[Federal Register Volume 61, Number 85 (Wednesday, May 1, 1996)]
[Notices]
[Pages 19259-19261]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-10827]
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DEPARTMENT OF COMMERCE
International Trade Administration
[C-791-001]
Ferrochrome From South Africa; 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 countervailing duty order on ferrochrome from South Africa
was revoked effective January 1, 1995, pursuant to section 753 of the
Tariff Act of 1930, as amended by the Uruguay Round Agreements Act (the
Act) (60 FR 40568). The Department of Commerce (the Department) is
conducting an administrative review of this order to determine the
appropriate assessment rate for entries made during the last review
period prior to the revocation of the order (January 1, 1994, through
December 31, 1994). We preliminarily determine the net subsidy to be de
minimis or zero for all companies for the period January 1, 1994
through December 31, 1994 (see ``Preliminary Results of Review''
section). 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,
shipments of the subject merchandise from all companies exported on or
after January 1, 1994 and entered on or before December 31, 1994.
Because this order has been revoked, the Department will not issue
further instructions with respect to cash deposits of estimated
countervailing duties.
EFFECTIVE DATE: May 1, 1996.
FOR FURTHER INFORMATION CONTACT: Melanie Brown or Dana Mermelstein,
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 April 9, 1981, the Department published in the Federal Register
(46 FR 21155) the countervailing duty order on ferrochrome from South
Africa. On March 7, 1995, the Department published a notice of
``Opportunity to Request an Administrative Review'' (60 FR 12540 ) of
this countervailing duty order. We received a timely request for review
from Chrome Resources (Pty) Ltd. (Chrome Resources), Consolidated
Metallurgical Industries Limited (CMI), Feralloys Limited (Feralloys),
and Samancor Limited (Samancor), South African manufacturers/exporters
of ferrochrome to the United States. In accordance with section 355.22
of the Department's Interim Regulations, this review covers only those
producers or exporters of the subject merchandise for which a review
was specifically requested (see Antidumping and Countervailing Duties:
Interim Regulations; Request for Comments, 60 FR 25130 (May 11, 1995)
(Interim Regulations). Therefore, this review covers the following
companies: Chrome Resources, CMI, Feralloys, and Samancor.
On November 22, 1995, we extended the period for completion of the
preliminary and final results pursuant to section 751(a)(3) of the
Tariff Act of 1930, as amended. See Extension of the Time Limit for
Certain Countervailing Duty Administrative Reviews, 60 FR 55699. As
explained in the memoranda from the Assistant Secretary for Import
Administration dated November 22, 1995, and January 11, 1996, all
deadlines were further extended to take into account the partial
shutdowns of the Federal Government from November 15 through November
21, 1995, and
[[Page 19260]]
December 15, 1995, through January 6, 1996. Therefore, the deadline for
these preliminary results is no later than April 30, 1996, and the
deadline for the final results of this review is no later than October
28, 1996.
Applicable Statute and Regulations
Unless otherwise indicated, all citations to the statute are
references to the provisions of the Act. The Department is conducting
this administrative review in accordance with section 751(a) of the
Act. References to the Countervailing Duties; Notice of Proposed
Rulemaking and Request for Public Comments, 54 FR 23366 (May 31, 1989)
(Proposed Regulations), are provided solely for further explanation of
the Department's countervailing duty practice. Although the Department
has withdrawn the particular rulemaking proceeding pursuant to which
the Proposed Regulations were issued, the subject matter of these
regulations is being considered in connection with an ongoing
rulemaking proceeding which, among other things, is intended to conform
the Department's regulations to the Uruguay Round Agreements Act
(URAA). See 60 FR 80 (January 3, 1995).
Scope of the Review
Imported products covered by this review are South African
ferrochrome, which is currently classifiable under items 7202.41.00,
7202.49.10 and 7202.49.50 of the Harmonized Tariff Schedule (HTS). The
HTS item numbers are provided for convenience and Customs purposes. The
written description remains dispositive.
Analysis of Programs
I. Program Previously Determined To Confer Subsidies
Regional Industrial Development Incentives
The Government of South Africa offered several incentives to
companies located in geographically remote areas, designated as
industrial development points. We determined in our previous review of
this order that, as regional subsidies, these incentives constitute
countervailable subsidies within the meaning of the Act. See
Preliminary Results of Countervailing Duty Administrative Review;
Ferrochrome from South Africa, 56 FR 12170 (March 22, 1991)
(Ferrochrome Preliminary Results); Final Results of Countervailing Duty
Administrative Review; Ferrochrome from South Africa, 56 FR 33254 (July
19, 1991) (Ferrochrome Final Results). No new information or evidence
of changed circumstances has been submitted in this proceeding to
warrant reconsideration of this finding.
A. Subsidy on Housing for Key Personnel: The Regional Industrial
Development Authorities subsidize housing for key personnel at
industrial development points for a maximum of 20 years on new mortgage
loans and the outstanding principal of existing loans. The government
subsidizes the interest paid at a rate of 4.25 percent, allowing the
company to pay interest at the interest rate charged by the largest
building society minus 4.25 percent. There is a proviso that the
recipient company must pay interest at the rate of at least six
percent; the Regional Industrial Development Authorities pay the
interest differential monthly. Chrome Resources and Samancor reported
having worker housing loans with the Industrial Development Corporation
which were subsidized by the Regional Industrial Development
Authorities.
Chrome Resources reported the amount of the government's payments
toward the interest accrued on the housing loans during the review
period. Consistent with Ferrochrome Preliminary Results, we treated
this amount as an annually recurring grant, and calculated Chrome
Resources' benefit by dividing this amount by Chrome Resources' total
sales during this period.
Rather than reporting the government's payments on its behalf,
Samancor reported the loan information. Thus, in accordance with the
Proposed Regulations (sections 355.49(d)(1) and 355.44(b)(5)) we
calculated the interest differential, using as our benchmark the
Official Building Society Rate, as reported in the questionnaire
response. Because the amount of interest actually paid during the
review period was less than the interest which would have been paid at
the benchmark rate, we calculated the difference, and divided this
amount by the company's total sales during the review period. On these
bases, we preliminarily determine the net subsidy from this program to
be 0.01 percent ad valorem for Chrome Resources and 0.001 percent ad
valorem for Samancor.
B. Labor Incentive: This incentive is offered as an annual cash
grant for seven years to approved regional development industries. The
incentive is calculated on the basis of the number of employees
directly involved in the manufacturing process at the industrial
development point, and is granted as a percentage of the average
salary/wage per employee. Chrome Resources received an incentive under
this program. In Ferrochrome Preliminary Results, we determined that
this incentive is an annually recurring grant (56 FR at 12171). As
such, we expense the benefit in the year of receipt, consistent with
our practice as described the General Issues Appendix appended to the
Final Countervailing Duty Determination; Certain Steel Products from
Austria (58 FR 37217, 37226 (July 9, 1993)) (General Issues Appendix)
and section 355.48(a) of the Proposed Regulations. To calculate the
benefit resulting from this program, we divided the amount of the grant
received during the review period by the company's total sales during
the same period. On this basis, we preliminarily determine the net
subsidy from this program to be 0.08 percent ad valorem for Chrome
Resources.
C. Interest Concession: An interest concession is paid quarterly as
a cash grant to approved industries at industrial development points,
for a period of ten years, on 100 percent of the company's investment
on land and buildings (excluding residential accommodations), and on 50
percent of their investment in other assets. The value of the grant is
based on the interest cost as reflected in the company's financial
statements and is calculated on the basis of a pre-determined market-
related interest rate. Chrome Resources received benefits under this
program. In Ferrochrome Preliminary Results (56 FR at 12171), we
determined that this grant is recurring. Thus, to calculate the benefit
attributable to this program, we divided the amount of the grant
received during the review period by the company's total sales during
the review period. See the General Issues Appendix (58 FR at 37226);
see also Proposed Regulations (54 FR 23384). On this basis, we
preliminarily determine the net subsidy from this program to be 0.11
percent ad valorem for Chrome Resources.
II. Programs Preliminarily Determined To Be Not Used
We examined the following programs and preliminarily find that the
producers and/or exporters of the subject merchandise did not apply for
or receive benefits under these programs during the period of review.
A. Export Incentive Program
B. General Export Incentive Scheme
C. Industrial Development Corporation Export Loans
D. Preferential Rail Rates
E. Beneficiation Allowance/Electricity Rebate
F. Government Loan Guarantees
Preliminary Results of Review
For the period January 1, 1994 through December 31, 1994, we
[[Page 19261]]
preliminarily determine the net subsidies to be as follows:
------------------------------------------------------------------------
Rate
Manufacturer/exporter (percent)
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Chrome Resources (Pty) Ltd................................... 00.20
Consolidated Metallurgical Industries Limited................ 00.00
Feralloys Limited............................................ 00.00
Samancor Limited............................................. 00.001
------------------------------------------------------------------------
In accordance with the Act, any rate less than 0.5 percent ad
valorem in an administrative review is de minimis.
The URAA replaced the general rule in favor of a country-wide rate
with a general rule in favor of individual rates for investigated and
reviewed companies. The procedures for countervailing duty cases are
now essentially the same as those in antidumping cases, except as
provided for in section 777(e)(2)(B) of the Act. Requests for
administrative reviews must now specify the companies to be reviewed.
See 19 CFR Sec. 355.22(a). The requested review will normally cover
only those companies specifically named. Pursuant to 19 CFR
Sec. 355.22(g), for all companies for which a review was not requested,
duties must be assessed at the cash deposit rate previously ordered.
Accordingly, for the period January 1 through December 31, 1994, the
assessment rates applicable to all non-reviewed companies covered by
this order are the cash deposit rates in effect at the time of entry.
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,
shipments of the subject merchandise from Chrome Resources (Pty) Ltd.,
Consolidated Metallurgical Industries Limited, Feralloys Limited, and
Samancor Limited exported on or after January 1, 1994 and entered on or
before December 31, 1994.
This countervailing duty order was subject to section 753 of the
Act. See Countervailing Duty Order; Opportunity to Request a Section
753 Injury Investigation, 60 FR 27,963 (May 26, 1995). Because no
domestic interested parties exercised their right under section 753(a)
of the Act to request an injury investigation, the International Trade
Commission made a negative injury determination with respect to this
order, pursuant to section 753(b)(4) of the Act. As a result, the
Department revoked this countervailing duty order, effective January 1,
1995, pursuant to section 753(b)(3)(B) of the Act. Revocation of
Countervailing Duty Orders, 60 FR 40568 (August 9, 1995). Accordingly,
the Department will not issue further instructions with respect to cash
deposits of estimated countervailing duties.
Public Comment
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. Rebuttal
briefs, limited to arguments raised in case briefs, may be submitted
seven days after the time limit for filing the case brief. Parties who
submit argument in this proceeding are requested to submit with the
argument (1) a statement of the issue and (2) a brief summary of the
argument. Any hearing, if requested, will be held seven days after the
scheduled date for submission of rebuttal briefs. Copies of case briefs
and rebuttal briefs must be served on interested parties in accordance
with section 355.38 of the Department's Interim Regulations.
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 Sec. 355.38, 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 Act (19 U.S.C. 1675(a)(1)).
Dated: April 25, 1996.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 96-10827 Filed 4-30-96; 8:45 am]
BILLING CODE 3510-DS-P