
Malaysia Quarterly Bulletin, plus an average 1.5 percent spread, as a 
benchmark, in accordance with section 355.44(b)(3)(i) of the 
Department's Proposed Rules.
    Comment 3: The GOM argues that both Heveafil and Filmax 
specifically excluded U.S. exports from the calculation of eligibility 
for the pre-shipment export financing. In addition, the GOM claims that 
the two companies did not use funds from exports to the United States 
to repay any of the pre-shipment loans. The GOM claims that in a 
similar situation, the Department concluded that exports to the United 
States did not receive benefits from short-term financing. See, 
Suspension of Countervailing Duty Investigation; Certain Forged Steel 
Crankshafts from Brazil (52 FR 28177, 28179; July 28, 1987) (Brazilian 
Crankshafts Suspension Agreement). Therefore, the GOM maintains that 
the companies received no benefit with regard to U.S. shipments.
    Petitioner argues that the exclusion of U.S. exports from the 
eligibility calculation did not affect benefits received and, 
therefore, the Department should dismiss the GOM's claim.
    Department's Position: The GOM provides ECR financing based on 
export performance. The explicit purpose of this program is to promote 
the export of manufactured and approved agricultural products. Two 
types of ECR financing are available: pre-shipment and post-shipment 
financing. There is no evidence that the GOM limits these ECR loans to 
increase exports to markets other than the United States, nor is there 
any evidence of a provision that prevents exporters from receiving ECR 
loans for exports to the United States. In fact, at verification we 
found that Heveafil received an ECR post-shipment loan for a U.S. 
export during the review period.
    During the review period, both Heveafil and Filmax applied for and 
used pre-shipment financing based on certificates of performance (CP). 
Pre-shipment financing based on CPs is a line of credit based on 
previous exports and cannot be tied to specific sales in specific 
markets. Because pre-shipment loans were not shipment specific, we 
included all loans in calculating the country-wide duty rate. By 
excluding exports to the United States from their application for 
export financing, the companies merely reduced the amount of financing 
they received. In addition, at verification, company officials at the 
Heveafil and Filmax rubber factories could not tie the rubber latex 
purchased with the pre-shipment loans to products exported to 
destinations other than the United States. The GOM incorrectly claims 
that, in a similar situation in the Brazilian Crankshafts Suspension 
Agreement, the Department concluded that no subsidy from the CACEX 
short-term financing was provided on exports to the United States 
because exporters agreed not to use that portion of any outstanding 
CACEX pre-shipment loans certificates which were based on merchandise 
exported to the United States. In fact, in the final determination of 
Brazilian Crankshafts, the Department found the CACEX export financing 
program to be countervailable. See, Final Countervailing Duty 
Determination; Certain Forged Steel Crankshafts From Brazil (52 FR 
28254, 28255; October 15, 1987). Therefore, we affirm that pre-shipment 
financing benefits all exports, including those to the United States.
    Comment 4: The GOM argues that in calculating the benefit from the 
post-shipment program the Department used the incorrect interest rates 
for certain transactions made by Filmax and Rubberflex. Since interest 
paid for such financing was broken out by interest rates charged by 
specific banks, the Department should recalculate the benefit using the 
applicable rates.
    Department's Position: We agree and have made the adjustments 
accordingly. In addition, we are including certain transactions made by 
Rubberflex that we inadvertently omitted in our calculation of post-
shipment financing benefits. These changes increase the benefit from 
this program from 0.0003 percent ad valorem to 0.11 percent ad valorem.
    Comment 5: The GOM argues that in calculating the export abatement 
benefit the Department should consider the actual tax savings in a 
particular year. Therefore, the Department should consider the non-
countervailable deductions. If those non-countervailable deductions 
equal the tax liability, then there is no benefit in the year in 
question.
    Petitioner argues that the GOM's claim ignores the fact that the 
subsidy's existence permits tax benefits to be carried forward to other 
years. Hence, the Malaysians do benefit from the export abatement 
subsidy. Further, petitioner believes that it is reasonable to assume 
that the Malaysians will take advantage of subsidy tax deductions.
    Department's Position: Essentially the GOM has asked us to assume 
that the non-countervailable allowances are used first, even if the 
non-countervailable allowances can be carried forward, while the export 
allowance cannot be carried forward. As we stated in the final 
determination in the investigation, given this distinction, it is more 
reasonable to assume that the [[Page 17518]] export abatement is used 
first. See, Malaysian Final Determination. Therefore, we continue to 
treat the export abatement as fully countervailable based on the tax 
return filed in the year under review.
    Comment 6: The GOM argues that since Heveafil and Filmax eliminated 
U.S. exports from their application for the tax deduction under the 
export abatement program, the Department cannot attribute any of the 
tax abatement program to such exports. Citing section 355.47(a) of the 
Proposed Rules, the GOM argues that the Department cannot find a 
program countervailable unless its benefits are tied to the subject 
merchandise.
    Petitioner argues that the GOM's method of exclusion was illusory, 
as it did not affect the benefits received.
    Department's Position: In calculating the ratio of total exports to 
total sales, Heveafil, the only company that claimed the abatement on 
its income tax return filed in the review period, deducted the amount 
of U.S. exports from both the numerator and denominator. In essence, 
the companies merely prorated the benefit (i.e. adjusted downward using 
the ratio of U.S. exports to total exports), since its calculation did 
not significantly change the ratio applied to adjusted income to 
determine its export abatement. The calculation methodology used by 
Heveafil in its tax return did not eliminate the benefit attributable 
to sales of U.S. exports. Therefore, we confirm our preliminary 
determination that this program provides a countervailable benefit with 
respect to exports of the subject merchandise.
    Comment 7: The GOM argues that the Department assumed that the 
entire deduction for all other export tax programs resulted in cash 
savings in the year under investigation. Moreover, these programs are 
unlike the export abatement in that they can be carried forward.
    Department's Position: The companies under review earned several 
types of allowances which may be used to offset taxable income. Each 
year, the company calculates the total value of allowances to which it 
is entitled. It then draws from this total the amount needed to 
eliminate any tax liability in that year. If anything remains in the 
pool, it can be carried forward to offset taxable income in future 
years.
    The specific allowances drawn from the pool in any given year are 
not identified on the tax form. Therefore, it was necessary to develop 
a methodology for estimating the portion of the allowance used in a 
given year that is attributable to countervailable programs, and the 
portion that is attributable to non-countervailable programs in order 
to calculate the net bounty or grant.
    As we did in the investigation, we assumed during this review that 
the countervailable programs would be used first. Our rationale was to 
consider that a central purpose of the countervailing duty law is to 
encourage foreign governments not to provide countervailable subsidies. 
In this review, this purpose can best be served by selecting the 
remaining countervailable allowances before selecting any of the non-
countervailable allowances available to the companies.
    In addition, if we treat a portion of the countervailable 
allowances as having been used, other portions carried forward for 
future use would also be countervailable when used. This means that we 
would have to track allowances carried forward and trace from year to 
year what portion of the allowances carried forward is countervailable. 
To avoid an unadministerable system of tracking and tracing, we have 
treated the countervailable portions as having been used in the year 
under review.
    Comment 8: The GOM argues that the Department previously found the 
Pioneer Status Program not countervailable. See Carbon Steel Wire Rod 
from Malaysia; Final Results of Countervailing Duty Administrative 
Review (Wire Rod from Malaysia) (56 FR 14927; April 12, 1991). The GOM 
asserts that it is not countervailable because tax benefits under this 
program are not limited to any sector or region of the Malaysian 
economy, nor is the program exclusively available to exporting 
companies. The GOM contends that the Department confirmed at 
verification, both the de jure and de facto availability of this 
program to the entire Malaysian economy, and that pioneer status tax 
benefits are not targeted to specific industries or companies in a 
discriminatory manner. Furthermore, the Department verified that the 
internal guidelines used to grant pioneer status are characterized by 
neutral criteria unrelated to exports, location or any other factors 
that could require a determination that the program is countervailable.
    The GOM further argues that the Department verified that the GOM 
does not require export commitments, or view them as preponderant, in 
evaluating applications; that export potential is merely one of 12 
factors considered in granting status; and that a product will not be 
accepted based on export potential alone. Furthermore, the GOM argues 
that the Department verified that the Malaysian Government commonly 
approves companies who do not make export commitments as well as some 
who do make them. Therefore, market destination is irrelevant to 
granting pioneer status.
    Department's Position: In Wire Rod from Malaysia, we concluded that 
no industry or group of industries used the program disproportionately 
and found the program not to be countervailable. That determination, 
however, did not specifically address situations where companies had a 
specific export condition attached to their pioneer status approval. In 
the Wire Rod investigation, petitioner raised the issue of an export 
requirement. Although the requirement per se is not new, it was not at 
issue with the companies investigated at the time.
    As stated in the Malaysian Final Determination, we continue to view 
the ``domestic'' side of the Pioneer Status Program to be not 
countervailable. However, in this instance recipients of the tax 
benefits conferred by this program can be divided into two categories: 
industries and activities that will find market opportunities in 
Malaysia and elsewhere, and those that face a saturated domestic 
market. At verification, we established that an export requirement may 
sometimes be applied to certain industries after it is determined that 
the domestic market will no longer support additional producers. The 
extruded rubber thread industry is among these industries.
    The combination of the necessary export orientation of the industry 
due to lack of domestic market opportunities and the explicit export 
condition attached to pioneer status approval in the rubber thread 
industry lead us to conclude that the ``export'' side of the Pioneer 
Status Program constitutes an export subsidy to the rubber thread 
industry. Whether or not the commitment was voluntary, as the GOM 
suggests, the company has obligated itself to export a very large 
portion of its production, and that commitment appears to have been an 
important condition for approval of benefits. For further information, 
see Malaysian Final Determination.
    Comment 9: The GOM argues that the Department overstated the 
benefit from the Pioneer Status Program because it fails to deduct 
normal capital allowances that would have been allowed if the program 
had not been used. The GOM claims that Rubberflex and Filmax, in fact, 
received no cash benefits from this program. Furthermore, the 
Department incorrectly allocated pioneer status tax benefits over only 
export sales even though pioneer status tax benefits are also 
applicable to profits on domestic [[Page 17519]] sales. According to 
the GOM, this is consistent with the Department's practice to allocate 
benefits over total sales to which they are ``tied.''
    Petitioner argues that pioneer status tax benefits are for the 
exports of the subject product. Thus, they are countervailable and 
properly allocated only over export sales.
    Department's Position: We have not overstated the benefit from the 
Pioneer Status Program. When a company receives pioneer status, it is 
allowed to stockpile normal capital allowances for use in future years. 
Therefore, these allowances should not be used to offset current 
benefits. Moreover, export sales should form the denominator because 
receipt of pioneer status tax benefits for the companies under review 
is contingent upon exportation. See section 355.47(a)(2) of the 
Proposed Rules.
    Comment 10: The GOM argues that the Rubber Discount Program ended 
on December 31, 1991 and that exports on or after January 1, 1992 were 
no longer eligible for rubber discount benefits. The GOM further argues 
that in the original investigation, the Department determined that the 
benefit from this program occurs at the time of export (not at the time 
of receipt of the cash).
    Therefore, exports after December 31, 1991 did not receive 
benefits.
    Petitioner, on the other hand, argues that the benefit from the 
program occurs at the time of receipt of the funds, as only then does 
the company have the money to use.
    Department's Position: We agree with respondent. In the preliminary 
results, the Department determined that the benefits were conferred at 
the time of export. Since the program was terminated effective January 
1, 1992, and the last date exports were eligible for rebates was 
December 30, 1991, no benefits were received from this program during 
the review period. Our position remains unchanged from our preliminary 
results.
    Comment 11: The GOM contends that we should adjust the cash deposit 
to reflect program-wide changes affecting future benefits: the 
reduction in the abatement of income for exports, the elimination of 
the development tax and the reduction of the corporate tax.
    Petitioner argues that cash deposit should not differ from the 
subsidy found in the review period, because the actual benefit is not 
known until after the full investigation of the level of subsidization.
    Department's Position: According to 19 CFR 355.50(a), the cash 
deposit rate will be adjusted for program-wide changes (1) which occur 
after the review period, but before the preliminary results are 
published, and (2) which can be measured. The benefits of certain types 
of programs are not always measurable. For example, in cases of certain 
loan programs, there may be many factors affecting the subsidy rate, 
not all of which can be quantified in advance. See, e.g., Certain 
Textile Mill Products from Thailand, 52 FR 7636 (1987); and Textile 
Mill Products from Mexico, 50 FR 10824 (1985); see, also, Live Swine 
From Canada, 53 FR 22189 (1988).
    In the instant review, the reduction of the corporate tax and the 
elimination of the development tax are not program-wide changes, but 
changes in one factor of the benefit calculation. In Antifriction 
Bearings (Other Than Tapered Roller Bearings) and Parts thereof from 
Singapore Final Results of Countervailing Duty Administrative Review 
(56 FR 26384, 26386; June 7, 1991), regarding the reduction of the 
corporate tax rate, we stated that ``there are a number of factors 
other than the corporate tax rate which affect the benefit calculations 
(i.e., total sales, total exports, adjusted profits, and investment 
allowances). Since changes in these factors can offset one another, a * 
* * reduction in the tax rate does not warrant a reduction in the cash 
deposit rate.'' While the reduction in the corporate tax rate and the 
elimination of the development tax may change the level of benefits 
found for a tax program, these changes in the tax rates do not 
constitute a program-wide change in a subsidy program under section 
355.50 of the Proposed Rules.
    The GOM also changed the abatement of income from exports programs 
by reducing the abatement rates. While the reduction in the abatement 
rates meets the definition of a ``program-wide change'' under section 
355.50(b) of the Proposed Rules, that change cannot be measured. 
Companies earn several types of general tax allowances which are not 
under review and which may be used to offset taxable income. Each year, 
the companies calculate the total value of allowances to which they are 
entitled. They draw from the total allowances the amount needed to 
eliminate any tax liability in that year. If anything remains in the 
pool, it can be carried forward to offset taxable income in future 
years. See, Department's Position to Comment 7. It is not known what 
deductions companies have taken until the tax returns are filed, and it 
is inappropriate to assume that the adjusted income would remain 
constant in the year(s) subsequent to our review period. We do not have 
information regarding the companies' current income and the 
consequences of the adjusted income, and it would be inappropriate to 
gather such information because that would, in essence, constitute a 
new review. Therefore, we have not adjusted the cash deposit.
    Unlike the above changes, we verified that the GOM has eliminated 
the Abatement of Five Percent of the Value of Indigenous Malaysian 
Materials Used in Exports Program. We consider this program to be a 
program-wide change because it occurred before we published the 
preliminary results and the change can be measured. We also verified 
that there are no residual benefits. As such, we have adjusted the cash 
deposit rate to reflect this change.
    Comment 12: The GOM claims that Section 707 of the Act prohibits 
the Department from ordering the collection of countervailing duties on 
entries made on or after April 28, 1992 and before August 25, 1992.
    Department's Position: We agree. See the ``Final Results of 
Review'' section of this notice.

Final Results of Review

    After considering all comments received, we determine the bounty or 
grant to be 3.30 percent ad valorem for the period January 1, 1992 
through December 31, 1992.
    The Department issued the its preliminary affirmative 
countervailable duty determination in the investigation on December 30, 
1991 (56 FR 67276). However, the ITC terminated its injury 
determination on Malaysian extruded rubber thread in light of the 
revocation of duty-free status under the Generalized System of 
Preferences, effective March 31, 1992. Therefore, as a result of the 
ITC determination, the Department issued instructions to Customs to 
liquidate entries of the subject merchandise entered, or withdrawn from 
warehouse, for consumption prior to March 31, 1992, without the 
imposition of countervailing duties. (See Amended Final Affirmative 
Countervailing Duty Determination and Countervailing Duty Order; 
Extruded Rubber Thread from Malaysia (58 FR 41084; August 2, 1993)).
    In accordance with 705(a)(1) of the Act, the final determination in 
the investigation was extended to coincide with the final antidumping 
determination involving the same product from Malaysia (57 FR 38472; 
August 25, 1992). Pursuant to section 705 of the Act and Article 5.3 of 
the GATT Subsidies Code, we cannot require suspension of liquidation 
for more than 120 days without the issuance of a countervailing duty 
order. [[Page 17520]] Therefore, the Department instructed Customs to 
terminate the suspension of liquidation on the subject merchandise 
entered, or withdrawn from warehouse, for consumption on or after April 
28, 1992. The Department reinstated suspension of liquidation and 
required cash deposits of estimated countervailing duties of entries 
made on or after August 25, 1992, the date of publication of the 
countervailing duty order (57 FR 38472). As such, merchandise entered 
on or after April 28, 1992 and before August 25, 1992 is to be 
liquidated without regard to countervailing duties.
    The Department will instruct the Customs Service to assess 
countervailing duties of 3.30 percent ad valorem of the f.o.b. invoice 
price on all shipments of the subject merchandise entered or withdrawn 
from warehouse, for consumption on or after March 31, 1992 and before 
April 28, 1992, and on all shipments of the subject merchandise entered 
or withdrawn from warehouse, for consumption on or after August 25, 
1992 and exported on or before December 31, 1992.
    The elimination of the Abatement of Five Percent of the Value of 
Indigenous Malaysian Materials Used in Exports Program reduces the 
total estimated duty deposit to 3.18 percent ad valorem. Therefore, the 
Department will instruct the Customs Service to collect a cash deposit 
of estimated countervailing duties of 3.18 percent ad valorem of the 
f.o.b. invoice price on all shipments of this merchandise entered, or 
withdrawn from warehouse, for consumption on or after the date of 
publication of the final results of this administrative review. This 
deposit requirement will remain in effect until publication of the 
final results of the next administrative review.
    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: March 29, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-8513 Filed 4-5-95; 8:45 am]
BILLING CODE 3510-DS-P