[Federal Register Volume 60, Number 96 (Thursday, May 18, 1995)]
[Notices]
[Pages 26717-26719]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-12199]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[C-201-003]
Ceramic Tile From Mexico; Preliminary Results of Countervailing
Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results of countervailing duty
administrative review.
-----------------------------------------------------------------------
SUMMARY: The Department of Commerce (the Department) is conducting an
administrative review of the countervailing duty order on ceramic tile
from Mexico. We have preliminarily determined the total bounty or grant
to be 0.48 percent ad valorem for all companies during the period
January 1, 1993, through December 31, 1993. In accordance with 19 CFR
355.7, any rate less than 0.5 percent ad valorem is de minimis. If the
final results remain the same as these preliminary results of
administrative review, we will instruct the U.S. Customs Service to
liquidate, without regard to countervailing duties as indicated above.
Interested parties are invited to comment on these preliminary
results.
EFFECTIVE DATE: May 18, 1995.
FOR FURTHER INFORMATION CONTACT: Gayle Longest or Kelly Parkhill,
Office of Countervailing Compliance, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue NW., Washington, DC 20230; telephone:
(202) 482-2786.
SUPPLEMENTARY INFORMATION:
Background
On May 10, 1982, the Department published in the Federal Register
(47 FR 20012) the countervailing duty order on ceramic tile from
Mexico. On May 4, 1994, the Department published a notice of
``Opportunity to Request Administrative Review'' (59 FR 23051) of this
duty order. We received a timely request for review from the Government
of Mexico (GOM) and Ceramica Regiomontana, S.A., (Ceramica).
On June 15, 1994, we initiated the review, covering the period
January 1, 1993, through December 31, 1993 (59 FR 30770). The review
covers 40 manufacturers/exporters of the subject merchandise and four
programs.
Applicable Statute and Regulations
The Department is conducting this administrative review in
accordance with section 751(a) of the Tariff Act of 1930, as amended
(the Act). Unless otherwise indicated, all citations to the statute and
to the Department's regulations are in reference to the provision as
they existed on December 31, 1994. However, references to the
Department's Countervailing Duties; Notice of Proposed Rulemaking and
Request for Public Comments, 54 FR 23366 (May 31, 1989) (Proposed
Regulations), are provided solely for further explanation of the
Department's countervailing duty practice. Although the Department has
withdrawn the particular rulemaking proceeding pursuant to which the
Proposed Regulations were issued, the subject matter of these
regulations is being considered in connection with an ongoing
rulemaking proceeding which, among other things, is intended to conform
the Department's regulations to the Uruguay Round Agreements Act. See
60 FR 80 (Jan. 3, 1995).
Partial Revocation
On May 31, 1994, in its request for administrative review, the GOM
submitted a request for partial revocation for 14 companies which
included only the agreements required under 19 CFR 355.25(b)(3)(iii).
On November 14, 1995, in its submission of the questionnaire response,
the GOM submitted company and government certifications as required
under 19 CFR 355.25(b)(3)(i) and (ii) to complete its request for
partial revocation. After examining the record for each of the 14
companies identified in the requests for revocation, the Department has
determined that none of them have met the minimum threshold
requirements to be considered for revocation under 19 CFR
355.25(a)(3)(i). These companies did not participate in five
consecutive administrative reviews in which they were found not to have
received any net subsidy, including the review in which they are
requesting revocation, and with no intervening period in which a review
of the company was not conducted.
Moreover, under 19 CFR 355.25(b)(3), a company must request
revocation in writing and, with its request, submit (1) government and
company certifications that the company neither applied for nor
received any net subsidy during the period of review and will not apply
for or receive any net subsidy in the future; and (2) the agreement
concerning revocation described in 19 CFR 355.25(a)(3)(iii). (According
to 19 CFR 355.25(a)(3)(iii), producers or exporters must agree in
writing to their immediate reinstatement in the order, as long as any
producer or exporter is subject to the order, if the Secretary
concludes that the producer or exporter, subsequent to the revocation,
has received any net subsidy on the merchandise.) In this case,
although the companies filed the agreements required under 19 CFR
355.25(a)(3)(iii) at the time of the revocation request, they did not
submit government and company certifications required under 19 CFR
355.25(b)(3)(i) and (ii) until November 14, 1995, the deadline for
submission of the questionnaire response.
All of the requirements for revocation are fully discussed in
Ceramic Tile From Mexico; Preliminary Results of Countervailing Duty
Administrative Review and Intent To Revoke in Part Countervailing Duty
Order (58 FR 31505; June 3, 1993) and Ceramic Tile From Mexico; Final
Results of Countervailing Duty Administrative [[Page 26718]] Review and
Revocation in Part of the Countervailing Duty Order (59 FR 2823;
January 19, 1994). For the reasons stated above, these 14 companies did
not meet those requirements and are therefore, not eligible for
revocation in this administrative review.
Scope of Review
Imports covered by this review are shipments of Mexican ceramic
tile, including non-mosaic, glazed, and unglazed ceramic floor and wall
tile. During the review period, such merchandise was classifiable under
the Harmonized Tariff Schedule (HTS) item numbers 6907.10.0000,
6907.90.0000, 6908.10.0000, and 6908.90.0000. The HTS item numbers are
provided for convenience and Customs purposes. The written description
remains dispositive.
Calculation Methodology for Assessment and Cash Deposit Purposes
We calculated the bounty or grant on a country-wide basis by first
calculating the bounty or grant for each company subject to the
administrative review. We then weight-averaged the rate received by
each company, even those with de minimis and zero rates, using as the
weight its share of total Mexican exports to the United States of
subject merchandise. We then summed the individual companies' weight-
averaged rates to determine the bounty or grant from all programs
benefitting exports of subject merchandise to the United States. Since
the country-wide rate calculated using this methodology was de minimis,
as defined by 19 CFR 355.7, no further calculations were necessary.
Analysis of Programs
I. Programs Conferring Subsidies
A. Programs Previously Found to Confer Subsidies BANCOMEXT Financing
for Exporters
Effective January 1, 1990, the Mexican Treasury Department
eliminated the Fondo para el Fomento de las Exportaciones de Productos
Manufacturados (FOMEX) loan program and transferred the FOMEX trust to
the Banco Nacional de Comercio Exterior, S.N.C. (BANCOMEXT). BANCOMEXT
offers short-term financing to producers or trading companies engaged
in export activities; any company generating foreign currency through
exports is eligible for financing under this program. The BANCOMEXT
program operates much like its predecessor, FOMEX. BANCOMEXT provides
two types of financing, both in U.S. dollars, to exporters: working
capital loans (pre-export loans), and loans for export sales (export
loans). In addition, BANCOMEXT may provide financing to foreign buyers
of Mexican goods and services.
The Department has previously found this program to confer an
export subsidy to the extent that the loans are provided at
preferential terms (See Ceramic Tile From Mexico; Preliminary Results
of Countervailing Duty Review (57 FR 5997, February 19, 1992) and
Ceramic Tile From Mexico; Final Results of Countervailing Duty Review
(57 FR 24247, June 8, 1992). In this review the GOM provided no new
information or evidence of changed circumstances that would lead the
Department to alter that determination.
We found that the annual interest rates BANCOMEXT charged to
borrowers for certain loans on which interest payments were due during
the review period were lower than commercial rates. The BANCOMEXT
dollar-denominated loans under review were granted at annual interest
rates ranging from 5.9 percent to 10.0 percent. As discussed in Certain
Steel Products from Mexico; Final Countervailing Duty Determination (58
FR 37357, July 9, 1993), because loans are funded by BANCOMEXT through
commercial banks in dollars and indexed to dollars for repayment, we
used a dollar benchmark. As the benchmark for BANCOMEXT pre-export and
export dollar-denominated loans granted in 1993, we used the average of
the quarterly weighted-average effective interest rates published in
the Federal Reserve Bulletin, which resulted in an annual benchmark of
7.03 percent in 1993.
We consider the benefits from short-term loans to occur at the time
the interest is paid. Because interest on BANCOMEXT pre-export loans is
paid at maturity, we calculated benefits based on loans that matured
during the review period; these were obtained between August 1992 and
October 1993. Interest on BANCOMEXT export loans is paid in advance; we
therefore calculated benefits based on BANCOMEXT loans received during
the review period.
Three exporters of ceramic tile products used BANCOMEXT pre-export
financing and one company used BANCOMEXT export financing. Because we
found that the exporters were able to tie their BANCOMEXT loans to
specific sales, we measured the benefit only from the BANCOMEXT loans
tied to sales of the subject merchandise to the United States. To
determine the benefit for each exporter, we multiplied the difference
between the interest rate charged to exporters for these loans and the
benchmark interest rate by the outstanding principal and then
multiplied this amount by the term of the loan divided by 365. We then
weight-averaged the benefit received by each company using as the
weight its share of total Mexican exports to the United States of the
subject merchandise. On this basis, we preliminarily determine the
benefit from this program to be 0.0002 percent ad valorem for all
companies.
PITEX
The Program for Temporary Importation of Products used in the
Production of Exports (PITEX) was established by a decree published in
the Diario Oficial on May 9, 1985, and amended in the Diario Oficial on
September 19, 1986, and May 3, 1990. The program is jointly
administered by the Ministry of Commerce and Industrial Development
(SECOFI) and the Customs Administration. Under PITEX, exporters with a
proven export record may receive authorization to temporarily import
products to be used in the production of exports for up to five years
without having to pay the import duties normally imposed on those
imports. PITEX allows for the exemption of import duties for the
following categories of merchandise used in export production: raw
materials, packing materials, fuels and lubricants, machinery used to
manufacture products for export, and spare parts and other machinery.
The importer must post a bond or other security to guarantee the
reexportation of the temporary imports. Because it is only available to
exporters, the Department previously found in Certain Textile Mill
Products From Mexico; Final Results of Countervailing Duty
Administrative Review (56 FR 50859, October 9, 1991) and Ceramic Tile
From Mexico; Final Results of Countervailing Duty Administrative Review
(57 FR 24247, June 8, 1992) that PITEX provides countervailable
benefits to the extent that it provides duty exemptions on imports of
merchandise not physically incorporated into exported products. The GOM
provided no new information or evidence of changed circumstances that
would lead the Department to alter that determination.
During the review period, four companies used the PITEX program for
imports of machinery and spare parts which are not physically
incorporated into exported products. To determine the benefit for each
exporter, we calculated the duties that should have been paid on the
non-physically incorporated items that were imported under the PITEX
program during the [[Page 26719]] review period. We then divided that
amount by each company's total exports and weight-averaged the benefit
received by each company using as the weight its share of total Mexican
exports to the United States of the subject merchandise. On this basis,
we preliminarily determine the benefit from this program to be 0.47
percent ad valorem for all companies.
NAFINSA Long-Term Loans
Two companies received long-term financing from NAFINSA loans
(Nacional Finciera Sociedad Anonima). Until December 31, 1988, NAFINSA
operated as a first-tier bank, which is defined as a commercial bank
that provides financing directly to the public. Since December 31,
1988, NAFINSA has operated as ``second-tier'' bank granting financing
to companies indirectly through the commercial bank, (i.e., first-tier
banks). NAFINSA long-term loans have been found to be specific in past
proceedings because availability was limited to specific geographical
regions of Mexico. See Bars and Shapes from Mexico Final Affirmative
Countervailing Duty Determinations and Countervailing Duty Orders 49 FR
161 (August 17, 1984). The GOM has provided no new information or
evidence of changed circumstances to lead us to conclude that this
program is not limited to companies in specific regions. Therefore, we
preliminarily determine that NAFINSA long-term loans are specific.
Since the GOM did not provide any information on long-term interest
rates, we are using a short-term CPP based rate as our benchmark rate
in accordance with our practices as set forth in section 355.49(b)(iii)
of the Department's regulations. See Countervailing Duties; Notice of
Proposed Rulemaking and Request for Public Comments, 54 FR 23366, 23384
(May 31, 1989). In past Mexican cases, we have used the Costo
Porcentual Promedio (CPP), a short-term interest rate, as the basis for
our benchmark. We have converted the CPP rate into a benchmark rate
using a standard formula that has been used consistently in past
Mexican cases. See Porcelain-on-Steel Cookingware from Mexico; Final
Results of Countervailing Duty Administrative Review, 57 FR 562
(January 7, 1982). Using this methodology, we calculated an annual
average benchmark of 29.79 percent for the peso-denominated loans. A
comparison between the benchmark rate and the NAFINSA loan rates
indicates that these loans are inconsistent with commercial
considerations.
To calculate the benefit, we multiplied the difference between the
benchmark rate and the interest rate in effect for the NAFINSA loan by
the principal outstanding during the review period. We divided the
benefit by the firm's total sales during the review period and then
weight-averaged the benefit received by each company using as the
weight its share of total Mexican exports to the United States of the
subject merchandise. On this basis, we preliminarily determine the
benefit from this program to be 0.01 percent ad valorem for all
companies.
II. Programs Preliminarily Found To Be Not Used
We also examined the following programs and preliminarily
determined that exporters of the subject merchandise did not apply for
or receive benefits under these programs during the review period:
(A) Other BANCOMEXT preferential financing;
(B) Other Dollar-Denominated Financing Programs;
(C) Fiscal Promotion Certificates (CEPROFI);
(D) Import duty reductions and exemptions;
(E) State tax incentives;
(F) Article 15 Loans;
(G) NAFINSA FONEI-type financing; and
(H) NAFINSA FOGAIN-type financing.
Preliminary Results of Review
For the period January 1, 1993, through December 31, 1993, we
preliminarily determined the total bounty or grant to be 0.48 percent
ad valorem for all companies. In accordance with 19 CFR 355.7, any rate
less than 0.5 percent ad valorem is de minimis.
If the final results remain the same as these preliminary results,
the Department intends to instruct the U.S. Customs Service to
liquidate, without regard to countervailing duties, all shipments of
the subject merchandise from Mexico exported on or after January 1,
1993, and on or before December 31, 1993.
The Department also intends to instruct the U.S. Customs Service to
collect a cash deposit of estimated countervailing duties of zero
percent of the f.o.b. invoice price on all shipments of the subject
merchandise from all companies, entered or withdrawn from warehouse,
for consumption on or after the date of publication of the final date
of the publication of the final result of this 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. Pursuant to 19
CFR 355.38(c), 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 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,
or at a hearing. 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: May 10, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-12199 Filed 5-17-95; 8:45 am]
BILLING CODE 3510-DS-P
