[Federal Register Volume 59, Number 1 (Monday, January 3, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 93-32072]
[[Page Unknown]]
[Federal Register: January 3, 1994]
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DEPARTMENT OF COMMERCE
[C-351-037]
Cotton Yarn From Brazil; Preliminary Results of Countervailing
Duty Administrative Review
AGENCY: International Trade Administration/Import Administration,
Department of Commerce.
ACTION: Notice of preliminary results of countervailing duty
administrative review.
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SUMMARY: The Department of Commerce is conducting an administrative
review of the countervailing duty order on cotton yarn from Brazil. We
are terminating the review with respect to Companhia Brasileira de
Fiacao, (CBF) and benefits received by this company are not included in
the net subsidy rate of the Department's preliminary results.
We preliminarily determine the net subsidy to be 0.30 percent ad
valorem for all producers and exporters of cotton yarn from Brazil for
the period January 1, 1992 through December 31, 1992. In accordance
with 19 CFR 355.7, any rate less than 0.50 percent ad valorem is de
minimis. We invite interested parties to comment on these preliminary
results.
EFFECTIVE DATE: January 3, 1994.
FOR FURTHER INFORMATION CONTACT: Gayle Longest or Kelly Parkhill,
Office of Countervailing Compliance, International Trade
Administration, U.S. Department of Commerce, Washington, DC 20230;
telephone: (202) 482-2786.
SUPPLEMENTARY INFORMATION:
Background
On March 12, 1993, the Department of Commerce (the Department)
published in the Federal Register a notice of ``Opportunity to Request
Administrative Review'' (58 FR 13583) of the countervailing duty order
on cotton yarn from Brazil (42 FR 14089; March 15, 1977) for the period
January 1, 1992 through December 31, 1992. On March 31, 1993, the
Government of Brazil requested an administrative review for that
period. We initiated the review on May 6, 1993 (58 FR 26960). The
Department is conducting this review in accordance with section 751 of
the Tariff Act of 1930, as amended (the Act). When examining Brazilian
customs information at verification, we found that export information
for non-subject merchandise, combed cotton yarn, had been inadvertently
included in the questionnaire response. Brazilian officials were not
aware that the Harmonized Tariff Schedule (HTS) numbers that covered
combed cotton yarn were not included in the scope of this order. At
verification, we found that one respondent, CBF, had no shipments of
the subject merchandise to the United States during the review period.
Therefore, we are terminating the review with respect to this company.
The final results of the last administrative review of this order were
published in the Federal Register on February 2, 1993 (58 FR 6779).
Scope of Review
Imports covered by this review are shipments of Brazilian yarn,
carded but not combed, wholly of cotton. During the review period, such
merchandise was classifiable under item numbers 5205.11.10, 5205.11.20,
5205.12.10, 5205.12.20, 5205.13.10, 5205.13.20, 5205.14.10, 5205.14.20,
5205.15.10, 5205.15.20, 5205.31.00, 5205.32.00, 5205.33.00, 5205.34.00,
and 5205.35.00 of the HTS. The HTS item numbers are provided for
convenience and Customs purposes. The written description remains
dispositive.
The review covers the period January 1, 1992 through December 31,
1992, seven programs and the following eight producers/exporters of
cotton yarn from Brazil: Companhia Industrial e Agricola Boyes,
Companhia Textil do Vale, Cotonificio Guilherme Giorgi S.A., Fiacao
Nordeste do Brasil S.A.--Finobrasa, Fiacao e Tecelagem Kanedo do Brasil
S.A., Nisshinbo do Brasil Industria Textil Ltda., Toyobo do Brasil
Industria Textil, and Unitika do Brasil Industria Textil Ltda.
Calculation Methodology for Assessment and Cash Deposit Purposes
In calculating the benefits received during the review period, we
followed the methodology described in the preamble to 19 CFR 355.20(d)
(53 FR 52325; December 27, 1988). First, we calculated a country-wide
rate, weight-averaging the subsidy rates of the eight companies subject
to review to determine the overall subsidy from all countervailing
programs benefitting exports of the subject merchandise to the United
States. Because the overall weighted-average country-wide rate was de
minimis, as defined by 19 CFR 355.7, we did not proceed any further in
our analysis.
Analysis of Programs
(1) Program That Provided Benefits During the Period of Review
a. Reductions of Taxes and Import Duties Through BEFIEX
The Commission for the Granting of Fiscal Benefits to Special
Export Programs (BEFIEX) allows Brazilian exporters, in exchange for
export commitments, to take advantage of several types of benefits,
such as import duty reductions and accelerated depreciation for
machinery used in the production of exports. Because this program
provides tax reductions that are limited to exporters, we preliminarily
determine that this program is countervailable. Brazilian Law 8.032 of
April 12, 1990, eliminated this program for new projects. However, the
Department has determined that residual benefits may continue due to
outstanding BEFIEX contracts.
Four cotton yarn exporters received import duty tax reductions and
two of these cotton yarn exporters also received merchant marine
freight tax reductions by virtue of their BEFIEX contracts during the
review period.
To calculate the benefit, we divided the amount of each firm's
import duty reductions and merchant marine tax exemptions received in
1992 by that firm's total exports in 1992. We then weight-averaged the
benefits by each respondent's share of exports of the subject
merchandise to the United States. On this basis, we preliminarily
determine the benefit to be 0.30 percent ad valorem for all firms.
(2) Terminated Programs With No Residual Benefits During the Period of
Review
a. Income Tax Reduction for Export Earnings
This program was terminated effective April 12, 1990, by Decree Law
8034 which established a uniform tax rate of 30 percent for domestic
and export earnings beginning with tax year 1990. Since the last tax
returns on which these benefits could be claimed were filed in 1991,
there are no residual benefits from this program. (See Cotton Yarn From
Brazil; Preliminary Results of Countervailing Duty Administrative
Review, (56 FR 47456) and Cotton Yarn From Brazil; Final Results of
Countervailing Duty Administrative Review, (57 FR 1454).)
b. CACEX (Carteira de Comercio Exterior) Preferential Working Capital
Financing for Exports
This program was terminated effective August 30, 1990, by Central
Bank Resolution 1744. In accordance with Resolution 1744, there are no
residual benefits from this program since all non-used portions of
financing were cancelled when the program was eliminated. At
verification, we saw no evidence of this financing at the companies.
c. IPI (Tax on Industrialized Products) for Imports of Machinery or
Equipment Under Decree Law 2324
This program was terminated effective December 28, 1989, by Decree-
Law 7988. Companies could benefit from the tax exemption until December
31, 1990, and no residual benefits were provided after this date. At
verification, we saw no evidence of IPI tax exemptions under Law 2324
at the companies.
(3) Programs Not Used
We also examined the following programs and preliminarily determine
that the respondents did not use them during the review period:
A. SUDENE Corporate Income Tax Reduction for Companies Located in
the Northeast of Brazil.
B. Preferential Export Financing under CIC-OPCRE of the Banco do
Brasil.
C. Preferential Financing for Industrial Enterprises by the Banco
do Brasil (FST and EGF loans).
Verification
As required under 19 CFR 355.36(a)(1)(iv)(B) of the Department's
regulations, we verified Brazilian cotton yarn exporters because no
verification had been conducted in either of the two immediately
preceeding administrative reviews. We selected several companies for
verification of both programs that were used and programs that were not
used. When conducting verification of Brazilian customs information, we
found that Brazilian officials had inadvertently reported export
information for shipments of non-subject merchandise, combed cotton
yarn, to the United States. According to Brazilian government records,
CBF, a company originally included in this review, had no shipments of
the subject merchandise to the United States during the review period.
At the company, we examined company records and found no evidence of
shipments of the subject merchandise to the United States during the
review period.
Preliminary Results of Review
As a result of our review, we preliminarily determine the net
subsidy to be 0.30 percent ad valorem for all firms for the period
January 1, 1992 through December 31, 1992. In accordance with 19 CFR
355.7, any rate less than 0.5 percent ad valorem is de minimis.
Therefore, in accordance with section 706(a)(1) of the Act (19
U.S.C. 1671e(a)(1)), the Department intends to instruct the Customs
Service to liquidate, upon publication of the final results of this
review in the Federal Register, without regard to countervailing
duties, all shipments of the subject merchandise from Brazil exported
on or after January 1, 1992, and on or before December 31, 1992.
The Department also intends to instruct the Customs Service not to
collect cash deposits of estimated countervailing duties on any
shipments of this merchandise from Brazil entered or withdrawn from
warehouse, for consumption on or after the date of publication of the
final results of this administrative review.
Parties to the proceeding may request disclosure of the calculation
methodology and interested parties may request a hearing not later than
10 days after the date of publication of this notice. Interested
parties may submit written arguments in case briefs on these
preliminary results within 30 days of the date of publication. Rebuttal
briefs, limited to arguments raised in case briefs, may be submitted
seven days after the time limit for filing the case brief. Any hearing,
if requested, will be held within seven days after the scheduled date
for submission of rebuttal briefs. Copies of case briefs and rebuttal
briefs must be served on interested parties in accordance with 19 CFR
355.38(e). 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 Sec. 355.38(c), 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 in accordance with
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 355.22.
Dated: December 23, 1993.
Barbara R. Stafford,
Acting Assistant Secretary for Import Administration.
[FR Doc. 93-32072 Filed 12-30-93; 8:45 am]
BILLING CODE 3510-DS-P
