[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