NOTICES
DEPARTMENT OF COMMERCE
[C-779-601]
Preliminary Negative Countervailing Duty Determination; Certain Fresh Cut
Flowers from Kenya
Monday, October 27, 1986
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AGENCY: Import Administration, International Trade Administration,
Commerce.
ACTION: Notice.
SUMMARY: We preliminarily determine that no benefits which constitute bounties or
grants within the meaning of the countervailing duty law are being provided to
producers or exporters in Kenya of certain fresh cut flowers (cut flowers) as described in
the "Scope of Investigation" section of this notice. We have notified the U.S. international
Trade Commission (ITC) of our determination. If this investigation proceeds normally, we
will make our final determination on or before January 5, 1987.
EFFECTIVE DATE: October 27, 1986.
FOR FURTHER INFORMATION CONTACT: Carole Showers or Gary Taverman, Office of
Investigations, Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC
20230; telephone (202) 377-3217 or 377-0161.
SUPPLEMENTAL INFORMATION:
Preliminary Determination
Based upon our investigation, we preliminarily determine that no benefits which
constitute bounties or grants within the meaning of section 303 of the Tariff Act of 1930,
as amended (the Act), are being provided to producers or exporters in Kenya of cut
flowers.
Case History
On May 21, 1986, we received a petition in proper form from the Floral Trade Council
filed on behalf of the U.S. industry producing cut flowers. In compliance with the filing
requirements of § 355.26 of the Commerce Regulations (19 CFR 355.26), the petition
alleged that producers or exporters in Kenya of cut flowers receive, directly or
indirectly, benefits which constitute bounties or grants within the meaning of section 303
of the Act.
We found that the petition contained sufficient grounds upon which to initiate a
countervailing duty investigation, and on June 10, 1986, we initiated an investigation
(51 FR 21953, June 17, 1986). We stated that we expected to issue a preliminary
determination on or before August 14, 1986.
On June 25, 1986, the petitioner requested a full extension of the period within which a
preliminary countervailing duty determination must be made pursuant to section
703(c)(1)(A) of the Act. On July 3, 1986, we issued a notice of postponement stating that
the preliminary determination would be made on or before October 20, 1986 (51 FR
25084, July 10, 1986).
Since Kenya is not a "country under the Agreement" within the meaning of section 701(b)
of the Act, section 303 of the Act applies to this investigation. However, because Kenya
is a signatory to the General Agreement on Tariffs and Trade and the cut flowers subject to
this investigation are duty-free, the petitioner is required to allege that, and the ITC is
required to determine whether, imports of the subject merchandise from Kenya
materially injure, or threaten material injury to, a U.S. industry. On July 7, 1986, the ITC
determined that there is a reasonable indication that an industry in the United States is
materially injured by reason of imports from Kenya of the subject merchandise (51 FR
25751, July 16, 1986).
On June 20, 1986, we presented a questionnaire to the Government of Kenya in
Washington, DC concerning petitioner's allegations. We received the government and
company responses on August 15, and September 22 and 26, 1986, respectively.
Scope of Investigation
The products covered by this investigation are fresh cut miniature (spray) carnations,
currently provided for in item 192.17 of the Tariff Schedules of the United States (TSUS),
and standard carnations, currently provided for in item 192.21 of the TSUS.
Analysis of Programs
Throughout this notice we refer to certain general principles applied to the facts of the
current investigation. These general principles are described in the "Subsidies Appendix
A" attached to the notice of Cold-Rolled Carbon Steel Flat-Rolled Products From
Argentina: Final Affirmative Countervailing Duty Determination and
Countervailing Duty Order (49 FR 18006, April 26, 1984).
Consistent with our practice in preliminary determinations, when a response to an
allegation denies existence of a program, receipt of benefits under a program, or the
eligibility of a company or industry under a program, and the Department has no
persuasive evidence showing that the response is incorect, we accept the response for
purposes of the preliminary determination. All such responses are subject to verification.
If the response cannot be supported at verification, and the program is otherwise
countervailing, the program will be considered a bounty or grant in the final
determination.
For purposes of this preliminary determination, the period for which we are measuring
bounties or grants (the review period) is calendar year 1985. Based upon our analysis of
the petition and the responses to our questionnaire, we preliminarily determine the
following:
I. Program Preliminarily Determined Not To Confer A Bounty Or Grant
We preliminarily determine that a bounty or grant is not geing provided to producers or
exporters in Kenya of cut flowers under the following program:
Reserch and Development Support
Petitioner alleges that producers of cut flowers in Kenya benefit from government
sponsored research projects undertaken at the National Potato Research Station and at
the Horticultural Research and Development Project on important cut flower crops in
Kenya. According to the government response, both of these research groups have
conducted adaptation trials on most flower types and on many other types of plants and
produce. Approximately seventy percent of the cost of these trials is funded by the
Government of Kenya and thirty percent by international organizations. The response
states that these trials are made available for all types of flowers, whether exported or
not, and are available to producers in any part of the country. The response states further
that the results of the trials are made publically available through publications of annual
reports or on request from farmers, with farmers bearing their own costs when using
results from these trials.
Because the research results appear to be publicly available on equal terms, and because
research appears to be conducted on a wide variety of horticultural and agricultural
products, we preliminarily determine that this program is not countervailable.
II. Programs Preliminarily Determined Not to be Used
We preliminarily determine that the producers or exporters in Kenya of cut flowers did
not use the following programs:
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A. Export Compensation Act
Petitioner alleges that exporters of cut flowers receive export incentives from the
Government of Kenya under the revised Local Manufacturers' Export Compensation Act
of June 1982. According to the government response, exporters of cut flowers are not
eligible for export incentives under this program.
B. Investment Allowances
Petitioner alleges that various investment allowances are provided by the Government of
Kenya to assist in the development of areas outside of the major metropolitan centers.
The government response states that investment incentives are only given to the
manufacturing sector. Therefore, producers and exporters of cut flowers are ineligible for
any benefits under this program.
C. Preferential Airfreight Rates for Exporters
Petitioner United States alleges that the Government of Kenya subsidizes airfreight rates
for exporters. In its response, the Government of Kenya stated that government directed
rates (GDR) do not exist for cut flowers and thereby, make exporters of flowers ineligible
for this program.
Verification
In accordance with section 776(a) of the Act, we will verify the information used in
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 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 Deputy Assistant Secretary for Import Administration.
If our final determination is affirmative, the ITC will determine whether these imports
materially injure, or threaten material injury to, a U.S. industry within 75 days after the
Department makes its final determination.
Public Comment
In accordance with § 355.35 of the Commerce Regulations (19 CFR 355.35), we will hold a
public hearing, if requested, to afford interested parties an opportunity to comment on
this preliminary determination at 10:00 a.m. on December 10, 1986, at the U.S.
Department of Commerce, Room 3708, 14th Street and Constitution Avenue, NW.,
Washington, DC 20230. Individuals who wish to participate in the hearing must submit a
request to the Deputy Assistant Secretary for Import Administration, Room B-099, at the
above address within ten days after publication of this notice in the Federal Register.
Requests should contain: (1) The party's name, address, and telephone number; (2) the
number of participants; (3) the reason for attending; and (4) a list of the issues to be
discussed. In addition, ten copies of the proprietary version and seven copies of the
nonproprietary version of the pre-hearing briefs must be submitted to the Deputy
Assistant Secretary by December 3, 1986. Oral presentations will be limited to issues
raised in the briefs. In accordance with 19 CFR 355.33(d) and 355.34, written views will
be considered if received not less than 30 days before the final determination is due or, if
a hearing is held, within ten days after the hearing transcript is available.
This determination is published pursuant to section 703(f) of the Act [19 U.S.C. 1671b(f)].
Gilbert B. Kaplan,
Deputy Assistant Secretary for Import Administration.
October 20, 1986.
[FR Doc. 86-24180 Filed 10-24-86; 8:45 am]
BILLING CODE 3510-DS-M