[Federal Register Volume 60, Number 150 (Friday, August 4, 1995)]
[Notices]
[Pages 39937-39938]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-19253]
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DEPARTMENT OF COMMERCE
[C-201-003]
Ceramic Tile From Mexico; 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 May 18, 1995, the Department of Commerce (the Department)
published in the Federal Register its preliminary results of
administrative review of the countervailing duty order on ceramic tile
from Mexico (60 FR 267177) for the period January 1, 1993 through
December 31, 1993. We have now completed this review and determine the
total bounty or grant to be 0.48 percent ad valorem for all companies.
In accordance with 19 CFR 355.7, any rate less than 0.5 percent ad
valorem is de minimis. We will instruct the U.S. Customs Service to
assess countervailing assess countervailing duties as indicated above.
EFFECTIVE DATE: August 4, 1995.
FOR FURTHER INFORMATION CONTACT: Gayle Longest or Kelly Parkhill,
Office of Countervailing Compliance, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, N.W., Washington, D.C. 20230;
telephone: (202) 482-2786.
SUPPLEMENTARY INFORMATION:
Background
On May 18, 1995, the DeparFederal Register (60 FR 26717) the
preliminary results of its administrative review of the countervailing
duty order on ceramic tile from Mexico (47 FR 20012; May 10, 1982). The
Department has now completed this administrative 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. On June 19, 1995, a case brief was submitted by Ceramica
Regiomontana, S.A., a producer of the subject merchandise which
exported ceramic tile to the United States during the review period
(respondent).
The review period is January 1, 1993, through December 31, 1993.
This review involves 40 companies and the following programs:
(1) BANCOMEXT Financing for Exporters;
(2) The Program for Temporary Importation of Products used in the
Production of Exports (PITEX);
(3) NAFINSA Long-Term Loans
(4) Other BANCOMEXT preferential financing;
(5) Other Dollar-Denominated Financing Programs;
(6) Fiscal Promotion Certificates (CEPROFI);
(7) Import duty reductions and exemptions;
(8) State tax incentives;
(9) Article 15 Loans;
(10) NAFINSA FONEI-type financing; and
(11) NAFINSA FOGAIN-type financing.
Applicable Statute and Regulations
The Department is conducting this administrative review in
accordance with section 751(a) of 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 Mexican ceramic
tile, including non-mosaic, glazed, and unglazed ceramic floor and wall
tile. During the review period, such merchandise was classifiable under
the Harmonized Tariff Schedule (HTS) item numbers 6907.10.0000,
6907.90.0000, 6908.10.0000, and 6908.90.0000. The HTS item numbers are
provided for convenience and Customs purposes. The written description
remains dispositive.
Calculation Methodology for Assessment and Cash Deposit Purposes
We calculated the total 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 rate received by
each company, even those with de minimis and zero rates, using as the
weight its share of total Mexican exports to the United States of
subject merchandise. We then summed the individual companies' weighted-
average rates to determine the bounty or grant from all programs
benefitting exports of subject merchandise to the United States. Since
the country-wide rate calculated using this methodology was de minimis,
as defined by 19 CFR Sec. 355.7, no further calculations were
necessary.
Analysis of Comments
Comment 1: As in past reviews, Ceramica Regiomontana contends that
the Department does not have the legal authority to assess
countervailing duties on ceramic tile from Mexico and must terminate
the review. Effective April 23, 1985, the date of the ``Understanding
Between the United States and Mexico regarding Subsidies and
Countervailing Duties'' (the Understanding), Mexico became a ``country
under the Agreement.'' Therefore, Ceramica Regiomontana argues that 19
U.S.C. 1671 requires an affirmative injury determination as a
prerequisite to the imposition of countervailing duties on any Mexican
merchandise imported on or after April 23, 1985. Furthermore, Ceramica
Regiomontana argues that the only applicable statutory authority for
this review would be 19 U.S.C. 1303; however, because Mexico became a
country under the Agreement, the provisions of section 1303 could no
longer apply. Therefore, Ceramica Regiomontana maintains the Department
has no authority to conduct this review and the review should be
terminated.
Department's Position: We fully addressed this issue in a previous
administrative review of this countervailing duty order. See Ceramic
Tile from Mexico; Final Results of Countervailing Duty Administrative
Review (55 FR 50744; December 10, 1990). The CIT and the U.S. Court of
Appeals for the Federal Circuit (Federal Circuit) have sustained the
Department's legal position that Mexican imports subject to an
outstanding countervailing duty order already in effect when Mexico
entered into the Understanding are not entitled to an injury test
pursuant to section 701 of the Act and paragraph 5 of the Understanding
(Ceramica Regiomontana, S.A., et. al v. United States, Slip Op. 96-78,
Court No. 89-06-00323 (May 5, 1994) (Ceramica Regiomontana''); Cementos
Anajuac del Golfo, S.A. v. U.S., 879 F.2d 847 (Fed. Cir. 1989), cert.
denied, 110 S.CT. 1318 (1989)). The countervailing duty order on
ceramic tile from Mexico was published prior to Mexico's entering into
the Understanding and, therefore, imports of ceramic tile are not
entitled
[[Page 39938]]
to an injury test pursuant to section 701 of the Act.
Comment 2: As in past administrative reviews, Ceramica Regiomontana
contends that the Department incorrectly treated the benefit from the
PITEX program as a grant. According to Ceramica Regiomontana, PITEX
benefits should be calculated as interest-free loans similar to the
Department's treatment of loan duty deferrals under a Peruvian program
in Cotton Sheeting and Sateen from Peru; Final Results of
Administrative Review of Countervailing Duty Order (49 FR 34542).
Ceramica Regiomontana contends that the Department provides no
legal justification for refusing to treat PITEX as an interest-free
loan rather than a grant in Certain Textile Mill Products from Mexico;
Final Results of Countervailing Duty Administrative Review (56 FR
50858). Furthermore, Ceramica Regiomontana argues that the Department
bases its refusal to calculate PITEX as an interest-free loan on the
difficulty of doing the calculation. Ceramica Regiomontana maintains
that although there is no certainty whether a company will ultimately
be exempt from payment of all or a portion of the duty, the deferral
should be treated as a loan rather than a grant in accordance with
legal requirements.
Department's Position: We fully addressed this issue in the
previous administrative review of this case. See Ceramic Tile from
Mexico; Final Results of Countervailing Duty Administrative Review (60
FR 19022; April 14, 1995). We stated that, under PITEX, an exporter may
temporarily import machinery for five years. At the end of five years,
the exporter can renew the temporary stay on an annual basis
indefinitely. Since payment of import duties upon conversion to
permanent import status is based on the depreciated value of the
equipment at the time it is converted to permanent import status, the
exporter can on an annual basis continue the temporary import status
after the initial five year period until the depreciated value of the
equipment is zero and no import duties are owed. Therefore, duty
exemptions under PITEX are properly treated as grants, and we expensed
them in full at the time of importation, when the exporters otherwise
would have paid duties on the imported machinery. Id.; Final Negative
Countervailing Duty Determination; Silicon Metal From Brazil (56 FR
26988). Ceramica Regiomontana has presented us with no new evidence or
arguments on this issue.
Comment 3: Ceramica Regiomontana argues that the calculation of the
PITEX net subsidy is incorrect because the Department improperly
divided the PITEX benefit by each company's total exports. Ceramica
Regiomontana contends that, since the machinery imported under the
PITEX program may be used to produce products for both the export and
domestic markets, the benefits from the program should be divided by
total sales rather than by total exports. Furthermore, Ceramica
Regiomontana argues that the program does not limit the use of imported
machinery to production for export products only. According to Ceramica
Regiomontana, machinery imported by the company is used for production
of merchandise for both export and domestic markets.
Ceramica Regiomontana claims that the Department's allocation
method in PITEX is incorrect because it does not measure the benefit of
the subsidy to the recipient and the proper method of allocation would
be based on total sales.
Department's Position: We disagree. In order to meet the
eligibility criteria for the PITEX program, a company is required to
have a proven export record, and to use the imported merchandise (both
raw materials and equipment) in the production of goods for export.
Since receipt of benefits under PITEX is tied to the company's exports,
thereby making the program an export subsidy, the proper basis for
allocation of these benefits is total exports, as opposed to total
sales. See Certain Textile Mill Products from Mexico; Final Results of
Countervailing Duty Administrative Review (56 FR 12175, 12178; March
22, 1991).
Final Results of Review
As a result of our review, we determine the total bounty or grant
to be 0.48 percent ad valorem for all companies. In accordance with 19
CFR Sec. 355.7, any rate less than 0.5 percent ad valorem is de
minimis.
Therefore, the Department will instruct the Customs Service to
liquidate, without regard to countervailing duties, shipments of this
merchandise from all companies on or after January 1, 1993, and on or
before December 31, 1993.
The Department will instruct the Customs Service to collect cash
deposits of estimated countervailing duties at a zero rate, as provided
by section 751(a)(1) of the Act, on shipments of this merchandise from
all companies entered, or withdrawn from warehouse, for consumption on
or after the date of publication of this notice. This deposit
requirement shall 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)), 19 CFR Sec. 355.22
and 19 CFR 355.25.
Dated: July 28, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-19253 Filed 8-3-95; 8:45 am]
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