57 FR 5248

                                   NOTICES

                           DEPARTMENT OF COMMERCE

                      International Trade Administration

                                  (C-549-804)

           Carbon Steel Butt-Weld Pipe Fittings From Thailand; Final Results of
                    Countervailing Duty Administrative Review

                            Thursday, February 13, 1992

AGENCY: International Trade Administration/Import Administration, Department of
Commerce.

ACTION: Notice of final results of countervailing duty administrative review.


                               (Cite as: 57 FR 5248)

SUMMARY: On October 25, 1991, the Department of Commerce published the preliminary results
of its administrative review of the countervailing duty order on carbon steel butt-weld pipe
fittings from Thailand for the period November 3, 1989 through December 31, 1990 (56 FR
55283). We have now completed that review and determine the total bounty or grant to be 1.02
percent ad valorem for the period November 3, 1989 through December 31, 1989 and 1.76 percent
ad valorem for the period January 1, 1990 through December 31, 1990 for all exports of the subject
merchandise to the United States. The rate for the period January 1, 1990 through December 31,
1990 differs from the preliminary rate of 2.02 percent ad valorem because of calculation
adjustments.

EFFECTIVE DATE: February 13, 1992.

FOR FURTHER INFORMATION CONTACT: Donna Kinsella or Barbara Tillman, Office of
Countervailing Duty Compliance, International Trade Administration, U.S.
Department of Commerce, Washington, DC 20230; telephone (202) 377-2786.

SUPPLEMENTARY INFORMATION:

Background

On October 25, 1991, the Department of Commerce (the Department) published in the Federal
Register (56 FR 55283) the preliminary results of its administrative review of the
countervailing duty order on carbon steel butt- weld pipe fittings from Thailand (55 FR
1695; January 18, 1990). The Department has now completed that administrative review in
accordance with section 751 of the Tariff Act of 1930, as amended (the Tariff Act).

Scope of Review

Imports covered by this review are shipments of carbon steel butt-weld pipe fittings, having an
inside diameter of less than 360 millimeters (fourteen inches), imported in either finished or
unfinished form. These formed or forged pipe fittings are used to join sections in piping systems
where conditions require permanent, welded connections, as distinguished from fittings based on
other fastening methods (e.g., threaded, grooved, or bolted fittings). During the review period, such
merchandise was classifiable under item number 73.07.93.30 of the Harmonized Tariff Schedule.
The HTS item number is provided for convenience and Customs purposes. The written description
remains dispositive.

The review covers the period November 3, 1989 through December 31, 1990, and the following
programs: (1) Tax certificates for exports; (2) export packing 
credits; (3) tax and duty exemptions under section 28 of the Investment Promotion Act (IPA); (4)
electricity discounts for exporters; (5) repurchase of industrial bills; (6) export processing zones;
(7) International Trade Promotion Fund; (8) reduced business taxes for producers of intermediate
goods for export industries; and (9) additional incentives under the IPA. Three companies
produced and exported the subject merchandise to the United States during the review period.

Analysis of Comments Received

We gave interested parties an opportunity to comment on the preliminary results. We received
comments from all three respondents--TTU Industrial Corporation Ltd., (TTU), Awaji Sangyo
(Thailand) Company, Ltd., (AST), and Thai Benkan Company, Ltd., (TBC)--and the Royal Thai
Government (RTG).

Comment 1: All three respondents and the RTG argue that the Department should recalculate AST's
benefits under section 28 of the Investment Promotion Act to reflect the actual amount of
exempted import duties and taxes on AST's importations of machinery during the review period.
AST states that in its questionnaire response it reported section 28 exemptions on duties and taxes
based upon the amounts stated in its applications to the Board of Investment. AST argues that at
verification it 
presented copies of Thai Customs import entry documentation which showed that the actual
exempted duties and taxes for two importations were different than the duty and tax exemptions
reported in its applications to the BOI and in the questionnaire response. Respondents argue
therefore that the Department should calculate the benefits under section 28 using the actual
amount of duties and taxes exempted as evidenced on the Thai Customs import entry
documentation.

Response: We agree with respondents that, with respect to taxes and import charge exemptions, it
is the Department's normal practice to calculate the benefit to respondent based on the actual
amount of taxes and import charges a firm would have paid absent the exemption. See, e.g., Final
Affirmative Countervailing Duty Determination; Certain Fresh Cut Flowers from Costa Rica
(52 FR 32030, 32031, August 25, 1987). While we note that data regarding AST's actual tax and
duty exemptions was not submitted on the record of this review until after verification, we also find
that the actual tax and duty exemptions stated on the relevant Thai Customs import documentation
vary from the estimated tax and duty exemptions on only two importations. Given that this change
constitutes only a minor correction to the questionnaire response, and given that it is our normal
practice to use actual exemption amounts where possible, for these final results, we have used the
actual amount of duties and taxes exempted on AST's imports of machinery in calculating the
benefits under section 28 of the IPA.

*5249

Comment 2: AST and TBC argue that for purposes of calculating the benefit received under section
28 of the IPA the Department should exclude tax and duty exemptions on machinery which is used
exclusively to produce non- subject merchandise.
AST states that in its questionnaire response it reported that a portion of the company's tax and
duty exemptions under section 28 were for machinery and equipment used to produce
merchandise outside the scope of this review. AST states that it calculated the amount of the
exemptions on such equipment and requested that the Department exclude this amount from its
calculation of AST's benefits. AST asserts that it demonstrated at verification that the section 28
exemptions for which it requested exclusion consisted entirely of duties and taxes on imported
machinery used exclusively to produce non-subject merchandise.

Response: We disagree with respondents. At verification, the Department examined documentation
relating to the importation of machinery, some of which respondent states is used exclusively to
produce non-subject merchandise. As we stated in our preliminary results, however, we were
unable to tie exempted duties and taxes as recorded on Thai Customs documentation to specific
pieces of machinery based on the evidence obtained at verification and on the record. As a result,
we calculated the benefit under this program by dividing the total amount of exemptions received
during the review period by the respondent's total export sales value.

The documentation referred to by respondent as proof that certain pieces of machinery exempted
from duties and taxes are used exclusively to produce merchandise outside the scope of the order
consists of invoices, packing lists, and Thai Customs import documentation. While the packing lists
accompanying certain invoices list various pieces of equipment by size, the relevant Customs
documentation does not specify the value of, or the exact amount of, actual duties and taxes
pertaining to individual pieces of equipment. As a result, the Department could not determine the
exact amount of tax and duty exempted on each piece of equipment, and, as such, could not
segregate the exact amount of taxes and duties exempted on machinery used to produce
non-subject merchandise. Furthermore, after reviewing respondent's questionnaire response and
subsequent submissions and examining documentation obtained at verification relating to this
issue, the Department found several discrepancies. For example, respondent's September 20, 1991
submission to the Department differs from its original questionnaire response as to which
exemptions should be excluded from the benefit calculation. Respondent provided no explanation
for these discrepancies.
In view of the above, for these final results, the Department has continued to include all tax and
duty exemptions received during the review period in calculating section 28 benefits.

Comment 3: The RTG and TTU argue that the Department should revise its treatment of the
allowable rebate rate under the tax certificate program to reflect information submitted by
respondents on additional physically incorporated inputs.

Response: Respondents' information relating to the tax certificate program is untimely. Contrary to
statements in respondents' brief, there was no discussion of this matter at verification. The
Department did not receive additional information regarding the allowable rebate rate under the
tax certificate program until after the preliminary results of review were issued. In accordance with
Departmental practice, new factual information submitted after the issuance of preliminary results
of review is considered untimely and cannot be considered for these final results.

Comment 4: Respondents argue that in the preliminary results of this review the Department
wrongly rejected the use of the 1989 and 1990 Bank of Thailand (BOT) benchmarks in favor of
an average of the minimum loan rates (MLR) and maximum overdraft rates (MOR) for 1989 and
1990. They argue that the BOT benchmarks are based on accurate and reliable data and that the
methodology used to calculate the BOT benchmarks is consistent with the Department's proposed
regulations. Respondents state that the MLR and MOR are not representative of the actual average
commercial lending rates in Thailand, because much commercial lending in Thailand is at
lower rates. Based on the 
above, respondents urge the Department to utilize the BOT benchmark interest rates for these final
results of review.

Response: As stated in the preliminary results of this review, the Department concluded in Final
Affirmative Countervailing Duty Determination and Countervailing Duty Order;
Steel Wire Rope from Thailand (56 FR 46299, September 11, 1991) (Steel Wire Rope)
that the MLR and MOR rates are more representative of short-term interest rates in Thailand
for calendar years 1988 and 1989 than the weighted-average interest rates charged by commercial
banks on domestic loans, bills, and overdrafts used in previous Thai cases. Respondents submitted
no evidence on the record of this review to refute this determination. Therefore, as the benchmark
interest rate for purposes of calculating the benefit from Export Packing Credit loans (EPCs) on
which interest was paid in 1989, we used an average of the 1989 MLR and MOR rates as calculated in
Steel Wire Rope. Furthermore, absent new evidence that the MLR and MOR rates are not more
representative of short-term interest rates during 1990 than the benchmark calculated by the BOT,
we have used an average of these rates during 1990 as the benchmark interest rate for calculating
the benefit from EPCs on which interest was paid in 1990.

Final Results of Review

As a result of our review, we determine the total bounty or grant to be 1.02 percent ad valorem for
the period November 3, 1989 through December 31, 1989 and 1.76 percent ad valorem for the
period January 1, 1990 through December 31, 1990.

The Department will instruct the Customs Service to assess countervailing duties of 1.02
percent of the f.o.b. invoice price on all shipments of this merchandise exported on or after
November 3, 1989 and on or before December 31, 1989 and 1.76 percent of the f.o.b. invoice price
on all shipments of this merchandise exported on or after January 1, 1990 and on or before
December 31, 1990.

The Department will instruct the Customs Service to collect a cash deposit of estimated
countervailing duties of 1.76 percent of the f.o.b. invoice price on all shipments of this
merchandise from Thailand entered, or withdrawn from warehouse, for consumption on or
after the date of publication of this notice.

This deposit requirement shall remain in effect until publication of the final results of the next
administrative review.
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 19 CFR 355.22.
Dated: January 31, 1992.

Alan M. Dunn,

Assistant Secretary for Import Administration.

(FR Doc. 92-3518 Filed 2-12-92; 8:45 am)

BILLING CODE 3510-DS-M