49 FR 17793
                             NOTICES

                     DEPARTMENT OF COMMERCE

                            [C-475-015]

       Pads for Woodwind Instrument Keys From Italy; Final Negative
                           Countervailing
                        Duty Determination

                      Wednesday, April 25, 1984

*17793

AGENCY: International Trade Administration, Import Administration,
Commerce.

ACTION: Notice.

SUMMARY: We determine that certain benefits that constitute subsidies within the
meaning of the countervailing duty law are being provided to the 
manufacturers, producers, or exporters in Italy of pads for woodwind
instrument keys, as described in the "Scope of Investigation" section of this notice,
but that the total estimated net subsidy is de minimis. Therefore, our final
  countervailing duty determination is negative.

EFFECTIVE DATE: April 25, 1984.

FOR FURTHER INFORMATION CONTACT:Vincent Kane, Office of Investigations,
Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue, N.W., Washington,
D.C. 20230, telephone (202) 377-5414.

SUPPLEMENTARY INFORMATION:

Final Determination

For purposes of this investigation, the only program found to confer a subsidy is the
tax concession granted under Italian Law 614. The total estimated net subsidy is
0.05 percent ad valorem. This ad valorem subsidy is de minimis. Therefore, we
determine that no benefits which constitute subsidies within the meaning of section
701 of the Tariff Act of 1930, as amended (the Act), are 
being provided to producers or exporters in Italy of pads for woodwind
instruments keys as described in the "Scope of Investigation" section of this notice.

Case History

On November 7, 1983, we received a petition from the Prestini Musical Instrument
Corporation, filed on behalf of the United States industry producing pads for
woodwind instrument keys. The petition alleged that the government of Italy
bestows subsidies within the meaning of section 701 of the Act upon the production
or exportation of pads for woodwind instrument keys. We found the petition to
contain sufficient grounds upon which to initiate a countervailing duty
investigation and on November 25, 1983, we initiated a countervailing duty
investigation (48 FR 55601).
We note that the notice of initiation published for this investigation (48 FR 55601)
stated in error that the petitioner had alleged critical circumstances in the
  countervailing duty petition. We hereby clarify that, in fact, no such
allegation was made.
Since Italy is a "country under the Agreement" within the meaning of section
701(b) of the Act, an injury determination is required for this investigation.
Therefore, we notified the International Trade Commission (ITC) of our 
initiation. On December 21, 1983, the ITC determined that there is a reasonable
indication that imports of the subject merchandise are materially injuring a U.S.
industry.
On November 30, 1983, we presented to the government of Italy in Washington,
D.C., a questionnaire concerning the allegations in the petition and Italian
government programs that, in prior investigations, we have found might confer
countervailable benefits. We also presented questionnaires to Luciano Pisoni and
Pads Manufacture di s.r.l., the sole Italian manufacturers exporting the subject
merchandise to the United States. On January 9, 1984, we received responses to the
questionnaires.
On January 31, 1984, we made a preliminary negative countervailing duty
determination with respect to the subject merchandise.

Scope of Investigation

The product covered by this investigation is pads for woodwind instrument keys,
currently provided for under item number 726.70 of the Tariff Schedules of the
United States (TSUS). These pads are affixed to the keys of various woodwind
instruments, e.g., saxophones, clarinets, oboes and flutes. The periods for which we
are measuring subsidies are January 1 to December 31, 1982, and January 1 to
September 30, 1983.

Analysis of Programs

In their responses, the government of Italy and the exporters provided data for
the applicable periods. Based upon our analysis of the petition, the responses to our
questionnaires and our verification, we determine the following:
I. Program Determined to Confer Subsidies. We determine that subsidies are being
provided to manufacturers, producers, and exporters in Italy of pads for
woodwind instrument keys under the following program:

A. Tax Concession under Italian Law 614. Italian Law 614 of May 22, 1966, provides
for a 10-year exemption from the provincial corporate income tax for new
manufacturers locating in certain depressed areas of central and northern Italy.
Since the benefit conferred by Law 614 is to specific regions of the country, we view
the benefit as resulting in the payment or bestowal of a subsidy within the meaning
of section 701 of the Act. Since 1978, Luciano Pisoni has qualified for and received
under Law 614 an exemption from provincial corporate income tax. In 1982, the
firm realized a tax savings which amounted to 0.05 percent of total f.o.b. sales
value.

II. Programs Determined Not to Confer Subsidies. We determine that the Italian
provincial government is not providing subsidies to manufacturers, producers, 
or exporters of pads for woodwind instrument keys under the following programs:

A. Loans under Provincial Law 17. Province of Trento Law 17 of 1975 provides for
medium-term financing to companies within the province experiencing financial
difficulties. The purpose of the financing is to allow companies in precarious
financial position to reorganize or restructure and thereby avoid or recover from
bankruptcy. In 1977, Pads Manufacturer s.r.l., received a medium- term loan under
Law 17.
We have determined that financing under Law 17 does not result in the 

*17794

payment or bestowal of a subsidy within the meaning of section 701 of the Act. The
provisions of Law 17 apply to a wide variety of enterprises and industries. Every
business within the province has the potential to receive assistance under this law.
And we verified that a wide variety of companies have actually received financing
under this law. Consequently, we do not view the benefits of this law as restricted to
a specific enterprise or industry, or group of enterprises or industries. Therefore,
Law 17 does not confer a subsidy.

B. Loan under Provincial Law 58. Province of Trento Law 58 of December 11, 1978,
provides for medium-term loans to small companies for the purpose of establishing
and expanding plant and equipment. It thereby promotes employment and the
training of new employees within the province. Firms may obtain loans in an
amount of up to 70 percent of capital expenditure, with approximately 60 
percent of the interest expense over the life of the loan absorbed by the province.
On June 6, 1980, Luciano Pisoni received a medium-term loan under provincial Law
58.
We have determined that financing under Law 58 does not confer a subsidy.
Although limited to small companies, the provisions of Law 58 nonetheless apply to
a wide variety of enterprises and industries. And we have verified that in actual
practice, loans under Law 58 were made without restrictions to small companies
applying for them. Consequently, we do not view the benefits received under this
law as restricted to a specific enterprise or industry, or group of enterprises or
industries, as required by the Act for the benefit to confer a subsidy.
III. Programs Determined Not to Be Used. We have determined that the programs
listed below, which we included in our notice of initiation, are not being used by
manufacturers, producers or exporters in Italy of pads for woodwind
instrument keys:

A. Financing for the Northern and Central Regions. Law 902 of 1976 provides for
loans at less than prevailing market rates to small and medium-sized companies in
northern and central Italy. We find that the companies under investigation have
noy received financing through the provisions of Law 902.

B. Long-term Financing from Mediocredito Centrale. Petitioner alleged that
manufacturers of the subject merchandise had received preferential long-term 
financing from the Instituzione Centrale per il Credito a Medio Terminate
(Mediocredito Centrale). During our investigation we found that Mediocredito
Centrale administers financing under Italian Law 902. However, neither producer
under consideration received loans under Law 902. In addition, we found that
neither producer received any other financing that may be considered inconsistent
with commercial considerations through laws or programs administered by
Mediocredito Centrale.

C. Export Credit Financing. Part IV of Italian Law 227 established medium-term
export credit financing to promote the exportation of goods and services. The law
provides for the establishment of lines of credit available to foreign buyers
contracting for the purchase of goods and services of Italian origin. Mediocredito
Centrale administers the export credit financing through special medium and
long-term credit institutions. The Minister of the Treasury, after consulting the
Interministerial Committee for Credit and Savings, establishes the requirements,
terms and conditions of the export credit financing. The financing is denominated in
Italian lire or any foreign currency acceptable to the Mediocredito Centrale and to
special medium and long-term credit institutions.
We find that during our period of investigation U.S. importers of the subject
merchandise have not received export credit financing under Italian Law 227.

Verification

In accordance with section 776(a) of the Act, we verified all the information used in
reaching our final determination. During this verification, we followed normal
procedures, including inspection of documents, discussions with government
officials and on-site inspection of manufacturers' operations and records.

Administrative Procedures

The Department gave interested parties an opportunity to present written and oral
views in accordance with its regulations (19 CFR 355.33(d)). No request to present
oral views or written views were received. We hereby conclude our investigation
regarding this case.
This notice is published pursuant to section 705(d) of the Act.
(19 U.S.C. 1671d(d))
Dated: April 13, 1984.

William T. Archey,

Acting Assistant Secretary for Trade Administration.

[FR Doc. 84-11048 Filed 4-24-84; 8:45 am]

BILLING CODE 3510-DS-M