[Federal Register Volume 61, Number 88 (Monday, May 6, 1996)]
[Notices]
[Pages 20411-20414]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-11243]
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DEPARTMENT OF COMMERCE
International Trade Administration
[C-421-601]
Standard Chrysanthemums From the Netherlands; 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.
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SUMMARY: The Department of Commerce (the Department) is conducting an
administrative review of the countervailing duty order on standard
chrysanthemums from the Netherlands. We preliminarily determine the net
subsidy to be de minimis for all exports of the subject merchandise to
the United States for the period January 1, 1994, through December 31,
1994. If the final results of this review 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 the Netherlands exported
on or after January 1, 1994, and on or before December 31, 1994.
Interested parties are invited to comment on these preliminary results.
EFFECTIVE DATE: May 6, 1996.
FOR FURTHER INFORMATION CONTACT: Lorenza Olivas or Richard Herring,
Office of Countervailing Compliance, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, N.W., Washington, D.C. 20230,
telephone: (202) 482-2786.
SUPPLEMENTARY INFORMATION:
Background
On March 12, 1987, the Department published in the Federal Register
(52 FR 7646) the countervailing duty order on standard chrysanthemums
from the Netherlands. On March 7, 1995, the Department published a
notice of ``Opportunity to Request Administrative Review'' (60 FR
12540) of this countervailing duty order. We received a timely request
for review from petitioner, Floral Trade Council, and we initiated the
review, covering the period January 1, 1994, through December 31, 1994,
on April 14, 1995 (60 FR 19018). On November 2, 1995, we fully extended
the period for completion of the preliminary and final results,
[[Page 20412]]
pursuant to section 751(a)(3) of the Tariff Act of 1930, as amended
(see Extension of the Time Limit for Certain Countervailing Duty
Administrative Reviews (60 FR 55699). As explained in the memoranda
from the Assistant Secretary for Import Administration dated November
22, 1995, and January11, 1996, all deadlines were further extended to
take into account the partial shutdowns of the Federal Government from
November 15 through November 21, 1995, and December 15, 1995, through
January 6, 1996. Therefore, the deadline for these preliminary results
is no later than April 30, 1996, and the deadline for the final results
of this review is no later than 180 days from the date on which these
preliminary results are published. This review is being conducted on an
aggregate basis. See Preliminary Results of Review section of this
notice.
Applicable Statute and Regulations
Unless otherwise indicated, all citations to the statute are
references to the provisions of the Tariff Act of 1930, as amended by
the Uruguay Round Agreements Act (URAA), effective January 1, 1995 (the
Act). The Department is conducting this administrative review in
accordance with section 751(a) of the Act. References to the
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 URAA. See 60 FR 80 (January 3, 1995).
Scope of Review
Imports covered by this review are shipments of Dutch standard
chrysanthemums. Such merchandise is classifiable under item number
0603.10.70 of the Harmonized Tariff Schedule (HTS). The HTS item number
is provided for convenience and Customs purposes. The written
description remains dispositive.
Subsidy Calculations for Assessment and Cash Deposit Purposes
Because this review is being conducted on an aggregate basis, we
calculated the net subsidy on a country-wide basis by first calculating
the subsidy rate for each program. We then summed the subsidy rates
from all programs benefitting exports of the subject merchandise to the
United States. The rate will be applied to all exports of the subject
merchandise as discussed in the Preliminary Results of Review section
of this notice.
Analysis of Programs
I. Programs Conferring Subsidies
Programs Previously Determined To Confer Subsidies
1. Aids for the Creation of Cooperative Organizations
Under European Community (EC) Regulation 355/77, the EC has
provided grants to Dutch auction houses, which are flower grower
cooperatives. These funds were provided by the EC through the
Agricultural Guidance and Guarantee Fund, with matching grant
contributions from EC member states. The purpose of the program was to
improve the processing, marketing and distribution of agricultural
products in member states. This program was terminated on January 1,
1986, and no grants were disbursed after 1987.
In the 1986 and 1987 reviews, the Department determined that this
grant program was countervailable because it was limited to a specific
enterprise or industry, or group of enterprises or industries, in the
Netherlands. (See Standard Chrysanthemums From the Netherlands;
Preliminary Results of Countervailing Duty Administrative Review (54 FR
43977, 43978; October 30, 1989) and Standard Chrysanthemums From the
Netherlands; Final Results of Countervailing Duty Administrative Review
(55 FR 462; January 5, 1990) (1987 Preliminary and Final Results)). We
have received no new information or evidence of changed circumstances
to warrant reconsideration of this finding. Although this program was
officially terminated in 1986, under our grant methodology, benefits
are still accruing from this program.
To calculate the benefit, we used a declining balance grant
methodology, as determined in Final Affirmative Countervailing Duty
Determination; Certain Fresh Cut Flowers From the Netherlands (52 FR
3301; February 3, 1987) (Netherlands Flowers). We allocated the
benefits from each grant over 10 years, the average useful life of
renewable physical assets in the agricultural sector as determined
under the U.S. Internal Revenue Service's Asset Depreciation Range
System. This methodology is in accordance with the Proposed Regulations
(51 FR at 23385). We used the average interest rate for long-term
commercial loans published by the Netherlands Bank (the Central Bank)
as the discount rate for each year in which grants were provided. We
divided the sum of these benefits by the f.o.b. value of total auction
sales in the relevant review period. On this basis, we preliminarily
determine the net subsidy to be 0.03 percent ad valorem for the period
January 1, 1994, through December 31, 1994.
2. Glasshouse Enterprises Program
Under the Glasshouse Enterprises Program, the Ministry of
Agriculture, Nature Management and Fisheries (MAF) provided grants to
greenhouse growers to stimulate private investment in energy saving
methods in the horticulture industry. This program was terminated in
June 1985. However, grants approved prior to the termination were
disbursed through 1987.
Because this program was available only to greenhouse growers, we
previously determined that this program was limited to a specific
enterprise or industry, or group of enterprises or industries, and
provided a countervailable domestic subsidy. (See 1987 Preliminary and
Final Results). We have received no new information or evidence of
changed circumstances to warrant reconsideration of this finding.
Although this program officially was terminated in 1985, under our
grant methodology, benefits are still accruing from this program.
To calculate the benefit from this program, we used the grant
methodology described in section 1. above. We divided the total
benefits from these grants by the value of total greenhouse sales in
the relevant review period. On this basis, we preliminarily determine
the net subsidy to be 0.05 percent ad valorem for the period January 1,
1994, through December 31, 1994.
3. Aids for the Reduction of Glass Surface
Under the Aids for the Reduction of Glass Surface program, the MAF
provided grants to greenhouse growers for the purpose of increasing the
energy efficiency of greenhouses by replacing existing glass with
modern energy-saving glass. The program was terminated in November
1984. However, grants approved prior to the termination of the program
were disbursed through 1987.
We previously determined that this program was countervailable
because it was limited to a specific enterprise or industry, or group
of enterprises or
[[Page 20413]]
industries. (See 1987 Preliminary and Final Results). We have received
no new information or evidence of changed circumstances to warrant
reconsideration of this finding. Although this program was officially
terminated in 1984, under our grant methodology, benefits are still
accruing under this program.
To calculate the benefit from this program, we used the grant
methodology described in section 1. above. We divided the total
benefits from these grants by the value of total greenhouse sales in
the relevant review period. On this basis, we preliminarily determine
the net subsidy to be less than 0.005 percent ad valorem for the period
January 1, 1994, through December 31, 1994.
4. Steam Drainage Systems
In January 1981, the Government of the Netherlands (GON) banned the
use of methylbromide as a means of soil disinfection due to the
potential health hazards caused by the chemical. In December of that
year, the MAF established a program making available cash grants to
encourage the use of steam drainage as an alternative method of soil
disinfection for greenhouses. The program was terminated in September
1984. However, some grants were disbursed through 1987.
In the 1990 administrative review of this case, we determined that
this program was countervailable because it was limited to a specific
enterprise or industry, or group of enterprises or industries. See
Standard Chrysanthemums From the Netherlands; Preliminary Results of
Countervailing Duty Administrative Review (57 FR 9539; March 19, 1992)
and Standard Chrysanthemums From the Netherlands; Final Results of
Countervailing Duty Administrative Review (57 FR 24249; June 8, 1992)
(1990 Preliminary and Final Results). We have received no new
information or evidence of changed circumstances to warrant
reconsideration of this finding. Although this program was officially
terminated in 1984, under our grant methodology, benefits are still
accruing under this program.
To calculate the benefit from this program, we used the grant
methodology described in section 1. above. We divided the benefits from
these grants by the value of total greenhouse sales in the relevant
review period. On this basis, we preliminarily determine the net
subsidy to be less than 0.005 percent ad valorem for the period January
1, 1994, through December 31, 1994.
5. Stimulation for the Innovation of Electric Energy (SES)
The SES program was implemented in 1988 to stimulate energy
conservation. Under the administration of the Ministry of Economic
Affairs (MEA), the program is designed to encourage the installation of
cogeneration equipment by providing payments of up to 25 percent of the
equipment cost, with a cap of 20 million guilders per project.
Cogeneration equipment reduces energy consumption by up to 30 percent.
The Department preliminarily determined that this program is
countervailable in Standard Chrysanthemums From the Netherlands;
Preliminary Results of Administrative Review for the 1992 and 1993
periods (1992/93 Preliminary Results), being simultaneously published
with this notice, because horticulture received a disproportionate
share of benefits under this program.
Our policy with respect to grants is (1) to expense recurring
grants in the year of receipt and (2) to allocate non-recurring grants
over the average useful life of assets in the industry, unless the sum
of grants provided under a particular program is less than 0.50 percent
of a firm's total or export sales (depending on whether the program is
a domestic or export subsidy) in the year in which the grants were
received. See section 355.49(a) of the Proposed Regulations and the
General Issues Appendix, at 37226, which is attached to Final
Affirmative Countervailing Duty Determination: Certain Steel Products
from Austria (58 FR 37217; July 9, 1993) (General Issues Appendix).
In the 1992 review, we determined that SES grants were
nonrecurring. For the 1992 administrative review, we found that the
amount of grants received under this program was not less than 0.50
percent of greenhouse sales. Following our grant methodology, we
allocated the grants over the average useful life of assets in the
industry. See 1992/93 Preliminary Results. As a result, residual
benefits from the program are allocable to 1994. Greenhouse growers
also received SES grants in 1994. We determine that the total amount of
SES grants received was less than 0.50 percent of greenhouse sales in
1994. Therefore, following our grant methodology, the total value of
all grants provided under this program in 1994 has been allocated to
that year.
To calculate the benefit for 1994, we added the benefit from the
1992 grants that were allocable to 1994 and the total value of grants
provided in 1994. We then divided the results by the value of
greenhouse sales in 1994. On this basis, we preliminarily determine the
net subsidy to be 0.35 percent ad valorem for the period January 1,
1994, through December 31, 1994.
II. Programs Preliminarily Determined Not to Confer Subsidies
Guarantee Fund for Agriculture
The Stichting Borgstellingsfonds voor de Landbouw (Foundation
Security Fund for Agriculture, or ``Fund'') is used to guarantee the
servicing and repayment of loans made by banks to farmers. The Fund
acts as an institutional guarantor, not as a lender itself, providing
guarantees only when the security offered by the farmer is inadequate
for the total loan amount. A loan application may be made to the Fund
only after all of the farmer's own securities or collateral have been
provided for the loan. If an application is approved under the Fund,
the guarantee applies only to the portion of the loan not originally
approved by the bank. This program was originally found countervailable
in Netherlands Flowers because it was administered in such a way as to
confer a benefit on a specific group of industries (i.e.,
horticulture).
In reviews subsequent to Netherlands Flowers, we found that the
average long-term annual interest rates charged on loans under this
Fund were consistent with the average interest rates charged on long-
term bank loans, as reported by De Nederlandsche Bank. See 1990
Preliminary and Final Results and 1992/93 Preliminary Results.
Based on our analysis of information provided in the 1994 review,
we again determine that the average long-term annual interest rates
charged on loans under this Fund were consistent with the average
interest rates charged on long-term bank loans. On this basis, we
determine that this program does not provide a countervailable benefit.
Because this program has not been terminated, we will continue to
review it in subsequent administrative reviews to determine whether the
interest rates on these loans are consistent with the interest rates on
comparable commercial loans.
III. Programs Preliminarily Found Not to be Countervailable
We examined the following programs during the 1992 review (See
1992/93 Preliminary Results) and determined these programs not to be
countervailable:
A. Arrangement for Stimulation of Innovation Projects
B. Arrangement for Structural Improvement and the Complementary
[[Page 20414]]
Scheme for Investment in Agricultural Holdings
C. Natural Gas Provided at Preferential Rates
D. Income Tax Deduction
E. Value-Added Tax (VAT) Reduction of 6 Percent for Natural Gas Users
and Partial Restitution of VAT for Mineral Oils, Fuels, Bulk or Bottled
Gas.
IV. Programs Preliminarily Determined To Be Not Used
We examined the following programs and preliminarily determine that
the producers and/or exporters of the subject merchandise did not apply
for or receive benefits under these programs during the period of
review:
A. Investment Incentive (WIR)--Regional Program
B. Loans at preferential interest rates.
Preliminary Results of Review
For the period January 1, 1994, through December 31, 1994, we
preliminarily determine the net subsidies to be 0.43 percent ad
valorem. In accordance with the Act, any rate less than 0.5 percent ad
valorem in an administrative review is de minimis.
The URAA replaced the general rule in favor of a country-wide rate
with a general rule in favor of individual rates for investigated and
reviewed companies. The procedures for countervailing duty cases are
now essentially the same as those in antidumping cases, except as
provided for in section 777A(e)(2)(B) of the Act. In the original
investigation of this order, it was determined that there were over
8,000 flower growers in the Netherlands. Therefore, we requested that
the GON provide information on an aggregate basis. See Netherlands
Flowers. Consistent with the decision made in the investigation,
administrative reviews of this order have been conducted on an
aggregate basis. In accordance with section 777A(e)(2)(B) of the Act,
we have also conducted this administrative review on an aggregate basis
because of the large number of producers and exporters, and on the
basis of the aggregate information submitted by the GON, we have
determined a single country-wide subsidy rate to be applied to all
producers and exporters of the subject merchandise.
If the final results of this review 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 the Netherlands exported
on or after January 1, 1994, and on or before December 31, 1994.
Because we preliminarily determine that all net subsidies are de
minimis for the period January 1, 1994, through December 31, 1994, no
cash deposit will be required.
Public Comment
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 briefs. Parties who
submit written arguments in these proceedings are requested to submit
with the argument (1) a statement of the issue and (2) a brief summary
of the argument. Any hearing, if requested, will ordinarily 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.
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 355.38, 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 Tariff Act (19 U.S.C. 1675(a)(1)).
Dated: April 30, 1996.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 96-11243 Filed 5-3-96; 8:45 am]
BILLING CODE 3510-DS-P
