49 FR 9921
NOTICES

DEPARTMENT OF COMMERCE (DOC)

[C-351-029]

Certain Castor Oil Products From Brazil; Final Results of Administrative
Review of Countervailing Duty Order

Friday, March 16, 1984

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AGENCY: International Trade Administration, Commerce.

ACTION: Notice of Final Results of Administrative Review of Countervailing Duty Order.

SUMMARY: On October 25, 1983, the Department of Commerce published the preliminary results of its administrative review of the countervailing duty order on certain castor oil products from Brazil. The review covers the period January 1, 1981 through December 31, 1981.

We gave interested parties an opportunity to comment on the preliminary results. The American Manufacturers of Castor Oil Products, the petitioner, requested a hearing which we held on January 17, 1984. After review of all comments received, the Department has determined the net subsidy during the period of review to be 4.70 percent.

EFFECTIVE DATE: March 16, 1984.

FOR FURTHER INFORMATION CONTACT: Peggy Clarke or Lorenza Olivas, Office of Compliance, International Trade Administration, U.S. Department of Commerce, Washington, D.C. 20230, telephone: (202) 377-2786.

SUPPLEMENTARY INFORMATION:

Background

On October 25, 1983, the Department of Commerce ("the Department") published in the Federal Register (48 FR 49320) the preliminary results of its administrative review of the countervailing duty order on certain castor oil products from Brazil (41 FR 8634, March 16, 1976). The Department has now completed that administrative review, in accordance with section 751 of the Tariff Act of 1930 ("the Tariff Act").

Scope of the Review

Imports covered by the review are shipments of Brazilian hydrogenated castor oil and 12-hydroxystearic acid. Such merchandise is currently classifiable under items 178.2000, 490.2650 and 490.2670 of the Tariff Schedules of the United States Annotated.
The review covers the period January 1, 1981 through December 31, 1981 and ten programs: (1) Preferential financing for exports; (2) income tax exemptions for export earnings; (3) the export credit premium for the Industrial Products Tax ("IPI"); (4) preferential export financing under CIC/CREGE 14-11; (5) accelerated depreciation for capital goods manufactured in Brazil; (6) fiscal benefits for special export programs; (7) tax reduction on equipment used in export promotion ("CIEX"); (8) preferential export financing under Resolution 68 ("FINEX"); (9) incentives for trading companies (Resolution 643); and (10) partially-indexed long-term loans.

Analysis of Comments Received

We gave interested parties an opportunity to comment on the preliminary results. The petitioner, the American Manufacturers of Castor Oil Products ("AMCOP"), requested a hearing which was held on January 17, 1983.

Comment 1: The petitioner argues that the Department should verify the accuracy of the response information. The petitioner cited the decision of the Court of International Trade which requires that the Department verify every review (Al Tech Specialty Steel v. United States, Slip Ops. 83-119 and 83-120 (November 21, 1983).

Department's Position: We disagree, and have appealed the Al Tech decision. The Department maintains that neither section 751 of the Tariff Act nor the Commerce Regulations require verification of information submitted in the course of an administrative review. We have long held that verification in section 751 administrative reviews is discretionary. See, e.g., "Final Results of Administrative Review of Countervailing Duty Order" on bicycle tires and tubes from Korea (48 FR 32205, July 14, 1983).

Comment 2: The petitioner argues that we should look at the internal corporate allocation of all subsidies to these companies rather than at only those subsidies received for the product covered by this order.

Department's Position: We allocate fully to products under review any subsidies directly tied to them. To allocate tied subsidies fully to the products to which they were tied and simultaneously to allocate any part of the same subsidies to other products would result in double-counting, which would be inconsistent with both the statute and the Subsidies Code.

Comment 3: The petitioner argues that the Department should reconsider its decision that the following five programs were not used during the review period: BEFIEX, CIEX, FINEX, incentives for trading companies and partially indexed long-term loans.

Department's Position: We have accepted the questionnaire response which says that these programs were not used. Absent contrary evidence, there is nothing to reconsider. We have received no such evidence.

Comment 4: The petitioner statesthat the Department should investigate three additional programs (Fundo Nacional de Participadoes, PROEX, and PROSIM) as a part of this review.

Department's Position: The Department will consider new

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allegations when possible. However, the petitioners have not submitted any evidence to support a reasonable possibility that these programs were used by producers of the products covered by this review. If we receive such an allegation we will consider it in the first review possible.

IPI Credit Premium Offset Tax

In our notice of preliminary results of review we stated that the IPI credit premium has been offset by an export tax since June 26, 1981. We have since discovered that, while this tax has been assessed since June, 1981, it was not collected until December 1982.
We consider the lag in collection to have conferred a benefit to the producers equivalent to an interest free loan, in the amount of the tax owed, rolled-over monthly until the tax was actually paid. Under current practice, the offset tax is to be paid 45 days after the end of the month in which the shipment earning the premium occurred. For purposes of calculating the benefit, we consider the interest free loan to have begun on the date the tax was due (i.e. 45 days after the end of the relevant month).
As a commercial benchmark, we have used the monthly Banco do Brasil rate for discounts of accounts receivable. The monthly rate in 1981 was 4.97 percent. Using this, we calculated the ad valorem benefit to be 0.95 percent. For purposes of the cash deposit of estimated countervailing duties, we believe this tax is now collected at the appropriate time and the potential benefit under this program is zero.

Final Results of the Review

Based on our analysis of comments received, we determine the aggregate net subsidy to be 4.70 percent for the period January 1, 1981 through December 31, 1981.
The Department will instruct the Customs Service to assess countervailing duties of 4.70 percent of the f.o.b. invoice price on any shipments exported on or after January 1, 1981 and entered, or withdrawn from warehouse, for consumption on or before August 2, 1981.
On August 3, 1981, the International Trade Commission ("the ITC") notified the Department that the Brazilian government had requested an injury determination for this order under section 104(b) of the Trade Agreements Act of 1979. On January 27, 1984, the ITC notified the Department of its determination that an industry in the United States would be materially injured or threatened with material injury if the order were revoked. As a result, the Department will instruct the Customs Service to assess countervailing duties, in the amount of the prevailing deposit rates at the time of entry, on all unliquidated entries of this merchandise entered, or withdrawn from warehouse, for consumption on or after August 3, 1981 and on or before January 27, 1984. These rates are 1 percent of the f.o.b. invoice price for the period August 3, 1981 through December 24, 1981; 2.53 percent of the f.o.b. invoice price for the period December 25, 1981 through September 7, 1983; and 0.82 percent of the f.o.b. invoice price for the period September 8, 1983 through January 27, 1984.
We determine the potential subsidy, for purposes of the cash deposit of estimated countervailing duties, to be 0.40 percent. The Department considers any rate less than 0.50 percent ad valorem to be de minimis.
The Department will instruct the Customs Service not to collect a cash deposit of estimated countervailing duties, as provided for in section 751(a)(1) of the Tariff Act, on any shipments of hydrogenated castor oil and 12-hydroxystearic acid from Brazil entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice. This deposit waiver shall remain in effect until publication of the final results of the next administrative review. The Department intends to begin the next administrative review on January 1, 1985.
The Department encourages interested parties to review the public record and submit applications for protective orders, if desired, as early as possible after the Department's receipt of the requested information.
This administrative review and notice are in accordance with section 751(a)(1) of the Tariff Act (19 U.S.C. 1675(a)(1)) and § 355.41 of the Commerce Regulations (19 CFR 355.41).
Dated: March 9, 1984.

Judith H. Bello,
Acting Deputy Assistant Secretary.