[Federal Register Volume 63, Number 174 (Wednesday, September 9, 1998)]
[Notices]
[Pages 48191-48193]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-24171]


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DEPARTMENT OF COMMERCE

International Trade Administration
[C-560-804]


Preliminary Negative Countervailing Duty Determination and 
Alignment of Final Countervailing Duty Determination With Final 
Antidumping Duty Determination: Extruded Rubber Thread From Indonesia

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

EFFECTIVE DATE: September 9, 1998.

FOR FURTHER INFORMATION CONTACT: Stephanie Moore or Eric B. Greynolds, 
Office of CVD/AD Enforcement VI, Import Administration, U.S. Department 
of Commerce, Room 3099, 14th Street and Constitution Avenue, N.W., 
Washington, D.C. 20230; telephone (202) 482-2786.

Preliminary Determination

    The Department of Commerce (the Department) preliminarily 
determines that countervailable subsidies are not being provided to 
producers or exporters of extruded rubber thread from Indonesia.

Petitioner

    The petition in this investigation was filed by North American 
Rubber Thread Co., Ltd. (the petitioner).

Case History

    Since the publication of the notice of initiation in the Federal 
Register, the following events have occurred. See Notice of Initiation 
of Antidumping and Countervailing Duty Investigations: Extruded Rubber 
Thread from

[[Page 48192]]

Indonesia, 63 FR 23267 (April 28, 1998) (Initiation Notice). On May 4, 
1998, we issued countervailing duty questionnaires to the Government of 
Indonesia (GOI), and the producers/exporters of the subject 
merchandise. On June 10, 1998, at the request of the petitioner, we 
postponed the preliminary determination of this investigation until 
August 28, 1998 (63 FR 31737).
    We received responses to our initial questionnaire from the GOI, 
Bakrie Rubber Industry (Bakrie), P.T. Swasthi Parama Mulya (Swasthi), 
and P.T. Perkebunan III (Pesero) on June 26 and 29, 1998. The 
information provided indicates that Pesero did not export to the United 
States during 1997, and that P.T. Cilatexindo Graha Alam Pt., an 
exporter named in the petition, stopped producing rubber thread in 
January 1994. A query of the U.S. Customs databases confirmed that 
these two companies did not export subject merchandise to the United 
States during 1997, the period of investigation. Therefore, we are not 
requesting further information from these two companies. On July 17, 
1998, we issued supplemental questionnaires to the GOI, Bakrie and 
Swasthi. We received responses to these supplemental questionnaires on 
July 27, 1998.

Scope of Investigation

    For purposes of this investigation, the product covered is extruded 
rubber thread (ERT) from Indonesia. ERT is defined as vulcanized rubber 
thread obtained by extrusion of stable or concentrated natural rubber 
latex of any cross sectional shape, measuring from 0.18 mm, which is 
0.007 inches or 140 gauge, to 1.42 mm, which is 0.056 inch or 18 gauge, 
in diameter.
    ERT is currently classified under subheadings 4007.00.00 of the 
Harmonized Tariff Schedule (HTS). Although the HTS subheadings are 
provided for convenience and customs purposes, the written description 
of the scope of this investigation is dispositive.

The Applicable Statute and Regulations

    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 effective January 1, 1995 (the Act). 
In addition, unless otherwise indicated, all citations to the 
Department's regulations are to the current regulations as codified at 
19 CFR 351 and published in the Federal Register on May 19, 1997 (62 FR 
27295).

Injury Test

    Because Indonesia is a ``Subsidies Agreement Country'' within the 
meaning of section 701(b) of the Act, the International Trade 
Commission (ITC) is required to determine whether imports of the 
subject merchandise from Indonesia materially injure, or threaten 
material injury to, a U.S. industry. On May 28, 1998, the ITC published 
its preliminary determination that there is a reasonable indication 
that an industry in the United States is being materially injured, or 
threatened with material injury, by reason of imports from Indonesia of 
the subject merchandise (63 FR 29250).

Alignment With Final Antidumping Duty Determination

    On August 18, 1998, the petitioner submitted a letter requesting 
alignment of the final determination in this investigation with the 
final determination in the companion antidumping duty investigation. In 
accordance with section 705(a)(1) of the Act, we are aligning the final 
determination in this investigation with the final antidumping duty 
determination in the antidumping investigation of ERT. See Initiation 
of Antidumping and Countervailing Duty Investigations: Extruded Rubber 
Thread From Indonesia, 63 FR 23267 (April 28, 1998).

Period of Investigation

    The period for which we are measuring subsidies (the POI) is 
calendar year 1997.

Company Histories

    The GOI identified two producers of subject merchandise that 
exported the subject merchandise to the United States during the POI:

Bakrie

    Bakrie was established on January 14, 1992, by the PT. Bakrie 
Nusantara Corporation and Globe Manufacturing Company, a U.S. producer 
of rubber thread, as a joint venture company. PT. Bakrie Nusantara 
Corporation was officially renamed PT. Bakrie Capitanindo Corporation 
on March 15, 1995. Bakrie manufactures and exports medium and heavy 
gauge rubber thread, coated with silicone emulsion which serves as a 
lubricant.

Swasthi

    Swasthi was established in November 1989. The company produces and 
exports ERT of various gauges of talc finish, various colors, and 
special qualities.

De Minimis Standard Under Section 771(36) of the Statute

    Pursuant to its authority under section 771(36) of the Act, the 
United States Trade Representative (USTR) has designated Indonesia as a 
``least-developed country'' for purposes of the CVD law. See USTR 
Interim Final Rule: Developing and Least-Developed Country Designations 
Under the Countervailing Duty Law (15 CFR 2013) (63 FR 29945, June 2, 
1998). Consequently, a net countervailable subsidy rate that does not 
exceed three percent ad valorem is considered de minimis in accordance 
with section 703(b)(4)(B) of the Act and Article 27 of the Agreement on 
Subsidies and Countervailing Measures (SCM Agreement). As discussed 
below, we preliminarily determine that the net countervailable subsidy 
bestowed on ERT from Indonesia is less than three percent ad valorem, 
and is, therefore, de minimis.

I. Program Preliminarily Determined To Be Countervailable Bank 
Indonesia (BI) Rediscount Loans

    Under Decree No. 132/MPP/Kep/1996 of June 4, 1996, the Ministry of 
Industry and Trade, the Ministry of Finance, and the Bank of Indonesia 
(BI) provide support for certain exporters with the goal of achieving 
diversification of the Indonesian export base from oil and gas. 
Companies designated as Perusahaan Eksportir Tertentu (PET) are 
eligible to participate in this program. Under the program, PETs sell 
their letters of credit and export drafts at a discount to the BI 
through participating foreign exchange banks, which are commercial 
banks that have obtained a license to conduct activities in foreign 
currencies. The sale of the letters of credit and export drafts by the 
PETs provides them with working capital at lower interest rates than 
they would otherwise pay on short-term commercial loans.
    We preliminarily determine that the loans provided under this 
program are countervailable in accordance with section 771(5)(A) of the 
Act. Through this program, the BI provides working capital to PETs at 
interest rates which are more favorable than those provided to non-
PETs. The benefit is the difference between the amount the borrower of 
the loan pays on the loan and the amount the borrower would pay on a 
comparable commercial loan. Finally, because the program is contingent 
upon export performance, it is an export subsidy under section 
771(5A)(B) and is, therefore, specific.
    Only one exporter, Swasthi, used the BI rediscount loan program 
during the

[[Page 48193]]

POI. According to the GOI's June 29, 1998 questionnaire response at 
page 4, the interest rates in effect during the POI were the Singapore 
Interbank Offering Rate (SIBOR) for PETs, and SIBOR plus 1 percent for 
non-PETs. Therefore, to calculate the benefit for Swasthi, we compared 
the interest rates Swasthi paid on loans for shipments to the United 
States to the interest rates that non-PET companies would have had to 
pay for comparable commercial loans. This difference was divided by 
Swasthi's total exports of subject merchandise to the United States 
during the POI. On this basis, we preliminarily determine the 
countervailable subsidy from this program to be 0.13 percent ad valorem 
for Swasthi.

II. Programs Preliminarily Determined To Be Not Used

    Based on information provided in the questionnaire responses, we 
preliminarily determine that the producers/exporters of subject 
merchandise did not apply for or receive benefits under the following 
programs during the POI.

A. Investment Credit for the Expansion of the Rubber Industry
B. Corporate Income Tax Holiday
C. Import Duty Exemption of Capital Equipment

Summary

    The total preliminary net countervailable subsidy for Swasthi is 
0.13 percent, which is de minimis. The rate for Bakrie is zero. 
Therefore, we preliminarily determine that countervailable subsidies 
are not being provided to producers or exporters of ERT from Indonesia.

Verification

    In accordance with section 782(i) of the Act, we will verify the 
information submitted by respondents prior to making our final 
determination.

ITC Notification

    In accordance with section 703(f) of the Act, we will notify the 
ITC of our determination. In addition, we are making available to the 
ITC all nonprivileged and nonproprietary information relating to this 
investigation. We will allow the ITC access to all privileged and 
business proprietary information in our files, provided the ITC 
confirms that it will not disclose such information, either publicly or 
under an administrative protective order, without the written consent 
of the Assistant Secretary, Import Administration.
    In accordance with section 705(b)(3) of the Act, if our final 
determination is affirmative, the ITC will make its final determination 
within 75 days after the Department makes its final determination.

Public Comment

    In accordance with 19 CFR 351.310, we will hold a public hearing, 
if requested, to afford interested parties an opportunity to comment on 
this preliminary determination. Individuals who wish to request a 
hearing must submit a written request within 30 days of the publication 
of this notice in the Federal Register to the Assistant Secretary for 
Import Administration, U.S. Department of Commerce, Room B-099, 14th 
Street and Constitution Avenue, N.W., Washington, DC 20230. Parties 
should confirm by telephone the time, date, and place of the hearing 48 
hours before the scheduled time.
    Requests for a public hearing should contain: (1) The party's name, 
address, and telephone number; (2) the number of participants; and, (3) 
to the extent practicable, an identification of the arguments to be 
raised at the hearing. In addition, six copies of the business 
proprietary version and six copies of the nonproprietary version of the 
case briefs must be submitted to the Assistant Secretary no later than 
50 days from the date of publication of the preliminary determination. 
As part of the case brief, parties are encouraged to provide a summary 
of the arguments not to exceed five pages and a table of statutes, 
regulations, and cases cited. Six copies of the business proprietary 
version and six copies of the nonproprietary version of the rebuttal 
briefs must be submitted to the Assistant Secretary no later than 55 
days from the date of publication of the preliminary determination. An 
interested party may make an affirmative presentation only on arguments 
included in that party's case or rebuttal briefs. Written arguments 
should be submitted in accordance with 19 CFR 351.309 and will be 
considered if received within the time limits specified above.
    This determination is published pursuant to section 703(f) of the 
Act.

    Dated: August 28, 1998.
Joseph A. Spetrini
Acting Assistant Secretary for Import Administration.
[FR Doc. 98-24171 Filed 9-8-98; 8:45 am]
BILLING CODE 3510-DS-P