[Federal Register Volume 61, Number 169 (Thursday, August 29, 1996)]
[Notices]
[Pages 45402-45404]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-22127]


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DEPARTMENT OF COMMERCE
[C-559-001]


Certain Refrigeration Compressors From the Republic of Singapore; 
Preliminary Results of Countervailing Duty Administrative Review

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

ACTION: Notice of Preliminary Results of Countervailing Duty 
Administrative Review.

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SUMMARY: In response to a request by the petitioner, Tecumseh Products 
Company (Tecumseh), the Department of Commerce (the Department) is 
conducting an administrative review of the agreement suspending the 
countervailing duty investigation on certain refrigeration compressors 
from the Republic of Singapore. This review covers the Government of 
the Republic of Singapore (GOS), Matsushita Refrigeration Industries 
(Singapore) Pte. Ltd. (MARIS), and Asia Matsushita Electric (Singapore) 
Pte. Ltd. (AMS), AMS was the sole exporter of the subject merchandise 
to the United States during the period of review (POR) April 1, 1994, 
through March 31, 1995. We preliminarily determine that the signatories 
have complied with the terms of the suspension agreement during the 
POR.
    Interested parties are invited to comment on these preliminary 
results. Parties who submit arguments in this proceeding are requested 
to submit with their argument (1) a statement of the issue and (2) a 
brief summary of the argument.

EFFECTIVE DATE: August 29, 1996.

FOR FURTHER INFORMATION CONTACT: Robert Bolling or Jean Kemp, AD/CVD 
Enforcement, Group III, International Trade Administration, U.S. 
Department of Commerce, Washington, D.C. 20230; telephone: (202) 482-
3793.

APPLICABLE STATUTE: Unless otherwise indicated, all citations to the 
statute and to the Department's regulations are in reference to the 
provisions as they existed on or after January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (the Tariff Act) 
in accordance with the Uruguay Round Agreements Act (URAA).

SUPPLEMENTARY INFORMATION:

Background

    On November 1, 1995, the Department published in the Federal 
Register (60 FR 55540) a notice of ``Opportunity to Request an 
Administrative Review'' of the agreement suspending the countervailing 
duty investigation on certain refrigeration compressor from

[[Page 45403]]

the Republic of Singapore. On November 30, 1995, the petitioner, 
Tecumseh, requested an administrative review of the agreement 
suspending the countervailing duty investigation on certain 
refrigeration compressors from the Republic of Singapore (48 FR 51167, 
November 7, 1983). We initiated the review, covering the period April 
1, 1994, through March 31, 1995, on December 15, 1995 (60 FR 64413). 
The Department is now conducting this review in accordance with section 
751 of the Tariff Act and 19 CFR 355.22. The Department sent out a 
questionnaire on March 4, 1995, and received a joint questionnaire 
response from the GOS, MARIS, and AMS, on April 25, 1996. Subsequently, 
the Department sent out a supplemental questionnaire on May 17, 1996 
and received a joint supplemental questionnaire response on May 31, 
1996.

Scope of the Review

    Imports covered by this review are shipments of hermetic 
refrigeration compressors rated not over one-quarter horsepower from 
Singapore. This merchandise is currently classified under Harmonized 
Tariff Schedule (HTS) item number 8414.30.40. The HTS item number is 
provided for convenience and Customs purposes. The written description 
remains dispositive.
    The review period is April 1, 1994 through March 31, 1995, and 
includes 3 programs. The review covers one producer and one exporter of 
the subject merchandise, MARIS and AMS, respectively. These two 
companies, along with the GOS, are the signatories to the suspension 
agreement.
    Under the terms of the suspension agreement, the GOS agrees to 
offset completely the amount of the net bounty or grant determined by 
the Department in this proceeding to exist with respect to the subject 
merchandise. The offset entails the collection by the GOS of an export 
charge applicable to the subject merchandise exported on or after the 
effective date of the agreement. See Certain Refrigeration Compressors 
from the Republic of Singapore: Suspension of Countervailing Duty 
Investigation, 48 FR 51167, 51170 (November 7, 1983).

Analysis of Programs

(1) The Economic Expansion Incentives Act--Part VI
    The Production for Export Programme under Part VI of the Economic 
Expansion Incentives Act allows a 90-percent tax exemption on a 
company's export profit if the GOS designates a company as an export 
enterprise. In the investigation, the Department preliminarily found 
this program to be countervailable because ``this tax exemption is 
provided only to certified export enterprises.'' See Preliminary 
Affirmative Countervailing Duty Determination: Certain Refrigeration 
Compressors from the Republic of Singapore, 48 FR 39109, 39110 (August 
29, 1983). MARIS is designated as an export enterprise and used this 
tax exemption during the period of review. AMS was not designated an 
export enterprise under Part VI of the Economic Expansion Incentives 
Act for the period of review.
    According to the Export Enterprise Certificate awarded to MARIS in 
a letter dated May 12, 1981, MARIS is to receive this benefit on the 
production of compressors, electrical parts and accessories for 
refrigerators, and plastic refrigerators. To calculate the benefit, we 
divided the tax savings claimed by MARIS under this program by the 
f.o.b. value of total exports of products receiving the benefit, for 
the period of review.
    MARIS' response to the Department's countervailing duty 
questionnaire for this review indicated that MARIS deducted export 
charges levied pursuant to the suspension agreement in arriving at an 
adjusted profit figure, which was then used to calculate exempt export 
profit for the review period. In the 90-91 administrative review, the 
Department determined that the amount of the export charge deduction 
must be added ``back to MARIS' export profit in calculating MARIS' tax 
savings in order to offset the deduction of the export charges in the 
review period.'' See Preliminary Results of Countervailing Duty Review: 
Certain Refrigeration Compressors from Singapore, 57 FR 31175 (July 14, 
1992), affirmed in Final Results of Countervailing Duty Review: Certain 
Refrigeration Compressors from Singapore, 57 FR 46539 (October 9, 
1992). Therefore, as the Department did in the 92-93 administrative 
review, in calculating the benefit from this program, we have added 
back this deduction. On this basis, we preliminarily determine the 
benefit from this program during the review period to be 1.23 percent 
of the f.o.b. value of the merchandise.
(2) Finance & Treasury Center (FTC)
    The Finance & Treasury Center Program allows for the taxation at a 
concessionary rate of ten percent on certain income earned by companies 
providing treasury, investment, or financial services in Singapore for 
their subsidiaries/affiliates outside Singapore. The FTC program under 
Section 43E of the Singapore Income Tax Act has been in effect since 
April 1, 1989 (since Singapore tax ``year of assessment 1991''). 
According to the response, applications to the FTC program had been 
received and approved by March 31, 1995 for 14 companies, including 
AMS. Every company which has applied to the program has been accepted. 
MARIS did not participate in the program for the period of review.
    The Department examined this program in the 92-93 review and found 
it to be de facto specific, and therefore countervailable. (See Certain 
Refrigeration Compressors from the Republic of Singapore: Final Results 
of Countervailing Duty Administrative Review (``Final Results''), 61 FR 
10315-8 (March 13, 1996)). The Department also stated in its 
preliminary results for the 92-93 review that, ``(b)ecause it is 
probable that participation in the FTC program by MNCs in Singapore 
could change over time, in future reviews we may re-examine the 
circumstances which have led the Department to find the program de 
facto specific, should any new information about the program's 
specificity arise.'' (See Certain Refrigeration Compressors from the 
Republic of Singapore: Preliminary Results of Countervailing Duty 
Administrative Review (``Preliminary Results''), 59 FR 59749 (November 
18, 1994
    During the 92-93 review, the Department found that 10 enterprises, 
representing five industries, were participating in the program (See 
Preliminary Results at 59750 (November 18, 1994)). For this review, the 
number of firms/enterprises participating in the FTC program for this 
review has increased to 14, and the number of industries participating 
has increased to eight. In performing our analysis of this program, the 
Department found that the overall increase in the number of firms/
enterprises (i.e., 10 to 14) and industries (i.e., 5 to 8) 
participating in the FTC program was neglible. Section 771 
(5A)(D)(iii)(I) of the Tariff Act provides that, where there are 
reasons to believe that a subsidy may be specific as a matter of fact, 
the subsidy is specific if one or more of four factors exist. The first 
factor is whether the actual recipients of the subsidy, whether 
considered on an enterprise or industry basis, are limited in number. 
Given the large number of multi-national companies operating in 
Singapore, the Department continues to find the FTC program de facto 
specific, and therefore countervailable, because only a small group of 
firms/enterprises representing

[[Page 45404]]

only eight industries actually used the FTC program.
    To calculate the benefit, we divided the tax savings attributable 
to the subject merchandise under this program by the value of all AMS 
product sales for the period of review. On this basis, we preliminarily 
determine the benefit from this program during the review period to be 
0.01 percent of the f.o.b. value of the merchandise.
(3) Financing through the Monetary Authority of Singapore
    Under the terms of the suspension agreement, MARIS and AMS agreed 
not to apply for or receive any financing provided by the rediscount 
facility of the Monetary Authority of Singapore for shipments of the 
subject merchandise to the United States. We determined during the 
review that neither MARIS nor AMS received any financing through the 
Monetary Authority of Singapore on the subject merchandise exported to 
the United States during the review period. Therefore, we preliminarily 
determine that both companies have complied with this clause of the 
agreement.

Preliminary Results of Review

    The suspension agreement states that the GOS will offset completely 
with an export charge the net bounty or grant calculated by the 
Department. As a result of our review, we preliminarily determine that 
the signatories have complied with the terms of the suspension 
agreement, including the payment of the provisional export charges in 
effect for the period April 1, 1994 through March 31, 1995. We also 
preliminarily determine the net bounty or grant to be 1.24 percent of 
the f.o.b. value of the merchandise for the April 1, 1994 through March 
31, 1995 review period.
    Following the methodology outlined in section B.4 of the agreement, 
the Department preliminarily determines that, for the period April 1, 
1994 through March 31, 1995, a negative adjustment may be made to the 
provisional export charge rate in effect. The adjustments will equal 
the difference between the provisional rate in effect during the review 
period and the rate determined in this review, plus interest. The 
provisional rate, established in the notice of the final results of the 
90-91 administrative reviews of the suspension agreement (See Certain 
Refrigeration Compressors from the Republic of Singapore; Final Results 
of Countervailing Duty Administrative Review, 57 FR 46540 (October 9, 
1992)) was 5.52 percent. The GOS may refund or credit, in accordance 
with section B.4.c of the agreement, the difference between that amount 
and 1.24 percent, plus interest, calculated in accordance with section 
778(b) of the Tariff Act, within 30 days of notification by the 
Department. The Department will notify the GOS of these adjustments 
after publication of the final results of this review.
    If the final results of this review remain the same as these 
preliminary results, the Department intends to notify the GOS that the 
provisional export charge rate on all exports to the United States with 
Outward Declarations filed on or after the date of publication of the 
final results of this administrative review shall be 1.24% percent of 
the f.o.b. value of the merchandise.
    The agreement can remain in force only as long as shipments from 
the signatories account for at least 85 percent of imports of the 
subject refrigeration compressors into the United States. Our 
information indicates that the two signatory companies accounted for 
100 percent of imports into the United States from Singapore of this 
merchandise during the review period.
    Parties to the proceeding may request disclosure within 5 days of 
the date of publication of this notice. Any interested party may 
request a hearing within 10 days of publication. Case briefs and/or 
written comments from interested parties may be submitted no later than 
30 days after the date of publication. Rebuttal briefs and rebuttals to 
written comments, limited to issues raised in the case briefs and 
comments, may be filed not later than 37 days after the date of 
publication of this notice. Any hearing, if requested, will be held 44 
days after the date of publication, or the first workday thereafter. 
The Department will publish the final results of this administrative 
review including the results of its analysis of issues raised in any 
such written comments or at a hearing.
    These requirements, when imposed, shall remain in effect until 
publication of the final results of the next administrative review.
    This administrative review and this notice are in accordance with 
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.

    Dated: August 22, 1996.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-22127 Filed 8-28-96; 8:45 am]
BILLING CODE 3510-DS-P