[Federal Register Volume 62, Number 109 (Friday, June 6, 1997)]
[Notices]
[Pages 31079-31081]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-14868]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration
[C-401-056]


Viscose Rayon Staple Fiber from Sweden; 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.

-----------------------------------------------------------------------

SUMMARY: The Department of Commerce (the Department) is conducting an 
administrative review of the countervailing duty order on viscose rayon 
staple fiber from Sweden for the period January 1, 1995 through 
December 31, 1995. We preliminarily determine the net subsidy to be 
zero percent ad valorem for Svenska Rayon AB (Svenska) for the period 
January 1, 1995 through December 31, 1995. 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, all shipments of the subject 
merchandise from Svenska exported on or after January 1, 1995 and on or 
before December 31, 1995. Interested parties are invited to comment on 
the preliminary results. (See Public Comment section of this notice.)

EFFECTIVE DATE: June 6, 1997.

FOR FURTHER INFORMATION CONTACT: Stephanie Moore or Russell Morris, 
Office CVD/AD Enforcement VI, 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 15, 1979, the Department published in the Federal Register 
(44 FR 28319) the countervailing duty order on viscose rayon staple 
fiber from Sweden. On May 8, 1996, the Department published a notice of 
``Opportunity to Request Administrative Review'' (61 FR 20791) of this 
countervailing duty order for the period January 1, 1995 through 
December 31, 1995. We received a timely request for review from the 
petitioners, and we initiated the review on June 25, 1996, as published 
in the Federal Register (61 FR 32771).
    In accordance with 19 CFR 355.22(a), this review covers only the 
producer or exporter of the subject merchandise for which a review was 
specifically requested. Accordingly, this review covers Svenska. This 
review also covers ten programs.

Applicable Statute

    Unless otherwise indicated, all citations to the statute are 
references to the provisions of the Tariff Act of 1930, as amended by 
the Uruguay Round Agreements Act (URAA) effective January 1, 1995 (the 
Act). The Department is conducting this administrative review in 
accordance with section 751(a) of the Act.

Scope of the Review

    Imports covered by this review are shipments from Sweden of regular 
viscose rayon staple fiber and high-wet modulus (modal) viscose rayon 
staple fiber. Such merchandise is classifiable under item number 
5504.10.00 of the Harmonized Tariff Schedule (HTS). The HTS item is 
provided for convenience and Customs purposes. The written description 
remains dispositive.

Analysis of Programs

    In its questionnaire response the Government of Sweden (GOS) 
reported that Svenska benefitted from the following programs during the 
period of review: (1) Investment Grants from the Working Life Fund, (2) 
Recruitment Incentive, (3) Trainee Temporary Replacement, and (4) 
Recruitment Subsidy. The Department has not previously examined these 
programs in this case or in other Swedish cases. Therefore, for 
purposes of this review, we have analyzed whether these programs confer 
countervailable subsidies.

I. Programs Preliminarily Determined Not to Confer Subsidies

A. Investment Grants From the Working Life Fund

    On June 7, 1989, the Swedish Parliament signed Act SFS 1989:484, 
which stated that employers were obligated to pay a work environment 
charge of 1.5 percent of the basic pension contribution paid by all 
employers during the period September 1989 to December 1990. This 
contribution was for the Working Life Fund, which is a trust held by 
the Swedish National Judicial Board and managed by the National 
Judicial Board for Public Lands and Funds. As stated in Decree number 
1990:130, the GOS provided aid to companies from the Working Life Fund 
to pay for: (1) The cost of rehabilitation measures for employees 
suffering from long-term impaired health; (2) costs incurred in

[[Page 31080]]

implementing measures to reduce employee absenteeism; and (3) costs 
incurred in investing in a better work environment where the employer 
is not bound by existing law or statute to make such an investment. The 
aid was in the form of grants which could be provided to companies in 
all sectors of the economy. The last date for granting aid was March 
31, 1995. However, in exceptional cases, the Fund could grant aid after 
March 31, 1995 but before July 1, 1995, when the Fund was abolished.
    According to the questionnaire responses, these grants were 
provided to a large number of sectors in Sweden ranging from aviation, 
construction, energy, and banks and insurance to forestry, land 
transportation, and mining, among many others. The data in the 
questionnaire response shows that Svenska received two small grants 
under this program.
    We preliminarily determine that this program is not limited to a 
specific enterprise or industry, or group thereof as defined in section 
771(5A)(D) of the Act because the benefits are provided to a large 
number and wide variety of industries, and because there is no evidence 
of record to indicate that the program is otherwise specific. 
Therefore, we preliminarily determine that this program is not 
countervailable.

B. Recruitment Incentive Program

    The Recruitment Incentive Program was a temporary labor market 
measure aiming to compensate companies for costs relating to recruiting 
the long-term unemployed who had a lower level of competency than the 
company normally would require. It was established by governmental 
ordinance SFS: 1995:287. This program allowed all companies with less 
than 500 employees to deduct from their payroll taxes up to 6,000 SEK 
for twelve months for each new employee, hired between January 1, 1995 
through May 31, 1995, who worked at least 17 hours per week. The 
deduction was automatically claimed on a company's tax form. There were 
no restrictions to claiming the deduction based on either location or 
type of industry. The last date that a company could claim the tax 
reduction was June 30, 1996. During the period of review, Svenska 
claimed a small deduction under this program.
    We preliminarily determine that this program is not limited to a 
specific enterprise or industry, or group thereof within the meaning of 
771(5A)(D) of the Act, because all companies in Sweden with less than 
500 employees, regardless of the type of industry or geographic 
location, can claim this tax deduction, and because there is no 
evidence of record to indicate that the program is otherwise specific. 
Therefore, we preliminarily determine that this program is not 
countervailable.

C. Trainee Temporary Replacement

    The Trainee Temporary Replacement Program, which was enacted by the 
GOS under Act 1991:329 on July 1, 1991, implements a labor market 
policy measure that allows employers to deduct from their social 
security contributions certain expenses related to the training of 
employees and the hiring of temporary replacements when those employees 
are in training. The objectives of the program are: (1) To give 
unemployed persons the chance of employment in temporary positions when 
staff are undergoing training, (2) to help employers improve the 
competence of their staff and in so doing improve the competitive 
strength of the company, and (3) to reduce the company's need for 
overtime when staff are undergoing training and to make future staff 
recruitment easier.
    The replacement employee must be referred to the employer by the 
county labor board. The employer provides details of the company and 
its training program as well as anticipated costs to the county labor 
board, which then assigns a replacement. The employer then 
automatically deducts from its social security contributions the cost 
of hiring the temporary worker and certain costs related to training of 
the permanent employee. According to the questionnaire response, all 
companies were entitled to claim this deduction if there was a 
temporary replacement employee available.
    There were no restrictions to claiming the deduction based on 
either location or type of industry. The deductions are accounted for 
in a revenue declaration form that is submitted by the company to the 
tax authorities on a regular basis. The data in the questionnaire 
response shows that Svenska only claimed a small deduction under this 
program.
    We preliminarily determine that this program is not limited to a 
specific enterprise or industry, or group thereof within the meaning of 
771(5A)(D) of the Act, because all companies in Sweden, regardless of 
the type of industry or geographic location, can claim these deductions 
from their social security contributions when temporary replacement 
workers are hired, and because there is no evidence of record to 
indicate that the program is otherwise specific. Therefore, we 
preliminarily determine that this program is not countervailable.

D. Recruitment Subsidy Program

    The purpose of the Recruitment Subsidy Program, commenced in 1984, 
is to increase employment among long-term unemployed persons. Aid is 
provided to employers for a period of six months through grants 
covering a maximum of 50 percent of monthly wage costs for the person 
hired up to a maximum of 7,000 SEK per month. Under certain conditions, 
the time period for a company to receive aid under this program can be 
extended to 12 months.
    The legislation states that this program is available to all 
employers, except for state employers. Applications for aid are 
submitted to the local employment office which decides whether aid 
should be granted. Hence, depending on circumstances in each case, the 
local employment offices can approve aid at a level below 50 percent of 
wage costs and/or for a shorter or longer period than six months.
    The GOS stated that it had no information on the distribution of 
these grants; however, the subsidy rate that would be attributable to 
Svenska under this program, if it were specific, would be 0.0002 
percent ad valorem. A rate this small would not change the overall 
subsidy rate for Svenska. Because any benefit we would calculate for 
this program would not affect the overall subsidy rate, the lack of 
information regarding the specificity of this program does not affect 
the results of this administrative review. See, e.g., Certain Cut-to-
Length Carbon Steel Plate from Sweden; Preliminary Results of 
Countervailing Duty Administrative Review, 61 FR 51683, 51686 (October 
3, 1996) and Certain Cut-to-Length Carbon Steel Plate from Sweden; 
Final Results of Countervailing Duty Administrative Review, 62 FR 
16551, 16553 (April 7, 1997). We will reexamine this program in any 
future administrative reviews of this order.

II. Programs Preliminarily Determined To Be Not Used

    We examined the following programs and preliminarily determine 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. Manpower Reduction Grants
B. Grants for Temporary Employment for Public Works
C. Regional Development Grant
D. Transportation Grants
E. Location-of-Industry Loans

[[Page 31081]]

III. Terminated Program

Elderly Employment Compensation Program

    In Viscose Rayon Fiber from Sweden; Final Results of Countervailing 
Duty Administrative Review, 57 FR 12912 (April 14, 1992), the 
Department found this program to be de jure specific because the 
program's legislation expressly made it available only to certain 
companies within the textile and apparel industries through a special 
employment contribution for older workers. Svenska received its last 
payment under this program in July 1982. In January 1983, the Swedish 
government excluded the rayon fiber industry, including Svenska, from 
eligibility to receive benefits under this program. Effective June 30, 
1989, Government Resolution Number: SFS 1989:333 discontinued the 
entire program.
    We had determined that the grants under this program were non-
recurring. As such they were allocated over time. The last grant was 
received in 1982 and was allocated over the 10-year average useful life 
of assets in the rayon fiber industry, according to the ``Asset 
Guideline Classes: of the Internal Revenue Service.'' Because the 10-
year benefit stream from the last grant received by Svenska ended in 
1991, and because this program was discontinued in its entirety as of 
June 30, 1989, we preliminarily determine that this program has been 
terminated.

Preliminary Results of Review

    For the period January 1, 1995 through December 31, 1995, we 
preliminarily determine that no countervailable subsidies were 
conferred on Svenska. If the final results of this review remain the 
same as these preliminary results, the Department intends to instruct 
the U.S. Customs Service (Customs) to liquidate without regard to 
countervailing duties, all shipments of this merchandise exported on or 
after January 1, 1995, and on or before December 31, 1995.
    The Department also intends to instruct Customs to collect a cash 
deposit of estimated countervailing duties of zero percent ad valorem, 
as provided for by section 751(a)(1) of the Act, on all shipments of 
this merchandise from Svenska, entered, or withdrawn from warehouse, 
for consumption on or after the date of publication of the final 
results of this administrative review.
    Because the URAA replaced the general rule in favor of a 
countrywide rate with a general rule in favor of individual rates for 
investigated and reviewed companies, the procedures for establishing 
countervailing duty rates, including those for non-reviewed companies, 
are now essentially the same as those in antidumping cases, except as 
provided for in section 777A(e)(2)(B) of the Act. The requested review 
will normally cover only those companies specifically named. See 19 CFR 
Sec. 355.22(a). 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, and cash deposits must continue to be collected, at 
the rate previously ordered. As such, the countervailing duty cash 
deposit rate applicable to a company can no longer change, except 
pursuant to a request for a review of that company. See Federal-Mogul 
Corporation and The Torrington Company v. United States, 822 F.Supp. 
782 (CIT 1993) and Floral Trade Council v. United States, 822 F.Supp. 
766 (CIT 1993) (interpreting 19 CFR Sec. 353.22(e), the antidumping 
regulation on automatic assessment, which is identical to 19 CFR 
Sec. 355.22(g)). Therefore, the cash deposit rates for all companies 
except those covered by this review will be unchanged by the results of 
this review.
    We will instruct Customs to continue to collect cash deposits for 
non-reviewed companies at the most recent company-specific or 
countrywide rate applicable to the company.

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 19 CFR Sec. 355.38.
    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: May 30, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-14868 Filed 6-5-97; 8:45 am]
BILLING CODE 3510-DS-P