NOTICES

                        DEPARTMENT OF COMMERCE

                               [C-557-804]

      Final Negative Countervailing Duty Determination; Certain Steel Wire Nails
                              From Malaysia

                         Tuesday, September 5, 1989

 AGENCY: Import Administration, International Trade Administration, Commerce.

 ACTION: Notice.

 SUMMARY: We determine that no benefits which constitute bounties or grants within the
 meaning of the countervailing duty law are being provided to manufacturers,
 producers, or exporters in Malaysia of certain steel wire nails ("the subject merchandise"),
 as described in the Scope of Investigation section of this notice.

 EFFECTIVE DATE: September 5, 1989.

 FOR FURTHER INFORMATION CONTACT:Vincent Kane or Carole Showers, Office of
 Countervailing Investigations, Import Administration, International Trade
 Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue
 NW., Washington, DC 20230; telephone: (202) 377-2815 or 377-3217.

 SUPPLEMENTARY INFORMATION:

 Final Determination

 Based on our investigation, we determine that no benefits which constitute bounties or
 grants within the meaning of section 303 of the Tariff Act of 1930, as amended (the Act),
 are being provided to manufacturers, producers, or exporters in Malaysia of the subject
 merchandise.

 Case History

 Since publication of the Preliminary Negative Countervailing Duty Determination:
 Certain Steel Wire Nails from Malaysia (54 FR 26229, June 22, 1989), the following events
 have occurred. From July 17 to July 21, 1989, we conducted verification in Malaysia of
 the questionnaire responses of the Government of Malaysia and South Engineers Sdn.
 Bhd. (South Engineers). On August 11, 1989, we received a case brief filed on behalf of
 respondents.

 Scope of Investigation

 The United States has developed a system of tariff classification based on the international
 harmonized system of customs nomenclature. On January 1, 1989, the U.S. tariff
 schedules were fully converted to the Harmonized Tariff Schedule (HTS), as provided for
 in section 1201 et seq. of the Omnibus Trade and Competitiveness Act of 1988. All
 merchandise entered, or withdrawn from warehouse, for consumption on or after that
 date is now classified solely according to the appropriate HTS sub-headings. The HTS
 sub-headings are provided for convenience and Customs purposes. The written
 description remains dispositive.
 The products covered by this investigation are certain steel wire nails from Malaysia.
 These nails are: steel wire nails of one-piece construction as currently provided for in HTS
 items 7317.00.5505, 7317.00.5510, 7317.00.5520, 7317.00.5530, 7317.00.5540,
 7317.00.5550, 7317.00.5560, 7317.00.5570, 7317.00.5580, 7317.00.5590, and
 7317.00.6560; steel wire nails of two-piece construction, as currently provided for in
 HTS item 7317.00.7500; and steel wire nails with lead heads, as currently provided for in
 HTS item 7317.00.7500.

 Analysis of Programs

 For purposes of this final determination, the period for which we are measuring bounties
 or grants ("the review period") is calendar year 1988, which corresponds to the fiscal year
 of the respondent company. Based upon our analysis of the petition, the responses to our
 questionnaires, verification, and respondents' case brief, we determine the following:

 I. Programs Determined Not To Be Used

 We determine that manufacturers, producers, or exporters in Malaysia of the subject
 merchandise did not receive benefits during the review period for exports of the subject
 merchandise to the United States under the programs listed below. With the exception of
 the Double Deduction of Insurance Premiums for Importers, these programs were
 described in the preliminary determination in this investigation:

 A. Export Tax Incentives

 1. Abatement of Taxable Income Based on the Ratio of Export Sales to Total Sales and an
 Abatement of Five Percent of the Value of Indigenous Materials Used in Exports
 2. Allowance of a Percentage of Net Taxable Income Based on the F.O.B. Value of Export
 Sales
 3. Allowance of Taxable Income of Five Percent of the F.O.B. Value of Export Sales for
 Trading Companies Exporting Malaysian-Made Products
 4. Double Deduction for Export Credit Insurance Payments
 5. Double Deduction for Export Promotion Expenses
 6. Industrial Building Allowance

 B. Other Export Incentives

 1. Export Credit Refinancing
 2. Export Insurance Program

 C. Other Tax Incentives

 1. Pioneer Status Under the Investment Incentives Act of 1968
 2. Pioneer Status Under the Promotion of Investments Act of 1986
 3. Investment Tax Allowance
 4. Double Deduction for Operational Expenses
 5. Abatement of Five Percent of Adjusted Income

 D. Medium- and Long-Term Government Financing

 Medium- and long-term financing provided by the following institutions:
 - the Industrial Bank of Malaysia (formerly the Industrial Development Bank of Malaysia)
 - the Development Bank of Malaysia
 - the Borneo Development Corporation
 - the Sabah Development Bank

 E. Double Deduction of Insurance Premiums for Importers

 Although not alleged by petitioner and not included in our notice of initiation or
 preliminary determination, we found during verification that South Engineers claimed a
 double deduction for insurance premiums on imports on its 1988 income tax return. The
 double deduction is authorized under the provisions of Income Tax (Deduction of
 Insurance Premiums for Importers) Rule 1982. The rule provides that the double 

*36841


 deduction may be taken by importers only if insurance is purchased from a company
 incorporated in Malaysia.
 In the case of South Engineers, we verified that the insurance premiums for which a
 double deduction was claimed were for imports of merchandise entirely unrelated to the
 manufacture or exportation of the subject merchandise. Therefore, we determine that,
 with respect to the subject merchandise, the double deduction of insurance premiums for
 importers was not used.

 Verification

 We verified the information used in making our final determination in accordance with
 section 776(b) of the Act. During verification we followed standard verification
 procedures including meeting with government and company officials, examining
 relevant documents and accounting records, tracing information in the responses to
 source documents, accounting ledgers and financial statements, and collecting additional
 information that we deemed necessary for making our final determination. Our
 verification results are outlined in detail in the public versions of the verification reports,
 which are on file in the Central Records Unit (Room B-099) of the Main Commerce
 Building.
 This determination is published pursuant to section 705(d) of the Act (19 U.S.C.
 1671d(d)).
 Dated: August 23, 1989.

 Eric I. Garfinkel,

 Assistant Secretary for Import Administration.

 [FR Doc. 89-20730 Filed 9-1-89; 8:45 am]

 BILLING CODE 3510-DS-M