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