[Federal Register Volume 68, Number 240 (Monday, December 15, 2003)]
[Notices]
[Pages 69660-69668]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-30902]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-357-813]


Honey From Argentina: Preliminary Results of Countervailing Duty 
Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (the Department) is conducting an 
administrative review of the countervailing duty order on honey from 
Argentina for the period January 1, 2001 through December 31, 2002. If 
the final results remain the same as the preliminary results of this 
review, we will instruct the U.S. Customs and Border Protection (CBP) 
to assess countervailing duties as detailed in the ``Preliminary 
Results of Administrative Review'' section of this notice. Interested 
parties are invited to comment on the preliminary results of this 
administrative review. (See the ``Public Comment'' section of this 
notice).

EFFECTIVE DATE: December 15, 2003.

FOR FURTHER INFORMATION CONTACT: Thomas Gilgunn or Addilyn Chams-
Eddine, Office of AD/CVD Enforcement VII, Import Administration, U.S. 
Department of Commerce, Room 4012, 14th Street and Constitution Avenue, 
NW., Washington, DC 20230; telephone (202) 482-4236 or (202) 482-0648, 
respectively.

SUPPLEMENTARY INFORMATION:

Background

    On December 10, 2001, the Department published in the Federal 
Register the countervailing duty order on honey from Argentina. See 
Notice of Countervailing Duty Order: Honey From Argentina, 66 FR 63673. 
In response to requests for an administrative review of the 
countervailing duty (CVD) order on honey from Argentina from the 
Government of Argentina (GOA) and the American Honey Producers 
Association and Sioux Honey Association (petitioners), the Department 
initiated an administrative review for the period January 1, 2001 
through December 31, 2001. See Initiation of Antidumping and 
Countervailing Duty Administrative Reviews and Request for Revocation 
in Part, 68 FR 3009 (January 22, 2003) (Initiation Notice).
    In its request for review, the GOA requested ``that the period of 
review be extended to include calendar year 2002.'' In the Initiation 
Notice, the Department stated that it was considering the GOA's 
request. On January 24, 2002, the Department solicited comments from 
the parties regarding the GOA's request. On February 3, 2003, the GOA 
submitted comments in support of its request to extend the POR to 
include calendar year 2002. On February 6, 2003, the petitioners 
submitted comments arguing against the GOA's request for extension. On 
February 10, 2003, the GOA submitted additional comments. In addition, 
on February 10, 2003, the Department offered a final opportunity for 
both parties to submit final comments on this issue by February 14, 
2003. (See memorandum to file from Barbara E. Tillman regarding 
``Countervailing Duty Order on Honey from Argentina; Telephone Calls to 
Petitioner and Respondent Concerning Comments on the Period of Review 
Issue in the first Administrative Review,'' dated February 13, 2003.) 
No additional comments were received from either party.
    Based on our analysis of the GOA's request and of the comments 
received on this issue from both the petitioners and the GOA, the 
Department expanded the POR to include 2002. As such, the instant 
review covers calendar years, January 1, 2001 through December 31, 2001 
and January 1, 2002 through December 31, 2002.\1\ (See memorandum from 
Thomas Gilgunn to Joseph A Spetrini ``Honey from Argentina: Expansion 
of the Period of Review in the First Administrative Review of the 
Countervailing Duty Order,'' dated February 21, 2003.)
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    \1\ For the purposes of these preliminary results, we have 
analyzed data for the period January 1, 2001 through December 31, 
2001 to determine the countervailable subsidy rate for exports of 
subject merchandise made during the periods in 2001 when liquidation 
of entries was suspended. In addition, we have analyzed data for the 
period January 1, 2002 through December 31, 2002 to determine the 
countervailable subsidy rate for exports during that period and to 
establish the cash deposit rate for subsequent exports of subject 
merchandise.
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    On February 21, 2003, we issued a questionnaire to the GOA. On 
April 14, 2003, the GOA submitted its questionnaire response. On June 
10, 2003 and August 15, 2003, the Department issued supplemental 
questionnaires to the GOA. The GOA submitted responses to those 
supplemental questionnaires on July 14, 2003 and September 22, 2003, 
respectively. The GOA also submitted additional information regarding 
certain provincial programs on August 20, 2003 and September 11, 2003. 
On July 23, 2003, we extended the period for the completion of the 
preliminary results pursuant to section 751(a)(2)(B)(iv) of the Tariff 
Act of 1930, as amended (the Act). See Notice of Extension of Time 
Limit for the Preliminary Results of Countervailing Duty Administrative 
Review: Honey from Argentina, 68 FR 43492 (July 23, 2003).

Verification

    As provided in section 782(i) of the Act, the Department conducted 
on-site verification of the GOA's questionnaire responses from October 
14 through October 21, 2003. The Department's findings at verification 
are detailed in two reports: ``First Administrative Review of Honey 
from Argentina: Verification Report for the Argentine Internal Tax 
Reimbursement/ Rebate Program (Reintegro); Honey Production, and Export 
Data,'' dated November 13, 2003 (Reintegro Verification Report); and 
``First Administrative Review of Honey from Argentina: Verification 
Report for the Government of Argentina,'' dated November 20, 2003 
(Honey Verification Report). Public versions of both reports are on 
file in the Central Records Unit (CRU) located in room B-099 of the 
Main Commerce Building.

Scope of the Order

    The merchandise covered by this order is artificial honey 
containing more than 50 percent natural honeys by weight, preparations 
of natural honey containing more than 50 percent natural honeys by 
weight, and flavored honey. The subject merchandise includes all grades 
and colors of honey whether in liquid, creamed, combs, cut comb, or 
chunk form, and whether packaged for retail or in bulk form.
    The merchandise subject to this order is currently classifiable 
under subheadings 0409.00.00, 1702.90, and 2106.90.99 of the Harmonized 
Tariff Schedule of the United States (HTSUS). Although the HTSUS 
subheadings are provided for convenience and Bureau of Customs and 
Border Protection (CBP) purposes, the Department's written description 
of the merchandise covered by this order is dispositive.

Subsidies Valuation Information

A. Aggregation

    Under section 777A(e)(2)(B) of the Act, the Department may 
calculate a

[[Page 69661]]

single country-wide rate applicable to all exporters if the Department 
determines it is not practicable to determine individual 
countervailable subsidy rates due to the large number of exporters or 
producers involved in the investigation or review.
    In the countervailing duty investigation of honey from Argentina, 
the Department solicited information from the GOA on an aggregate or 
industry-wide basis in accordance with section 777A(e)(2)(B) of the 
Act, rather than from individual producers and exporters, due to the 
large number of producers and exporters of honey in Argentina. See 
Memorandum to the File, Countervailing Duty Investigation of Honey from 
Argentina: Conducting the Investigation on an Aggregate Basis, dated 
November 22, 2000. As noted above, in accordance with 19 CFR Sec.  
351.213(b)(2), both the GOA and the petitioners requested an 
administrative review of this countervailing duty order. (See 
Initiation Notice.) No individual exporters requested the review 
pursuant to 19 CFR Sec.  351.213(b). Accordingly, the Department has 
conducted this review of the order on an aggregate basis and will 
calculate a single country-wide subsidy rate for 2001 and 2002 to be 
applied to all exports of the subject merchandise. See Section 
777A(e)(2)(B) of the Act.

Allocation Period

    In the underlying investigation, we identified the allocation 
period in accordance with 19 CFR Sec.  351.524(d)(2) which directs us 
to rely on the average useful life (AUL) of renewable physical assets 
for the industry concerned, as listed in the Internal Revenue Service's 
(IRS) 1977 Class Life Asset Depreciation Range System, as updated by 
the Department of Treasury. No parties provided information or argument 
about the AUL issue. Therefore, we will continue to use the 10-year AUL 
as reported in the IRS tables to allocate any non-recurring subsidies 
under review.

Benchmark Interest Rates and Discount Rates

    In selecting benchmark interest rates for use in calculating the 
benefits conferred by the various loan programs under review, we would 
normally look for the interest rate a borrower had received on a 
comparable commercial loan. See 19 CFR 351.505(a)(3)(i). However, since 
we are conducting this review on the aggregate level, and we are not 
examining individual companies, we have sought information on the 
national average interest rates for comparable commercial loans. See 19 
CFR 351.505(a)(3)(ii). The GOA provided information compiled by the 
Central Bank of Argentina showing the national average interest rates 
for various types of financing: long-term, fixed-rate, denominated in 
Argentine Peso and in foreign currency. For each loan program found to 
be countervailable, we have selected a benchmark from the information 
provided depending upon the terms and characteristics of the particular 
loan program.
    We are directed by 19 CFR 351.524(d)(3) regarding the selection of 
a discount rate for the purposes of allocating non-recurring subsidies 
over time. Since we are conducting this investigation on an aggregate 
basis under section 777A(e)(2)(B) of the Act, we are using, as the 
discount rate, the average cost of long-term fixed-rate loans in 
Argentina as reported by the GOA. See 19 CFR 351.524(d)(3)(i)(B).

Denominator Issues

    The GOA has provided information for 2001 and 2002 relating to the 
total volume of honey produced in Argentina, the volume and value in 
U.S. Dollars, of total honey exports, and the volume and value in U.S. 
Dollars, of exports of honey to the United States. The GOA has also 
broken down, where possible, the export volumes and values according to 
the province in which the honey was produced. However, the GOA was 
unable to provide information relating to total domestic sales of honey 
for 2001 and 2002. As a proxy for total sales information, the GOA 
provided data showing the volume of honey production by province during 
2001 and 2002. However, the GOA stated that it could not provide the 
value of production for 2001 and 2002. Consistent with the 
investigation, we calculated a proxy for the value of the total 
production reported by the GOA using the volume and value data provided 
for exports to the United States. See Notice of Final Affirmative 
Countervailing Duty Determination: Honey from Argentina, 66 FR 50613 
(October 4, 2001) (Honey Final Determination), and the accompanying 
Issues and Decision Memorandum (Honey Issues Memo), at 
``Denominators.'' We divided the value of Argentine honey exports to 
the United States by the volume of those exports to calculate a per 
kilogram value in U.S. Dollars. We then multiplied this per kilogram 
value by the provincial production data provided to arrive at the value 
of total Argentine honey production during 2001 and 2002. We have used 
this total production value as our denominator when calculating the 
subsidy from domestic subsidy programs provided by the GOA, and we have 
used the relevant provincial production value as our denominator when 
calculating the subsidy from domestic subsidies provided at the 
provincial level. We have used the total or provincial export values, 
as appropriate, as our denominators when calculating the subsidy from 
programs we have determined to be export subsidies.
    To determine the final subsidy from each provincial program that is 
attributable to exports of honey to the United States, we applied the 
following methodologies: (1) For provinces for which we have reported 
data on the volume and value of honey production that was exported, we 
weight-averaged the subsidies from each provincial program by 
multiplying each subsidy by the province's share of total honey 
exports, by value, to the United States during the POR; and (2) for 
provincial domestic subsidy programs in provinces that do not have 
reported exports of honey to the United States during the POR, but do 
have reported honey production during the POR, and for which the GOA 
did not specifically report that the province had no exports to the 
United States, we divided the benefits by the value of total value of 
Argentine honey production during the POR.
    As noted above, Argentine honey production and exports have been 
valued in U.S. Dollars. As detailed below, certain Argentine Peso-
denominated loan programs provided benefits to Argentine honey 
producers and exporters in Argentine Pesos. In such instances, we 
converted those Argentine Peso-denominated benefits into U.S. Dollars 
using the official exchange rate data provided by the GOA.

Analysis of Programs

I. Programs Preliminarily Determined to be Countervailable

A. Federal Programs

1. Argentine Internal Tax Reimbursement/Rebate Program (Reintegro)
    The Reintegro program entitles Argentine exporters to a rebate of 
many internal domestic taxes levied during the production, 
distribution, and sales process on many exported products. The 
Reintegro program provides a cumulative stage tax rebate paid upon 
export, calculated as a percentage of the ``free on board'' (FOB) 
invoice price of an exported product.
    In the underlying investigation, the Department found the Reintegro 
to be

[[Page 69662]]

countervailable. (See Honey Issues Memo, at ``Argentine Internal Tax 
Reimbursement/Rebate Program (Reintegro)).''
    In its April 14, 2003, questionnaire response, the GOA stated that 
it did not ``intend to provide a full defense of the reintegro program 
in this review.'' Rather, the GOA stated that Resolution 220/2001, 
enacted on June 18, 2001, reduced the Reintegro rate for all products 
by 7 percent thereby lowering the reintegro on bulk honey to zero and 
for processed honey to 5.4 percent. The GOA also maintains that 
Resolution 470/2001, enacted on September 17, 2001, specifically set 
the Reintegro rate for processed honey to zero. The GOA further noted 
that the Reintegro level for both bulk and processed honey ``has 
remained at zero since this time, including the remainder of the 2001 
and the entire 2002 POR.''
    Since the GOA did not provide new information regarding the 
countervailability of the Reintegro, we continue to find the entire 
amount of the Reintegro for bulk and processed honey to confer a 
countervailable benefit. See 19 CFR Sec.  351.518(a)(4). However, we 
did verify that in June 2001, the Reintegro rate applicable to bulk 
honey was set to zero while the rate for processed honey was decreased 
to 5 percent. We further verified that the Reintegro rate for processed 
honey was then set to zero in September 2001. As such, for the purposes 
of establishing the countervailable subsidy rate for 2001, we weight-
averaged the Reintegro rates in effect during that year (5.4 percent 
for bulk honey and 12 percent for processed honey through June 18, 2001 
and 5 percent for processed honey from June 18, 2001 through September 
16, 2001) by the FOB value of exports of bulk and processed honey to 
the United States during these distinct periods in 2001. Therefore, the 
countervailable subsidy rate for 2001 exports to the United States 
applicable to this program is 5.352 percent ad valorem.
    We verified the Reintegro rate was zero throughout 2002 for both 
bulk and processed honey. Thus, both the countervailable subsidy rate 
for 2002 and the cash deposit rate applicable to this program are zero.
2. Factor de Convergencia (Convergence Factor)
    After the completion of verifications in both the instant review 
and the concurrent antidumping duty administrative review, we learned 
that on the record of the administrative review of the antidumping duty 
order, there was verified information relating to a GOA program called 
the factor de convergencia (Convergence Factor). Under this program, as 
described in public information provided by several of the respondents 
in the antidumping duty administrative review, exporters could claim a 
payment from the GOA for a percentage of the FOB value of the exports. 
According to this public information on the record, the rate of payment 
was determined according to a formula accounting for the exchange rate 
between the U.S. Dollar and the Euro. See memorandum to the file 
placing public information regarding the Convergence Factor from the 
antidumping review on the record of this review dated December 8, 2003 
(CF Public Information Memo).
    Our review of the record in the countervailing duty administrative 
review shows that the GOA did not report the existence of this program. 
The public information in the antidumping review identified a 
resolution which addressed the operational interaction between the 
Reintegro and the Convergence Factor. Resolution 470/2001, dated 
September 17, 2001, had been submitted, in Spanish, as Exhibit 8 to the 
GOA's April 14, 2003 countervailing duty questionnaire response. 
Resolution 470/2001 consists of numerous articles: one directly 
addressing the Reintegro rates for honey; another addressing the 
interaction between Reintegro and the Convergence Factor. However, the 
only article for which a translation was provided and discussed in the 
questionnaire response was the article pertaining directly to the 
Reintegro rates for honey.
    In addition, the GOA provided no information about this program in 
response either to questions regarding changes in Reintegro or to 
questions regarding ``any other forms of assistance to producers and 
exporters of subject merchandise.'' See the GOA's April 14, 2003 
questionnaire response. Furthermore, in response to questions at 
verification regarding whether the GOA implemented any additional forms 
of assistance for exporters in lieu of Reintegro payments at the time 
of or since the reduction of the Reintegro rates, officials of the 
Production Ministry indicated that the GOA had implemented no such 
measures. (See Reintegro Verification Report.)
    On November 14, 2003, we requested that the GOA provide an 
explanation of why it did not report the Convergence Factor to the 
Department either in the questionnaire responses or at verification. On 
November 20, 2003, the GOA stated that the Convergence Factor was not a 
government subsidy program but an exchange rate mechanism that applied 
to all foreign trade, both imports and exports. The GOA cited earlier 
cases in which the Department made clear that exchange rate policies 
that apply equally to imports and exports are not countervailable 
(citing to Certain Electrical Conductor Aluminum Redraw Rod from 
Venezuela; Final Affirmative Countervailing Duty Determination, 53 FR 
24763 (June 30, 1988); Carbon Steel Wire Rod from Czechoslovakia; 
Preliminary Negative Countervailing Duty Determination, 49 FR 6773 
(February 23, 1984); and Carbon Steel Wire Rod from Poland; Preliminary 
Negative Countervailing Duty Determination, 49 FR 6768 (February 23, 
1984)). Moreover, the GOA maintained that since the Convergence Factor 
had nothing to do with the concept of rebating indirect taxes, the 
Convergence Factor cannot reasonably be understood to be a replacement 
for the Reintegro program. As such, given that the Convergence Factor 
operated as an exchange rate mechanism for imports and exports wholly 
unrelated to the rebate of indirect taxes, the GOA maintained that it 
did not report the Convergence Factor to the Department because it had 
no reason to believe that the Department might consider the Convergence 
Factor to be a subsidy program much less a replacement of the Reintegro 
program.
    In addition to stating that the Convergence Factor should not be 
considered a subsidy program, the GOA stated that it was willing to 
answer any additional questions that the Department had regarding the 
operation of the Convergence Factor. The GOA argued that it would 
rather the Department request specific information regarding the 
Convergence Factor than have the Department draw any adverse inferences 
from a perceived lack of response. The GOA contended that the 
Department's general questions seeking information on new subsidy 
programs or replacement programs for the reintegro could not reasonably 
have been interpreted by the GOA to be seeking information on an 
exchange rate mechanism like the Convergence Factor. Moreover, the GOA 
argued that it would be unreasonable for the Department to draw any 
adverse inferences from the record with regard to the Convergence 
Factor without providing the GOA with an opportunity to respond to 
specific questions regarding the Convergence Factor.
    On December 2, 2003, the petitioners submitted comments and 
information regarding the GOA's November 20, 2003 letter. On December 
8, 2003, the GOA submitted additional comments

[[Page 69663]]

regarding the petitioner's December 2, 2003 letter. These comments and 
information were submitted too late for consideration in these 
preliminary results.
    Sections 776(a)(2)(A) and 776(a)(2)(B) of the Act provide for the 
use of facts otherwise available when an interested party withholds 
information that has been requested by the Department, or when an 
interested party fails to provide the information requested in a timely 
manner and in the form required.
    The GOA provided no information about the Convergence Factor in 
response either to questions regarding changes in the Reintegro or 
questions regarding any other forms of assistance provided to producers 
and exporters of subject merchandise. (See the GOA's April 14, 2003 
response to the Department's initial questionnaire.) Moreover, the 
record also shows that when questioned at verification regarding 
whether the GOA implemented any additional forms of assistance for 
exporters in lieu of Reintegro payments at the time of or since the 
reduction of the Reintegro rates, GOA officials stated that there were 
no such measures. (See the Reintegro Verification Report.) Therefore, 
because the GOA failed to provide information on the Convergence 
Factor, the Department must resort to facts otherwise available.
    Section 776(b) of the Act provides that, in selecting from among 
the facts available, the Department may use an inference that is 
adverse to the interests of a respondent, if it determines that a party 
has failed to cooperate to the best of its ability.
    The GOA's stated position for not providing information on the 
Convergence Factor appears to be the following: (1) The Convergence 
Factor was an exchange rate mechanism that was not an additional 
subsidy which provided assistance to exporters; (2) exchange rate 
mechanisms have nothing to do with the Reintegro; and (3) the 
Department has found exchange rate policies which apply to imports and 
exports to be not countervailable.
    We disagree with the GOA's contention that it could not reasonably 
be expected to provide information regarding the Convergence Factor in 
response to the Department's question regarding any other forms of 
assistance provided to producers and exporters of subject merchandise. 
Clearly, the Convergence Factor is a form of assistance that was 
provided to exporters of the subject merchandise during the POR. (See 
CF Public Information Memo.) As such, it is reasonable to conclude that 
the GOA was obligated to provide information regarding the Convergence 
Factor in response to questions regarding other forms of assistance 
provided to exporters of the subject merchandise. Moreover, it is 
reasonable to conclude that the GOA was aware of its obligation to 
provide information regarding the Convergence Factor in response to 
questions regarding other forms of assistance provided to exporters of 
the subject merchandise.
    We note that, in response to the Department's question regarding 
any other forms of assistance provided to producers and exporters of 
subject merchandise, the GOA did provide information regarding a 
provincial loan program called ``Convenio Programa MIPyMES 
Agropecuarios Bonaerenses 2000'' which the GOA maintained was not 
countervailable. (See ``Program Preliminarily Determined to be Not 
Countervailable,'' below.) Since the GOA did report information on one 
program which it believed to be not countervailable, the Department can 
reasonably conclude that the GOA was aware of its obligation to report 
programs like the Convergence Factor even though it may believe that 
the Department should find a program such as the Convergence Factor to 
be not countervailable.
    We also disagree with the GOA's contention that it could not 
reasonably be expected to provide information regarding the Convergence 
Factor in response to the Department's questions regarding possible 
replacements to the Reintegro program. In response to questions 
regarding the Reintegro program, the GOA provided a Spanish version of 
Resolution 470/2001 with a translation of Article 6 which set the 
reintegro rate for processed honey to zero. In response to the 
Department's November 14, 2003 letter which mentioned Article 2 of 
Resolution 470/2001, the GOA stated that Article 2 provides that 
``companies accruing a credit from the difference in exchange rates 
would receive less of a reintegro rebate.'' Based even on this partial 
translation of Resolution 470/2001, it is clear that the operation of 
the Convergence Factor and the Reintegro were interrelated.
    Moreover, a more complete translation of Article 2 shows that in 
cases where the Convergence Factor is larger than the corresponding 
Reintegro, only the Convergence Factor should be paid in lieu of the 
Reintegro. (See Memorandum placing translation of Resolution 470/2001, 
Article 2 on the record of this review, dated December 8, 2003.) As 
such, the record shows that both the Convergence Factor and the 
Reintegro program provided credits to exporters and the amount of 
credits provided by the Convergence Factor and the Reintegro program 
were limited by Article 2 of Resolution 470/2001. Since the GOA enacted 
Resolution 470/2001, and Article 2 of said resolution governed the 
interrelationship of the Convergence Factor and the Reintegro, it is 
reasonable to conclude that the GOA was obligated to provide 
information regarding the Convergence Factor in response to questions 
regarding possible replacements to the Reintegro.
    Finally, we disagree with the GOA's contention that the existence 
of the cases it cited shows that the Department will not find a 
multiple exchange rate countervailable. There are several 
administrative cases where the Department has found multiple exchange 
rates countervailable. (See, e.g., Final Affirmative Countervailing 
Duty Determination; Certain Electrical Conductor Aluminum Redraw Rod 
From Venezuela, 53 FR 24763 (June 30, 1988).) The Department's 
decisions regarding multiple exchange rates like the Convergence Factor 
are fact specific. Since the GOA failed to provide information on the 
Convergence Factor, we must resort to facts otherwise available to make 
our decision regarding the countervailability of the Convergence 
Factor.
    The GOA was aware of its obligation to report information regarding 
the Convergence Factor and had the ability to report its own program. 
Therefore, the Department preliminarily concludes that the GOA failed 
to cooperate to the best of its ability. Accordingly, in applying the 
facts otherwise available, the Department finds that an adverse 
inference is warranted, pursuant to section 776(b) of the Act.
    An analysis of the public information from the companion 
antidumping duty review shows the following. On June 19, 2001, GOA 
Decree 803/2001 modified the relationship between the Argentine Peso 
and the U.S. Dollar, as applied to import/export transactions. The 
Central Bank established a ``factor de convergencia'' or convergence 
factor (CF) for import/export transactions. The CF did not affect the 
convertibility plan for other types of U.S. Dollar transactions. The CF 
mechanism acted as an export promotion instrument. Concurrent with 
implementation of the CF, the GOA reduced the Reintegro for all 
products by seven percent. GOA Decree 191/2002 apparently suspended the 
CF on January 29, 2002. (See CF Public Information Memo.)
    Public information from the companion antidumping duty review 
indicates the GOA calculated the CF for

[[Page 69664]]

exporters on a daily basis using a formula accounting for the exchange 
rate between the U.S. Dollar and the Euro (i.e., exporters exchanged 
their U.S. Dollars into Argentine Pesos at a rate of one Peso equals 1 
U.S. Dollar + (1 U.S. Dollar + 1 Euro)/2). (See CF Public Information 
Memo.) As such, Argentine exporters ultimately converted their U.S. 
Dollar payments to Argentine Pesos at a rate more advantageous than the 
one-to-one parity established by the Convertibility Law. In making CF 
claims, exporters apparently applied the officially published CF from 
the date of their export declaration to the FOB value of the goods 
exported. The GOA then paid the CF proceeds directly to the exporter.
    The CF program provides a payment to exporters, calculated as a 
percentage of the ``free on board'' (FOB) invoice price of an exported 
product. These CF payments are issued by the GOA directly to exporters 
and therefore, constitute a financial contribution to recipients under 
section 771(5)(D)(I) of the Act. The CF program also provides a benefit 
because the exchange rate established through this program allowed 
exporters to convert U.S. Dollars to Argentine Pesos at a rate more 
advantageous than the official one-to-one exchange rate mandated by the 
GOA's Convertibility Law. Further, since receipt of CF payments is 
contingent upon export performance, CF payments are specific under 
section 771(5A)(D) of the Act.
    In order to calculate the countervailable subsidy for the CF 
program applicable to honey exports from June 19, 2001 through December 
31, 2001, we obtained the official daily CF data through a search of 
GOA websites, and we calculated an average CF for the period.\2\ We 
then multiplied that average CF by the FOB value of honey exports to 
the United States for the same period and divided that total by the 
total FOB value of honey exports to the United States in 2001. As such, 
the countervailable subsidy rate for the CF program applicable to 2001 
is 0.060 percent ad valorem.
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    \2\ The official CF data is available from the following GOA 
website: http://www.afip.gov.ar/factor/inter--consulta.asp.
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    For the purposes of establishing the countervailable subsidy rate 
for 2002 and the cash deposit rate of estimated countervailing duties, 
we obtained the official daily CF data for the period January 1, 2002 
through January 29, 2002 (the date on which Resolution 191/2002 
apparently suspended the Convergence Factor) and calculated an average 
CF for that period. We then applied that average CF to the total FOB 
value of honey exports to the United States for the same period. We 
estimated the total FOB value of honey exports to the United States for 
the period January 1, 2002 through January 29, 2002 by dividing the 
total FOB value of honey exports to the United States in 2002 by 365 
days and multiplying the daily FOB value by 29 days. We then divided 
the total CF accrued during 2002 by the total FOB value of honey 
exports to the United States in 2002. Therefore, we preliminarily 
determine that the countervailable subsidy rate applicable to exports 
in 2002 and the rate of cash deposit of estimated countervailing duties 
applicable to this program is 0.477 percent ad valorem.
    Section 776(c) of the Act provides that when the Department relies 
on the facts otherwise available and relies on ``secondary 
information,'' the Department shall, to the extent practicable, 
corroborate that information from independent sources reasonably at the 
Department's disposal. The Statement of Administrative Action, H.R. 
Doc. 103-316 (SAA), states that ``corroborate'' means to determine that 
the information used has probative value. See SAA at 870. To 
corroborate secondary information, the Department will, to the extent 
practicable, examine the reliability and relevance of the information 
to be used.
    In the instant review, we have relied on verified public 
information from the companion antidumping duty review to calculate 
countervailable subsidy and cash deposit rate applicable to the CF. 
Since this public information obtained from the companion antidumping 
duty proceeding was contemporaneous to the instant review and verified 
in the context of the companion antidumping duty review we consider it 
to be reliable and to have probative value. (See CF Public Information 
Memo.) We also used public information obtained from a GOA Web site: 
http://www.afip. gov.ar/. Because this is information issued by the GOA 
independent of this administrative review, we consider it to be 
reliable and to have probative value.
3. Regional Productive Revitalization Program
    The GOA established the ``Regional Productive Revitalization: 
National Program for the Promotion and Development of Local Productive 
Initiative'' (Regional Productive Revitalization Program) to strengthen 
the economies of small and medium-sized towns in the Argentine 
interior. The program was established in 1995 with funds from the 
national treasury allocated for use by the provinces. Although the 
program was administered at the national government level, its 
objective was to address financial emergencies and regional economic 
devastation in the provinces. The program discontinued granting new 
credits in the beginning of 1999. However, it remains operational as 
long as the loans granted are outstanding and continue to be serviced. 
The Regional Productive Revitalization Program provided credit for the 
acquisition of capital goods, technology, working capital, training 
needs, and technical assistance. During the time the program was fully 
operational, two Argentine Peso-denominated loans were made to honey 
producers. Those loans were outstanding during both 2001 and 2002. The 
GOA reported that under Resolution 0324, dated September 16, 2002, 
borrowers were permitted to refinance their loans under this program at 
terms which differed for companies that had remained current in their 
payment of interest and principal and for companies which had not 
remained current with their loan repayment obligations.
    In the Honey Final Determination, we determined that the Regional 
Productive Revitalization Program was countervailable as a regional 
subsidy. See Honey Issues Memo, at ``Regional Productive 
Revitalization: National Program for the Promotion and Development of 
Local Productive Initiative.'' There is no new information or evidence 
of changed circumstances which would warrant reconsidering this 
finding.
    Consistent with our approach in the Honey Final Determination, we 
are treating these two loans differently for the purposes of 
calculating the benefit. For the first loan, we calculated the 
Argentine Peso-denominated benefit for the loan by multiplying the 
average loan balance outstanding during 2001and 2002 by the difference 
between the loan interest rate charged and the benchmark interest rate. 
For our benchmark interest rate, we selected from the information 
provided by the Central Bank of Argentina, a rate for the type of loans 
that most closely resembled the terms of this program. See ``Benchmark 
Interest Rates and Discount Rates'' above.
    For the second loan, in the Honey Final Determination, we 
considered that this loan had been forgiven during 1999, the period of 
investigation POI, and treated the amount of debt forgiven as a grant 
conferred in that year. See 19 CFR Sec.  351.508. There is no new 
information or evidence of changed circumstances which would warrant 
treating this loan differently for purposes of these preliminary 
results of

[[Page 69665]]

review. Therefore, we continue to treat this loan as debt forgiven in 
1999. To calculate the benefit, we have allocated the resulting 
Argentine Peso-denominated grant amount over the AUL of 10 years. See 
section entitled ``Allocation Period'' above. We have used an 
appropriate discount rate, as discussed in the ``Benchmark Interest 
Rates and Discount Rates'' section, above. Separately for 2001 and 2002 
we summed the Argentine Peso-denominated benefit amounts attributable 
to each loan and converted the benefit amounts to U.S. Dollars using 
the official exchange rate data provided by the GOA. We then divided 
the U.S. Dollar-denominated benefits by the U.S. Dollar-denominated 
value of honey produced in Argentina during 2001 and 2002, as 
appropriate, to calculate a countervailable subsidy rate of 0.089 
percent ad valorem for 2001 and 0.005 percent ad valorem for 2002. The 
cash deposit rate of estimated countervailing duties for this program 
is 0.005 percent ad valorem.
4. BNA Financing for the Acquisition of Goods of Argentine Origin
    The financing for the Acquisition of Goods of Argentine origin 
program was established by the Banco de la Naci[oacute]n Argentina 
(BNA), a bank owned by the GOA, pursuant to Annex B to the BNA Circular 
No. 10715/I. This line of credit is offered by BNA to companies 
purchasing capital equipment manufactured in Argentina (defined as 
having a maximum foreign component of 40 percent). Financing is 
provided for up to five years, in an amount equal to 80 percent of the 
purchase price of the equipment not to exceed US$500,000. There was one 
loan under this program to a honey producer or exporter which was 
outstanding during 2001 and 2002.
    A program that is ``contingent upon the use of domestic goods over 
imported goods, alone, or as 1 of 2 or more conditions,'' is an import 
substitution subsidy under section 771(5A)(c) of the Act. Because this 
financing is available only for the purchase of Argentine origin goods, 
the BNA Financing for the Acquisition of Goods of Argentine Origin is 
specific as an import substitution subsidy under section 771(5A)(c) of 
the Act.
    Loans under this program provide a financial contribution under 
section 771(5)(D) of the Act in the form of a transfer of funds. To 
determine whether there is a benefit, we compared the interest rate 
charged on the loan provided under this program to the commercial 
interest rate for loans that most closely resemble loans under this 
program. (See ``Benchmark Interest Rates and Discount Rates'' above.) 
Based on this comparison, the amount that the recipient pays is less 
than the amount the recipient would have paid on a comparable 
commercial loan that could actually be obtained on the market. Thus, 
this line of credit provides a benefit under section 771(5)(E) of the 
Act.
    The Republic of Argentina followed a currency board system under 
its Convertibility Law of maintaining parity between the Argentine peso 
and the U.S. dollar until January 2002. Thus, the exchange rate for the 
year 2001 was one Argentine Peso to one U.S. dollar. On January 6, 
2002, Emergency Law No. 25,561 (Law 25,561) ended the one Argentine 
peso-one U.S. dollar relationship. In addition, Article 6, paragraph 2 
of Law 25,561 and Decree 214/2002 established the mandatory 
restructuring of foreign currency-denominated debts \3\ at a 
relationship of one U.S. Dollar-one Argentine Peso. This loan was 
converted from U.S. Dollars to Argentine Pesos under Law 25,567 and 
Decree 214/2002.
---------------------------------------------------------------------------

    \3\ Law 25,567 and Decree 214/2002 converted all foreign 
currency-denominated debts except those directly related to the 
financing of exports.
---------------------------------------------------------------------------

    Because this is a long-term fixed-rate loan, the benefit is 
calculated by multiplying the average outstanding loan balance during 
2001 by the difference between the interest rate charged under the 
program and the benchmark interest rate in accordance with 19 CFR Sec.  
351.505(c). We then divided this benefit amount by the U.S. Dollar 
value of total honey production in Argentina during 2001. Thus, for 
2001, we preliminarily determine that the value of any countervailable 
benefits to honey producers or exporters under this program would have 
no measurable impact on the overall subsidy rate (i.e., the rate is 
less than 0.001 percent ad valorem).
    Because this loan was converted from U.S. Dollars to Argentine 
Pesos on January 29, 2002 pursuant to Law 25,567 and Decree 214/2002, 
we consider that there was, in effect, a new long-term fixed rate 
Argentine Peso-denominated loan made in 2002. We calculated the 
countervailable subsidy for 2002 in five steps: (1) We multiplied the 
average U.S. Dollar-denominated outstanding loan balance which existed 
from January 1, 2002 through January 28, 2002 by the difference between 
the interest rate for loans charged under the program and the benchmark 
interest rate for U.S. Dollar-denominated loans; (2) we multiplied the 
average Argentine Peso-denominated outstanding loan balance which 
existed from January 29, 2002 through December 31, 2002 by the 
difference between the interest rate charged under the program and the 
appropriate benchmark interest rate for Argentine Peso-denominated 
loans made during 2002; (3) we converted the 2002 Argentine Peso-
denominated benefit into U.S. Dollars using the official annual average 
exchange rate data provided by the GOA; (4) we summed the two U.S. 
Dollar-denominated benefits from the two periods in 2002; and (5) we 
divided this U.S. Dollar-denominated amount by the U.S. Dollar value of 
total honey production in Argentina during 2002. We thus preliminarily 
find the countervailable subsidy from this program to be 0.001 percent 
ad valorem for 2002. The cash deposit rate of estimated countervailing 
duties is 0.001 percent ad valorem.

B. Provincial Programs

1. Province of San Luis Honey Development Program
    The San Luis Honey Development Program (SLHDP) promoted honey 
production to supplement the income of disadvantaged people in 
underdeveloped areas in the province of San Luis through credit lines. 
These long-term, fixed rate, and Argentine Peso-denominated loans were 
made as part of a series of annual campaigns which took place from 1994 
through 1999.
    In the underlying investigation, the Department found the Province 
of San Luis Honey Development Program to be countervailable. See Honey 
Issues Memo, at ``Province of San Luis Honey Development Program.'' 
There is no new information or evidence of changed circumstances which 
would warrant reconsideration of this finding.
    In the underlying investigation we treated loans made under this 
program as loans that had been forgiven during the 1999, the POI. See 
19 CFR 351.508(a). In the instant review, the GOA reported that the 
Province of San Luis had undertaken significant efforts to collect 
payment on these loans. We verified that the Province of San Luis had 
collected a few, very small payments in 2001 and 2002. However, the 
amount collected was so small that it would have no impact on the 
countervailable subsidy rate. As such, we need not address whether it 
is appropriate to consider these payments as repayments of the subsidy. 
Therefore, consistent with our methodology in the investigation, we 
have summed the amounts disbursed through the program for the years 
1994 through 1999, plus the accrued interest through 1999, when

[[Page 69666]]

the loans were effectively forgiven. We summed those amounts and added 
the leasing amount for 1999 and then allocated this sum over the 10-
year average useful life of assets (AUL) used in the honey industry. We 
used the 1999 annual average of long-term fixed Peso-denominated 
interest rates as our discount rate. See ``Benchmark Interest Rates and 
Discount Rates,'' and ``Allocation Period'' sections, above.
    For the purposes of establishing the countervailable subsidy rate 
for 2001, we converted the Argentine Peso-denominated benefit 
attributable to 2001 into U.S. Dollars using the official exchange 
rates provided by the GOA. We then divided this amount by the U.S. 
Dollar value of honey production in the Province of San Luis during 
2001. We then determined the countervailable subsidy attributable to 
subject merchandise from this program by multiplying the calculated 
subsidy rate by the percentage that honey from San Luis represents of 
total honey exports to the United States during 2001. Thus, the 
countervailable subsidy rate attributable to this program for 2001 is 
0.141 percent ad valorem.
    For the purposes of establishing the countervailable subsidy rate 
for 2002, and the cash deposit rate, we converted the Argentine Peso-
denominated benefit attributable to 2002 into U.S. Dollars using the 
official annual average exchange rate provided by the GOA. We then 
divided this amount by the U.S. Dollar value of honey production in the 
Province of San Luis during 2002. We then determined the subsidy 
attributable to subject merchandise from this program by multiplying 
the calculated subsidy rate by the percentage that honey from San Luis 
represents of total honey exports to the United States during 2002. 
Thus, the countervailable subsidy rate for 2002 and cash deposit rate 
applicable to this program are 0.024 percent ad valorem.
2. Province of Chaco Line of Credit Earmarked for the Honey Sector
    The Chaco government's Line of Credit Earmarked for the Honey 
Sector funded efforts to increase honey production in the province. The 
Chaco government offered long-term, fixed rate, Argentine Peso-
denominated loans to purchase hives as well as loans to improve access 
to new bee breeds and for honey extraction rooms. These loans were made 
as part of a series of annual campaigns which took place in 1995, 1997, 
and 1999.
    In the Honey Final Determination, we determined that the leasing 
component of the Honey Program was countervailable. See Honey Issues 
Memo, at ``Province of Chaco Line of Credit Earmarked for the Honey 
Sector.'' There is no new information or evidence of changed 
circumstances which would warrant the reconsideration of this finding.
    However, in the instant review, based on the results of 
verification, we find it appropriate to make one change to the 
calculation of the benefit arising from this program. We calculated 
outstanding balances for these loans to include outstanding interest 
which accrued on these loans. In order to determine whether a benefit 
existed, we compared the interest rate charged on loans provided under 
this program to the commercial interest rates for loans that most 
closely resemble loans under this program. Because these are long-term, 
fixed rate, Argentine Peso-denominated loans, we selected from 
information provided by the GOA a long-term benchmark from: 1995 to 
apply to the 1995 tranche; 1997 to apply to the 1997 tranche; and 1999 
to apply to the 1999 tranche. Based on this comparison, there is a 
difference in the amount the recipient of the loan pays on the loan and 
the amount the recipient would have paid on a comparable commercial 
loan that the recipient could have actually obtained on the market. 
Thus, this line of credit is providing a benefit, under section 
771(5)(E) (ii)of the Act.
    We calculated the amount of the benefit for 2001 in the following 
steps: (1) We multiplied the average outstanding Argentine Peso-
denominated loan balances for 2001 by the interest rate differential; 
(2) we converted the resulting the resulting Argentine Peso-denominated 
benefit into U.S. Dollars using the official annual average exchange 
rates provided by the GOA; (3) we divided this U.S. Dollar-denominated 
benefit by the U.S. Dollar value of honey production in the Province of 
Chaco during 2001: (4) we then determined the subsidy attributable to 
subject merchandise from this program by multiplying the calculated 
subsidy rate by the percentage that honey from the Province of Chaco 
represents of total honey exports to the United States during 2001. We 
find the countervailable subsidy from this line of credit to be 0.084 
percent ad valorem for 2001.
    For the purposes of establishing the countervailable subsidy rate 
for 2002 and the cash deposit rate of estimated countervailing duties, 
we calculated the amount of the benefit for 2002 in the following 
steps: (1) We multiplied the average outstanding Argentine Peso-
denominated loan balances for 2002 by the interest rate differential; 
(2) we converted the resulting Argentine Peso-denominated benefit into 
U.S. Dollars using the official exchange rates provided by the GOA; (3) 
because the GOA was unable to demonstrate that no honey produced in 
Chaco was exported to the United States in 2002, we divided this U.S. 
Dollar-denominated benefit by the U.S. Dollar value of honey production 
in Argentina during 2002. Thus, the countervailable subsidy rate for 
2002 and cash deposit rate applicable to this program are 0.019 percent 
ad valorem.
3. Buenos Aires Honey Program
    In 1996, the Province of Buenos Aires created the Buenos Aires 
Honey Development Program (BAHP) to increase provincial honey 
production, and improve production efficiency and quality. Through the 
program, the Banco de la Provincia de Buenos Aires (Banco Provincia or 
BAPRO), a bank owned by the government of the Province of Buenos Aires, 
provides two types of credit lines to honey producers in the province: 
the Line of Credit for Working Capital; and the Line of Credit for the 
Acquisition of Capital Goods. Eligibility for both credit lines 
requires honey producers to enroll in the Province's Registry of Honey 
Producers. In addition, the Province of Buenos Aires provided Technical 
Assistance at no charge to honey producers.
    In the underlying investigation, we found all three elements of the 
BAHP to provide countervailable subsidies. See Honey Issues Memo, at 
``Buenos Aires Honey Program.'' There is no new information or evidence 
of changed circumstances which would warrant reconsideration of this 
finding. However, the GOA reported, and we verified, that no Technical 
Assistance was provided under the BAHP during the POR.

A. The Line of Credit for Working Capital

    The Line of Credit for Working Capital enables beekeepers to 
finance their operating expenses. Beekeepers applying for this loan 
must have a minimum of fifteen beehives. This line offers US$15.00 per 
active producing beehive with no limit on the number of beehives. The 
maximum term for repayment of the loan may not exceed 180 days from the 
date of the loan.
    The Banco Provincia offered two different rates under this line of 
credit: (i) For products that will be exported, the applicable interest 
rate is the market rate applied by Banco Provincia under its line of 
credit for the pre-financing of exports: (ii) for all other cases, the 
applicable interest rate is the market rate that Banco Provincia 
charges under

[[Page 69667]]

all other credit facilities. There were no loans for the prefinancing 
of exports under this line of credit with outstanding balances in 2001 
or 2002
    To calculate the 2001 benefit we multiplied the average U.S. 
Dollar-denominated loan balance outstanding during 2001 by the 
difference between the interest rate charged by this program and the 
benchmark for short-term, U.S. Dollar-denominated loans (See 
``Benchmark Interest Rates and Discount Rates'' section above).
    Because loans made under this program were converted from U.S. 
Dollars to Argentine Pesos on January 29, 2002 pursuant to Law 25,567 
and Decree 214/2002, we consider this conversion to constitute, in 
effect, a new loan made in 2002. To calculate the benefit for 2002 we 
did the following: (1) We multipled the U.S. Dollar-denominated 
outstanding loan balances which existed from January 1, 2002 through 
January 29, 2002 by the difference between the interest rate for loans 
charged under the program and the appropriate benchmark interest rate 
for U.S. Dollar-denominated loans; (2) we then multiplied the-averaged 
Argentine Peso-denominated outstanding loan balance which existed from 
January 29, 2002 through December 31, 2002 by the difference between 
the interest rate charged under the program and the appropriate 
benchmark interest rate for short-term, Argentine Peso-denominated 
loans made during 2002; and (3) we converted the 2002 Argentine Peso-
denominated benefit into U.S. Dollars using the official exchange rate 
data provide by the GOA.

B. The Line of Credit for the Acquisition of Capital Goods

    The Line of Credit for the Acquisition of Capital Goods under the 
BAHP was implemented by the Banco Provincia through Circular ``A'' No. 
13,854 in July 1997, pursuant to an agreement between the Banco 
Provincia and Banco de Inversion y Comercio Exterior S.A. (BICE), and 
utilizes funding provided through the BICE Norms 006 and 006/1. The 
BICE is a GOA entity, which functions as a ``second tier'' bank, 
lending money to other banks (both commercial and other government-
owned or controlled banks) for the purpose of implementing government 
lending programs.
    Under this line of credit, beekeepers are eligible to receive long-
term financing for the acquisition of capital goods including beehives, 
new nuclei, inert material, and extraction and processing material, 
among other goods. Financing for this line of credit carries a maximum 
repayment term of five years. Interest rates are based on LIBOR, plus a 
spread added by the BICE, and a spread added by the Banco Provincia. 
The spreads given by both the BICE and Banco Provincia vary depending 
upon the repayment schedule of the loan. All of the loans that had 
outstanding loan balances during the POR were originally provided in 
U.S. Dollars; but these balances were converted to Argentine Pesos on 
January 29, 2002 in accordance with Law 25,567 and Decree 214/2002.
    To calculate the 2001 benefit we multiplied the average U.S. 
Dollar-denominated balance outstanding during 2001 by the difference 
between the interest rate charged by this program and the benchmark for 
long-term U.S. Dollar-denominated loans (See ``Benchmark Interest Rates 
and Discount Rates'' section above).
    As discussed above, loans made under this program were converted 
from U.S. Dollars to Argentine Pesos pursuant to Law 25,567 and Decree 
214/2002. As such, we consider that this conversion constitutes, in 
effect, the provision of new loans made in 2002. We calculated the 
benefit for 2002 in the following steps: (1) We multiplied the average 
U.S. Dollar-denominated outstanding loan balances which existed from 
January 1, 2002 through January 28, 2002 by the difference between the 
interest rate for loans charged under the program and the appropriate 
benchmark interest rate for U.S. Dollar-denominated loans; (2) we 
multiplied the average Argentine Peso-denominated outstanding loan 
balance which existed from January 29, 2002 through December 31, 2002 
by the difference between the interest rate charged under the program 
and the appropriate benchmark interest rate for long-term, Argentine 
Peso-denominated loans made during 2002; and (3) we converted the 2002 
Argentine Peso-denominated benefit into U.S. Dollars using the official 
exchange rate data provide by the GOA.
Total Countervailable Subsidy From the Buenos Aires Honey Program
    To calculate the total countervailable subsidy for 2001 from the 
Buenos Aires Honey program, we did the following: (1) We summed all 
dollar-denominated benefits arising from Loans for Working Capital and 
Loans for the Acquisition of Capital Goods; (2) we divided this total 
2001 benefit by the value of honey production in the Province of Buenos 
Aires during the 2001; (3) we then determined the subsidy attributable 
to subject merchandise from this program by multiplying the calculated 
subsidy rate by the percentage that honey from the Province of Buenos 
Aires represents of total honey exports to the United States during 
2001. See section entitled ``Denominator Issues'' above. Thus, we 
preliminarily determine the countervailable subsidy rate from the 
Buenos Aires Honey Program for 2001 is 0.047 percent ad valorem.
    To calculate the total countervailable subsidy for 2002 from the 
Buenos Aires Honey program, we did the following: (1) We summed all 
dollar-denominated benefits arising from Loans for Working Capital and 
Loans for the Acquisition of Capital Goods; (2) we divided this total 
2002 benefit by the value of honey production in the Province of Buenos 
Aires during the 2002; (3) we then determined the subsidy attributable 
to subject merchandise from this program by multiplying the calculated 
subsidy rate by the percentage that honey from the Province of Buenos 
Aires represents of total honey exports to the United States during 
2002. See section entitled ``Denominator Issues'' above. Thus, we 
preliminarily determine the countervailable subsidy rate from the 
Buenos Aires Honey Program for 2002 and the rate of cash deposit of 
estimated countervailing duties applicable to this program is 0.045 
percent ad valorem.

II. Program Preliminarily Determined To Be Not Countervailable

Provincial Program

Buenos Aires Micro-, Small- and Medium-Sized Businesses (MIPyMEs) 
Agreement for 2000 and the Buenos Aires Agricultural MIPyMEs Agreement 
for 2000
    The Province of Buenos Aires provided information on two 
agreements: the ``Convenio Programa MIPyMEs Bonarenses 2000'' and the 
``Convenio Programa MIPyMEs Agropecarias Bonarense 2000,'' which 
together comprise the MIPyMEs Agreement. This program is administered 
by the Banco de la Provincia de Buenos Aires (Banco Provincia or BAPRO) 
and its goal is to preserve and assist in the development of small 
businesses. MIPyMEs is the acronym for Micros, Peque[ntilde]as y 
Medianas Empresas (micro- small-, and medium sized businesses). 
Information about these programs was provided in response to the 
Department's question regarding whether the GOA, or entities owned 
directly, in whole or in part, by the government, provide, directly or 
indirectly, any other forms of assistance to producers or exporters of 
the subject merchandise.
    Under the MIPyMEs Agreement, the government of the Province of 
Buenos Aires, through Banco Provincia,

[[Page 69668]]

allocated US$ 50,000 for each of the agreements made under the Special 
Programs of Support of Economic Activities of the Province of Buenos 
Aires for the year 2000. The programs are to offset up to 7 annual 
percentage points for loans issued by Banco Provincia during the year 
2000 to micro-, small-, and medium-sized companies in the agricultural, 
industrial, commercial, and services sectors within the Province of 
Buenos Aires. In general, under the MIPyMEs Agreement, loans are 
granted for purposes of working capital and investment. The terms 
(length) of the loans varied and were based on the nature of the 
borrower. For the honey sector, loans can be given up to US$ 20,000 and 
have an interest rate for non-export transactions \4\ in foreign 
currency. The Province can defray the interest on these loans up to 
four percent annually.
---------------------------------------------------------------------------

    \4\ According to the questionnaire response, dated April 14, 
2003, this rate typically exceeds the rate associated with loans 
that pertain to foreign trade, due to the perceived higher level of 
risk associated with the transactions.
---------------------------------------------------------------------------

    While eligibility for this program is limited to micro-, small- and 
medium-sized businesses involved in agricultural, industrial, 
commercial, and services sectors within the Province of Buenos Aires, 
in accordance with 19 CFR Sec.  351.502(e), a subsidy is not specific 
solely because the subsidy is limited to small firms or small- and 
medium-sized firms. As such, we preliminarily determine that this 
program is not de jure specific. We have analyzed whether the actual 
use of these credit loans give rise to de facto specificity under 
section 71(5A)(D)(iii) of the Act. Based on information examined at 
verification, these loans were provided to a broad range of borrowers 
within numerous industries in agriculture, industry, and services. 
Honey producers received significantly less than one percent of the 
loans, by value, under the MIPyMEs Agreement. Thus, there is no basis 
for concluding that benefits under this program are de facto specific 
to an enterprise or industry or group of industries within the meaning 
of section 771(5A)(D)(iii) of the Act. Moreover, we found no evidence 
to indicate that these loans were provided to finance exports or import 
substitution.
    As a result, we preliminarily determine that the loans offered 
under the MIPyMEs Agreement are not countervailable subsidies within 
the meaning of the Act.

III. Programs Preliminarily Determined To Be Not Used

    We preliminarily determine that Argentine producers and exporters 
of honey to the United States did not apply for or receive benefits 
under the following programs during the POR.

A. Federal Programs

    1. BICE Norm 001: Financing of Production of Goods Destined for 
Export
    2. BICE Norm 007: Line of Credit Offered to Finance Industrial 
Investment Projects to Restructure and Modernize the Argentine Industry
    3. BNA Line of Credit to the Agricultural Producers of the 
Patagonia
    4. BNA Pre-Financing of Exports Regime for the Agricultural Sector
    5. Production Pole Program for Honey Producers
    6. Enterprise Restructuring Program
    7. SGRs--Government Backed Loans Guarantees
    8. Fundacion Export *AR
    9. PROAPI

B. Provincial Programs

    1. Province of Entre Rios Honey Program
    2. Province of Chabut: Province of Chabut Law No. 4430/98
    3. Province of Santiago del Estero Creditos de Confinanzas (Trust 
Credits)

Preliminary Results of Administrative Review

    In accordance with section 777A(e)(2)(B) of the Act, we have 
calculated CVD rates on an aggregate or industry-wide basis for exports 
of subject merchandise in this administrative review. We have 
calculated separate rates for 2001 and for 2002. We preliminarily 
determine the total net countervailable subsidy rate is 5.77 percent ad 
valorem for 2001 and 0.57 percent ad valorem for 2002.
    If the final results of this administrative review remain the same 
as the preliminary results, the Department will instruct CBP to 
liquidate shipments of honey from Argentina entered, or withdrawn from 
warehouse, for consumption from January 1, 2001 through December 31, 
2001 at 5.77 percent ad valorem and shipments of honey from Argentina 
entered, or withdrawn from warehouse, for consumption from January 1, 
2002 through December 31, 2002 at 0.57 percent ad valorem. Also, the 
rate of cash deposits of estimated countervailing duties will be set at 
0.57 percent ad valorem for all shipments of honey from Argentina 
entered, or withdrawn from warehouse, for consumption on or after the 
publication of the final results of this administrative review. The 
Department will issue appropriate assessment instructions directly to 
the CBP within 15 days of publication of the final results of this 
review.

Public Comment

    Pursuant to 19 CFR Sec.  351.224(b), the Department will disclose 
to parties to the proceeding any calculations performed in connection 
with these preliminary results within five days after the date of 
publication of this notice. Pursuant to 19 CFR Sec.  351.309, 
interested parties may submit written comments in response to these 
preliminary results. Unless otherwise extended, case briefs must be 
submitted within 30 days after the date of publication of this notice, 
and rebuttal briefs, limited to arguments raised in case briefs, must 
be submitted no later than five days after the time limit for filing 
case briefs. 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. Case and rebuttal briefs must 
be served on interested parties in accordance with 19 CFR 351.303(f). 
Also, pursuant to 19 CFR 351.310, within 30 days of the date of 
publication of this notice, interested parties may request a public 
hearing on arguments to be raised in the case and rebuttal briefs. 
Unless the Secretary specifies otherwise, the hearing, if requested, 
will be held two days after the date of submission of rebuttal briefs, 
that is, thirty-seven days after the date of publication of these 
preliminary results.
    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 351.309(c)(ii), 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.
    This administrative review and notice are issued and published in 
accordance with section 751(a)(1) and 777(i)(1) of the Act (19 U.S.C. 
1675(a)(1) and 19 U.S.C. 1677f(1)).

    Dated: December 8, 2003.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 03-30902 Filed 12-12-03; 8:45 am]
BILLING CODE 3510-DS-P