56 FR 2751
                                   NOTICES

                           DEPARTMENT OF COMMERCE

                                  [C-508-605]

  Industrial Phosphoric Acid From Israel; Final Results of Countervailing Duty
                              Administrative Review

                            Thursday, January 24, 1991

AGENCY: International Trade Administration/Import Administration, Department of
Commerce.

ACTION: Notice of final results of countervailing duty administrative review.

SUMMARY: On September 14, 1990, the Department of Commerce published the preliminary
results of its administrative review of the countervailing duty 
order on industrial phosphoric acid from Israel. We have no completed that review and
determine the net subsidy during the period February 5, 1987 through December 31, 1987 to be
5.96 percent ad valorem.

EFFECTIVE DATE: January 24, 1991.

FOR FURTHER INFORMATION CONTACT:Britt Doughtie or Maria MacKay, Office of Countervailing
Compliance, International Trade Administration, U.S. Department of Commerce,
Washington, DC 20230; telephone: (202) 377-2786.

SUPPLEMENTARY INFORMATION:

Background

On September 14, 1990, the Department of Commerce (the Department) published in the Federal
Register (55 FR 37926) the preliminary results of its administrative review of the
countervailing duty order on industrial phosphoric acid from Israel (52 FR
31057; August 19, 1987). The Department has now completed that administrative review in
accordance with section 751 of the Tariff Act of 1930, as amended (the Tariff Act).

Scope of Review

Imports covered in this review are shipments of Israeli industrial phosphoric acid. During
the period of review, this merchandise was classifiable under item number 416.30 of the Tariff
Schedules of the United States (TSUS). This merchandise is currently classifiable under the
Harmonized Tariff Schedule (HTS) item number 2809.20.00. The TSUS and HTS item numbers are
provided for convenience and Customs purposes. The written description remains dispositive.
The review covers the period February 5, 1987 through December 31, 1987 and four programs.
Negev Phosphates, Ltd. (Negev) is the only known exporter of industrial phosphoric acid
(IPA) from Israel to the United States during the review period.

Analysis of Comments Received

We gave interested parties an opportunity to comment on the preliminary results. We received
written comments from the petitioners, FMC Corporation and Monsanto Company, and from the
Israeli producer, Negev Phosphates, Ltd. (Negev).

Comment 1: Negev argues that the Department should not have considered as countervailable a
grant received by Negev under the Encouragement of Research 
and Development Law (ERDL). Negev contends that the grant is unrelated to IPA production
because: (1) It was given for research on particular phosphate rock at a particular geographical
location--Zohar; (2) it will not benefit any other locale, including the Arad plant; and (3) the
research does not benefit the raw material used to produce IPA, which comes from the Arad mine.
The petitioners concur with the Department's decision to countervail the ERDL grant because the
grant is indirectly related to the production of IPA. The results of such research could lead to
improved methods for mining or extracting phosphate rock and be applied in the future to Arad or
other locations where IPA was being produced. It is also possible that this research could make it
feasible to use phosphate rock extracted at Zohar in the production of IPA.

Department's position: We disagree with Negev. The ERDL grant benefits a research project
concerning the development of a process for the quarrying and beneficiation of rock phosphates.
Rock phosphates are the main input in the production of IPA. Because it is possible that quarrying
and beneficiation techniques learned through this research project could be used at other Negev
quarry sites, including Arad, and because the results of the research are not made publicly
available, the Department determines that this grant provides a countervailable benefit to IPA.

Comment 2: The petitioners argue that the Department, in calculating benefits 
from the Encouragement of Capital Investment Law (ECIL) grants received by Negev, should have
used a long-term interest rate as the discount rate in allocating the grant benefits instead of the
short-term interest rate used in the preliminary results. The petitioners state that: (1) In view of the
high level of inflation in Israel, the use of a short-term rate for discount purposes substantially
understates the benefit accruing to Negev from the ECIL grants; and (2) the language in the
Department's proposed regulations (see proposed § 355.49(b) at 54 FR 23384, May 31, 1989)
explains that when the long-term fixed-rate debt of the firm in question is not available, the
average cost of long-term, fixed-rate debt in the country in question should be used. Negev argues
that the Department used the correct rate for calculating the benefit from the ECIL grants because
Negev had no long-term borrowing at fixed interest rates during the review period and, because of
inflation, long-term, fixed rate loans were not available in Israel during the review period.

Department's position: We agree with the petitioners. We have adjusted our ECIL grant calculations
by using the long-term fixed rate for industrial development loans in Israel, adjusted for
inflation, from the Bank of Israel Annual Report for 1987. As a result, we determine the benefit
from this program to be 2.25 percent ad valorem, instead of the 1.69 percent rate found in our
preliminary results.

Final Results of Review

As a result of our review, we determine the net subsidy to be 5.96 percent ad valorem during the
period February 5, 1987 through December 31, 1987.
In accordance with section 705(a)(1) of the Tariff Act, the final determination in this case was
extended to coincide with the final antidumping determination on the same product from Israel.

Because, pursuant to Article 5.3 of the Subsidies Code, we cannot require suspension of
liquidation for more than 120 days without the issuance of a countervailing duty order, we
terminated the suspension of liquidation on the subject merchandise entered, or withdrawn from
warehouse, for consumption on or after June 5, 1987. We reinstated the suspension of liquidation
and required the collection of cash deposits of estimated countervailing duties for the
subject merchandise entered, or withdrawn from warehouse, for consumption on or after August
19, 1987, the date of publication of the countervailing duty order.
Therefore, the Department will instruct the Customs Service to assess countervailing duties
of 5.96 percent of the f.o.b. invoice price on all shipments of this merchandise entered, or
withdrawn from warehouse, for consumption on or after February 5, 1987 and on or before June 4,
1987. Entries or withdrawals made on or after June 5, 1987 and on or before August 18, 1987 are
not subject to countervailing duties. Further, the Department will instruct the 

*2752

Customs Service to assess countervailing duties of 5.96 percent of the f.o.b. invoice price on
all shipments of this merchandise entered, or withdrawn from warehouse, for consumption on or
after August 19, 1987 and exported on or before December 31, 1987.

Further, the Department will instruct the Customs Service to collect a cash deposit of estimated
countervailing duties of 5.96 percent of the f.o.b. invoice price on all shipments of this
merchandise entered, or withdrawn from warehouse, for consumption on or after the date of
publication of this notice. This deposit requirement shall remain in effect until publication of the
final results of the next administrative review.

This administrative review and notice are in accordance with section 751(a)(1) of the Tariff Act (19
U.S.C. 1675(a)(1)) and 19 CFR 355.22
Dated: January 16, 1991.

Eric I. Garfinkel,

Assistant Secretary for Import Administration.

[FR Doc. 91-1669 Filed 1-23-91; 8:45 am]

BILLING CODE 3510-DS-M