[Federal Register Volume 60, Number 137 (Tuesday, July 18, 1995)]
[Notices]
[Pages 36779-36782]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-17496]
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DEPARTMENT OF COMMERCE
[C-549-401]
Certain Textile Mill Products From Thailand; Preliminary Results
of Countervailing Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results of the countervailing duty
administrative review on noncontinuous noncellulosic yarns (NCNC Yarns)
covered under the suspended investigation on certain textile mill
products from Thailand.
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SUMMARY: The Department of Commerce (the Department) is conducting an
administrative review of NCNC Yarns covered under the suspended
countervailing duty investigation on Certain Textile Mill Products from
Thailand (``suspension agreement''). We have preliminarily determined
that for the period January 1, 1993, through December 31, 1993, the
signatories were not in violation of the suspension agreement.
Interested parties are invited to comment on these preliminary results.
EFFECTIVE DATE: July 18, 1995.
FOR FURTHER INFORMATION CONTACT: Lisa Yarbrough or Jackie Wallace,
Office of Agreements Compliance, Import Administration, International
Trade Administration, U.S. Department of
[[Page 36780]]
Commerce, Washington, D.C. 20230, telephone (202) 482-3793.
SUPPLEMENTARY INFORMATION:
Background
On February 26, 1990, the Department published in the Federal
Register (55 FR 6669) a notice stating its intent to terminate the
suspension agreement on certain textile mill products from Thailand (50
FR 9837, March 12, 1985). On March 26, 1990, the American Yarn Spinners
Association (AYSA), a trade association, objected to the Department's
intent to terminate the suspension agreement. As a result, on November
23, 1990, the Department terminated the suspension agreement with
regard to all non-yarn products covered by the suspension agreement (55
FR 48885).
Subsequent to publication of the November 23, 1990 notice, counsel
for the Royal Thai Government (RTG) filed a lawsuit in the United
States Court of International Trade (CIT) challenging the Department's
determination that AYSA had standing to oppose the termination of the
suspension agreement. On May 17, 1991, the CIT remanded the
determination to the Department for reconsideration of AYSA's standing
to oppose the termination. On July 3, 1991, the Department issued
remand results finding that AYSA had standing to oppose the termination
vis-a-vis only one like product covered by the suspension agreement,
i.e., NCNC yarns. The CIT affirmed the remand determination in its
entirety on August 5, 1991. The Royal Thai Government, et al., v.
United States, Slip Op. 91-68 (August 5, 1991).
On March 16, 1994, the Department published in the Federal Register
a notice of ``Opportunity to Request Administrative Review'' (59 FR
12240) of the suspension agreement for the period January 1, 1993 to
December 31, 1993. The Department received requests for an
administrative review of NCNC yarns on March 31, 1994, from AYSA and
certain individual producers. On April 15, 1994, the Department
initiated a countervailing duty administrative review on NCNC yarns for
the period January 1, 1993 to December 31, 1993 (59 FR 18099, April 15,
1994). The review covers nine programs and seven producers/exporters:
Saha Union, Venus Thread, Union Thread, Union Spinning, Union Knitting,
Union Industries, and Thai Melon.
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
Imports covered by this review are shipments of NCNC Yarns from
Thailand. During the period of review (POR), such merchandise was
classifiable under the Harmonized Tariff Schedule (HTS) item numbers
5508.10.0000, 5509.21.0000, 5509.22.0010, 5509.22.0090, 5509.32.0000,
5509.51.3000, 5509.51.6000, 5509.69.4000, 5511.10.0030, 5511.10.0060,
and 5511.20.0000.
Analysis of Programs
1. Electricity Discounts
Under Section II (b) of the suspension agreement, the producers and
exporters are not to apply for, or receive, any discount on electricity
rates provided by the electricity authorities of Thailand (the
Electricity Generating Authority of Thailand (EGAT), Metropolitan
Electricity Authority (MEA) or the Provincial Electricity Authority
(PEA)) for exports of subject merchandise.
EGAT is the general producing authority of electricity in Thailand
selling to regional authorities such as MEA and PEA. PEA and MEA in
turn sell electricity to companies in their jurisdiction. This program
was terminated effective January 1, 1990. However, producers and
exporters who applied for discounts on exports prior to January 1,
1990, are still eligible to receive residual benefits on those exports.
Based on our verification, we found that neither EGAT, MEA, or PEA
provided residual benefits during the POR on exports of subject
merchandise to the United States. See verification report dated June 1,
1995.
2. Repurchase of Industrial Bills
Under Section II (f) of the suspension agreement, the producers and
exporters are not to apply for, or receive, any promissory notes from
the Bank of Thailand (BOT) for exports of subject merchandise to the
United States.
In 1988, this program was changed from ``Rediscount of Industrial
Bills'' to ``Repurchase of Industrial Bills'' (see ``Notification of
the Bank of Thailand #2531 re: Repurchase of Industrial Bills 1988'').
Under this program, companies can receive discounted financing for
working capital on industrial bills for a period of 120 days. This
program operates similarly to the Export Packing Credit Program where
companies can receive financing from a commercial bank or the
Industrial Finance Corporation at interest rates of 10% or less. The
BOT will then repurchase 50% of the bills from the commercial bank or
Industrial Finance Corporation.
Based on our verification, we found the signatories subject to this
review were not among those that applied for, or received, industrial
bills for exports of subject merchandise to the United States during
the POR. See verification report dated June 1, 1995.
3. Investment Promotion Act: Section 28, 31, 35, and 36
Under Section II (i) of the suspension agreement, the producers and
exporters are to notify the Department in writing prior to applying
for, or receiving, benefits under the Investment Promotion Act on
shipments exported to the United States.
The Investment Promotion Act of 1977 (IPA) is a general act,
administered by the Board of Investment (BOI), that allows for the
promotion of different industries selected for development assistance
by the BOI. Under this program, producers and exporters must be granted
a BOI license which enables them to receive various IPA benefits. Such
benefits include the following:
Section 28-IPA Section 28 provides an exemption from payment of
import duties on imported machinery.
Section 31-IPA Section 31 provides an exemption of juristic person
income tax on the net profit derived from the promoted activity.
Section 35-IPA Section 35 provides certain income tax benefits to
firms located in investment promotion zones.
Section 36-(1) IPA Section 36(1) allows companies an exemption from
import duties on raw and essential materials used to produce goods for
export.
Section 36-(4) IPA Section 36(4) grants companies permission to
deduct from taxable income an amount equal to 5% of the increase in
export earnings over the previous year.
Based on our verification, we found no indication of signatories
receiving benefits under these programs during the POR. See
verification report dated June 1, 1995.
4. International Trade Promotion Fund
Under Section II (h) of the suspension agreement, the producers and
exporters are to notify the Department in writing prior to applying for
or accepting any new benefit which is, or is likely to be, a
countervailable bounty or grant on
[[Page 36781]]
shipments of subject merchandise exported, directly or indirectly, to
the United States. Although the Department has never determined this
program to be countervailable, we reviewed this program in the
administrative review.
This program, governed by the ``Rule on Administration of the
International Trade Promotion Fund (ITPF), B.E. 2532 (1989),'' promotes
and develops Thai exports worldwide through incoming and outgoing trade
missions. The ITPF provides training and seminars for exporters, and
publicity through public advertisements.
Based on our verification, we confirmed that Saha Union and its
relateds (Union Spinning, Union Thread, and Venus Thread) participated
in a trade fair promoting subject merchandise. Saha Union and its
related companies paid their own expenses to participate in the trade
fair. See verification report dated June 1, 1995.
5. Export Processing Zones
Under Section II (i) of the suspension agreement, producers and
exporters shall notify the Department in writing prior to making an
application to locate in an Export Processing Zone.
This program is governed by the ``Industrial Estates Authority of
Thailand Act, B.E. 2522, 1979.'' Under this program, a company must
apply to the Industrial Estate Authority of Thailand (IEAT) for
permission to locate in an export processing zone (EPZ). All EPZ's are
located inside an industrial estate. Companies located within an EPZ
can receive import duty exemptions on equipment and raw materials, and
exemption of export duties on exported goods.
Based on our verification, we found no use of this program by
signatories to the suspension agreement. See verification report dated
June 1, 1995.
6. Duty Drawback
Under Section II (c) of the suspension agreement, exporters and
producers are not to apply for, or receive, rebates on shipments of
subject merchandise in excess of the import duties paid on items that
are physically incorporated into exported products.
Under this program, Thai Customs will refund import duties paid on
imported goods used in the production of an exported product. In order
to qualify for duty drawback, the goods must be exported through an
authorized port, the exports must be shipped within one year of the
date of importation of the goods on which drawback is claimed, and the
producer/exporter must request drawback within six months of the date
of exportation of the goods.
During the POR, Saha Union, Union Spinning, Union Thread, Venus
Thread, and Thai Melon used duty drawback on exported goods of subject
merchandise to the United States. Based on our verification, we found
that the amount of drawback received was not in excess of the items
physically incorporated into the exported product. See verification
report dated June 1, 1995.
7. Double Deduction for Foreign Marketing Expenses
Under Section II (e) of the suspension agreement, the producers and
exporters are not to apply for, or receive, the double deduction of
foreign marketing expenses for income tax purposes or financing on
concessionary terms from the BOT on exports of subject merchandise.
From 1978 through 1981, the BOI granted trading companies a benefit
on the double deduction of foreign marketing expenses from taxable
income. In order to receive this benefit, a company had to be promoted
through the BOI. This program was terminated in 1981 ``BOI Announcement
No. 1/2524.''
Based on our verification, we found no use of this benefit. See
verification report dated June 1, 1995.
8. Tax Certificates
Under Section II (c) of the suspension agreement, the producers and
exporters can apply for or receive tax certificates on shipments of
subject merchandise exported directly or indirectly to the United
States for import duties paid on items that are physically incorporated
into exported products. If the producers and exporters apply for tax
certificates in excess of the items physically incorporated, the
suspension agreement requires that the producers and exporters repay to
the RTG, in an annual adjustment, the amount in which the tax
certificates exceed the import duties on physically incorporated
inputs.
Tax certificate applications are made on a shipment by shipment
basis after the producer/exporter receives payment for its shipment.
The application can include up to 10 shipments and must be submitted
within one year of the shipment date. Exporters can apply for an
extension if they do not meet the one year deadline.
The law governing this program is the ``Tax and Duty Compensation
of Exported Goods Produced in the Kingdom Act, B.E. 2524 (1981).''
Effective January 1, 1992, new nominal rebate rates were established
for all products by the Committee on Tax and Duty Rebates for Exported
Goods Produced in the Kingdom. The new nominal rates applicable to
signatories are categorized by the following sectors: spinning,
weaving, made-up textile goods, and knitting. Because nominal rates are
in excess of the physically incorporated inputs, the Department has
calculated, and requested that the RTG implement, non-excessive rates.
See verification report dated September 15, 1994, and letter from
Roland L. MacDonald to Arthur J. Lafave III dated November 15, 1994.
Thai Melon applied for one tax certificate at a nominal rate during
the POR. The Department will require that Thai Melon repay the RTG, in
an annual adjustment, the amount in which the tax certificate exceeds
the import duties paid on physically incorporated inputs. See
verification report dated June 1, 1995.
9. Export Packing Credits
Under Section II (a) of the suspension agreement, the producers and
exporters are not to apply for, or receive, Export Packing Credits
(EPCs) from the BOT that permit the rediscounting of promissory notes
arising from shipments of subject merchandise to the United States.
EPCs are pre-shipment short-term loans available to exporters for a
maximum of 180 days from the date of issuance. Under the EPC program,
commercial banks issue loans based on promissory notes from
creditworthy exporters. Such notes have to be supported by an
irrevocable letter of credit, a sales contract, a purchase order, or a
warehouse receipt. The commercial bank will then resell 50% of the
promissory note to the BOT at a lower interest rate. The maximum
interest rate a commercial bank can charge the exporter is 10% per
annum.
If an exporter does not fulfill the contract by the due date of the
EPC, the BOT will automatically charge the commercial bank a penalty
interest rate. The commercial bank will then pass this penalty on to
the exporter. The penalty interest rate is 6.5% per annum calculated
over the full term of the loan. However, penalties can be refunded if
the exporter ships the merchandise within 60 days after the due date.
If only a portion of the goods is shipped by the due date, the exporter
receives a partial refund in proportion to the value of the goods
shipped.
Based on our verification, we found that this program was not used
by the signatories during the POR. See verification report dated June
1, 1995.
[[Page 36782]]
Preliminary Results of Review
As a result of our review, we preliminarily determine that for the
period January 1, 1993 through December 31, 1993, the signatories are
not in violation of the suspension agreement within the meaning of 19
CFR Section 355.19(1994). However, we will require that Thai Melon
repay to the RTG, in an annual adjustment, the amount by which the tax
certificate on NCNC yarns exceeds the amount of import duties paid on
physically incorporated inputs. The annual adjustment will be
calculated in accordance with Section II c(i)(ii) of the suspension
agreement.
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.
Interested parties may submit written arguments in case briefs on
these preliminary results within 30 days of the date of publication, in
accordance with 19 CFR 355.38(c)(ii)(1994). Rebuttal briefs, limited to
arguments raised in case briefs, may be submitted seven days after the
time limit for filing the case brief, in accordance with 19 CFR
355.38(d)(1994). Any hearing, if requested, will be held seven days
after the scheduled date for submission of rebuttal briefs (19 CFR
355.38(f)(1994)). Copies of case briefs and rebuttal briefs must be
served on interested parties in accordance with 19 CFR 355.38(e)(1994).
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)(1994), 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 Tariff Act (19 U.S.C. 1675(a)(1)(1994)) and 19
CFR 355.22(1994).
Dated: July 6, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-17496 Filed 7-17-95; 8:45 am]
BILLING CODE 3510-DS-P