[Federal Register Volume 61, Number 19 (Monday, January 29, 1996)]
[Notices]
[Pages 2800-2802]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-1455]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
[C-549-401]
Certain Textile Mill Products From Thailand; Final Results of
Countervailing Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of Final Results of the Countervailing Duty
Administrative Review on Noncontinuous Noncellulosic Yarns (NCNC Yarns)
covered under the Suspended Investigation on Certain Textile Mill
Products from Thailand.
-----------------------------------------------------------------------
SUMMARY: On July 18, 1995, the Department of Commerce (the Department)
published in the Federal Register its preliminary results of
administrative review on NCNC Yarns covered under the agreement
suspending the countervailing duty investigation on Certain Textile
Mill Products from Thailand for the period January 1, 1993 through
December 31, 1993 (suspension agreement). We have completed this review
and have determined that the signatories were not in violation of the
suspension agreement. However, we do note that the Department will
require that one signatory repay the Royal Thai Government (RTG), in an
annual adjustment, the amount by which the tax certificate received
exceeded the import duties on physically incorporated inputs.
EFFECTIVE DATE: January 29, 1996.
FOR FURTHER INFORMATION CONTACT: Lisa Yarbrough or Jim Doyle, Office of
Agreements Compliance, Import Administration, International Trade
Administration, U.S. Department of Commerce, Washington, D.C. 20230,
telephone (202) 482-3793.
SUPPLEMENTARY INFORMATION:
Background
On February 26, 1990, the Department published in the Federal
Register (55 FR 6669) a notice stating its intent to terminate the
suspension agreement on certain textile mill products from Thailand (50
FR 9837, March 12, 1985). On March 26, 1990, the American Yarn Spinners
Association (AYSA), a trade association, objected to the Department's
intent to terminate the suspension agreement. As a result, on November
23, 1990, the Department terminated the suspension agreement with
regard to all non-yarn products covered by the suspension agreement (55
FR 48885).
Subsequent to publication of the November 23, 1990 notice, counsel
for the RTG filed a lawsuit in the United States Court of International
Trade (CIT) challenging the Department's determination that AYSA had
standing to oppose the termination of the suspension agreement. On May
17, 1991, the CIT remanded the determination to the Department for
reconsideration of AYSA's standing to oppose the termination. On July
3, 1991, the Department issued remand results finding that AYSA had
standing to oppose the termination vis-a-vis only one like product
covered by the suspension agreement, i.e., NCNC yarns. The CIT affirmed
the remand determination in its entirety on August 5, 1991. The Royal
Thai Government, et al., v. United States, Slip Op. 91-68 (August 5,
1991).
On March 16, 1994, the Department published in the Federal Register
a notice of ``Opportunity to Request Administrative Review'' (59 FR
12240) of the suspension agreement for the period January 1, 1993 to
December 31, 1993. The Department received requests for an
administrative review of NCNC yarns on March 31, 1994, from AYSA and
certain individual producers. On April 15, 1994, the Department
initiated a countervailing duty administrative review on NCNC yarns for
the period January 1, 1993 to December 31, 1993 (59 FR 18099, April 15,
1994). The Department verified the responses of the RTG and the Thai
Textile Manufacturers Association (TTMA) from January 16 through
January 25, 1995 pursuant to the administrative review.
On July 18, 1995, the Department published in the Federal Register
(60 FR 36779) the preliminary results of its administrative review of
NCNC yarns for the period January 1, 1993 through December 31, 1993.
The Department invited interested parties to comment on the preliminary
results. On August 14, 1995, a case brief was submitted by Economic
Consulting Services (ECS), a representative for the AYSA and individual
member companies of the AYSA.
The Department has now completed this administrative review in
accordance with section 751 of the Tariff Act of 1930, as amended (the
Act). The review covers nine programs and seven producers/exporters:
Saha Union, Venus Thread, Union Thread, Union Spinning, Union Knitting,
Union Industries, and Thai Melon.
Applicable Statute and Regulations
The Department is conducting this administrative review in
accordance with section 751(a) of the Act. Unless otherwise indicated,
all citations to the statute and to the Department's regulations are in
reference to the provisions as they existed on December 31, 1994.
Scope of Review
Imports covered by this review are shipments of NCNC Yarns from
Thailand. During the period of review (POR), such merchandise was
classifiable under the Harmonized Tariff Schedule (HTS) item numbers
5508.10.0000, 5509.21.0000, 5509.22.0010, 5509.22.0090, 5509.32.0000,
5509.51.3000, 5509.51.6000, 5509.69.4000, 5511.10.0030, 5511.10.0060,
and 5511.20.0000.
Analysis of Programs
Based upon our analysis of our questionnaire and verification we
determine the following:
I. Programs Found To Be Used
A. Tax Certificates
Under Section II (c) of the suspension agreement, the producers and
exporters can apply for or receive tax certificates on shipments of
subject merchandise exported directly or indirectly to the United
States for import duties paid on
[[Page 2801]]
items that are physically incorporated into exported products. If the
producers and exporters apply for tax certificates in excess of the
items physically incorporated, the suspension agreement requires that
the producers and exporters repay to the RTG, in an annual adjustment,
the amount by which the tax certificates exceed the import duties on
physically incorporated inputs.
Tax certificate applications are made on a shipment by shipment
basis after the producer/exporter receives payment for its shipment.
The application can include up to 10 shipments and must be submitted
within one year of the shipment date. Exporters can apply for an
extension if they do not meet the one year deadline.
The law governing this program is the ``Tax and Duty Compensation
of Exported Goods Produced in the Kingdom Act, B.E. 2524 (1981).''
Effective January 1, 1992, new nominal rebate rates were established
for all products by the Committee on Tax and Duty Rebates for Exported
Goods Produced in the Kingdom. The new nominal rates applicable to
signatories are categorized by the following sectors: spinning,
weaving, made-up textile goods, and knitting. Because nominal rates are
in excess of the physically incorporated inputs, the Department has
calculated, and requested that the RTG implement, non-excessive rates.
See verification report dated September 15, 1994, and letter from
Roland L. MacDonald to Arthur J. Lafave III dated November 15, 1994.
In the preliminary results, we found that Thai Melon applied for a
tax certificate on subject merchandise to the United States at a
nominal rate during the POR. Our analysis of the comments submitted by
the interested parties, summarized below, has not led us to change our
findings in the preliminary results. On this basis, the Department will
require that Thai Melon repay the RTG, in an annual adjustment, the
amount by which the tax certificate exceeded the import duties on
physically incorporated inputs.
B. International Trade Promotion Fund
Under Section II (h) of the suspension agreement, the producers and
exporters are to notify the Department in writing prior to applying for
or accepting any new benefit which is, or is likely to be, a
countervailable bounty or grant on shipments of subject merchandise
exported, directly or indirectly, to the United States. Although the
Department has never determined this program to be countervailable, we
reviewed this program in the administrative review.
This program, governed by the ``Rule on Administration of the
International Trade Promotion Fund (ITPF), B.E. 2532 (1989),'' promotes
and develops Thai exports worldwide through incoming and outgoing trade
missions. The ITPF provides training and seminars for exporters, and
publicity through public advertisements.
In the preliminary results, we confirmed that Saha Union and its
relateds (Union Spinning, Union Thread, and Venus Thread) participated
in an international trade fair, promoting subject merchandise. However,
Saha Union and its related companies paid their own expenses to
participate in the trade fair. Thus, the signatories were not found to
be in violation of the agreement. Our analysis of the comments
submitted by the interested parties, summarized below, has not led us
to change our findings in the preliminary results.
C. Duty Drawback
Under Section II (c) of the suspension agreement, exporters and
producers are not to apply for, or receive, rebates on shipments of
subject merchandise in excess of the import duties paid on items that
are physically incorporated into exported products.
Under this program, Thai Customs will refund import duties paid on
imported goods used in the production of an exported product. In order
to qualify for duty drawback, the goods must be exported through an
authorized port, the exports must be shipped within one year of the
date of importation of the goods on which drawback is claimed, and the
producer/exporter must request drawback within six months of the date
of exportation of the goods.
In the preliminary results, we found that Saha Union, Union
Spinning, Union Thread, Venus Thread, and Thai Melon used duty drawback
on exported goods of subject merchandise to the United States. Based on
verification, we determined that the amount of drawback received was
not in excess of the items physically incorporated into the exported
product. Hence, the signatories were not found to be in violation of
the agreement. Our analysis of the comments submitted by the interested
parties, summarized below, has not led us to change our findings in the
preliminary results.
II. Programs Found Not To Be Used
In the preliminary results we found that the producers/exporters of
the subject merchandise did not apply for or receive benefits under the
following programs:
A. Electricity Discounts
B. Repurchase of Industrial Bills
C. Investment Promotion Act: Sections 28, 31, 35, and 36
D. Export Processing Zones
E. Double Deduction of Foreign Marketing Expenses
F. Export Packing Credits
Our analysis of the comments submitted by the interested parties,
summarized below, has not led us to change our findings in the
preliminary results.
Analysis of Comments
Comment 1
ECS argues that the Department verified the continued existence of
numerous subsidy programs and the continued receipt by several Thai
yarn producers and exporters of benefits from several of the subsidy
programs. They further claim that these subsidy benefits found by the
Department are distinct from and are above and beyond the large subsidy
benefits that were given to the Thai yarn industry under the Investment
Promotion Act. ECS maintains that the large subsidy benefits received
by the Thai yarn industry under the Investment Promotion Act were
instrumental in the massive expansion of the capacity of the Thai yarn
industry several years ago.
Department's Position
The Department disagrees with the arguments raised by ECS. As
described in the preliminary results of administrative review (60 FR
39363), the programs found to be used did not confer a subsidy which
violated the terms of the agreement.
In regard to the tax certificate received by Thai Melon during the
POR, under Section II (c) of the suspension agreement, the producers
and exporters can apply or receive tax certificates on shipments of
subject merchandise exported directly or indirectly to the United
States for import duties paid on items that are physically incorporated
into exported products. However, if the producers and exporters apply
for tax certificates in excess of the items physically incorporated,
the suspension agreement requires that the producers and exporters
repay to the RTG, in an annual adjustment, the amount by which the tax
certificates exceed the import duties on physically incorporated
inputs.
The Department will require that Thai Melon repay to the RTG, in an
annual adjustment, any amount by which the tax certificate received
exceeded the amount of import duties on physically incorporated inputs.
The annual
[[Page 2802]]
adjustment shall be calculated in accordance with Section II c(i) and
(ii) of the suspension agreement.
With respect to the use of duty drawback, the Department verified
that the amount received was not in excess of the import duties paid on
physically incorporated inputs. Thus, the signatories were not in
violation. (See verification report dated June 1, 1995).
Finally, the participation in the international trade promotion
fund by four signatories does not confer a benefit because the
Department verified that the signatories paid their own expenses.
Furthermore, the Department has never determined this program to be
countervailable.
Comment 2
ECS wants assurance that any benefits found by the Department
during the period of review are repaid to the RTG in order to reverse
any benefits received by the Thai yarn producers during the POR.
Department's Position
As stated above, the Department will require that Thai Melon repay
the amount in which the tax certificate exceeds the import duties on
physically incorporated inputs. If Thai Melon fails to comply with this
requirement, the Department will have grounds to determine that the
signatory has violated the agreement.
Comment 3
ECS urges the Department to maintain close scrutiny over the
administration of the agreement so that the U.S. industry can be
assured that the subsidies found by the Department will be repaid to
the RTG and that such benefits will not continue in the future.
Department's Position
The Department will continue to closely monitor the administration
of the agreement in order to ensure that the excess amount of the tax
certificate is repaid and that the signatories do not receive any
benefits in the future that would constitute a violation of the
agreement.
Final Results of Review
For the period January 1, 1993 through December 31, 1993, we
determine that the signatories were not in violation of the suspension
agreement.
This notice 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 C.F.R. 355.34(d). Timely written notification
of return/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 administrative review and notice are in accordance with
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)(1994)) and 19 CFR
3.5.5.22 (1994).
Dated: December 14, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 96-1455 Filed 1-26-96; 8:45 am]
BILLING CODE 3510-DS-P
