63 FR 48191 September 9, 1998
DEPARTMENT OF COMMERCE
International Trade Administration
[C-560-804]
Preliminary Negative Countervailing Duty Determination and
Alignment of Final Countervailing Duty Determination With Final
Antidumping Duty Determination: Extruded Rubber Thread From Indonesia
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: September 9, 1998.
FOR FURTHER INFORMATION CONTACT: Stephanie Moore or Eric B. Greynolds,
Office of CVD/AD Enforcement VI, Import Administration, U.S. Department
of Commerce, Room 3099, 14th Street and Constitution Avenue, N.W.,
Washington, D.C. 20230; telephone (202) 482-2786.
Preliminary Determination
The Department of Commerce (the Department) preliminarily
determines that countervailable subsidies are not being provided to
producers or exporters of extruded rubber thread from Indonesia.
Petitioner
The petition in this investigation was filed by North American
Rubber Thread Co., Ltd. (the petitioner).
Case History
Since the publication of the notice of initiation in the Federal
Register, the following events have occurred. See Notice of Initiation
of Antidumping and Countervailing Duty Investigations: Extruded Rubber
Thread from
[[Page 48192]]
Indonesia, 63 FR 23267 (April 28, 1998) (Initiation Notice). On May 4,
1998, we issued countervailing duty questionnaires to the Government of
Indonesia (GOI), and the producers/exporters of the subject
merchandise. On June 10, 1998, at the request of the petitioner, we
postponed the preliminary determination of this investigation until
August 28, 1998 (63 FR 31737).
We received responses to our initial questionnaire from the GOI,
Bakrie Rubber Industry (Bakrie), P.T. Swasthi Parama Mulya (Swasthi),
and P.T. Perkebunan III (Pesero) on June 26 and 29, 1998. The
information provided indicates that Pesero did not export to the United
States during 1997, and that P.T. Cilatexindo Graha Alam Pt., an
exporter named in the petition, stopped producing rubber thread in
January 1994. A query of the U.S. Customs databases confirmed that
these two companies did not export subject merchandise to the United
States during 1997, the period of investigation. Therefore, we are not
requesting further information from these two companies. On July 17,
1998, we issued supplemental questionnaires to the GOI, Bakrie and
Swasthi. We received responses to these supplemental questionnaires
on July 27, 1998.
Scope of Investigation
For purposes of this investigation, the product covered is extruded
rubber thread (ERT) from Indonesia. ERT is defined as vulcanized rubber
thread obtained by extrusion of stable or concentrated natural rubber
latex of any cross sectional shape, measuring from 0.18 mm, which is
0.007 inches or 140 gauge, to 1.42 mm, which is 0.056 inch or 18 gauge,
in diameter.
ERT is currently classified under subheadings 4007.00.00 of the
Harmonized Tariff Schedule (HTS). Although the HTS subheadings are
provided for convenience and customs purposes, the written description
of the scope of this investigation is dispositive.
The Applicable Statute and Regulations
Unless otherwise indicated, all citations to the statute are
references to the provisions of the Tariff Act of 1930, as amended by
the Uruguay Round Agreements Act effective January 1, 1995 (the Act).
In addition, unless otherwise indicated, all citations to the
Department's regulations are to the current regulations as codified at
19 CFR 351 and published in the Federal Register on May 19, 1997 (62 FR
27295).
Injury Test
Because Indonesia is a ``Subsidies Agreement Country'' within the
meaning of section 701(b) of the Act, the International Trade
Commission (ITC) is required to determine whether imports of the
subject merchandise from Indonesia materially injure, or threaten
material injury to, a U.S. industry. On May 28, 1998, the ITC published
its preliminary determination that there is a reasonable indication
that an industry in the United States is being materially injured, or
threatened with material injury, by reason of imports from Indonesia of
the subject merchandise (63 FR 29250).
Alignment With Final Antidumping Duty Determination
On August 18, 1998, the petitioner submitted a letter requesting
alignment of the final determination in this investigation with the
final determination in the companion antidumping duty investigation. In
accordance with section 705(a)(1) of the Act, we are aligning the final
determination in this investigation with the final antidumping duty
determination in the antidumping investigation of ERT. See Initiation
of Antidumping and Countervailing Duty Investigations: Extruded Rubber
Thread From Indonesia, 63 FR 23267 (April 28, 1998).
Period of Investigation
The period for which we are measuring subsidies (the POI) is
calendar year 1997.
Company Histories
The GOI identified two producers of subject merchandise that
exported the subject merchandise to the United States during the POI:
Bakrie
Bakrie was established on January 14, 1992, by the PT. Bakrie
Nusantara Corporation and Globe Manufacturing Company, a U.S. producer
of rubber thread, as a joint venture company. PT. Bakrie Nusantara
Corporation was officially renamed PT. Bakrie Capitanindo Corporation
on March 15, 1995. Bakrie manufactures and exports medium and heavy
gauge rubber thread, coated with silicone emulsion which serves as a
lubricant.
Swasthi
Swasthi was established in November 1989. The company produces and
exports ERT of various gauges of talc finish, various colors, and
special qualities.
De Minimis Standard Under Section 771(36) of the Statute
Pursuant to its authority under section 771(36) of the Act, the
United States Trade Representative (USTR) has designated Indonesia as a
``least-developed country'' for purposes of the CVD law. See USTR
Interim Final Rule: Developing and Least-Developed Country Designations
Under the Countervailing Duty Law (15 CFR 2013) (63 FR 29945, June 2,
1998). Consequently, a net countervailable subsidy rate that does not
exceed three percent ad valorem is considered de minimis in accordance
with section 703(b)(4)(B) of the Act and Article 27 of the Agreement on
Subsidies and Countervailing Measures (SCM Agreement). As discussed
below, we preliminarily determine that the net countervailable subsidy
bestowed on ERT from Indonesia is less than three percent ad valorem,
and is, therefore, de minimis.
I. Program Preliminarily Determined To Be Countervailable Bank
Indonesia (BI) Rediscount Loans
Under Decree No. 132/MPP/Kep/1996 of June 4, 1996, the Ministry of
Industry and Trade, the Ministry of Finance, and the Bank of Indonesia
(BI) provide support for certain exporters with the goal of achieving
diversification of the Indonesian export base from oil and gas.
Companies designated as Perusahaan Eksportir Tertentu (PET) are
eligible to participate in this program. Under the program, PETs sell
their letters of credit and export drafts at a discount to the BI
through participating foreign exchange banks, which are commercial
banks that have obtained a license to conduct activities in foreign
currencies. The sale of the letters of credit and export drafts by the
PETs provides them with working capital at lower interest rates than
they would otherwise pay on short-term commercial loans.
We preliminarily determine that the loans provided under this
program are countervailable in accordance with section 771(5)(A) of the
Act. Through this program, the BI provides working capital to PETs at
interest rates which are more favorable than those provided to non-
PETs. The benefit is the difference between the amount the borrower of
the loan pays on the loan and the amount the borrower would pay on a
comparable commercial loan. Finally, because the program is contingent
upon export performance, it is an export subsidy under section
771(5A)(B) and is, therefore, specific.
Only one exporter, Swasthi, used the BI rediscount loan program
during the
[[Page 48193]]
POI. According to the GOI's June 29, 1998 questionnaire response at
page 4, the interest rates in effect during the POI were the Singapore
Interbank Offering Rate (SIBOR) for PETs, and SIBOR plus 1 percent
for non-PETs. Therefore, to calculate the benefit for Swasthi, we compared
the interest rates Swasthi paid on loans for shipments to the United
States to the interest rates that non-PET companies would have had to
pay for comparable commercial loans. This difference was divided by
Swasthi's total exports of subject merchandise to the United States
during the POI. On this basis, we preliminarily determine the
countervailable subsidy from this program to be 0.13 percent ad
valorem
for Swasthi.
II. Programs Preliminarily Determined To Be Not Used
Based on information provided in the questionnaire responses, we
preliminarily determine that the producers/exporters of subject
merchandise did not apply for or receive benefits under the following
programs during the POI.
A. Investment Credit for the Expansion of the Rubber Industry
B. Corporate Income Tax Holiday
C. Import Duty Exemption of Capital Equipment
Summary
The total preliminary net countervailable subsidy for Swasthi is
0.13 percent, which is de minimis. The rate for Bakrie is zero.
Therefore, we preliminarily determine that countervailable subsidies
are not being provided to producers or exporters of ERT from
Indonesia.
Verification
In accordance with section 782(i) of the Act, we will verify the
information submitted by respondents prior to making our final
determination.
ITC Notification
In accordance with section 703(f) of the Act, we will notify the
ITC of our determination. In addition, we are making available to the
ITC all nonprivileged and nonproprietary information relating to this
investigation. We will allow the ITC access to all privileged and
business proprietary information in our files, provided the ITC
confirms that it will not disclose such information, either publicly or
under an administrative protective order, without the written consent
of the Assistant Secretary, Import Administration.
In accordance with section 705(b)(3) of the Act, if our final
determination is affirmative, the ITC will make its final determination
within 75 days after the Department makes its final determination.
Public Comment
In accordance with 19 CFR 351.310, we will hold a public hearing,
if requested, to afford interested parties an opportunity to comment on
this preliminary determination. Individuals who wish to request a
hearing must submit a written request within 30 days of the publication
of this notice in the Federal Register to the Assistant Secretary for
Import Administration, U.S. Department of Commerce, Room B-099, 14th
Street and Constitution Avenue, N.W., Washington, DC 20230. Parties
should confirm by telephone the time, date, and place of the hearing 48
hours before the scheduled time.
Requests for a public hearing should contain: (1) The party's name,
address, and telephone number; (2) the number of participants; and, (3)
to the extent practicable, an identification of the arguments to be
raised at the hearing. In addition, six copies of the business
proprietary version and six copies of the nonproprietary version of the
case briefs must be submitted to the Assistant Secretary no later than
50 days from the date of publication of the preliminary determination.
As part of the case brief, parties are encouraged to provide a summary
of the arguments not to exceed five pages and a table of statutes,
regulations, and cases cited. Six copies of the business proprietary
version and six copies of the nonproprietary version of the rebuttal
briefs must be submitted to the Assistant Secretary no later than 55
days from the date of publication of the preliminary determination. An
interested party may make an affirmative presentation only on arguments
included in that party's case or rebuttal briefs. Written arguments
should be submitted in accordance with 19 CFR 351.309 and will be
considered if received within the time limits specified above.
This determination is published pursuant to section 703(f) of the Act.
Dated: August 28, 1998.
Joseph A. Spetrini
Acting Assistant Secretary for Import Administration.
[FR Doc. 98-24171 Filed 9-8-98; 8:45 am]
BILLING CODE 3510-DS-P