[Federal Register Volume 61, Number 19 (Monday, January 29, 1996)]
[Notices]
[Pages 2800-2802]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-1455]



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DEPARTMENT OF COMMERCE
[C-549-401]


Certain Textile Mill Products From Thailand; Final Results of 
Countervailing Duty Administrative Review

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

ACTION: Notice of Final 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: On July 18, 1995, the Department of Commerce (the Department) 
published in the Federal Register its preliminary results of 
administrative review on NCNC Yarns covered under the agreement 
suspending the countervailing duty investigation on Certain Textile 
Mill Products from Thailand for the period January 1, 1993 through 
December 31, 1993 (suspension agreement). We have completed this review 
and have determined that the signatories were not in violation of the 
suspension agreement. However, we do note that the Department will 
require that one signatory repay the Royal Thai Government (RTG), in an 
annual adjustment, the amount by which the tax certificate received 
exceeded the import duties on physically incorporated inputs.

EFFECTIVE DATE: January 29, 1996.

FOR FURTHER INFORMATION CONTACT: Lisa Yarbrough or Jim Doyle, Office of 
Agreements Compliance, Import Administration, International Trade 
Administration, U.S. Department of 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 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 Department verified the responses of the RTG and the Thai 
Textile Manufacturers Association (TTMA) from January 16 through 
January 25, 1995 pursuant to the administrative review.
    On July 18, 1995, the Department published in the Federal Register 
(60 FR 36779) the preliminary results of its administrative review of 
NCNC yarns for the period January 1, 1993 through December 31, 1993. 
The Department invited interested parties to comment on the preliminary 
results. On August 14, 1995, a case brief was submitted by Economic 
Consulting Services (ECS), a representative for the AYSA and individual 
member companies of the AYSA.
    The Department has now completed this administrative review in 
accordance with section 751 of the Tariff Act of 1930, as amended (the 
Act). 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 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

    Based upon our analysis of our questionnaire and verification we 
determine the following:

I. Programs Found To Be Used

A. 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 

[[Page 2801]]
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 by 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.
    In the preliminary results, we found that Thai Melon applied for a 
tax certificate on subject merchandise to the United States at a 
nominal rate during the POR. Our analysis of the comments submitted by 
the interested parties, summarized below, has not led us to change our 
findings in the preliminary results. On this basis, the Department will 
require that Thai Melon repay the RTG, in an annual adjustment, the 
amount by which the tax certificate exceeded the import duties on 
physically incorporated inputs.
B. 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 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.
    In the preliminary results, we confirmed that Saha Union and its 
relateds (Union Spinning, Union Thread, and Venus Thread) participated 
in an international trade fair, promoting subject merchandise. However, 
Saha Union and its related companies paid their own expenses to 
participate in the trade fair. Thus, the signatories were not found to 
be in violation of the agreement. Our analysis of the comments 
submitted by the interested parties, summarized below, has not led us 
to change our findings in the preliminary results.
C. 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.
    In the preliminary results, we found that 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 
verification, we determined that the amount of drawback received was 
not in excess of the items physically incorporated into the exported 
product. Hence, the signatories were not found to be in violation of 
the agreement. Our analysis of the comments submitted by the interested 
parties, summarized below, has not led us to change our findings in the 
preliminary results.

II. Programs Found Not To Be Used

    In the preliminary results we found that the producers/exporters of 
the subject merchandise did not apply for or receive benefits under the 
following programs:

A. Electricity Discounts
B. Repurchase of Industrial Bills
C. Investment Promotion Act: Sections 28, 31, 35, and 36
D. Export Processing Zones
E. Double Deduction of Foreign Marketing Expenses
F. Export Packing Credits

    Our analysis of the comments submitted by the interested parties, 
summarized below, has not led us to change our findings in the 
preliminary results.

Analysis of Comments

Comment 1

    ECS argues that the Department verified the continued existence of 
numerous subsidy programs and the continued receipt by several Thai 
yarn producers and exporters of benefits from several of the subsidy 
programs. They further claim that these subsidy benefits found by the 
Department are distinct from and are above and beyond the large subsidy 
benefits that were given to the Thai yarn industry under the Investment 
Promotion Act. ECS maintains that the large subsidy benefits received 
by the Thai yarn industry under the Investment Promotion Act were 
instrumental in the massive expansion of the capacity of the Thai yarn 
industry several years ago.

Department's Position

    The Department disagrees with the arguments raised by ECS. As 
described in the preliminary results of administrative review (60 FR 
39363), the programs found to be used did not confer a subsidy which 
violated the terms of the agreement.
    In regard to the tax certificate received by Thai Melon during the 
POR, under Section II (c) of the suspension agreement, the producers 
and exporters can apply 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. However, 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 by which the tax 
certificates exceed the import duties on physically incorporated 
inputs.
    The Department will require that Thai Melon repay to the RTG, in an 
annual adjustment, any amount by which the tax certificate received 
exceeded the amount of import duties on physically incorporated inputs. 
The annual 

[[Page 2802]]
adjustment shall be calculated in accordance with Section II c(i) and 
(ii) of the suspension agreement.
    With respect to the use of duty drawback, the Department verified 
that the amount received was not in excess of the import duties paid on 
physically incorporated inputs. Thus, the signatories were not in 
violation. (See verification report dated June 1, 1995).
    Finally, the participation in the international trade promotion 
fund by four signatories does not confer a benefit because the 
Department verified that the signatories paid their own expenses. 
Furthermore, the Department has never determined this program to be 
countervailable.

Comment 2

    ECS wants assurance that any benefits found by the Department 
during the period of review are repaid to the RTG in order to reverse 
any benefits received by the Thai yarn producers during the POR.

Department's Position

    As stated above, the Department will require that Thai Melon repay 
the amount in which the tax certificate exceeds the import duties on 
physically incorporated inputs. If Thai Melon fails to comply with this 
requirement, the Department will have grounds to determine that the 
signatory has violated the agreement.

Comment 3

    ECS urges the Department to maintain close scrutiny over the 
administration of the agreement so that the U.S. industry can be 
assured that the subsidies found by the Department will be repaid to 
the RTG and that such benefits will not continue in the future.

Department's Position

    The Department will continue to closely monitor the administration 
of the agreement in order to ensure that the excess amount of the tax 
certificate is repaid and that the signatories do not receive any 
benefits in the future that would constitute a violation of the 
agreement.

Final Results of Review

    For the period January 1, 1993 through December 31, 1993, we 
determine that the signatories were not in violation of the suspension 
agreement.
    This notice serves as a reminder to parties subject to 
administrative protective order (APO) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 C.F.R. 355.34(d). Timely written notification 
of return/destruction of APO materials or conversion to judicial 
protective order is hereby requested. Failure to comply with the 
regulations and the terms of an APO is a sanctionable violation.
    This administrative review and notice are in accordance with 
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)(1994)) and 19 CFR 
3.5.5.22 (1994).

    Dated: December 14, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 96-1455 Filed 1-26-96; 8:45 am]
BILLING CODE 3510-DS-P