NOTICES

                        DEPARTMENT OF COMMERCE

                               [C-333-401]

   Cotton Shop Towels From Peru; Suspension of Countervailing Duty Determination

                       Wednesday, September 12, 1984

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 AGENCY: International Trade Administration, Commerce.

 ACTION: Notice of Suspension of Countervailing Duty Investigation.

 SUMMARY: The Department of Commerce has decided to suspend the countervailing
 duty investigation involving cotton shop towels from Peru. The basis for the suspension
 is an agreement to cease exports of this product to the United States.

 EFFECTIVE DATE: September 12, 1984.

 FOR FURTHER INFORMATION CONTACT: Andrew Debicki, Office of Investigations,
 Import Administration, International Trade Administration, U.S. Department of
 Commerce, 14th Street and Constitution Avenue, NW., Washington, D.C. 20230;
 telephone: (202) 377-3965.

 SUPPLEMENTARY INFORMATION:

 Case History

 On March 28, 1984, we received a petition from Milliken and Company filed on behalf of
 the U.S. cotton shop towel industry. In compliance with the filing requirements of section
 355.26 of the Commerce Regulations (19 CFR 355.26), petitioners alleged that
 manufacturers, producers, or exporters in Peru of cotton shop towels received, 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 April 17, 1984, we initiated an
 investigation (49 FR 15250). We stated at that time that we expected to issue a
 preliminary determination by June 21, 1984.
 Peru is not a "country under the Agreement" within the meaning of section 701(b) of the
 Act, and, therefore, section 303 of the Act applies to this investigation. The merchandise
 under investigation is dutiable. Therefore, under this section, the petitioner is not
 required to allege that, and the U.S. International Trade Commission is not required to
 determine whether, imports of these products cause or threaten material injury to a U.S.
 industry.
 We presented questionnaires concerning the allegations to the government of Peru at its
 Embassy in Washington, D.C., on April 24, 1984. On June 7, 1984, we received replies to
 the questionnaires.
 We issued an affirmative preliminary determination on June 21, 1984. (49 FR 26273). We
 determined preliminarily that there was reason to believe or suspect that certain benefits
 which constitute bounties or grants within the meaning of the Act are being provided to
 manufacturers, producers or exporters in Peru of cotton shop towels. We preliminarily
 determined the net bounty or grant to be 44 percent ad valorem. The programs
 preliminarily determined to bestow countervailable benefits were the certificate of tax
 rebate (CERTEX) program and the non-traditional export fund (FENT).
 We directed the U.S. Customs Service to suspend liquidation of all entries of the product
 under investigation which were entered, or withdrawn from warehouse, for consumption,
 and to require a cash deposit or the posting of a bond on this product in an amount equal
 to the estimated net bounties or grants.
 Verification of the questionnaire responses from the government and Fabrica de Tejidos
 La Union Limitada, S.A., (La Union) took place during the week of July 23-29, 1984.
 Our notice of preliminary determination gave interested parties an opportunity to submit
 oral and written views. A public hearing was requested, but cancelled upon notice to the
 parties to the investigation of the initialing of a suspension agreement. Both petitioners
 and respondents filed pre-hearing briefs commenting on our preliminary determination.
 On August 3, 1984 we initialed a proposed suspension agreement. Petitioners have had 30
 days in which to submit comments regarding the proposed suspension agreement. By a
 letter dated August 31, 1984, petitioner informed us that it had no objection to the
 proposed suspension agreement.

 Scope of Investigation

 The product covered by this investigation is cotton shop towels. This merchandise is
 currently classified under item number 366.2740 of the Tariff Schedules of the United
 States Annotated (TSUSA).
 The period for which we are measuring bounties or grants is the calendar year 1983.

 Suspension of Investigation

 The Department has consulted with the petitioners and has considered any comments
 submitted with respect to the proposed suspension agreement. We have determined the
 agreement will lead to the cessation within 6 months of imports from Peru of the subject
 merchandise exported directly or indirectly to the United States, that the agreement can
 be monitored effectively, and that the agreement is in the public interest. Therefore, we
 find that the criteria for suspension of an investigation pursuant to section 704 of the Act
 have been met. The terms and conditions of the agreement, signed September 4, 1984, are
 set forth in Annex I of this notice.
 Pursuant to section 704(f)(2)(A) of the Act, the suspension of liquidation of all entries,
 entered or withdrawn from warehouse, for consumption of cotton shop towels from Peru
 effective June 27, 1983, as directed in our notice of "Preliminary Affirmative
 Countervailing Duty Determination: Cotton Shop Towels from Peru," 49 FR 26273, is
 hereby terminated. Any cash deposits on entries of cotton shop towels from Peru
 pursuant to that suspension of liquidation shall be refunded and any bonds shall be
 released.

 Annex I--Suspension Agreement, Cotton Shop Towels from Peru

 Pursuant to the provisions of section 704 of the Tariff Act of 1930 (The Act), and § 355.31
 of the Department of Commerce Regulations, the Department of Commerce (the
 Department) and Fabrica de Tejidos La Union Limitada, S.A. (La Union), Av. Nicolas
 Ayllon 2681, El Augustino, Lima, Peru, and Santa Cecilia Compania Textil, S.A. (Santa
 Cecilia) Av. de las Torres 261 Lima 3, Peru, enter into the following suspension
 agreement (the agreement) on the basis of which the Department shall suspend its
 countervailing duty investigation with respect to cotton shop towels from Peru,
 subject to the terms and provisions set forth below.

 A. Product Coverage

 This agreement applies to cotton shop towels from Peru which are the subject of the
 above referenced investigation, manufactured or exported by La Union, and Santa Cecilia
 and which are currently provided for under item number 366.2740 of the Tariff
 Schedules of the United States (hereinafter the subject product).

 B. Basis for the Agreement

 As of the effective date of this agreement, La Union and Santa Cecilia, exporters which
 account for substantially all of the exports of the subject product from Peru to the United
 States, agree not to make further exports of the subject product to the United States,
 either directly or through intermediaries, from Peru or through third countries.

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 C. Monitoring

 La Union and Santa Cecilia will supply to the Department such information as the
 Department deems necessary to ensure that they are in full compliance with the terms of
 this agreement, so as to enable the Department to monitor this agreement effectively in
 accordance with section 704 of the Act and § 355.31 of the Department of Commerce
 Regulations. Such information shall include a quarterly statement of La Union's and Santa
 Cecilia's exports of the subject product to the United States and to all countries. The
 statement shall include the volume of the subject product exported either directly or
 through intermediaries, together with any information La Union and Santa Cecilia possess
 as to the ultimate destination of the merchandise, if this differs from the country to which
 the initial export is made. The statement shall be itemized by country of destination. In
 the absence of exports of the subject product to the United States, either directly or
 through intermediaries, La Union's and Santa Cecilia's quarterly statements shall so
 indicate. La Union and Santa Cecilia agree to submit such quarterly statements to the
 Department within 30 days after the beginning of the subsequent calendar quarter. La
 Union and Santa Cecilia will permit such data collection and verification as the
 Department deems necessary for monitoring this agreement. The Department may also
 request such information and conduct such verifications periodically purusant to the
 administrative reviews conducted under section 751 of the Act. If the Department
 requests information in addition to the quarterly statements specified above, it will
 explain, upon making such request, the reason or reasons why it considers such
 information and/or verification thereof necessary to ensure full compliance with terms of
 this agreement. La Union and Santa Cecilia will notify the Department immediately should
 they alter their positions with respect to any terms of this agreement.

 D. Violation of the Agreement 

 The Departmental shall terminate this agreement and resume the investigation or issue a
 countervailing duty order, as appropriate under § 355.32 of the Department of
 Commerce's Regulations, with respect to the subject product if the Department
 determines, pursuant to section 704(i)(1) of the Act, that either La Union or Santa Cecilia
 has not honored its obligations under this agreement. Additionally, the Department will
 resume this investigation or issue a countervailing duty order, as appropriate under §
 355.32 of the Department of Commerce's Regulations, if it determines that the suspension
 of this investigation is no longer in the public interest or that effective monitoring is no
 longer practicable, as required by section 704(d)(1) (A) and (B) of the Act, or if this
 Agreement has been violated. Additionally, should La Union's and Santa Cecilia's annual
 imports of cotton shop towels from 1983 account for less than 85 percent of the cotton
 shop towels imported to the United States from Peru during any subsequent period of
 review, the Department, on its own initiative or at the request of the petitioner, may
 terminate this agreement and reopen the investigation or issue a countervailing duty
 order, as appropriate under § 355.32 of the Department of Commerce's Regulations. If
 reopened, the investigation will be resumed for all cotton shop towel exporters as if the
 affirmative preliminary determination was made on the date that the Department
 terminates this agreement.

 E. Other Provisions 

 In entering into this agreement, La Union and Santa Cecilia do not admit that any benefits
 they have received in Peru on cotton shop towels are bounties, grants, or subsidies
 within the meaning of the United States countervailing duty law or any other United
 States law.
 The effective date of this suspension agreement is the date of publication of notice of
 suspension of this investigation in the Federal Register.
 Signed on this 4th day of September, 1984, for Fabrica de Tejidos La Union Limitada, S.A.
 and Santa Cecilia Compania Textil, S.A.

 Gary M. Welsh

 The Department intends immediately to begin an administrative review under section
 751 of the Act. For further information regarding this review, contact Richard Moreland
 at (202) 377-2786.
 Nothwithstanding the suspension agreement, the Department will continue the
 investigation if we receive such a request in accordance with section 704(g) of the Act
 within 20 days after the date of publication of this notice.
 This notice is published pursuant to section 704(f)(1)(A) of the Act.
 Dated: September 4, 1984.

 Alan F. Holmer,

 Deputy Assistant Secretary for Import Administration.

 [FR Doc. 84-24107 Filed 9-11-84; 8:45 am]

 BILLING CODE 3510-DS-M