[Federal Register Volume 60, Number 110 (Thursday, June 8, 1995)]
[Notices]
[Pages 30284-30286]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-13983]
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DEPARTMENT OF COMMERCE
[C-549-501]
Certain Circular Welded Carbon Steel Pipes and Tubes From
Thailand: 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 certain
circular welded carbon steel pipe and tubes from Thailand. We
preliminarily determine the net subsidy to be 0.23 percent ad valorem
for Saha Thai Pipe and Tube Company (Saha Thai) and all other companies
for the period January 1, 1993, through December 31, 1993. Because the
net subsidy is de minimis, if the final results are the same as these
preliminary results of administrative review, we will instruct U.S.
customs to liquidate entries without regard to countervailing duties.
Interested parties are invited to comment on these preliminary results.
EFFECTIVE DATE: June 8, 1995.
FOR FURTHER INFORMATION CONTACT: Stephen Lebowitz and Kelly Parkhill,
Office of Countervailing Compliance, Import Administration,
International Trade Administration, U.S. Department of Commerce, Room
B099, 14th Street and Constitution Avenue, N.W., Washington, DC 20230;
telephone (202) 482-1503 or 482-4126, respectively.
SUPPLEMENTARY INFORMATION
Background
On August 14, 1985, the Department published in the Federal
Register (50 FR 32751) the countervailing duty order on certain
circular welded carbon steel pipes and tubes from Thailand. On August
3, 1994, the Department published a notice of ``Opportunity to Request
an Administrative Review'' (59 FR 39543) of this countervailing duty
order. We received a timely request from Saha Thai.
We initiated the review, covering the period January 1, 1993,
through December 31, 1993, on September 16, 1994 (59 FR 47609). The
review covers one manufacturer/exporter of the subject merchandise and
nine programs. The final results of the last administrative review in
this case were published October 9, 1991 (56 FR 50852).
Applicable Statute and Regulations
The Department is conducting this administrative review in
accordance with section 751(a) of the Tariff Act of 1930, as amended
(the Act). Unless otherwise indicated, all citations to the statute and
to the Department's regulations are in reference to the provisions as
they existed on December 31, 1994.
Scope of Review
On March 29, 1994, the Department clarified the Harmonized Tariff
Schedule (HTS) numbers that were applicable to the subject merchandise
(see Memorandum to Susan Esserman from Susan Kuhbach, available in the
Central Records Unit, Room B099, Main Commerce Building). This
clarification was necessary because of annual changes in the HTS. The
scope now reads:
Imports covered in this review are shipments of circular welded
carbon steel pipes and tubes (pipes and tubes) with an outside diameter
of 0.375 inch or more but not over 16 inches, of any wall thickness.
These products, commonly referred to in the industry as standard pipe
or structural tubing, are [[Page 30285]] produced to various ASTM
specifications, most notably A-120, A-53 and A-135. During the review
period, this merchandise was classified under item numbers 7306.30.10
and 7306.30.50 of the HTS. The HTS numbers are provided for convenience
and Customs purposes. The written description remains dispositive.
The review covers the period January 1, 1993, through December 31,
1993.
Calculation Methodology for Assessment and Cash Deposit Purposes
We calculated the net subsidy on a country-wide basis by first
calculating the subsidy rate for Saha Thai. As this was the only
exporter of the subject merchandise, we used Saha Thai's rate as the
country-wide rate. Since the country-wide rate calculated using this
methodology was de minimis, as defined by 19 CFR Sec. 355.7(1994), no
further calculations were necessary.
Analysis of programs
I. Program Conferring Subsidies
Export Packing Credits
Export packing credits (EPCs) are short-term loans used for pre-
shipment export financing. The loans are issued by commercial banks in
baht for up to 180 days. The commercial banks are required to charge no
more than a maximum interest rate of 10 percent per annum on the loan.
Interest is paid on the due date of the loan. To obtain these loans,
exporters issue promissory notes to the lending bank. The notes must be
supported by an irrevocable letter of credit, a sales agreement, a
purchase order, warehouse receipt, or issuance export bill. Commercial
banks can lend up to the amount of the shipment. The commercial banks
may rediscount 50 percent of the loan with the Bank of Thailand (BOT).
On the date the loan is due, the BOT debits the commercial bank's
account for the principal and the interest due. The commercial bank, in
turn, debits the exporter's account or extends further credit at
negotiated, commercial rates to the exporter.
If the exporter fails to export the total value of the goods by the
due date, the BOT automatically charges the commercial bank a penalty
retroactive to the first day of the loan. In case of non-performance by
the exporter on the due date of the loan, this penalty is passed on to
the exporter. During the period of review (POR), the penalty interest
rate was 6.5 percent per annum on the entire loan. This penalty is
forgiven and the exporter receives the EPC preferential rate if it
makes the export shipment or receives payment in foreign currency for
the product within 60 days after the due date of the promissory note.
Because EPCs are available only to exporters, they are countervailable
to the extent that the loans are provided at preferential rates.
To determine whether the loans are preferential, we ordinarily use
as the benchmark the interest rate for the predominant source of short-
term financing in the country in question. Where there is no single,
predominant source of short-term financing, we may use a benchmark
composed of the interest rates for two or more sources of short-term
financing in the country in question, weighted, whenever possible,
according to the value of the financing granted by each source. In
Final Countervailing Duty Determination and Countervailing Duty Order:
Steel Wire Rope from Thailand (56 FR 46299; Sept. 11, 1991) (Steel Wire
Rope), the Department concluded that the minimum loan rate (MLR) and
the minimum overdraft rate (MOR) as reported in the BOT Quarterly
Bulletin are more representative of the prevailing short-term interest
rates in Thailand than the rates used in previous cases. Based on that
determination and on the recent United States Court of International
Trade (CIT) decision in Royal Thai Government and TTU Industrial Corp.
v United States, 850 F. Supp. 44 (CIT 1994), which said that the
average rate of the MLR and MOR rates was the appropriate benchmark for
short term loans, we are using the average of the 1993 MLR and MOR
rates as reported in the BOT Quarterly Bulletin for 1993. That rate was
11.18 percent, which exceeded the maximum interest rate on EPCs of 10
percent. Therefore, we preliminarily determine that EPC loans are
preferential.
To calculate the benefit provided to Saha Thai, currently the only
known producer/exporter of the subject merchandise,1 by the EPC
loans during the POR, we compared the amount of interest actually paid
to the amount that would have been paid at the benchmark rate. During
the verification of the 1992 administrative review, we noted that the
company had to specify the destination of the merchandise in order to
receive the EPC loans. (See, Certain Circular Welded Carbon Steel Pipes
and Tubes From Thailand: Preliminary Results of Countervailing Duty
Administrative Review (60 FR 15901; March 28, 1995).) Because Saha Thai
had to specify the destination of the subject merchandise for approval
and because they exported only the subject merchandise to the United
States, we divided the benefit by its total exports of the subject
merchandise to the United States to arrive at a net bounty or grant of
0.23 percent ad valorem.
\1\ S.A.F. is an export trading company that is related to Saha
Thai that began operations in 1993. All pipe exported by S.A.F. is
produced by Saha Thai. We are treating the two companies as one
corporate entity for purposes of our calculations.
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II. Programs Preliminary Found Not To Be Used
We also examined the following programs and preliminarily determine
that Saha Thai did not apply for or receive benefits under these
programs for the review period.
1. Tax Certificates for Exporters
2. Electricity Discounts for Exporters
3. Tax and Duty Exemptions Under Section 28 of the Investment Promotion
Act
4. Repurchase of Industrial Bills
5. Export Processing Zones
6. International Trade Promotion Fund/Export Promotion Fund
7. Reduced Business Taxes for Producers of Intermediate Goods for
Export Industries
8. Additional Incentives under the IPA.
Preliminary Results of Review
For the period of January 1, 1993, through December 31, 1993, we
preliminarily determine the net subsidy to be 0.23 percent ad valorem
for all exporters and producers of pipe and tube from Thailand. In
accordance with 19 CFR Sec. 355.7, any rate less than 0.5% ad valorem
is de minimis.
If the final results of this review remain the same as these
preliminary results, the Department intends to instruct the U.S.
Customs Service to liquidate, without regard to countervailing duties,
all shipments of the subject merchandise from Thailand exported on or
after January 1, 1993, and on or before December 31, 1993.
The Department intends to instruct the Customs Service to collect
cash deposits of zero percent ad valorem of the f.o.b. invoice price on
all shipments of this merchandise entered, or withdrawn from the
warehouse, for consumption on or after the date of publication of the
final results of this administrative review.
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 written notice.
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
[[Page 30286]] 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, under 19 CFR 355.38(c), 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.
The 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: May 26, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-13983 Filed 6-7-95; 8:45 am]
BILLING CODE 3510-DS-P