NOTICES
DEPARTMENT OF COMMERCE
[C-357-052]
Non-Rubber Footwear From Argentina; Final Results of Countervailing Duty
Administrative Review
Wednesday, November 16, 1988
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AGENCY: International Trade Administration, Import Administration,
Commerce.
ACTION: Notice of final results of countervailing duty administrative review.
SUMMARY: On April 27, 1988, the Department of Commerce published the preliminary
results of its administrative review of the countervailing duty order on non-rubber
footwear from Argentina. We have now completed that review and determine the total
bounty or grant during the period January 1, 1986 through December 31, 1986 to be zero
for 24 firms 3.13 percent ad valorem for all other firms.
EFFECTIVE DATE: November 16, 1988.
FOR FURTHER INFORMATION CONTACT:Lorenza Olivas or Bernard Carreau, Office of
Compliance, International Trade Administration, U.S. Department of Commerce,
Washington, DC 20230; telephone: (202) 377-2786.
SUPPLEMENTARY INFORMATION:
Background
On April 27, 1988, the Department of Commerce ("the Department") published in the
Federal Register (53 FR 15094) the preliminary results of its administrative review of the
countervailing duty order on non-rubber footwear from Argentina (44 FR 3474,
January 17, 1979), The Department has now conducted that administrative review in
accordance with section 751 of the Tariff Act of 1930 ("the Tariff Act").
Scope of Review
Imports covered by this review are shipments of Argentine footwear described in Part 1A
of Schedule 7 of the Tariff Schedules of the United States Annotated, excluding items
700.5100 through 700.5400, 700.5700 through 700.7100, and 700.9000. These
produces are currently classifiable under the Harmonized Tariff Schedule (HTS) item
number listed in the Appendix to this notice.
The review covers the period January 1, 1986 through December 31, 1986 and three
programs: (1) A rebate of indirect taxes; (2) post-export financing; and (3) pre-export
financing.
Analysis of Comments Received
We gave interested parties an opportunity to comment on the preliminary results. We
received written comments from the Argentine Footwear Industry Federation ("the
Federation").
Comment 1: The Federation argues that the appropriate benchmark for measuring the
benefits from pre- and post-export financing is the yearly average of only the regulated
interest rates, not the average of both the regulated and the unregulated rates. The
Federation points out that, according to the Subsidies Appendix (49 FR 18016) (1984),
the Department's practice of using a national average commercial interest rate to measure
the benefit from short-term preferential loan programs was adopted to avoid the
administrative burden of having to compute company-specific benchmarks. The
Federation maintains that it is not requesting the Department to use company-specific
benchmarks. Rather, because non-rubber footwear producers provided evidence that
they were able to secure standard commercial loans at the regulated interest rates, it is
asking the Department to compute the benchmark using only those interest rates that
were available to the specific exporters covered by this review.
Department's Position: We disagree. The benchmark rate should reflect the predominant
alternative sources of short-term financing available to an average firm in Argentina.
Since unregulated interest rate loans make up a significant portion of the lending in
Argentina, it is appropriate to include them in the national average
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benchmark.
(See Oil Country Tubular Goods from Argentina; Final Results of Countervailing
Duty Administrative Review (53 FR 846, January 9, 1987); and Roses and Other Cut
Flowers from Colombia; Final Results of Countervailing Duty Administrative Review
(52 FR 248, December 28, 1987).)
Comment 2: The Federation requests that the Department correct certain clerical errors
in its calculations of the benefits from the pre- and post- export financing programs in the
preliminary results.
Department's Position: With regard to Mocassino, we have revised our calculations in
those instances where we used the incorrect loan value to determine the pre-export
financing benefit. We have also weight-averaged Cerro's pre-export financing benefits
based on its non-rubber footwear exports to the United States.
In our preliminary results, we based our benchmark rate on a six-month average of the
regulated and unregulated interest rates because the level of pre- and post-export lending
to most of the footwear producers was disproportionately spread between the first and
second half of the year. Since the monthly regulated and unregulated rates did not vary
greatly during the review period, we have now used a yearly average benchmark. (See
Final Affirmative Countervailing Duty Determinations and Countervailing Duty
Orders: Certain Welded Carbon Steel Pipe and Tube Products from Argentina, (53 FR
37619, September 27, 1988).)
Adjusting for all these changes, we determine the benefit to be 2.57 percent ad valorem
for pre-export financing and 0.56 percent ad valorem for post-export financing.
Comment 3: The Federation argues that the Department should grant a zero duty deposit
rate to new companies that did not export to the United States during the period of
review. The new exporters have individually certified that they have not received, and
will not apply for, either pre- or post-export financing, the two programs preliminarily
found countervailable by the Department in this review. Similarly, the Department should
grant a zero duty deposit to three companies found to have received benefits during the
review period that have also certified they will not receive either pre- or post- export
financing in the future.
Department's Position: Generally, to be considered for a zero rate for purposes of cash
deposit of estimated coutervailing duties, a company must have exported during the
review period. If a company has not exported during the review period, we have no "track
record" on which to rely in determining the appropriate cash deposit rate. Therefore,
until the new companies demonstrate otherwise, the "all other" rate is our best estimate of
the countervailable benefits received by these companies. This has long been our
practice, not only for new companies, but also for all unknown exporters. (See e.q.,
Certain Textile Mill Products from Mexico; Final Results of Countervailing Duty
Administrative Review (52 FR 45010, November 24, 1987); cf. Asahi Chemical Industry
Co. v. United States, 548 F. Supp. 1261, 1267 (Ct. Int'l Trade 1982) (Asahi), holding
reasonable the Department's use of most recent price and value information to establish
margins when there were no entries during the period of review.)
Our policy regarding the companies that did export during the review period is to set a
cash deposit rate that reflects our best estimate of the current benefit that those
companies receive from countervailable programs. We normally change the cash deposit
rate if a program-wide change has occurred before the publication of our preliminary
results, or if some other change has occurred that we are able to verify before publishing
the preliminary results. In this case, neither has occurred with respect to the new
companies or the companies found to have received benefits during the period of review.
Therefore, we conclude that the cash deposit rate should be the same as the assessment
rate for all companies.
Comment 4: The Federation contends that the cash deposit requirements of the
Commerce Regulations do not apply to new exporters because new exporters were not
subject to an administrative review. Therefore, it is not logical for the Department to
assign the "all other" rate to new exporters. If the Department believes it must set a cash
deposit rate for new exporters, it should base that rate on any relevant facts collected
during the review, including the renunciation certifications. In this way, the duty deposit
rate will realistically correspond to the established facts.
Department's Position: We disagree with the Federation's contention that the cash deposit
rate set in an administrative review does not apply to new exporters. Section 701 of the
Tariff Act provides for the imposition of countervailing duties on all merchandise
imported into the United States, the production or exportation of which receives a
subsidy. Consequently, in an administrative review, we review exports of all merchandise
except exports of merchandise from companies that have been excluded. We cannot
exclude a company from a countervailing duty order once the order is issued.
Requests for company exclusions must be submitted within 30 days of publication of a
ntoice to initiate an investigation, and the decision as to the exclusion must be made in
the Department's final determination (19 CFR 355.38). No company has been excluded
from this order. All Argentine firms exporting non-rubber footwear to the United States
are subject to the results of this review, including the new exporting firms. Consequently,
the "all other" rate for duty deposit purposes applies to the merchandise exported to the
United States by all firms, whether or not the firms exported during the period of review.
(Cf. Asahi.)
Comment 5: The Federation claims that the Department's selection of the "all other" rate
as the duty deposit rate for the new exporters is arbitrary and capricious. Since the Trade
and Tariff Act of 1984 provides for the automatic assessment of countervailing duties
in the amount of the estimated duty required at the time of entry, the duty deposit rate
could become the final assessed countervailing duty rate if a review is not requested.
The countervailing duties actually assessed on current entries by the new exporters
could reflect a "benefit" that bears no relation whatsoever to reality.
Due process is denied the new exporters if the duty deposits required for 1988 and 1989
entries are based on outdated or erroneous information for 1986.
Department's Position: We disagree with the Federation's claim that our selection of the
"all other" rate as the duty deposit rate for new exporters is arbitrary and capricious. (See
our positions on Comments 3 and 4.) The Federation has the opportunity in January 1989
to request a review of 1988 entries, and in January 1990, of 1989 entries. If we receive
review requests for those years, we will collect updated information. Whether we conduct
reviews or follow the automatic liquidation procedure, we believe that due process is
fully served.
Final Results of Review
After considering all of the comments received, we determine the total bounty or grant to
be zero for the 24 firms listed below and 3.13 percent ad valorem for all other firms for
the period January 1, 1986 through December 31, 1986.
The following firms received no benefits during the period of review:
1. Alarsu S.A.
2. Alikon
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3. Alpargatas S.A.I.C.
4. Armeny S.A.
5. Balassi E Hijos S.A.
6. Barttolome Blengio y Cia
7. Bonsoir S.R.L.
8. Borcal S.A.
9. Camboriu S.R.I.
10. Casa Corazon Cueros S.R.L.
11. Costa S.A.
12. Creaciones Ketal S.R.L.
13. Dinor S.A.
14. E-Meu S.R.L.
15. Fabrica De Calzado M.B. S.A.
16. Jose Cabrabs E Hijos
17. Jose Gravagna S.A.
18. La Scarpa S.A.
19. Linea Vanguard S.A.
20. Macri Calz S.A.
21. Mocasineria Morganti S.R.L.
22. Orlando Asan
23. Pell-Cuer S.R.L.
24. Vogue Shoes S.R.L.
The Department therefore will instruct the Customs Service to liquidate, without regard
to countervailing duties, entries of this merchandise from the 24 firms listed above
and to assess countervailing duties of 3.13 percent of the f.o.b. invoice price on
shipments of this merchandise from all other firms exported on or after January 1, 1986
and on or before December 31, 1986.
Further, as provided by section 751(a)(1) of the Tariff Act, the Department will instruct
the Customs Service to waive cash deposits of estimated countervailing duties on
shipments of this merchandise from the 24 firms listed above and to collect a cash deposit
of estimated countervailing duties of 3.13 percent of the f.o.b. invoice price on
shipments from all other firms 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 355.10.
Jan W. Mares,
Assistant Secretary, Import Administration.
Date: November 8, 1988.
Appendix--Non-Rubber Footwear HTS Classifications
6115.91.00.00 6115.93.20.00 6209.90.40.00 6401.92.30.00 6401.92.60.00
6401.99.80.00 6402.11.00.00 6402.19.10.00 6402.19.50.00 6402.30.30.00
6402.30.50.00 6402.91.40.00 6402.91.50.00 6402.99.05.00 6402.99.10.00
6402.99.15.00 6402.99.70.00 6402.99.80.00 6403.11.30.00 6403.11.60.00
6403.19.15.00 6403.19.45.00 6403.19.60.00 6403.20.00.00 6403.30.00.00
6403.40.30.00 6403.40.60.00 6403.51.30.00 6403.51.60.00 6403.51.0.00
6403.59.15.00 6403.59.30.00 6403.59.60.00 6403.59.90.00 6403.91.30.00
6403.91.60.00 6403.91.90.00 6403.99.20.00 6403.99.40.00 6403.99.60.00
6403.99.75.00 6403.99.90.00 6404.11.20.00 6404.19.15.00 6404.19.20.00
6404.19.25.00 6404.19.30.00 6404.19.35.00 6404.19.509.00 6404.19.60.00 [FN1]
6404.19.70.00 [FN1] 6404.19.35.00 6404.19.50.00 6404.19.60.00 6404.19.70.00
6404.20.20.00 6404.20.40.00 6404.20.60.00 6405.10.00.00 6405.20.30.00
6405.20.60.00 6405.20.90.00 6405.90.90.00 6406.10.05.00 6406.10.10.00
6406.10.20.00 6406.10.45.00 6812.50.10.00 9021.19.80.00
FN1 Except footwear which is over 50 percent by weight of rubber or plastics or over 50
percent by weight of fibers and rubber or plastics with at least 10 percent by weight being
rubber or plastics.
[FR Doc. 88-26471 Filed 11-15-88; 8:45 am]
BILLING CODE 3510-DS-M