[Federal Register Volume 60, Number 148 (Wednesday, August 2, 1995)]
[Notices]
[Pages 39360-39363]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-19014]
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DEPARTMENT OF COMMERCE
[C-201-505]
Porcelain-on-Steel Cookingware from Mexico; Preliminary Results
of a 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 porcelain-
[[Page 39361]]
on-steel cookingware from Mexico. We preliminarily determine the net
subsidy to be de minimis for Acero Porcelanizado, S. A. de C.V. (APSA)
and 0.53 percent ad valorem for all other companies for the period
January 1, 1993 through December 31, 1993. If the final results remain
the same as these preliminary results of administrative review, we will
instruct U.S. Customs Service to assess countervailing duties as
indicated above. Interested parties are invited to comment on these
preliminary results.
EFFECTIVE DATE: August 2, 1995.
FOR FURTHER INFORMATION CONTACT: Norma Curtis or Kelly Parkhill, 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 December 12, 1986, the Department published in the Federal
Register (55 FR 51139) the countervailing duty order on porcelain-on-
steel cookingware from Mexico. On November 26, 1993, the Department
published in the Federal Register a notice of ``Opportunity to Request
Administrative Review'' (58 FR 62326) of this countervailing duty
order. We received a timely request for review from APSA, a respondent
company.
We initiated the review, covering the period January 1, 1993
through December 31, 1993 (POR), on January 18, 1994 (59 FR 2593). We
conducted a verification of the questionnaire responses on September 7,
1994 through September 14, 1994. The review covers two manufacturers/
exporters of the subject merchandise, APSA and Cinsa, S.A. de C.V.
(Cinsa), which accounted for all exports of POS cookware during the POR
and ten 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 provisions as
they existed on December 31, 1994.
Scope of the Review
Imports covered by this review are shipments of porcelain-on-steel
cookingware from Mexico. The products are porcelain-on-steel
cookingware (except teakettles), which do not have self-contained
electric heating elements. All of the foregoing are constructed of
steel, and are enameled or glazed with vitreous glasses. During the
review period, such merchandise was classifiable under item number
7323.94.0020 of the Harmonized Tariff Schedule (HTS). The HTS item
number is provided for convenience and Customs purposes. The written
description remains dispositive.
Calculation Methodology for Assessment and Cash Deposit Purposes
We calculated the net subsidy on a country-wide basis by first
calculating the subsidy rate for each company subject to the
administrative review. We then weight-averaged the rate received by
each company using as the weight its share of total Mexican exports to
the United States of subject merchandise, including all companies, even
those with de minimis and zero rates. We then summed the individual
companies' weight-averaged rates to determine the subsidy rate from all
programs benefitting exports of subject merchandise to the United
States.
Since the country-wide rate calculated using this methodology was
above de minimis, as defined by 19 CFR Sec. 355.7 (1994), we proceeded
to the next step and examined the net subsidy rate calculated for each
company to determine whether individual company rates differed
significantly from the weighted-average country-wide rate, pursuant to
19 CFR Sec. 355.22(d)(3). APSA had a significantly different net
subsidy rate during the review period pursuant to 19 CFR
Sec. 355.22(d)(3). This company is treated separately for assessment
and cash deposit purposes. All other companies are assigned the
country-wide rate.
Analysis of Programs
I. Programs Conferring Subsidies
A. Programs Previously Determined to Confer Subsidies
1. BANCOMEXT Financing for Exporters
Banco Nacional de Comercio Exterior, S.N.C. (Bancomext) is a
government program through which short-term financing is provided to
producers or trading companies engaged in export activities. In order
to be eligible for Bancomext financing a company must be established
according to Mexican law, 30 percent Mexican national owned, and be an
exporter. Bancomext provides two types of financing to exporters,
denominated in either U.S. dollars or in Mexican pesos: working capital
(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 Porcelain-on-Steel Cookingware From Mexico;
Preliminary Results of Countervailing Duty Administrative Review (56 FR
48163; September 24, 1991) and Porcelain-on-Steel Cookingware From
Mexico; Final Results of Countervailing Duty Administrative Review (57
FR 562; January 7, 1992)). In this review the Government of Mexico
provided no new information that would lead the Department to alter
that determination.
Both APSA and Cinsa had Bancomext loans on which interest was due
during the POR. We found that the annual interest rates that Bancomext
charged to borrowers for certain loans on which interest payments were
due during the review period were lower than the commercial rates. The
dollar-denominated Bancomext loans under review were granted at annual
interest rates ranging from 6.0 percent to 8.75 percent. For these
loans, we used the average quarterly weighted-average effective
interest rates published in the Federal Reserve Bulletin, which
resulted in an annual average benchmark of 6.5 percent in 1993. This is
the same benchmark calculation methodology that has been applied in
prior reviews (See Porcelain-on-Steel Cookingware From Mexico;
Preliminary Results of Countervailing Duty Administrative Review (56 FR
48163; September 24, 1991) and Porcelain-on-Steel Cookingware From
Mexico; Final Results of Countervailing Duty Administrative Review (57
FR 562; January 7, 1992)).
The peso-denominated Bancomext pre-export loan under review was
granted at an annual interest rate of 14.8 percent. As a basis for our
benchmark for this loan, we have relied in part on the effective rates
for the years 1981 through 1984, as published monthly in the Banco de
Mexico's Indicadores Economicos y Moneda (I.E.), because the Banco de
Mexico stopped publishing data on nominal and effective commercial
lending rates in Mexico after 1984. We calculated the average
difference between the I.E. effective interest rates and the Costo
Porcentual Promedio (CPP) rates, the average cost of short-term funds
to banks, for the years 1981 through 1984. We added this average
difference to the 1993 average annual CPP rates. For the peso-
denominated loan on which interest was due during 1993, we
[[Page 39362]]
calculated an annual benchmark of 29.79 percent. This is the same
benchmark calculation methodology that has been applied in prior
reviews (See Porcelain-on-Steel Cookingware From Mexico; Preliminary
Results of Countervailing Duty Administrative Review (56 FR 48163;
September 24, 1991) and Porcelain-on-Steel Cookingware From Mexico;
Final Results of Countervailing Duty Administrative Review (57 FR 562;
January 7, 1992)). 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; such loans were obtained
between December 1992 and September 1993.
During verification at APSA, we discovered one short-term loan that
appears to be a Fomex loan which was not reported in the questionnaire
responses. Fomex was a program previously found countervailable by the
Department and operates much like the Bancomext program which the
Department has also found countervailable (See Porcelain-on-Steel
Cookingware From Mexico; Preliminary Results of Countervailing Duty
Administrative Review (56 FR 48163; September 24, 1991) and Porcelain-
on-Steel Cookingware From Mexico; Final Results of Countervailing Duty
Administrative Review (57 FR 562; January 7, 1992)). However, the
interest rate for this loan is higher than the benchmark and,
therefore, there is no benefit to APSA.
During verification at the Government of Mexico, we discovered one
Bancomext loan for Cinsa that had not been reported in the
questionnaire responses, and for which the company did not provide the
interest rate upon request at verification. (See Bancomext Section of
the Government of Mexico's Verification Report dated May 9, 1995 and
Short-Term Loan Section of Cinsa's Verification Report dated May 9,
1995, on file in the public file of the Central Records Unit, Room B-
099 of the Department of Commerce). Section 776(c) of the Act requires
the Department to use best information available (BIA) whenever a party
or any other person refuses or is unable to produce information
requested. Furthermore, 19 CFR 355.37 (1994) requires the Department to
use BIA ``whenever the Secretary: (1) does not receive a complete,
accurate, and timely response to the Secretary's request for factual
information; or (2) is unable to verify, within the time specified, the
accuracy and completeness of the factual information submitted''. Since
the interest rate for this loan was not reported in the questionnaire
responses nor provided at verification when requested, we must use BIA
to calculate the benefit from this loan. Therefore, as BIA we are
assigning this loan a zero interest rate, and have used that rate to
calculate the benefit from this loan. The interest rate we are applying
as BIA is zero percent because it is the most adverse interest rate.
To calculate 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 principal and then
multiplied this amount by the term of the loan divided by 365. Because
one company's monthly sales figures are indexed to account for
inflation, we adjusted that company's benefit amounts to be on the same
terms as the sales figures. Since neither APSA nor Cinsa was able to
tie their loans to specific sales, we divided the benefit by total
export sales. On this basis, we preliminarily determine the subsidy
from this program to be 0.02 percent ad valorem for APSA and 0.60
percent ad valorem for Cinsa.
2. FONEI Long-Term Financing
The Fund for Industrial Development (FONEI) was a Government of
Mexico trust administered by the Banco de Mexico until its dissolution
on December 31, 1989. FONEI was a specialized financial development
fund that provided long-term loans at below-market rates. FONEI was
designed to foster the efficient production of services and industrial
goods by Mexican companies.
The Department has previously found this program to confer a
subsidy because it provides loans on terms inconsistent with commercial
considerations and restricts loan benefits to companies located in
specific regions (See Porcelain-on-Steel Cookingware From Mexico;
Preliminary Results of Countervailing Duty Administrative Review (56 FR
48163; September 24, 1991) and Porcelain-on-Steel Cookingware From
Mexico; Final Results of Countervailing Duty Administrative Review (57
FR 562; January 7, 1992)). In this review the Government of Mexico
provided no new information that would lead the Department to alter
that determination.
Cinsa had a FONEI loan outstanding during the review period.
Because this peso-denominated loan had a variable interest rate, we
treated it as a series of short-term loans, as we have done previously
in Porcelain-on-Steel Cookingware From Mexico; Preliminary Results of
Countervailing Duty Administrative Review (56 FR 48163; September 24,
1991) and Porcelain-on-Steel Cookingware From Mexico; Final Results of
Countervailing Duty Administrative Review (57 FR 562; January 7, 1992).
To calculate the benefit from this loan, we used the same benchmark as
for the peso-denominated Bancomext pre-export loan. We compared this
benchmark with the interest rate in effect for each FONEI loan payment
made during the review period and multiplied the difference by the
outstanding loan principal. We divided the benefit by the company's
total sales to all markets during the review period. On this basis, we
preliminarily determine the subsidy from this program to be 0.01
percent ad valorem for Cinsa.
II. Programs Preliminarily Found Not to be Used
We also examined the following programs and preliminarily determine
that the exporters of the subject merchandise did not apply for or
receive benefits under these programs during the review period:
(A) Certificates of Fiscal Promotion (CEPROFI)
(B) PITEX
(C) Other Bancomext Preferential Financing
(D) Import Duty Reductions and Exemptions
(E) State Tax Incentives
(F) Article 15 Loans
(G) NAFINSA FOGAIN-type Financing
(H) NAFINSA FONEI-type Financing
Preliminary Results of Review
For the period January 1, 1993 through December 31, 1993, we
preliminarily determine the net subsidy to be 0.02 percent ad valorem
for APSA and 0.53 percent ad valorem for all other companies. In
accordance with 19 CFR 255.7, any rate less than 0.5% ad valorem is de
minimis.
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 assess the following countervailing duties:
------------------------------------------------------------------------
Rate
Manufacturer/exporter (percent)
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APSA......................................................... 0.00
All Other Companies.......................................... 0.53
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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
[[Page 39363]]
of the subject merchandise from APSA, and 0.53 percent of the f.o.b.
invoice price on all shipments of the subject merchandise from all
other companies entered, or withdrawn from warehouse, for consumption
on or after the date of publication of the final results 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. 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. Parties who
submit written arguments in this proceeding 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 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 section 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: July 26, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-19014 Filed 8-1-95; 8:45 am]
BILLING CODE 3510-DS-P
