01-24923. Final Affirmative Countervailing Duty Determination: Honey From Argentina

AGENCY:

Import Administration, International Trade Administration Department of Commerce.

ACTION:

Notice of final affirmative countervailing duty investigation.

SUMMARY:

On March 13, 2001, the Department of Commerce (the Department) published in the Federal Register its preliminary affirmative determination in the countervailing duty investigation of honey from Argentina. Based on our analysis of the questionnaire responses, verification, and the comments submitted by the parties, we determine that subsidies are being conferred on the manufacture, production and export of honey from Argentina. The subsidy rates in this final determination differ from those in the preliminary determination. The revised final subsidy rates for the investigated producers/exporters are listed below in the “Suspension of Liquidation” section of this notice.

EFFECTIVE DATE:

October 4, 2001.

FOR FURTHER INFORMATION CONTACT:

Thomas Gilgunn at [phone], Holly Hawkins at [phone] or Christian Hughes at [phone], Office of AD/CVD Enforcement VII, Group III, Import Administration, International Trade Administration, U.S. Department of Commerce, Room 7866, 14th Street and Constitution Avenue, NW., Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Applicable Statute and Regulations

Unless otherwise indicated, all citations to the statute are references to the Tariff Act of 1930, as amended. In addition, unless otherwise indicated, all citations to the Department's regulations are to the regulations codified at 19 CFR part 351 (2000).

Background

On March 13, 2001, the Department published the results of its preliminary determination in the investigation of Honey From Argentina. See Honey from Argentina: Preliminary Affirmative Countervailing Duty Determination and Alignment with Final Antidumping Determination on Honey from the People's Republic of China, 66 FR 14521 (Preliminary Determination). We invited interested parties to comment on the Preliminary Determination.

On April 3, 2001, we issued a supplemental questionnaire to the Government of Argentina. We received a response to this questionnaire on April 30, 2001. On May 7, 2001, we received comments from petitioners regarding the verification of the questionnaire responses. Verification of the questionnaire responses provided by the Government of Argentina (GOA) was conducted May 30 through June 11, 2001. We also met with an independent banker in Argentina during this time period.

On May 31, 2001, we postponed the final determination in this investigation until September 24, 2001, pursuant to the postponement of the final determination in the companion antidumping duty investigation of honey from the People's Republic of China with which this investigation had previously been aligned. See Notice of Postponement of Final Determination of Sales at Less Than Fair Value: Honey from Argentina and the People's Republic of China and Postponement of Final Countervailing Duty Determination: Honey from Argentina, 66 FR 30413 (June 6, 2001).

The GOA and petitioners submitted timely case and rebuttal briefs in this investigation.

Although the deadline for this determination was originally September 24, 2001, in light of the events of September 11, 2001 and the subsequent closure of the Federal Government for reasons of security, the time frame for issuing this determination has been extended by two days.

Scope of the Investigation

The merchandise subject to this investigation is natural honey, artificial honey containing more than 50 percent natural honeys by weight, preparations of natural honey containing more than 50 percent natural honeys by weight, and flavored honey. The subject merchandise includes all grades and colors of honey whether in liquid, creamed, combs, cut comb, or chunk form, and whether packaged for retail or in bulk form.

The merchandise subject to this investigation is currently classifiable under subheadings 0409.00.00, 1702.90, and 2106.90.99 of the Harmonized Tariff Schedule of the United States (HTSUS). Although the HTSUS subheadings are provided for convenience and U.S. Customs Service (Customs) purposes, the Department's written description of the merchandise under investigation is dispositive.

Analysis of Comments Received

The programs under investigation, as well as the issues raised in the case and rebuttal briefs submitted in this countervailing duty investigation are discussed and addressed in the Issues and Decision Memorandum in the Final Affirmative Countervailing Duty Determination: Honey from Argentina, from Joseph A. Spetrini, Deputy Assistant Secretary for AD/CVD Enforcement III, to Faryar Shirzad, Assistant Secretary for Import Administration, dated September 26, 2001, (Decision Memorandum) which is hereby adopted by this notice. Attached to this notice as an appendix is a list of the programs under investigation, as well as a list of the issues which parties have raised and to which we have responded in the Decision Memorandum. Parties can find a complete discussion of the programs and issues raised in this investigation, and the corresponding recommendations in this public memorandum, which is on file in the Department's Central Records Unit, in room B-099. In addition, the Decision Memorandum can be accessed directly on the World Wide Web at http://ia.ita.doc.gov, under the heading “Federal Register Notices.” The paper copy and electronic version of the Decision Memorandum are identical in content.

Suspension Agreement

On August 24, 2001, the Department and the Government of Argentina initialed a proposed suspension agreement and the Department gave interested parties until September 14, 2001 to comment on the proposed agreement. However, the Department and the Government of Argentina did not sign a final suspension agreement on honey from Argentina by the deadline date of September 26, 2001. Consequently, we have not addressed petitioners' and the GOA's comments on the proposed suspension agreement.

Suspension of Liquidation

In accordance with section 777A(e)(2)(B) of the Act, we have calculated an aggregate or industry-wide rate for all of the producers/exporters of honey under investigation. We have determined that the total estimated countervailable subsidy rate is 4.53 percent ad valorem. However, due to a program-wide change, we have established a cash deposit rate of 5.85 percent ad valorem in accordance with section 351.526(a) of the Department's regulations.

In accordance with our preliminary affirmative determination, we instructed Customs to suspend liquidation of all entries of honey from Argentina, which were entered or withdrawn from warehouse for consumption on or after March 13, 2001, the date of the publication of our preliminary determination in the Federal Register, and to require a cash deposit or bond for such entries of the merchandise in the amounts indicated in the Preliminary Determination. In accordance with section 703(d) of the Act, we instructed Customs to discontinue the suspension of liquidation for merchandise entered on or after August 18, 2001, but to continue the suspension of liquidation of entries made between March 12, 2001 and August 18, 2001.

We will reinstate suspension of liquidation under section 706(a) of the Act for all entries if the ITC issues a final affirmative injury determination, and we will require a cash deposit of estimated countervailing duties for such entries of merchandise in the amount indicated above. This suspension of liquidation, if reinstated, will be effective on the date of publication of the countervailing duty order. If the ITC determines that material injury, or threat of material injury, does not exist, this proceeding will be terminated and all estimated duties deposited or securities posted as a result of the suspension of liquidation will be refunded or canceled.

ITC Notification

In accordance with section 705(d) of the Act, we will notify the ITC of our determination. In addition, we are making available to the ITC all non-privileged and non-proprietary information related to this investigation. We will allow the ITC access to all privileged and business proprietary information in our files, provided that the ITC confirms that it will not disclose such information, either publically or under an administrative protective order (APO), without the written consent of the Assistant Secretary for Import Administration.

If the ITC determines that material injury, or threat of material injury, does not exist, this proceeding will be terminated. If however, the ITC determines that such injury does exist, we will issue a countervailing duty order.

Return or Destruction of Proprietary Information

In the event that the ITC issues a final negative injury determination, this notice will serve as the only reminder to parties subject to APO of their responsibility concerning the destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Failure to comply is a violation of the APO.

This determination and notice are issued and published in accordance with sections 705(d) and 777(i) of the Act.

Dated: September 26, 2001.

Faryar Shirzad,

Assistant Secretary for Import Administration.

Appendix I—Issues and Decision Memorandum

I. Subsidies Valuation Information

A. Aggregation

B. Green Box Claims

C. Allocation Period

D. Discount Rates and Benchmark Loan Rates

E. Denominators

II. Programs Determined to Confer Subsidies

A. Federal Programs

1. Argentine Internal Tax Reimbursement/Rebate Program (Reintegro)

2. BNA Pre-Financing of Exports Regime for the Agriculture Sector

3. Regional Productive Revitalization: National Program for the Promotion and Development of Local Productive Initiative (Dinamizacion Productiva Regional Nacional de Promocion y Fomenta de la Iniciativa Productiva Local)

B. Provincial Government Programs

1. Buenos Aires Honey Program

a. Line of Credit for Working Capital

b. Line of Credit for the Acquisition of Capital Goods

c. Technical Assistance

2. Province of Chaco Line of Credit Earmarked for the Honey Sector

3. Province of San Luis Honey Development Program

a. Leasing Agreements

b. CFI Lines of Credit

III. Programs Determined Not to Confer Subsidies

A. Federal Programs

1. BNA Line of Credit for Working Capital and Investment Purposes

2. Global Credit Program for Micro and Small Businesses

3. Credit for Small Business Ventures

4. National Income Tax Exemption Pursuant to Article 20(1) of Law 20,628

5. Law 22,913 Emergency Aid/Emergency Agricultural and Livestock Law

6. BICE Norm 007: Line of Credit Offered to Finance Industrial Investment Projects, and Projects to Restructure and/or Modernize the Argentine Industry

7. PROAPI

B. Provincial Government Program

Exemption from Municipal Gross Income Tax Contingent on Export Activity Pursuant to Article 116(12) of Law 150 (Buenos Aires Gross Income Tax Exemption)

IV. Programs Determined to be Not Used

A. Federal Programs

1. BICE Norm 011: Financing of Production of Goods Destined for Export

2. BNA Line of Credit to the Agricultural Producers of the Patagonia (Regulation Annex to Circular BNA No. 10,111/1)

3. BNA Financing for the Acquisition of Goods of Argentine Origin Line of Credit for the Acquisition of Industrial and Agricultural Machinery, Silos and Transportation Vehicles

4. “Production Pole” Program for Honey Producers

5. Enterprise Restructuring Program (PRE)

6. Government Backed Loan Guarantees (SGR)

7. Fundacion Export*Ar

B. Provincial Government Programs

1. Province of Chubut Honey Program under Law No. 4430/98

2. Province of Santiago del Estero: Creditos de Confianza (Trust Credits)

3. Entre Rios Honey Program: Law No. 7435/84

V. Federal Programs Determined to be Terminated

A. Federal Programs

1. PROMEX Consortium for Honey Exportation

2. Regional Promotional Scheme-Reimbursement “Patagonico”: Exemption of Import Duties on Capital Goods

B. Provincial Program

Formosa Honey Program/Undomesticated Bee Development Project

VI. Programs Determined Not to Exist

A. Federal Programs

1. BNA Warrant-Based Export Financing

2. Honey-Specific Line of Credit Program for the Pre-Financing of Development Expenses Associated with Export Sales

B. Provincial Government Programs

1. La Pampa Lines of Credit

2. Province of San Luis: Creditos de Confianza (Trust Credits)

VII. Analysis of Comments

Comment 1: Initiation Standard

Comment 2: Denominator

Comment 3: Argentine Internal Tax Reimbursement/Rebate Program (Reintegro)

Comment 4: The System for Determining the Reintegro

Comment 5: The Credibility of the EcoLatina Report

Comment 6: The EcoLatina Report: Examination of the Indirect Tax Incidence for the Argentine Honey Sector

Comment 7: The EcoLatina Report: Indirect Taxes

Comment 8: Buenos Aires Honey Program: Specificity of the Line of Credit for Working Capital

Comment 9: Buenos Aires Honey Program: Specificity of the Line of Credit for the Acquisition of Capital Goods

Comment 10: Buenos Aires Honey Program: Benchmark Rate

Comment 11: Chaco Line of Credit Earmarked for the Honey Sector

Comment 12: San Luis Honey Development Program: Countervailability of the Leasing Component

Comment 13: San Luis Honey Development Program: Leasing Component Calculations

Comment 14: CFI Credit for Small Business Ventures Program Loans to the Honey Sector and De Jure Specificity

Comment 15: CFI Financing: De Jure/De Facto Specificity

Comment 16: CFI Credit for Small Business Ventures in the Province of San Luis: Link between Programs

Comment 17: Countervailability of BICE Norm 007

Comment 18: PROAPI'S Sales of Fertilized Queen Bees: Adequacy of Remuneration

Comment 19: Use of BNA Loan Programs

Comment 20: Countervailability of Fundacion Export*Ar Program

Comment 21: Warrant-Based Financing

VIII. Total Ad Valorem Subsidy Rate

IX. Recommendation