[Federal Register Volume 67, Number 95 (Thursday, May 16, 2002)]
[Notices]
[Pages 34905-34907]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-12294]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-533-825]


Notice of Final Affirmative Countervailing Duty Determination: 
Polyethylene Terephthalate Film, Sheet, and Strip (PET Film) From India

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

ACTION: Notice of final affirmative countervailing duty determination.

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SUMMARY: The Department of Commerce has made a final determination that 
countervailable subsidies are being provided to certain producers and 
exporters of PET film from India. For information on the estimated 
countervailing duty rates, please see the ``Suspension of Liquidation'' 
section, below.

EFFECTIVE DATE: May 16, 2002.

FOR FURTHER INFORMATION CONTACT: Mark Manning or Karine Gziryan, (202) 
482-5253 and (202) 482-4081, respectively, Office of AD/CVD Enforcement 
IV, Group II, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

The Applicable Statute and Regulations

     
    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (the Act) by the 
Uruguay Round Agreements Act (URAA). In addition, unless otherwise 
indicated, all citations to the Department's regulations are to the 
regulations codified at 19 CFR part 351 (2000).

Case History

    Since the publication of the preliminary determination in the 
Federal Register (see Preliminary Affirmative Countervailing Duty 
Determination and Alignment of Final Countervailing Duty Determination 
With Final Antidumping Duty Determination: Polyethylene Terephthalate 
Film, Sheet, and Strip (PET film) from India, 66 FR 53389 (October 22, 
2001) (Preliminary Determination)), the following events have occurred:
    From October 30, 2001 to November 9, 2001, we conducted a 
verification of the questionnaire responses submitted by the Government 
of India (GOI),\1\ Ester Industries Ltd. (Ester), Garware Polyester 
Ltd. (Garware), Garware's affiliated input supplier, Garware Chemicals 
Ltd. (Garware Chemicals), and Polyplex Corporation Ltd. (Polyplex). On 
December 12, 2001, we published a notice postponing the final 
determination in the companion antidumping duty investigation until May 
6, 2002. See Notice of Preliminary Determination of Sales at Less Than 
Fair Value and Postponement of Final Determination: Polyethylene 
Terephthalate Film, Sheet, and Strip (PET film) from India, 66 FR 65893 
(December 12, 2001). Because of the alignment of this countervailing 
duty investigation with the companion antidumping duty investigation, 
the final determination in this countervailing duty investigation was 
also postponed until May 6, 2002.
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    \1\ We conducted a verification of the responses submitted by 
the GOI at the GOI, the Government of the State of Uttaranchal, and 
the Government of the State of Maharashtra.
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    On February 25 and 26, 2002, we received case briefs from the 
petitioners, DuPont Teijin Films, Mitsubishi Polyester Film, and Toray 
Plastics (America) Inc. (collectively, the petitioners), the GOI, 
Ester, and Garware and Garware Chemicals. On March 7, 2002, we received 
rebuttal briefs from all parties that had submitted case briefs. On 
March 20, 2002, a public hearing was held at the Department of 
Commerce.
    In addition, on October 22, 2001, six producers and exporters of 
PET film from India, Ester, Flex Industries Limited (Flex), Garware, 
Jindal Polyester Ltd. (Jindal), MTZ Polyfilms Ltd., and Polyplex, 
submitted a proposal for a suspension agreement in this investigation. 
Subsequently, on January 22, 2002, we met with counsel for the GOI, 
Ester, Flex, Jindal, and Polyplex to discuss this proposal, but no 
agreement resulted from this meeting. For further details, see 
Memorandum to the file dated May 6, 2002 on proposed suspension 
agreement.

Scope of the Investigation

    For purposes of this investigation, the products covered are all 
gauges of raw, pretreated, or primed PET film, whether extruded or 
coextruded. Excluded are metallized films and other finished films that 
have had at least one of their surfaces modified by the application of 
a performance-enhancing resinous or inorganic layer of more than 
0.00001 inches thick. Imports of PET film are classifiable in the 
Harmonized Tariff Schedule of the United States (HTSUS) under item 
number 3920.62.00. HTSUS subheadings are provided for convenience and 
Customs purposes. The written description of the scope of this 
proceeding is dispositive.

Injury Test

    Because India is a ``Subsidy 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 India materially injure or threaten material injury to a U.S. 
industry. On July 11, 2001, the ITC published its preliminary 
determination finding that there is a reasonable indication that an 
industry in the United States is being materially injured by reason of 
imports from India of subject merchandise. See Polyethylene 
Terephthalate Film, Sheet, and Strip From India and Taiwan, 66 FR 36292 
(July 11, 2001).

Period of Investigation

    The period of investigation (POI) for which we are measuring 
subsidies is April 1, 2000, through March 31, 2001, which corresponds 
to the period for the

[[Page 34906]]

respondents' most recently completed fiscal year.

Analysis of Comments Received

    All issues raised in the case and rebuttal briefs by parties to 
this investigation are addressed in the ``Issues and Decision 
Memorandum'' (Decision Memorandum) dated May 6, 2002, which is hereby 
adopted by this notice. A list of issues which parties have raised and 
to which we have responded, all of which are in the Decision 
Memorandum, is attached to this notice as Appendix I. Parties can find 
a complete discussion of all issues raised in this investigation and 
the corresponding recommendations in this public memorandum which is on 
file in room B-099 of the Main Commerce Building. In addition, a 
complete version of the Decision Memorandum can be accessed directly on 
the World Wide Web at http://www.ia.ita.doc.gov, under the heading 
``Federal Register Notices.'' The paper copy and electronic version of 
the Decision Memorandum are identical in content.

Changes Since the Preliminary Determination

    Based on our analysis of comments received and findings at 
verification, we have made certain changes in our determination. 
Specifically, we have made changes or new determinations concerning the 
following issues:
    1. Calculation of Garware's short-term benchmark interest rate for 
post-shipment export financing;
    2. Calculation of Garware's long-term benchmark interest rate;
    3. Calculation of subsidy rate for EPCGS licenses with an export 
commitment of PET chips or an export commitment of PET chips and PET 
film;
    4. Calculation of subsidy rate for pre-shipment export financing;
    5. Calculation of Polyplex's subsidy rate for the Post-export Duty 
Entitlement Passbook Scheme (DEPS);
    6. Calculation of subsidy rate for, and countervailability of, 
Special Import Licenses (SILs);
    7. Calculation of subsidy rate for Export Promotion Capital Goods 
Scheme (EPCGS);
    8. Calculation of subsidy rate for State of Maharashtra (SOM) sales 
tax incentives;
    9. Countervailability of Octroi Refund Scheme;
    10. Countervailability of SOM Capital Incentive Scheme;
    11. Countervailability of Interest Waived by SICOM Limited;
    12. Countervailability of State of Uttar Pradesh (UP) sales tax 
incentives for exports under Section 4-B of the UP Trade Tax Act;
    13. Program-wide changes in the SIL Scheme and the Post-export 
DEPS;
    We have also corrected certain programming and clerical errors in 
our preliminary calculations, where applicable. These changes are 
discussed in the relevant section of the Decision Memorandum and the 
calculation memoranda for Ester, Garware, and Polyplex, dated May 6, 
2002.

Suspension of Liquidation

    In accordance with section 705(c)(1)(B)(i)(I) of the Act, we have 
calculated individual net subsidy rates for the companies under 
investigation (Ester, Garware, and Polyplex). To calculate the ``all 
others'' rate, we weight-averaged the individual rates of these 
companies by each company's respective sales of subject merchandise 
made to the United States during the POI. We determine the net subsidy 
rates to be as follows:

------------------------------------------------------------------------
             Producer/exporter                    Net subsidy rate
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Ester Industries Ltd......................  19.42% ad valorem.
arware Polyester Ltd......................  25.47% ad valorem.
Polyplex Corporation Ltd..................  20.12% ad valorem.
All Others                                  21.59% ad valorem.
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    Under section 351.526 of the Department's regulations, the 
Department can adjust cash deposit rates to account for program-wide 
changes. During this investigation, the Department verified that one 
program, the Special Import License Scheme, was terminated subsequent 
to the POI, and that a program-wide change occurred subsequent to the 
POI in the rate of the post-export Duty Entitlement Passbook Scheme 
(DEPS). Therefore, we have adjusted the following cash deposit rates to 
take into account these program-wide changes:

------------------------------------------------------------------------
             Producer/exporter                    Cash deposit rate
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Ester Industries Ltd......................  18.43% ad valorem.
Garware Polyester Ltd.....................  24.48% ad valorem.
Polyplex Corporation Ltd..................  18.66% ad valorem.
All Others................................  20.40% ad valorem.
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    In accordance with our preliminary affirmative determination, we 
instructed the U.S. Customs Service to suspend liquidation of all 
entries of PET film from India, which were entered or withdrawn from 
warehouse, for consumption on or after October 22, 2001, the date of 
the publication of our preliminary determination in the Federal 
Register. In accordance with section 703(d) of the Act, we instructed 
the U.S. Customs Service to discontinue the suspension of liquidation 
for merchandise entered on or after February 22, 2002, but to continue 
the suspension of liquidation of entries made between October 22, 2001 
and February 21, 2002. We will issue a countervailing duty order and 
reinstate suspension of liquidation under section 706(a) of the Act for 
all entries if the ITC issues a final affirmative injury determination 
and will require a cash deposit of estimated countervailing duties for 
such entries of merchandise in the amounts indicated above. If the ITC 
determines that material injury, or threat of material injury, does not 
exist, this proceeding will be terminated and all estimated duties 
deposited or securities posted as a result of the suspension of 
liquidation will be refunded or canceled.

ITC Notification

    In accordance with section 705(d) of the Act, we will notify the 
ITC of our determination. In addition, we are making available to the 
ITC all non-privileged and non-proprietary information related to this 
investigation. We will allow the ITC access to all privileged and 
business proprietary information in our files, provided that the ITC 
confirms that it will not disclose such information, either publically 
or under an administrative protective order (APO), without the written 
consent of the Assistant Secretary for Import Administration.
    This notice also 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 CFR 351.305. Timely notification of return or 
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 determination is issued and published pursuant to sections 
705(d) and 777(i) of the Act.

    Dated: May 6, 2002.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.

Appendix--Issues in the Decision Memorandum

General Issues

    1. Countervailability of the DEPS
    2. Calculation of the Benefit for the DEPS
    3. Financial Contribution in the Pre- and Post-Shipment Export 
Financing Programs
    4. Calculation of the Benefit for the Pre- and Post-Shipment 
Export Financing Programs
    5. Calculation of the Benefit for EPCGS

[[Page 34907]]

    6. Termination of the Pre-Export DEPS and the Special Import 
License Scheme
    7. Program-Wide Change in the Post-Export DEPS
    8. Deemed Exports in Calculation of Export Subsidies
    9. State of Maharashtra's Package Scheme of Incentives
    10. Benefit of Sales Tax Incentives for Exports Under Section 4-
B of the Uttar Pradesh Trade Tax Act
    11. Specificity of Sales Tax Incentives Under Section 4-A of the 
Uttar Pradesh Trade Tax Act

Company-Specific Issues

    12. Calculation of EPCGS Benefit for Ester
    13. Calculation of Pre- and Post-Shipment Financing for Ester
    14. Correction of Ester's Clerical Errors
    15. Application of Input Supplier Rule to Garware and Garware 
Chemicals
    16. Ministerial Error in the Calculation of Garware's EPCGS 
Benefits
    17. Benchmarks for Garware's Pre- and Post-Shipment Export 
Financing Loans
[FR Doc. 02-12294 Filed 5-15-02; 8:45 am]
BILLING CODE 3510-DS-P