[Federal Register Volume 59, Number 214 (Monday, November 7, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-21549]
[[Page Unknown]]
[Federal Register: November 7, 1994]
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DEPARTMENT OF COMMERCE
[C-351-029]
Certain Castor Oil Products From Brazil: Preliminary Results of
Countervailing Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: November 7, 1994.
FOR FURTHER INFORMATION CONTACT: Raphiel Hampton or Vincent Kane,
Office of Countervailing Investigations, U.S. Department of Commerce,
Room B099, 14th Street and Constitution Avenue, N.W., Washington, DC
20230; telephone (202) 482-0176 or 482-2815, respectively.
Preliminary Results
The Department of Commerce is conducting an administrative review
of the countervailing duty order of certain castor oil products from
Brazil. We preliminarily determine the net subsidy to be 0.03 percent
ad valorem, which is de minimis, for the period January 1, 1992,
through December 31, 1992. We invite interested parties to comment on
these preliminary results.
Background
Since the publication of the notice of initiation in the Federal
Register (58 FR 26960, May 6, 1993), the following events have
occurred.
On October 13, 1993, we issued a questionnaire to the Brazilian
Embassy in Washington, D.C., concerning the subsidy programs under
review. We received a response from the Government of Brazil (GOB) on
December 29, 1993, on behalf of itself and the respondent's companies.
After reviewing the GOB's response, we issued a supplemental
questionnaire to the GOB on January 28, 1994. We received a
supplemental response from the GOB on February 23, 1994. From March 7
to 18, 1994, we verified the government and companies' responses in
Brazil.
Scope of Review
The merchandise subject to this review is hydrogenated castor oil
and 12-hydroxystearic acid. Imports of these products are currently
classifiable under the following Harmonized Tariff Schedule (``HTS'')
subheadings: 1516.20.90 and 1519.19.40. Although the HTS subheadings
are provided for convenience and customs purposes, our written
description of the scope of this proceeding is dispositive.
The review covers six companies, the period January 1 through
December 31, 1992, and 12 programs: (1) Preferential Export Financing
under Resolution 950/1009; (2) Income Tax Exemption for Export
Earnings; (3) Preferential Export Financing Under CIC-OPCRE 6-2-6; (4)
Preferential Financing for Industrial Enterprises by the Bank of
Brazil; (5) Reduction of Industrial Products Tax (IPI) and Import
Duties Under Decreto No. 77.065 through BEFIEX; (6) Preferential
Financing for National Trading Companies under Resolution 883 of the
Banco Central do Brasil; (7) Accelerated Depreciation for Brazilian-
Made Capital Goods; (8) Preferential Financing under Resolution 68
through FINEX; (9) Preferential Financing under Resolution 578/83
through FUNPAR; (10) Preferential Financing under Resolution 579/83
through PROEX and PROSIM; (11) Preferential Financing for the Storage
of Merchandise Destined for Export under Resolution 330/Portaria 130 of
the Banco Central do Brasil; and (12) Green Yellow Drawback (Portaria
68/83).
Calculation Methodology for Assessment and Cash Deposit Purposes
In calculating the benefits received during the review period, we
followed the methodology described in 19 CFR 355.20(d)(1) (53 FR 52325,
December 27, 1988). Using this methodology we calculated a country-wide
rate of 0.03 percent which is de minimis.
Analysis of Program
(1) Income Tax Exemption for Export Earnings
Under this program, exporters of the subject merchandise were
eligible for an exemption from income tax on the portion of their
profits attributable to exports. On April 12, 1990, Decree Law 8,034
eliminated this exemption by establishing a 30 percent income tax rate
for export profits, which equaled the normal corporate income tax rate.
Boley, however, was authorized to use the income tax exemption on
export earnings under the terms of a contract with the Commission for
the Granting of Fiscal Benefits to Special Export Programs (BEFIEX)
until its contract expired. Therefore, despite the fact that the income
tax exemption for export earnings was eliminated, Boley received
residual benefits from the program during the review period. No other
company under review used this program.
To calculate the income tax savings realized by Boley during the
review period, we multiplied the income tax deduction taken by the firm
under this program by 30 percent, the corporate income tax rate during
the review period. We then used the amount of Boley's income tax
savings to calculate a country-wide rate. We calculated the country-
wide rate by dividing the total income tax savings realized by Boley by
the total exports of all products by all of the companies under review.
On this basis, we calculated a subsidy rate of 0.03 percent ad valorem,
which is de minimis.
Programs Preliminarily Found To Be Terminated
We examined the following programs and preliminarily determine
these programs to be terminated. Further, we verified that the
respondents did not receive any residual benefits under them during the
period of review.
a. Preferential Export Financing Under Resolution 950/1009 Through
CACEX (Carteira de Comercio Exterior) of the Bank of Brazil
We verified that this program was terminated on August 30, 1990, by
Banco Central Bank do Brasil Resolution No. 1,744. See, also, Final
Affirmative Countervailing Duty Determination: Silicon Metal from
Brazil, June 12, 1991 (56 FR 26988).
b. Preferential Export Financing Under CIC-OPCRE 6-2-6
We verified that on May 10, 1990, the functions of CACEX of the
Bank of Brazil, which administered these export financing loans, were
absorbed by the Secretariat of Foreign Trade (SECEX). SECEX was not
empowered to perform banking operations and the export financing was
discontinued. See, also, Certain Round-Shaped Agricultural Tillage
Tools from Brazil; Preliminary Results of Countervailing Duty
Administrative Review, March 31, 1992 (57 FR 10885) (Tillage Tools).
c. Reduction of Industrial Products Tax (IPI) and Import Duties Under
Decreto No. 77.065 Through BEFIEX (Comissao par a Concessao de
Beneficios a Programas Especials de Exportacao) and CIEX (Comissao para
Incentivos a Exportacao)
We verified that on April 12, 1990, Decree Law 8,032 limited this
program exclusively to imports made by the federal, state, and
municipal governments, territories, and other political entities, and
scientific institutions, thereby eliminating the benefit to commerical
enterprises. See, also, Tillage Tools.
d. Preferential Financing for National Trading Companies Under
Resolution 883 of the Banco Central do Brasil
We verified that Banco Central do Brasil Resolution 1,744 revoked
Resolution 883 on August 30, 1990, thereby terminating this program.
See, also, Tillage Tools.
e. Preferential Financing Under Resolution 68 Through FINEX
We verified that this program was terminated on April 5, 1988, by
Article 4 of Brazil's new constitution, which provided that all
programs requiring funding from the national treasury had to be
reenacted within a two-year period or cease to exist. Legislation to
reenact preferential financing through FINEX was not passed and the
program ceased to exist.
f. Preferential Financing Under Resolution 579/83 Through PROEX and
PROSIM
We verified that preferential financing through PROSIM was
terminated on February 4, 1985, by BNDES Resolution 607, and that
preferential financing through PROEX was terminated in 1991 by BNDES
Resolution 762.
g. Preferential Financing for the Storage of Merchandise Destined for
Export Under Resolution 330/Portaria 130 of the Banco Central do Brasil
We verified that this program was terminated on August 21, 1984, by
Central Bank Resolution 950.
Programs Preliminarily Found To Be Not Used
We also examined the following programs and preliminarily determine
that the respondents did not use them during the review period:
a. Preferential Financing for Industrial Enterprises by the Bank of
Brazil
b. Preferential Financing Under Resolution 578/83 Through FUNPAR
c. Accelerated Depreciation for Brazilian Made Capital Goods
d. Green Yellow Drawback (Portaria 68/83)
Preliminary Results of Review
As a result of our review, we preliminarily determine the net
subsidy to be 0.03 percent, which is de minimis, for the period January
1, 1992 through December 31, 1992.
If the final results of this review remain the same as these
preliminary results, the Department intends to instruct the Customs
Service not to assess countervailing duties on shipments of the subject
merchandise from all companies, exported on or after January 1, 1992
and on or before December 31, 1992. Further, as provided by section
751(a)(1) of the Act, the Department will instruct Customs not to
collect cash deposits on shipments of this merchandise from all
companies 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
ten 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 agruments raised in case briefs, may be submitted
seven days after the time limit for filing the case brief. Requests for
a hearing should be made within ten days of the publication of these
preliminary results. 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) of the Department's
regulations. 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: September 28, 1994.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 94-21549 Filed 11-4-94; 8:45 am]
BILLING CODE 3510-DS-M
