NOTICES
DEPARTMENT OF COMMERCE
[C-560-401]
Preliminary Affirmative Countervailing Duty Determinations; Certain Textile
Mill Products and Apparel From Indonesia
Friday, December 21, 1984
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AGENCY: Import Administration, International Trade Administration,
Commerce.
ACTION: Notice.
SUMMARY: We preliminarily determine that certain benefits which constitute bounties
or grants within the meaning of the countervailing duty law are being provided to
manufacturers, producers, or exporters in Indonesia of certain textile mill products
and apparel. The estimated net bounty or grant is 0.83 percent ad valorem for textile mill
products and 0.636 percent ad valorem for apparel. We are directing the U.S. Customs
Service to suspend liquidation of all entries of certain textile mill products and apparel
from Indonesia that are entered, or withdrawn from warehouse, for consumption after
the date of publication of this notice, and to require a cash deposit or bond on entries of
these products in the amount equal to the estimated net bounty or grant.
These investigations were initiated by the Department under the title "Certain Textiles and
Textile Products from Indonesia." Because of the number of products covered, and the
differences in those products, the Department determined that it should conduct separate
investigations--one of textiles and non-apparel products, and one of apparel. Because of
the potential for confusion, we are changing the title of these investigations to "Certain
Textile Mill Products and Apparel from Indonesia." The scope of these investigations
remains the same as announced in the initiation notice.
If these investigations proceed normally, we will make our final determinations by March
4, 1984.
EFFECTIVE DATE: December 21, 1984.
FOR FURTHER INFORMATION CONTACT: Alain Letort or Stuart Keitz, Office of
Investigations, Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, D.C.
20230; telephone: (202) 377-5050 or 377-1769.
SUPPLEMENTARY INFORMATION:
Preliminary Determinations
Based upon our investigations, we preliminarily determine that there is reason to believe
or suspect that certain 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 Indonesia of certain textile mill products
and apparel. For purposes of these investigations, the following programs are
preliminarily found to confer a bounty or grant:
- Preferential Short-Term Financing for Non-Oil Exports
- Tax Holidays, Accelerated Depreciation, and Other Tax Benefits
- Import Duty Exemptions for Capital Equipment
We estimate the net bounty or grant to be 0.83 percent ad valorem for textile mill
products and 0.636 percent ad valorem for apparel.
Case History
On July 20, 1984, we received a petition from the American Textile Manufacturers
Institute (ATMI), the Amalgamated Clothing and Textile Workers Union (ACTWU), and
the International Ladies' Garment Workers Union (ILGWU), on behalf of the U.S.
industries producing certain textile mill products and apparel. In compliance with the
filing requirements of § 355.26 of our regulations (19 CFR 355.26), the petition alleges
that manufacturers, producers, or exporters in Indonesia of textile mill products and
apparel receive, directly or indirectly, benefits which constitute bounties or grants within
the meaning of section 303 of the Act.
We found that the petition contained sufficient grounds upon which to initiate
countervailing duty investigations, and on August 9, 1984, we initiated such
investigations (49 FR 32642). We stated that we expected to issue preliminary
determinations by October 15, 1984. On September 21, 1984, we determined these
investigations to be "extraordinarily complicated," as defined in section 703(c)(1)(B) of
the Act. Therefore, we extended the period for making our preliminary determinations by
65 days until December 17, 1984 (49 FR 40198).
Since Indonesia is not a "country under the Agreement" within the meaning of section
701(b) of the Act and the merchandise being investigated is dutiable, sections 303(a)(1)
and (b) of the Act apply to these investigations. Accordingly, the domestic industry is not
required to allege that, and the U.S. International Trade Commission is not required to
determine whether, imports of these products cause or threaten material injury to U.S.
Industries.
Due to the scope of these investigations, we employed a two-step questionnaire process.
We presented a preliminary questionnaire to the government of Indonesia in
Washington, D.C., on August 27, 1984. Based on the responses to the preliminary
questionnaire, we requested detailed responses from those producers who account for at
least 60 percent of the textile mill poducts and apparel exported to the United States. We
selected 2 textile mill producers and exporters, and 14 apparel producers and exporters
to respond to the detailed questionnaire. On October 25 and November 1, 1984, we
presented the detailed government and company questionnaires to the government of
Indonesia in Washington, D.C. The responses to our detailed questionnaires were
received on November 26, 1984.
Sanding of Petitioners
Subsequent to our initiation of the instant investigations and twelve other investigations
of textiles and textile products on the basis of petitions filed by the same petitioners, we
received objections to the initiations from a number of respondents.
Respondents requested that we rescind the initiation of these investigations on the
ground that petitioners lack standing to file countervailing duty petitions, because
they failed to demonstrate either that they are an "interested party" as to each of the
numerous products covered by the petitions or that the petitions were filed "on behalf of"
each of the industries producing those products. The Department may rescind an
initiation of an investigation where it subsequently discovers that the petitioner lacks
standing with respect to the products under investigation. Gilmore Steel Corp. v. United
States, 585 F. Supp. 670 (Ct. Int'l Trade 1984).
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With respect to ACTWU and ILGWU, a certified or recognized union is an
"interested party" if it is "representative of an industry engaged in the manufacture,
production, or wholesale in the United States of a like product" [19 U.S.C. 1677(9)(D)].
With respect to ATMI, a trade or business association is an "interested party" if "a majority
of [its] members manufacture, produce, or wholesale a like product in the United States"
[19 U.S.C. 1677(9)(E)]. "Industry" is defined generally as "the domestic producers as a
whole of a like product, or those producers whose collective output of the like product
constitutes a major proportion of the total domestic production of that product" [19
U.S.C. 1677(4)(A)]. Thus, petitioners' standing depends upon the definition of "like
product." "Like product" is defined in 19 U.S.C. 1677(10) as "* * * a product which is like,
or in the absence of like, most similar in characteristics and uses with, the article subject
to an investigation under this title."
Petitioners have contended that all of the various types of products under investigation
constitute one type of merchandise with respect to which petitioners acquire standing by
virtue of their production of a wide range of textiles and textile products in the United
States as a whole, and that an analysis of standing in terms of a narrower definition of "like
product" is unwarranted. Under petitioners' approach, a handbag would be a "like
product" to an imported blouse. We do not agree with this interpretation of "like product."
Therefore, in order to resolve the standing issue raised by respondents, the Department,
in consultation with its industry experts, compiled a preliminary list of the various
categories of products under investigation, and requested petitioners to provide
additional information to establish either that a majority of ATMI members produce each
"like product" or that the unions are representative of an industry producing each "like
product."
In response to our request. ATMI, which alleged originally that it is an interested party as
to all textiles and textile products except apparel, failed to establish that a majority of its
members produce each of the enumerated like products. Moreover, ATMI provided no
listing of its membership or the products produced by its members that would enable the
Department to determine whether a majority of its members produce each of the like
products. Accordingly, we determine that ATMI lacks standing as a petitioner in these
investigations, because it has not established that it is an interested party with respect to
any of the products covered by the investigations.
Absent any other information, we would have rescinded our investigations as to textiles
and textile products, other than apparel. However, the petition was amended to name as
petitioners eight ATMI jmember companies:
- Belton Industries, Inc., of Belton, South Carolina;
- Burlington Industries, Inc., of Greensboro, North Carolina;
- Chatham Manufacturing Company of Elkin, North Carolina;
- Milliken & Company of Spartanburg, South Carolina;
- Mount Vernon Mills, Inc., of Greenville, South Carolina;
- Shuford Mills, Inc., of Hickory, North Carolina;
- J. P. Stevens & Co., Inc., of New York, New York; and
- West Point-Pepperell, Inc., of West Point, Georgia.
These eight companies collectively appear to satisfy the interested party requirements of
the Act, because at least one company is a "manufacturer, producer, or wholesaler in the
United States" of a product like each of those (other than apparel) covered by the
investigations [19 U.S.C. 1677(9)(C)]. In addition, ATMI has stated its continuing support
for the petitions, as amended. Because ATMI members account for over 85 percent of the
textiles and textile products produced in the United States, and because, until quite
recently, no other U.S. producers have indicated opposition to the petitions, we are
unable to find that the petitions, as amended, are not filed "on behalf of" the U.S industries
producing the various like products.
With respect to the standing of the unions, ACTWU and ILGWU have indicated that
workers represented by one or both unions are engaged in the production of each of the
apparel like products. The two unions collectively represent over 650,00 workers
engaged in the production of textiles and apparel. Until quite recently, no workers,
groups of workers, or other industry representatives have indicated opposition to the
petitions or that the unions are not representative of the industries producing the like
products covered by these investigations. Therefore, we are unable to determine at this
time that the unions have not filed "on behalf of" the U.S. industries producing the various
apparel like products.
As suggested above, the Department recently has received letters from various U.S.
producers of textiles and textile products opposing the petitions. The Department has not
yet been able to assess the extent to which this opposition contradicts petitioners' claims
that they have filed "on behalf of" U.S. industries. The Department will continue to
examine this question, but at present the Department considers the eight companies and
the unions to be legitimate petitioners.
Scope of the Investigations
The products covered by these investigations are certain textile mill products and
apparel, which are described in the Appendix to this notice.
Analysis of Programs
Throughout this notice, we refer to certain general principles applied to the facts of the
instant investigation. These principles are described 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,"
which was published in the April 26, 1984, issue of the Federal Register (49 FR 18006).
Consistent with our practice in preliminary determinations, where a response to an
allegation denies the existence of a program, receipt of benefits under a program, or
eligibility of a company or industry under a program, and the Department has no
persuasive evidence showing that the response is incorrect, we accept the response for
purposes of the preliminary determination. All such responses, of course, are subject to
verification. If the response cannot be supported at verification, and the program is
otherwise countervailable, the program will be considered a subsidy in the final
determination.
For purposes of these preliminary determinations, the period for which we are measuring
bounties or grants ("the review period") is calendar year 1983.
Based upon our analysis of the petition and the response to our questionnaires, we
preliminarily determine the following:
I. Programs Determined To Confer Bounties or Grants
We preliminarily determine that bounties or grants are being provided to manufacturers,
producers, or exporters in Indonesia of certain textile mill products and apparel under
the following programs.
A. Preferential Short-Term Financing for Non-Oil Exports
Petitioners allege that Indonesia's state-controlled banks provide short-
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term
credits to exporters of non-oil goods at preferential interest rates.
In its response, the government of Indonesia outlined the two export credit schemes
that were available to exporters in Indonesia during the review period.
Prior to June 1983, Indonesian banks (both state-owned and private banks) charged a
designated interest rate for export credits of 9 percent per annum for "strong" export
commodities and 6 percent per annum for "weak" export commodities. The determination
as to which commodities were "strong" and "weak" was made by the Ministry of Trade,
based on its view of the strength of the market for each particular commodity. The
company responses indicate that all short-term credits received by the respondents
before June 1, 1983, carried an interest rate of 6 percent. Counsel for the government of
Indonesia confirmed that textile mill products and apparel were considered as "weak"
commodities.
Since June 1, 1983, Indonesian state banks and private banks have offered working capital
export credits to domestic companies exporting commodities and goods other than oil or
gas products. To whom and at what interest rates such credits are granted is at the
discretion of the lending institution, based on commercial considerations such as the
creditworthiness of the borrower, the cost of money to the bank, the liquidity position of
the bank and its desired rate of return. The maximum amount of credit is 85 percent of
the f.o.b. price of the exported merchandise. At the time an export sale is consummated,
the lender refunds to the borrower any interest charged in excess of 9 percent per annum.
In addition to payment of interest, the borrower pays a charge of 1.1 percent of the
principal amount of the loan at the time the credit is granted (0.1 percent commitment fee
plus 1 percent provision); a 1.1 percent charge is payable upon each extension of the loan
term.
Since receipt of both working capital export credits (before June 1, 1983) and interest
rate rebates (since June 1, 1983) are contingent upon export performance, and provide
funds to borrowers at interest rates lower than those available from commercial sources,
we preliminarily determine that they confer a countervailable benefit upon certain textile
mill products and apparel from Indonesia. To calculate the amount of the benefit, we
applied two different methodologies. In the case of credits received prior to June 1983,
we used as our benchmark the interest rate charged by state banks for short-term credits
to non-favored industries, as reported in Bank Indonesia's Indonesian Financial
Statistics (June 1984). We then calculated the amount of the benefit using our short-term
loan methodology. In the case of credits bestowed after June 1, 1983, we expensed the
rebate amounts received over export sales of the subject merchandise from Indonesia.
We calculated a net bounty or grant of 0.83 percent for textile mill products and 0.565
percent for apparel.
B. Tax Holidays, Accelerated Depreciation, and Other Tax Benefits
Petitioners allege that, under the Corporation Tax Ordinance of 1925 (CTO), the
Indonesian Ministry of Finance grants a variety of tax benefits to specially designated
investments in certain "priority" industries, as defined by the Badan Koordinasi
Penanaman Modal (BKPM, or Investment Coordinating Board), which include the textile
mill products and apparel sectors. These tax benefits, which may vary depending on a
given firm's level of export earnings or import savings, allegedly comprise: (1) A two-year
holiday from the corporate tax; (2) accelerated depreciation on capital investments for
four years after the expiration of the holiday period; (3) exemptions from the capital
stamp duty and dock clearance tax; and (4) a tax reduction for up to 20 percent of the
amounts of capital invested in any one year.
Petitioners further allege that, under Government Regulation No. 2/1981 (GR- 2), the
Ministry of Finance provides additional tax relief to companies that earn "substantial"
foreign exchange from exports. Such relief allegedly includes: (1) An exemption of as
much as 100 percent from the corporate profits tax for up to 10 years, and (2) a 50
percent reduction of the corporate dividends tax for up to 10 years.
In its response, the government of Indonesia stated that, prior to January 1, 1984,
various tax programs were available to producers and exporters of certain textile mill
products and apparel, among others. These programs were jointly administered by the
Ministry of Finance and BKPM under the provisions of the CTO, Foreign Investment Law
No. 1 of 1967 (as amended by Law No. 11 of 1970), and Domestic Investment Law No. 6 of
1968. GR-2 was never implemented and, in fact, became moot with the enactment of new
tax legislation on December 31, 1983.
According to the government of Indonesia, tax benefits were provided under the
legislation cited above to companies whose name appears on one of two priority lists
called Daftar Skala Prioritas (DSP). One DSP list governs domestic investment and the
other foreign investment in Indonesia, because certain fields of vital national interest
are closed to foreign investment. The DSP lists provide for a wide array of tax benefits,
including tax holidays, exemption from capital stamp duties, exemption from the
corporation tax, investment allowances against the corporation tax, and accelerated
depreciation. An industry sector becomes eligible for inclusion in the DSP lists if it
appears that investment in that sector is consistent with the government of Indonesia's
long-term economic objectives, which are to expand the national economy, create job
opportunities, spread development efforts throughout the country, encourage equitable
distribution of the proceeds of development, and accumulate foreign exchange. Because
these objectives are so broad, the government of Indonesia claims, these criteria apply
to essentially every industry in Indonesia, thereby making these benefits available to
more than a specific industry or group of industries.
However, examination of the DSP lists reveals that they contain certain elements of
preferentiality in that the type and level of benefits available to the industries listed
therein appear to vary widely depending on: (1) The industry involved, (2) whether the
investment is for a new project or the expansion of an old one, (3) whether the investment
is located outside the island of Java, or (4) whether the investment was given special
priority consideration by the government of Indonesia.
The foregoing considerations lead us to believe at this time that the various tax benefits
provided under the CTO and its amending legislation are not, in fact, generally available,
but rather are limited to certain industries in certain regions. Accordingly, we
preliminarily determine that these tax benefits confer a bounty or grant upon the
manufacture and exportation of certain textile mill products and apparel in Indonesia.
During the review period, one apparel manufacturer received an exemption from the
corporate income tax. We treated the amount of corporate income tax the company
would normally have paid in 1983 as a grant, and expensed it over the value of sales of
apparel by the respondents in 1983. We thereby calculated a net subsidy of 0.052 percent
for apparel.
C. Import Duty Exemptions for Capital Equipment
Petitioners allege that producers of certain textile mill products and apparel
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in
Indonesia benefited from waivers or reductions of import duties and sales taxes on
certain machinery, equipment, and raw materials.
The government of Indonesia stated in its response that, under the tax programs
described in section I.B above, three apparel manufacturers were exempted from
payment of duties on imported raw materials, and one apparel manufacturer was
exempted from payment of duties on imported capital equipment. As stated above, we
preliminarily determine that the various benefits granted under the CTO and its
succeeding legislation confer bounties or grants on the merchandise under investigation.
We are countervailing only the exemption of import duties on capital equipment, since
the imported raw materials were physically incorporated in the merchandise. Because the
exemption of import duties in question was contingent upon export performance, we
treated the total amount of unpaid import duties as a grant, and expensed it over the
value of exports of apparel by the respondents in 1983. We thereby calculated a net
subsidy of 0.019 percent for apparel.
II. Programs Determined Not To Confer Bounties or Grants11We preliminarily determine
that bounties or grants are not being provided to manufacturers, producers, or exporters
in Indonesia of certain textile mill products and apparel under the following programs.
A. Textile Export Incentive Program
Petitioners allege that the government of Indonesia maintains a "textile export
incentive program" which provides exporters of the subject merchandise with
certificates, based on the amount and type of exports, that may be redeemed for cash.
In its response, the government of Indonesia supplied the following information. The
"Sertifikat Ekspor" (Export Certificate, or SE) program, which was established in 1978, is a
mechanism for the rebate of import duties and taxes [import sales tax and import MPO
(WAPU) withholding tax]. The legal foundation for the SE program is Article 3a of the
Indonesian tariff law. The program itself was implemented by Ministry of Finance decrees
434/KMK. 01/1979 , 269/KMK. 01/1982 , and 576/KMK. 05/1984.
Under the Act, the non-excessive rebate of import duties and import taxes borne by
inputs that are physically incorporated into the final product, is not considered a subsidy.
The SE program is designed to refund import duties and import taxes that "bear directly
or indirectly on exported products." Based on our review of the import duties and taxes
which the SE program is designed to rebate, we are satisfied that the SE program operates
for the purpose of rebating import duties and taxes.
Under the SE program, the government of Indonesia has undertaken to analyze the
physically incorporated imported inputs for a number of industrial products exported
from Indonesia. For each product, the government has determined the amount of each
imported input physically incorporated into each unit of output and the world market
price of each input. The world market price becomes the "import check price." The actual
import levies paid by the importers are assessed on the basis of the import check price or
the invoice price for the imported goods, whichever is higher. The government of
Indonesia also calculated the minimum import levies which would be paid for each unit
of output of each of the industrial products studied. It then established an "export check
price" for each product, based on the value of both imported and local inputs plus salary,
overhead, depreciation, interest, and profit. Having done this, the government of
Indonesia was able to express the total minimum import levies for each product as a
percentage of the export check price. Exporters could then apply for export certificates
qualifying them for rebates in the amount of the percentage of the export check price.
No product is eligible for a rebate under the SE program unless the full analysis described
above is performed. In 1978, and also in 1980, the government of Indonesia undertook
studies of the inputs into exported textile mill products and apparel. In 1980 the
percentages of export check prices eligible for rebate under the SE program were revised
downward to reflect the lower level of imported inputs and the lower minimum amount of
import levies borne by exported products. In conjunction with the general study
conducted in 1978, the 1980 review sufficiently demonstrates that there is a clear link
between eligibility for the SE program and import levies paid.
In its questionnaire response, the government of Indonesia stated that it continuously
monitors the operation of the SE program to ensure that no product receives a rebate
greater than the total amount of levies paid with respect to inputs that are physically
incorporated into the product. When an importer modifies a product so that it uses fewer
physically incorporated imported inputs than those on which the SE rebate for the
original product was based, the government of Indonesia creates a new product
category, analyzes the imported inputs and the minimum value of import levies
applicable, sets a new export check price, and calculates the percentage of the export
check price eligible for rebate. The government of Indonesia claims that it has identified
several hundred different categories of textile and apparel categories, and that individual
input analyses have been performed for each such category. In its response, the
government of Indonesia has provided sample input analyses for three major product
categories: men's polyester cotton shirts, men's 100- percent cotton shirts, and men's and
women's 100-percent cotton denim jeans.
The government of Indonesia maintains that although import check prices are
established for physically incorporated inputs, import check prices serve only as floors
for the assessment of import levies in each separate import transaction. If an input is
imported at a price lower than the import check price, it is the check price on which
import levies are paid. If, on the other hand, the input is imported at a price higher than
the import check price, it is the actual import price on which import levies are based.
However, rebates are paid on the basis of the import check price only, even if the actual
levies paid are higher. The SE rebate percentage is based on the minimum amount of
import levies payable on the imported inputs which are physically incorporated into a
product. This percentage is applied to the export check price--not the invoice price--in
determining the rebate to be paid on any given export shipment. Therefore, the SE
program ensures that the rebate received by an exporter can never be greater than the
total amount of duties and taxes paid for imported materials physically incorporated into
the product.
Based on the foregoing, we believe that the government of Indonesia has reasonably
calculated the import duties and import taxes on physically incorporated raw materials,
and has demonstrated that the import duties and import taxes paid are linked to the
rebate paid on export. Accordingly, we preliminarily determine that the SE program does
not confer a countervailable benefit upon certain textile mill products and apparel from
Indonesia.
B. Medium- and Long-Term Financing
Petitioners allege that medium- and long-term financing from state banks at preferential
interest rates is available to
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Indonesian firms in priority industry sectors,
including textile mill products and apparel. Petitioners believe that subsidized medium-
and long-term loans are made available to the industries producing textile mill products
and apparel in Indonesia under the Domestic Investment Law and by two leading
financial institutions, Bank Pembangunan Indonesia (BAPINDO, or Development Bank
of Indonesia) and P.T. Usaha Pembiayaan Pembangunan Indonesia (UPPINDO), also
known as the Indonesian Development Finance Company (IDFC).
In its response, the government of Indonesia states that no financing had ever been
provided under the Domestic Investment Law, and that both BAPINDO and UPPINDO
extend medium- and long-term loans to all sectors of the Indonesian economy on equal
terms. Therefore, we preliminarily determine that medium- and long-term loans confer
no countervailable benefits upon certain textile mill products and apparel from
Indonesia.
C. Free Trade Zones
Petitioners allege that companies located in a free-trade zone in Jakarta benefit from
export incentives in the from of a five-year exemption form the corporate tax, capital tax,
stamp duty, and tax on dividends, as well as exemptions from import duties on materials
and capital equipment.
The government of Indonesia stated in its response that the Jakarta Export Processing
Zone (JEPZ) is managed by P.T. Bonded Warehouse Indonesia (P.T. BWI), a private
commercial venture. P.T. BWI offers no financial assistance to companies located in the
zone; any services it offers are paid for on a commercial, cost-covering basis. The
government of Indonesia stated that firms located in the zone receive no incentives,
and no exemptions from, or reductions of, taxes and duties, that are not equally available
to firms outside the zone. Because of the special customs status of the zone, however,
exemption from import duties is available to firms in the zone without prior approval
from governmental authorities; by contrast, firms located outside the zone must obtain
prior government approval in order to receive such an exemption.
It appears, therefore, that the only benefit an exporter of textile mill products or apparel
located in the JEPZ receives is a waiver of the process for securing an exemption from
input duties.
We are aware of any reasonable methodology to quantify any benefit presumed to arise
from not having to apply for import duty exemptions. Therefore, we conclude that
because any attempt to quantify the benefit would be arbitrary and capricious, location in
the Jakarta Export Processing Zone does not confer a bounty or grant upon certain textile
mill products and apparel from Indonesia.
D. Industrial Estates
Petitioners allege that a number of "industrial estates" in Indonesia offer their tenants
preferential terms on land acquisition, building permits, site formation, and other
infrastructure and facilities.
In its response, the government of Indonesia stated that only one such estate, the
Jakarta Pulogadueng Industrial Estate (JIEP), includes a producer and exporter of textile
mill products and apparel. JIEP is managed by P.T. Jakarta Industrial Estate Pulogadueng
(P.T. JIEP), a consistently profitable commercial venture. According to the government
of Indonesia, P.T. JIEP provides no financial assistance of any kind to firms located in
the JIEP. Indeed, tenants pay premium prices in order to enjoy the facilities offered by
the JIEP.
In light of the foregoing, we preliminarily determine that location in an industrial estate
does not confer a countervailable benefit upon certain textile mill products and apparel
from Indonesia.
E. Government Investment in Fiber Mills
Petitioners allege that the government of Indonesia may have made equity investments
in the fiber industry, such as synthetic fiber spinning mills and other textile producing
plants, on terms inconsistent with commercial considerations. Petitioners believe that
these investments confer countervailable benefits on firms in which the government of
Indonesia has an ownership interest.
In its response, the government of Indonesia stated that it has no ownership interest in
any of the companies under investigation; therefore, the allegation is moot. Accordingly,
we preliminarily determine that government investment in fiber mills does not confer a
countervailable benefit upon certain textile mill products and apparel from Indonesia.
III. Program Determined Not To Be Used
We preliminarily determine that manufacturers, producers or exporters in Indonesia of
certain textile mill products and apparel did not use the following program which was
listed in our notice of initiation.
Incentives for Companies With Publicly Held Stock
Petitioners allege that at least three publicly held fiber and textile companies have
received benefits under the government of Indonesia's incentive program for publicly
held companies.
In their responses, both the government of Indonesia and the individual respondents
denied that any company under investigation was publicly held and had benefited from
any such incentives.
Accordingly, we preliminarily determine this program was not used by the manufacturers
or exporters of certain textile mill products and apparel in Indonesia.
IV. Program for Which Additional Information Is Needed
Export Countertrade (Counterpurchase) Program
Petitioners allege that the government of Indonesia maintains an export countertrade
(or counterpurchase) program, under which foreign suppliers of, and contractors with,
Indonesian government agencies are required to purchase certain quantities of
Indonesian goods, including textile mill products and apparel.
In its response, the government of Indonesia stated that the counterpurchase program,
which is administered by the Ministry of Trade, requires certain foreign suppliers with
which the government of Indonesia has entered into procurement contracts exceeding
Rp 500 million in value to purchase for export commodities other than oil and gas in an
amount equal to that of the procurement contract. The government of Indonesia stated
further that it provides no financial assistance in support of purchases made under the
countertrade program, and plays no part in setting the prices or establishing the terms of
any purchases made under the program. All purchase agreements are made directly
between the buyer and the seller.
In their responses, the companies under investigation all denied any involvement in the
Indonesian counterpurchase program. Because the government of Indonesia has not
yet provided us with a complete listing of all transactions made under this program, we
are unable at present to determine whether this program was actually used by
manufacturers or exporters of certain textile mill products and apparel in Indonesia.
We will seek to obtain additional information concerning this program during
verification.
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Verification
In accordance with section 776(a) of the Act, we will verify the data used in making our
final determination. As previously stated, we will not accept any statement in the
responses that cannot be verified in our final determination.
Suspension of Liquidation
In accordance with section 703(d) of the Act, we are directing the U.S. Customs Service
to suspend liquidation of all entries of certain textile mill products and apparel from
Indonesia which are entered, or withdrawn from warehouse, for consumption on or
after the date of publication of this notice in the Federal Register and to require an ad
valorem cash deposit or bond for each such entry of this merchandise as follows:
-----------------------------------------------------------
Product Ad valorem rate (percent)
-----------------------------------------------------------
Textile mill products ............................... 0.830
Apparel ............................................. 0.636
-----------------------------------------------------------
This suspension will remain in effect until further notice.
Public Comment
In accordance with § 355.35 of our regulations, we will hold a public hearing, if requested,
to afford interested parties an opportunity to comment on these preliminary
determinations at 2:00 p.m. on February 15, 1985, at the U.S. Department of Commerce,
room 6802, 14th Street and Constitution Avenue, NW., Washington, D.C. 20230.
Individuals who wish to participate in the hearing must submit a request to the Deputy
Assistant Secretary for Import Administration, room B-099, at the above address within
10 days of the publication of this notice.
Requests should contain: (1) The party's name, address, and telephone number; (2) the
number of participants; (3) the reason for attending; and (4) a list of the issues to be
discussed. In addition, pre-hearing briefs in at least 10 copies must be submitted to the
Deputy Assistant Secretary by February 8, 1985. Oral presentations will be limited to
issues raised in the briefs. All written views should be filed in accordance with 19 CFR
355.34, within 30 days of the publication of this notice, at the above address and in at
least 10 copies.
This notice is published pursuant to section 703(f) of the Act [19 U.S.C. 1671b(f)].
Dated: December 17, 1984.
Alan F. Holmer,
Deputy Assistant Secretary for Import Administration.
Appendix
List of TSUSA Codes Which Covered Indonesia's Exports of Certain Textile Mill Products
and Apparel to the United States in 1983
[Note: The following TABLE/FORM is too wide to be displayed on one screen.
You must print it for a meaningful review of its contents. The table has been
divided into multiple pieces with each piece containing information to help you
assemble a printout of the table. The information for each piece includes: (1)
a three line message preceding the tabular data showing by line # and
character # the position of the upper left-hand corner of the piece and the
position of the piece within the entire table; and (2) a numeric scale
following the tabular data displaying the character positions.]
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******** This is piece 1. -- It begins at character 1 of table line 1. ********
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A. Textile Mill Products
Yarns & Threads
310.0250 310.5049
Fabrics
320.0001 320.0002 320.0003 320.0036 320.0038
322.3032 322.3094 322.4092 322.4094 322.5092
326.1058 326.3026 326.3032 326.3092 332.4040
338.5032 338.5035 338.5036 338.5039 338.5064
Special Construction Fabrics
-----------
----------- ----------- ----------- 347.3380 -----------
Textile Furnishings
-----------
361.4500 363.4500 363.5115 365.7825 365.7865
366.4600 366.4700 366.7925 366.7930 727.8630
Luggage and Handbags
-----------
706.3400 706.3640 706.3650 706.3680 706.4106
706.4150
Miscellaneous
-----------
----------- 386.1500 386.4000 386.5045 389.3000
B. Apparel
Wearing Apparel
372.1060 372.1540 372.1560 372.2000 372.7000
379.0220 379.0620 379.0640 379.0645 379.0810
379.3120 379.3940 379.4010 379.4020 379.4040
379.4630 379.4640 379.4650 379.4660 379.4670
379.5510 379.5520 379.5525 379.5530 379.5535
379.5550 379.5560 379.5565 379.5800 379.6210
379.6240 379.6250 379.6470 379.8915 379.9025
379.9250 379.9530 379.9535 379.9540 379.9545
379.9570 379.9575 379.9580 379.9585 379.9641
383.0221 383.0225 383.0250 383.0260 383.0265
383.0355 383.0505 383.0506 383.0520 383.0610
383.0616 383.0620 383.0630 383.0805 383.0835
383.0856 383.0859 383.0860 383.1305 383.1802
383.1820 383.1841 383.1910 383.1915 383.1920
383.2005 383.2013 383.2014 383.2020 383.2025
383.2050 383.2052 383.2058 383.2060 383.2205
383.2225 383.2230 383.2235 383.2240 383.2245
383.2315 383.2320 383.2325 383.2330 383.2335
383.2352 383.2354 383.2356 383.2360 383.2365
383.2590 383.2707 383.2708 383.2709 383.2720
383.2731 383.2815 383.2830 383.2835 383.2910
383.3060 383.3080 383.3090 383.3200 383.3430
383.3446 383.3448 383.3450 383.3460 383.3465
383.4015 383.4300 383.4702 383.4704 383.4705
383.4711 383.4715 383.4720 383.4721 383.4730
383.4753 383.4755 383.4761 383.4763 383.4765
383.4900 383.5030 383.5035 383.5036 383.5039
383.5062 383.5072 383.5078 383.5082 383.5084
383.5090 383.5295 383.5395 383.6371 383.7882
383.8004 383.8005 383.8043 383.8044 383.8045
383.8073 383.8115 383.8135 383.8145 383.8160
383.8635 383.8645 383.8660 383.8663 383.8669
383.9005 383.9010 383.9015 383.9020 383.9025
383.9051 383.9060 383.9065 383.9070 383.9210
383.9235 383.9240 383.9245 383.9255 383.9267
383.9290 383.9291
Headwear
702.1400
Gloves
704.4010 704.4025 704.4504 704.4506 704.4508
1...+...10....+...20....+...30....+...40....+...50....+...60....+...70
*******************************************************************************
******* This is piece 2. -- It begins at character 71 of table line 1. ********
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320.1038 322.1084 ------
322.8094 325.8092 ------
338.5021 338.5024 ------
338.5069
----------- -----------
366.2740 366.2780 ------
706.4111 706.4140 ------
389.7000 -----------
372.7520 378.1540 ------
379.2350 379.2630 ------
379.4050 379.4330 ------
379.5210 379.5220 ------
379.5540 379.5545 ------
379.6220 379.6230 ------
379.9030 379.9040 ------
379.9550 379.9555 ------
379.9650 379.0215 ------
383.0305 383.0335 ------
383.0611 383.0615 ------
383.0838 383.0841 ------
383.1803 383.1807 ------
383.1925 383.1930 ------
383.2035 383.2040 ------
383.2210 383.2215 ------
383.2250 383.2305 ------
383.2340 383.2350 ------
383.2535 383.2550 ------
383.2725 383.2730 ------
383.3030 383.3040 ------
383.3435 383.3445 ------
383.3466 383.3770 ------
383.4707 383.4709 ------
383.4747 383.4749 ------
383.4821 383.4825 ------
383.5049 383.5050 ------
383.5086 383.5088 ------
383.8002 383.8003 ------
383.8047 383.8070 ------
383.8605 383.8620 ------
383.8670 383.8810 ------
383.9030 383.9050 ------
383.9220 383.9225 ------
383.9270 383.9276 ------
704.5015
71..+...80....+...90....+....0...
*49678 [FR Doc. 84-33255 Filed 12-20-84; 8:45 am]
BILLING CODE 3510-DS-M