NOTICES

DEPARTMENT OF COMMERCE

[C-538-801]

Final Negative Countervailing Duty Determination: Shop Towels from Bangladesh

Monday, July 1, 1991

AGENCY: Import Administration, International Trade Administration, Commerce.

EFFECTIVE DATE: July 1, 1991.

FOR FURTHER INFORMATION CONTACT: Kristal Eldredge, 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) 377-0631.

Final Determination

Case History

Since publication of our preliminary determination in the Federal Register (56 FR 15330, April 16, 1991) (Preliminary Determination), the following events have occurred. We conducted verification in Bangladesh of the questionnaire responses of the Government of the People's Republic of Bangladesh (GOB), Sonar Cotton Mills (Bangladesh), Ltd. (Sonar), Eagle Star Textile Mills, Ltd. (Eagle Star), Greyfab (Bangladesh), Ltd. (Greyfab), Khaled Textile Mills, Ltd. (Khaled), and Shabnam Textiles (Shabnam) from April 21, 1991 through May 2, 1991. Case briefs were filed by petitioner and respondents on June 4, 1991, and rebuttal briefs were filed by both parties on June 10, 1991. A public hearing was held on June 12, 1991, at the request of petitioner.

Scope of Investigation

The products covered by this investigation are shop towels. Shop towels are absorbent industrial wiping cloths made from a loosely woven fabric. The fabric may be either 100 percent cotton or a blend of materials. Shop towels are primarily used for wiping machine parts and cleaning ink, grease, oil, or other unwanted substances from machinery or other items in industrial or commercial settings. Shop towels are currently provided for in subheadings 6307.10.2005 and 6307.10.2015 of the Harmonized Tariff Schedule (HTS). Although the HTS subheadings are provided for convenience and customs purposes, our written description of the scope of this investigation is dispositive.

Analysis of Programs

For purposes of this investigation, the period for which we are measuring bounties or grants ("the review period") is calendar year 1990, which corresponds to the most recently completed fiscal year of the majority of the respondent companies. The other respondent companies each have different fiscal years which overlap this period. In accordance with our practice in such situations, we have chosen the most recently completed calendar year as our review period.

Based upon our analysis of the petition, responses to our questionnaires, verification, and written comments from petitioner and respondents, we determine the following:

I. Programs Determined to Confer Bounties or Grants

We determine that bounties or grants are being provided to manufacturers, producers, or exporters in Bangladesh of shop towels under the following programs:

A. Concessional Export Credit Financing

Under Number One, Parts (i) and (ii) of the "Export Policy 1989-1991," the GOB provides concessional interest rates on export financing for non-traditional exports. Shop towels are considered a non-traditional export and, therefore, shop towel producers are eligible for this financing.

The Banking Control Department (BCD) of Bangladesh Bank, the central bank of Bangladesh, sets interest rate bands for all types of financing. There are eleven interest rate bands. There are three loan categories that may apply to the shop towel industry. These are (1) Large- and Medium-Scale Industry, (2) Working Capital (Other than Jute), and (3) Other Exports.

To utilize this program, a shop towel producer applies for a loan from a commercial bank and specifies that the loan will be used for the export of shop towels. If the commercial bank decides to make the loan, it is made within the band of interest rates for "Other Exports". We verified that the band for other exports during the review period was 8 percent to 11 percent. BCD Circular Number 40 of December 9, 1990, changed this band to 8.5 percent to 11.5 percent. The Bangladesh Bank then compensates the lending bank for the difference between the band of interest rates charged to shop towel exporters and the band of interest rates charged for other short-term commercial loans.

We verified that only one company, Shabnam, received a loan under this program on which interest was paid during the review period. Because only exporters are eligible for these loans, we determine that they are countervailable to the extent that they are provided at preferential rates.

As the benchmark for short-term (less than one-year) loans, it is our practice to use the average interest rate for an alternative source of short-term financing in the country in question. In determining this benchmark, we will normally rely upon the predominant source of short-term financing.

As previously stated, in Bangladesh, bands of interest rates are established by the BCD of Bangladesh Bank. We verified that the band of interest rates on short-term commercial loans is 12 percent to 20 percent per annum. We verified that during the review period, the average interest rate applicable to the predominant source of short-term commercial financing was 18 percent. We, therefore, selected 18 percent as our benchmark rate.

Comparing the benchmark rate to the rate charged on the loan made under this program during the review period, we find that this loan is preferential and, therefore, confers a bounty or grant on exports of shop towels.

To calculate the benefit from the loan made under this program on which interest was paid during the review period, we followed the short-term loan methodology which has been applied consistently in our past determinations and which is described in more detail in the Subsidies Appendix attached to the notice of Cold-Rolled Carbon Steel Flat-Rolled Products from Argentina: Final Affirmative Countervailing Duty Determination and Countervailing Duty Order, 49 FR 18006, April 26, 1984; see also, Alhambra Foundry v. United States, 626 F. Supp. 402 (CIT, 1985). Accordingly, we compared the amount of interest actually paid during the review period to the amount that would have been paid at the benchmark rate of 18 percent.

We verified that Shabnam exports the subject merchandise only to the United States, and therefore, we divided the total interest savings by the value of Shabnam's exports of the subject merchandise to the United States during the review period to obtain the company's ad valorem rate. We then weight-averaged the individual benefit by each company's share of total exports of the subject merchandise to the United States. On this basis, we determine the benefit to be 0.02 percent ad valorem.

Furthermore, the GOB formerly provided an additional two percent incentive on interest rates when exporters of non-traditional goods exceeded export earning targets established on the basis of previous year earnings. We verified that this aspect of the program was discontinued under BCD Circular Number 33 of November 16, 1989.

B. Income Tax Holiday

Under section 45 of the Income Tax Ordinance, 1984, the GOB provides a tax holiday for industrial undertakings provided that certain conditions are met. All producers in Bangladesh who create a new manufacturing operation which will in turn create jobs are eligible for an exemption from income taxes. However, the number of years a company may benefit from this program differs by region. Under the current statute, there is a five-year exemption in developed areas; a seven-year exemption in less developed areas; and a nine-year exemption in the least developed areas. Industrial undertakings in an Export Processing Zone (EPZ) are eligible for a ten-year exemption from taxes beginning with the first month the business commences. After ten years, the income tax holiday is converted into a 50 percent tax rebate on export sales. Companies located in the Hill Tracts are eligible for a twelve-year tax holiday.

We verified that the availability of the five-year tax holiday is not dependent on the exportation of merchandise. Furthermore, we verified that this tax holiday is not limited to an enterprise or industry or group of enterprises or industries. However, as previously stated, the number of years a company may receive benefits from this program is based on the region in which it is located.

Therefore, we determine that this program confers a bounty or grant to the extent that shop towel producers located in a lesser developed area, least developed area, in an EPZ, or in the Hill Tracts are allowed a longer income tax holiday than producers located in a more developed region.

We verified that Sonar, Greyfab, Khaled, and Shabnam received income tax holidays during the review period. Because Sonar and Greyfab are located in the Chittagong EPZ, they are eligible for a ten-year exemption, while Khaled and Shabnam are eligible for a seven-year exemption because they are located in a lesser developed region.

To determine whether countervailable benefits were provided under this program during the review period, we used the five-year tax holiday as our "benchmark". Any additional years of income tax holiday beyond this benchmark would, therefore, confer a countervailable benefit. Because (1) the companies under investigation who are eligible for an income tax holiday have been eligible for such benefits for fewer than five years and (2) the companies do not have taxable income during the review period, we determine that the income tax holiday did not confer a benefit during the review period.

C. Export Performance Benefit

In Bangladesh, there is a multiple exchange rate system made up of two legally recognized rates: the official exchange rate, which is set by the GOB, and the Secondary Exchange Market (SEM) rate, which is determined by a committee of authorized dealers and approved by the GOB. A third rate, the flow rate, also exists, but is not used for commercial transactions.

The objective of this system was to encourage Bangladeshi workers abroad to exchange their earnings through official channels. Previously, a large portion of the earnings of workers abroad was exchanged through a black market. The GOB created the SEM rate to discourage the use of a black market rate.

Under this multiple exchange rate system, most exporters are required to convert their export earnings at the less favorable official rate. According to the GOB, because exporters frequently complained about this system, the Export Performance Benefit Scheme (XPB) was created to compensate the exporters for their losses. Under Number Four of the "Export Policy 1989-1991," the GOB allows exporters of non-traditional products to receive a remittance calculated as a portion of the difference between the official rate and the SEM rate (the rate at which most imports are purchased). The authorized dealer pays out the XPB premium and then seeks reimbursement of the XPB from the Bangladesh Bank. Exporters located in an EPZ may maintain a portion of their earnings in a dollar account and exchange the remainder of their export earnings at the SEM rate. Therefore, exporters located in an EPZ are not eligible for XPB.

Depending on the amount of domestic value or content in the exported product, exporters are entitled to a 100 percent, 70 percent, or 40 percent XPB. A 100 percent entitlement means that the exporter can receive 100 percent of the difference between the official and SEM rates, in effect, granting the SEM rate. The 70 percent and 40 percent

entitlements similarly mean that the exporter can receive 70 percent or 40 percent of the difference between the two rates.

We verified that Eagle Star, Khaled, and Shabnam received XPB during the review period. Eagle Star is entitled to a 70 percent XPB, while Khaled and Shabnam are entitled to a 100 percent XPB. Because all exporters who are eligible for XPB are required to convert their export earnings at the less favorable official exchange rate while most imports are purchased at the SEM, the XPB is designed to mitigate the exporter's losses by covering some or all of the disparity in the two rates. For example, when exporters go to an authorized dealer to exchange their export earnings from dollars to takas (the Bangladeshi currency), they will have to exchange at the less favorable official rate and, therefore, receive fewer takas per dollar than if they had been able to exchange at the SEM rate. Conversely, importers exchange their takas for dollars using the SEM rate and, therefore, must give the authorized dealer more takas per dollar than they would receive as exporters. Thus, this program allows exporters to receive a remittance equal to the difference between the two rates.

However, during verification, we noted that one company, Shabnam, applied for XPB twice for the same shipments, once at a 100 percent entitlement and once at a 70 percent entitlement. Therefore, for some transactions, the company received 170 percent entitlement. While we verified with the GOB that no company is supposed to receive more than 100 percent entitlement, this company received an overpayment and therefore, received more than needed to equalize the losses resulting from the exchange rate differences.

Furthermore, we noted on verification that the commercial banks do not consistently apply the official and SEM exchange rates when applying them to import and export transactions. We verified that the companies applied for XPB at the rate of either .61 taka per dollar, .62 taka per dollar, or .58 taka per dollar, which reflects the difference between the official and SEM rates. However, when the commercial banks actually posted export and import transactions to the companies' accounts they generally used rates with a smaller difference between them. Therefore, the difference between the claimed XPB and the exchange rate differential actually used by the commercial banks also results in an overpayment to the companies.

We determine that this program provides a countervailable benefit to the companies to the extent that it provides an overpayment of XPB beyond what should have been paid to equalize the exporter's exchange rates for imports and exports.

We calculated the benefit by calculating the average difference between the XPB rate applied for and received by each company and the average difference between the two rates actually received by the companies. We multiplied this result by each company's total FOB amount to get the amount overpaid. We added to this overpayment any overpayment attributable to double claims.

We verified that the payments received by Eagle Star, Shabnam, and Khaled were only based on the companies, exports of the subject merchandise to the United States, and therefore, divided the result by the value of exports of the subject merchandise to the United States during the review period to obtain each company's ad valorem rate. We then weight-averaged the individual benefit by each company's share of total exports of the subject merchandise to the U.S. On this basis, we determine the benefit to be 0.14 percent ad valorem.

D. GOB Equity Infusion Converted Into An Interest-Free Loan

During verification, we noted an entry in Eagle Star's financial statement regarding a GOB equity converted loan. We verified the following information with respect to this loan. On March 26, 1972, Eagle Star was nationalized by the GOB. On June 30, 1983, when the government still owned the company, it made a capital investment of 781,000 taka into the company. The GOB returned the company to its original owners under an agreement dated June 1, 1985.

One of the terms of the agreement was that the original owners became responsible for any contracts, loans, or any other liabilities undertaken by the GOB while the company was under its control. In addition, the original owners of the company had to repay to the government the amount of capital investment made by the government into the company. The agreement specifies that the capital investment of 781,000 taka would be treated as a loan to the company to be paid within nine years, at an interest rate determined by the government. No interest was charged to the company.

We verified that receipt of this loan was not dependent on the exportation of merchandise. Furthermore, there is no evidence that this type of loan is not limited to a specific industry or enterprise or group of industries or enterprises. Therefore, we determine that it is countervailable to the extent that it was made on terms inconsistent with commercial considerations.

In the absence of information on long-term commercial interest rates in Bangladesh, we used as our benchmark the same benchmark discussed under the Concessional Export Credit Financing section of this notice (i.e., 18 percent). Comparing the benchmark rate to the rate charged on the loan (0 percent), we find that this loan was made on terms inconsistent with commercial considerations and, therefore, confers a bounty or grant on exports of the subject merchandise.

To calculate the benefit from the loan we followed the short-term loan methodology fully described in the Concessional Export Credit Financing section of this notice. We divided the total interest savings by the total value of Eagle Star's sales during the review period to obtain the company's ad valorem rate. We then weight-averaged the individual benefit by exports of the subject merchandise to the United States. On this basis, we determine the benefit to be 0.01 percent ad valorem.

II. Program Determined Not To Confer a Bounty or Grant

Based on the responses and verification, we determine that bounties or grants are not being provided to manufacturers, producers, and exporters in Bangladesh under the following program:

A. Concessional Duty Treatment Under the Indigenous Raw Materials Provision of S.R.O. 282

Under Number Six, Part (i) of the "Export Policy 1989-1991," the GOB offers industries concessional import duties on capital machinery. This program, administered by the Ministry of Finance, is designed to help industries modernize or improve their plant facilities. In the first half of the review period, the duty rates on capital machinery varied between 2.5 percent and 15 percent. Statutory Rules and Orders, dated July 25, 1990 (S.R.O. 282/L.1318/Cus.), revised the rate of duty to ten percent.

There are two separate provisions under S.R.O. 282 which allow a company to receive concessional duty treatment. These two provisions cover (1) industries which export 70 percent or more of their production or (2) industries which use a minimum of 70 percent indigenous raw materials. Under either of these provisions, an industry is

entitled to a total rebate of 7.5 percent of the ten percent duties paid at the time of importation.

We verified that concessional duty treatment under the indigenous raw material provision is open to a large number and wide variety of industries. We verified that the industries eligible for concessional duty treatment under this provision are based on a list compiled by the Ministry of Textiles and the Ministry of Industries and contains any industry they believed was capable of using at least 70 percent local raw materials. If an industry is not currently on the list and the company can show that it meets the threshold requirement, it too may receive concessional duty treatment.

Because receipt of concessional duty treatment under the indigenous raw material provision of S.R.O. 282: (1) is not contingent upon export performance and (2) is not limited to an enterprise or industry or group of enterprises or industries, we determine that this provision does not confer a bounty or grant on manufacturers, producers, or exporters in Bangladesh.

III. Programs Determined Not To Be Used

Based on the responses and verification we determine that manufacturers, producers, or exporters in Bangladesh of shop towels did not apply for, claim or receive benefits during the review period for exports of shop towels to the United States under the following programs:

A. Concessional Duty Treatment Under the Export Provision of S.R.O. 282

B. Income Tax Rebates Under Number Seven of the "Export Policy 1989-1991"

C. Cash Assistance for Exports Under Number 13 of the "Export Policy 1989- 1991"

D. Import Duty Exemption For Companies Located in an Export Processing Zone

IV. Program Determined Not to Exist

Based on the responses and verification, we determine that the following program does not exist:

A. Rebates on Insurance Premiums

Number Eight of the "Export Policy 1989-1991" provides for rebates on insurance premiums. However, we verified that this program has never been put into effect. Sadharan Bima Corporation, the state-owned general insurance corporation, never issued an order or circular putting this program into effect.

The total ad valorem benefits received by Bangladeshi manufacturers, producers, and exporters of shop towels equals 0.17 percent. This amount is de minimis and, pursuant to 19 CFR 355.7, we determine that exports of shop towels from Bangladesh are not receiving benefits which constitute countervailable bounties or grants.

(Comments)

Comment 1

Petitioner argues that the provision of duty-free importation of machinery, equipment, and raw materials to companies located in the EPZ is a countervailable bounty or grant benefitting Sonar. Specifically, petitioner asserts that although the machinery imported by Sonar in 1990 was and remains inoperable, the company received a countervailable benefit because it was not required to pay import duties on this machinery. Further, the company imported yarn free of duty due to its location in the zone and, therefore, received a countervailable benefit.

Respondents argue that although Sonar did import machinery in 1990 free of duty, the machinery was defective when imported and remains inoperative and, therefore, the company did not receive a competitive and commercial benefit. Further, respondents stated that they have refused to pay for the machinery and have been engaged in negotiations with the supplier concerning the disposition of the machinery which may include its return or replacement. They further assert that there is no benefit through the duty-free importation of raw materials into the EPZ because the entire zone acts as a bonded warehouse in which the raw materials are incorporated in the finished product and re- exported.

DOC Position

With respect to raw materials which are physically incorporated into the exported product, we agree with respondents that no benefit arises. This is because duty-free importation of these materials is equivalent to duty drawback, which does not confer a bounty or grant.

With respect to the duty-free importation of machinery, we have determined that the facts in this case raise an issue of first impression. In the instant case, the imported machinery was defective, and we verified that the machinery had not been used in production of any kind, including production of the subject merchandise. Indeed, there is nothing that would lead us to conclude that the machinery will ever be used in production.

But for the complicating factor of the well-publicized hurricane, which may make it difficult to prove to the supplier (or any tribunal resolving a contractual dispute between the supplier and the importer) that the machinery was defective on delivery, it is reasonable to assume that the machinery would have been returned to and/or replaced by the company that manufactured it. If the machinery had been returned, then there would clearly be no benefit arising from the duty-free importation of the machinery. If it had been replaced, then the benefit would arise from the duty-free treatment of the replacement machine, not from the fact that duties were not paid on a machine that was not, and could not be used to produce the subject merchandise.

Consequently, we are faced with a situation in which no use whatsoever has been made of the equipment the purchase of which was allegedly subsidized, and further, that there is reason to believe the machinery will be re-exported. Thus, in effect, the firm is no better off than if it had never purchased the machinery at all. Under these circumstances, we determine there to be no countervailable benefit.

Comment 2

Petitioner argues that the allowance of foreign currency accounts used for the purchase of imported raw materials by companies located in the EPZ provides a countervailable benefit because importers are not required to use the official exchange rate, as they would normally be required to do, and this results in a savings to the companies. Petitioner cites the Final Affirmative Countervailing Duty Determination and Countervailing Duty Order: Certain Steel Wire Nails from Thailand, 52 FR 36987 (October 2, 1987) (Thai Nails) in support of its argument.

Respondents argue that Sonar and Greyfab do not receive any benefit merely from being able to purchase imports using foreign currency accounts. They assert that holding foreign currency accounts (dollar accounts) is the same as an exporter, not located in the zone, receiving 100 percent XPB. Also, respondents assert that petitioner's citation to Thai Nails in support of their assertion that holding foreign currency accounts provides a countervailable benefit does not apply.

DOC Position

We disagree that the ability to hold dollar accounts provides a countervailable benefit to the companies located in the EPZ.

Companies located in the EPZ pay for their imports directly from their dollar accounts and therefore incur no

exchange rate losses. However, the XPB program, which is designed to return to companies outside the EPZ the difference between the official and SEM exchange rates, also effectively eliminates any exchange rate losses. We have determined that there is no countervailable benefit provided under the XPB program when the reimbursement by the GOB equals the difference between the two rates. (See, the Department's Preliminary Determination). Although the Department has found the XPB program to be countervailable for purposes of this final determination, the basis of that finding is rooted exclusively in the manner in which the program was administered. Had the program been administered as designed, we would not have identified any countervailable benefit.

Because this program and the XPB counteract the differences in the applicable exchange rates for converting export proceeds and for converting currency for purchasing imports, there are no savings attributable to the holding of dollar accounts to those companies located in the EPZ.

Further, petitioner's reliance upon Thai Nails is inappropriate because in that case foreign currency accounts were determined not to be used.

Comment 3

Petitioner argues that because Sonar and Greyfab are allowed to convert their export earnings at the higher SEM rate, they receive a countervailable benefit.

Respondents argue that these companies do not receive a countervailable benefit merely because they are eligible to convert a portion of their export earnings at the SEM rate. They assert that the conversion of export earnings at the SEM rate is essentially the same as an exporter receiving 100 percent XPB. Further, the portion of their export earnings which is converted into local currency is used to pay for local expenses.

DOC Position

We agree with respondents that the eligibility of a company to convert its export earnings at the SEM rate is equivalent to receiving a 100 percent XPB entitlement. The receipt of 100 percent XPB, when it is properly applied for and received, does not constitute a benefit (see, the Department's Preliminary Determination). Therefore, a program that essentially provides the same entitlement does not constitute a countervailable bounty or grant.

Comment 4

Petitioner argues that the interest-free loan to repay a prior GOB investment in Eagle Star is inconsistent with commercial considerations under 19 U.S.C. 1677(5)(A) and, therefore, confers a countervailable bounty or grant.

Respondents argue that this interest-free loan did not provide a countervailable benefit to Eagle Star. They assert that: (1) Thousands of companies were nationalized by the government and subsequently returned to private ownership under similar forced conditions; (2) the companies had no choice but to accept the terms laid down by the government; and (3) several years of repairs, maintenance, and expansion were necessary after the company was returned to private ownership. All of these factors show that the government "investment" conferred no real benefit.

DOC Position

There is nothing on the record to support respondents' contention that "thousand of companies were nationalized by the government and subsequently returned to private ownership under similar forced conditions." Therefore, we determine that this loan is limited to a specific enterprise or industry or group of enterprises or industries. We further agree with petitioner that the loan was made on terms inconsistent with commercial considerations.

Comment 5

Petitioner argues that Eagle Star's receipt of concessional duty treatment for importation of machinery provides a countervailable benefit. They assert that because Eagle Star qualifies for eligibility for concessional duty treatment under both the indigenous raw material provision and the level of exports provision of S.R.O. 282, it may have received the concessional duty treatment for attaining the required level of exports rather than by reason of using a given amount of indigenous raw materials. They further argue that the machinery receiving concessional duty treatment is used to make gray fabrics, a major input for shop towels and, therefore, this provision should be considered an upstream subsidy under 19 U.S.C. 1677-1.

Respondents argue that Eagle Star could only receive concessional duty treatment under the indigenous raw material provision of S.R.O. 282 because the company did not export 70 percent or more of its products during the review period.

DOC Position

The Department agrees with respondents. An analysis of the sales figures contained in our verification report demonstrates that the company did not meet the export requirement for concessional duty treatment. Moreover, even if the company had met the requirement for receipt of concessional duty treatment on the basis of export levels, the machinery in question was imported in 1988. It is the Department's practice that recurring benefits are to be expensed in the year of receipt (i.e., 1988). Therefore, the issue would in any case be moot.

Comment 6

Petitioner argues that Shabnam's receipt of a low interest loan under concessional export credit financing is inconsistent with commercial considerations and, therefore, provides a countervailable benefit. They further assert that the benchmark rate should be 18 percent.

Respondents argue that because the bank required the company to pay various other charges, such as a watchman's salary, the effective interest rate is actually higher than nine percent.

DOC Position

We agree with petitioner. We verified that the most common nominal interest rate on short-term commercial financing is 18 percent. Furthermore, it was confirmed that any additional charges levied on the loan would be applied to every loan, whether concessional or not. Therefore, if an effective interest rate comparison was performed, the effect of the additional charges on concessional and commercial loans would cancel each other out.

Comment 7

Petitioner argues that the receipt of low-interest packing credits to cover freight expenses provides a countervailable benefit to Khaled.

DOC Position

We verified that the packing credits received by Khaled were at a commercial interest rate and, therefore, were not preferential.

Comment 8

Petitioner argues that the receipt of double XPB payments by Khaled constitutes a countervailable benefit.

Respondents contend that a countervailable benefit cannot be unwittingly furnished by a government where participants in an otherwise non- countervailable program unintentionally or inadvertently obtain through

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improper application more than they were entitled to under the program.

DOC Position

We agree with petitioner. Although the program is not designed to provide double benefits, Khaled's exports did benefit from extra payments. Therefore, we find the overpayment of XPB to Khaled to be a countervailable benefit.

Verification

In accordance with section 776(b) of the Act, we verified the information used in making our final determination. We followed standard verification procedures, including meeting with government and company officials, inspecting internal documents and ledgers, tracing information in the responses to source documents, accounting ledgers and financial statements, examination of original source documents and collecting additional information that we deemed necessary for making our final determination. Our verification results are outlined in detail in the verification reports, which are on file in the Central Records Unit (room B-099) of the Main Commerce Building.

Suspension of Liquidation

Due to the fact that the estimated net bounty or grant rate is de minimis, we are not directing the U.S. Customs Service to suspend liquidation on entries of shop towels from Bangladesh.

This determination is published pursuant to section 705(d) of the Act (19 U.S.C. 1671d(d)).

Dated: June 24, 1991.

Marjorie A. Chorlins,

Acting Assistant Secretary for Import Administration.