49 FR 924

                                   NOTICES

                           DEPARTMENT OF COMMERCE

                                  [C-580-064]

        Fresh Cut Roses From Israel; Final Results of Administrative Review of
                           Countervailing Duty Order

                             Friday, January 6, 1984

*924

AGENCY: International Trade Administration, Commerce.

ACTION: Notice of final results of Administrative Review of Countervailing Duty Order.

SUMMARY: On October 31, 1983, the Department of Commerce published the preliminary results
of its administrative review of the countervailing duty 
order on fresh cut roses from Israel. The review covers the period October 1, 1980 through
September 30, 1981.

We gave interested parties an opportunity to comment on the preliminary results. After our review
of the one comment received, the final results of the review are the same as the preliminary results.

EFFECTIVE DATE: January 6, 1984.

FOR FURTHER INFORMATION CONTACT:Alan Long or Laura Kneale, Office of Compliance,
International Trade Administration, U.S. Department of Commerce, Washington, D.C.
20230; telephone: (202) 377-2786.

SUPPLEMENTARY INFORMATION:

Background

On October 31, 1983, the Department of Commerce ("the Department") published in the Federal
Register (48 FR 50140) the preliminary results of its administrative review of the
countervailing duty order on fresh cut roses from Israel (45 FR 58516, September
4, 1980). The Department has now completed that 
administrative review, in accordance with section 751 of the Tariff Act of 1930 ("the Tariff Act").

Scope of the Review

Imports covered by the review are shipments of Israeli fresh cut roses. Such merchandise is
currently classifiable under item 192.1800 of the Tariff Schedules of the United States Annotated.
The review covers the period October 1, 1980 through September 30, 1981 and ten programs: (1)
The Encouragement of Capital Investment Law ("the ECIL"); (2) Government-Guaranteed Minimum
Price program; (3) preferential short-term financing; (4) government funding of AGREXCO; (5) cash
payments to growers for greenhouses; (6) cash payments to packing houses; (7) cash payments
from the Export Promotion Fund; (8) fuel grants to rose growers; (9) 

*925


long-term loans granted to AGREXCO; and (10) a capital fund for AGREXCO.

Analysis of Comment Received

We gave interested parties an opportunity to comment on the preliminary results. We received a
comment from the Government of Israel.

Comment: The Ministry of Finance of the Government of Israel contends that the 
Department erred in calculating the estimated subsidy from the Export Production Fund, one of
the three funds for preferential short-term financing. The Department calculated the benefit from
this fund in dollars. The correct method of calculating the subsidy is to use lira, since 
loans granted under this fund are denominated in lira. To calculate a best evidence estimate 
of credit eligibility, the Department should multiply the dollar value of the prior period's 
exports by the exchange rate prevailing at the commencement of the growing year, when the credit 
was received, and multiply this lira value of exports by the rate of credit formula for loan 
eligibility. Then, based on that amount of principal, in calculating the subsidy, the Department 
should divide the lira amount of interest savings by the exchange rate prevailing at the end 
of the growing year, when the loans are repaid, and divide this dollar value of the benefit by 
the dollar value of exports during the year. This methodology would eliminate any inflationary 
effect and take into account the real interest.

Department's Position: In administering this fund, the Bank of Israel adjusts quarterly credit
eligibility, including the exchange rate used in the rate of credit formula. Therefore, calculating
eligibility by using the dollar/lira exchange rate prevailing at the commencement of the growing
season would underestimate the amount of credit available to exporters. Furthermore, the
Ministry of Finance is assuming that all loans under this fund are received 
at the beginning of the growing year and repaid at the end of the growing year. However, firms may
borrow at any time during the year, up to their line of credit. In the absence of actual loan
information, it is the Department's practice to assume uniform borrowing over the course of the
year. See "Final Results of Administrative Review of Countervailing Duty Order" regarding
Spanish ferroalloys (48 FR 34493, July 29, 1983). Therefore, it is more appropriate to use the
average exchange rate, weighted by days, during the period of review to calculate both credit
eligibility and the ad valorem subsidy. Since these two currency conversions calculations cancel
each other out when the same exchange rate is used for both, we have estimated the amount of
interest savings in dollars. If we calculate the interest saved in lira, using an average exchange 
rate, we would obtain identical results.

Final Results of the Review

After review of the comment received, the final results of the review are the same as the
preliminary results. We determine the aggregate net subsidy to be 27.94 percent for the period
October 1, 1980 through September 30, 1981.

The Department will instruct the Customs Service to assess countervailing duties of 27.94
percent of the f.o.b. invoice price on any shipments exported on or after October 1, 1980 and
entered, or withdrawn from warehouse, for consumption on or before September 31, 1981.

The Department will instruct the Customs Service to collect a cash deposit of estimated
countervailing duties, as provided for in section 751(a)(1) of the Tariff Act, of 22.56 percent
of the entered value on any shipment of Israeli fresh cut roses 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. The Department intends to begin immediately the next administrative review.
The Department encourages interested parties to review the public record and submit applications
for protective orders as early as possible after the Department's receipt of the requested
information . 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 § 355.41 of the Commerce Regulations (19 CFR 355.41).
Dated: December 28, 1983.

C. Christopher Parlin,

Acting Deputy Assistant Secretary, Import Administration.

[FR Doc. 84-384 Filed 1-5-84; 8:45 am]

BILLING CODE 3510-25-M