NOTICES

                        DEPARTMENT OF COMMERCE

                      International Trade Administratation

                               [C-565-001]

      Canned Tuna From the Philippines; Final Results of Countervailing Duty
                           Administrative Review

                         Thursday, December 4, 1986

 *43758

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

 *43759

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

 SUMMARY: On October 9, 1986, the Department of Commerce published the preliminary
 results of its administrative review of the countervailing duty order on canned tuna
 from the Philippines. The review covers the period January 1, 1984 through December
 31, 1984 and 19 programs.

 We gave interested parties an opportunity to comment on the preliminary results. After
 reviewing all of the comments received, we have determined the total bounty or grant for
 the period of review to be 0.43 percent ad valorem, a rate the Department considers to be
 de minimis.

 EFFECTIVE DATE: December 4, 1986.

 FOR FURTHER INFORMATION CONTACT: Christopher Beach or Lorenza Olivas, Office of
 Compliance, International Trade Administration, U.S. Department of Commerce,
 Washington, DC 20230; telephone: (202) 377-2786.

 SUPPLEMENTARY INFORMATION:

 Background

 On July 25, 1985, the Department of Commerce ("the Department") published in the
 Federal Register (48 FR 50914) the final results of its last administrative review of the
 countervailing duty order on canned tuna from the Philippines. On October 31,
 1985, the Government of the Philippines, a group of importers, the Tuna Group of the
 Association of Food Industries, and a group of exporters, the Tuna Canners Association of
 the Philippines, requested in accordance with § 355.10 of the Commerce Regulations
 that we complete the administrative review of this order. We published the initiation of
 the administrative review on November 12, 1985 (50 FR 46689) and the preliminary
 results on October 9, l986 (51 FR 36260). We have now completed that administrative
 review in accordance with section 751 of the Tariff Act of 1930 ("the Tariff Act").

 Scope of Review

 Imports covered by the review are shipments of Philippine tuna, packed and preserved in
 any manner, not in oil, in airtight containers. Such merchandise is currently classifiable
 under items 112.3020, 112.3040, and 112.3400 of the Tariff Schedules of the Unites
 States Annotated ("TSUSA").


 The review covers the period January 1, 1984 through December 31, 1984 and 19
 programs: (1) Export packing credits; (2) an income tax deduction for labor and raw
 materials; (3) equity investment by insurance companies; (4) foreign equity investment;
 (5) preferential access to foreign exchange; (6) an exemption from import taxes; (7) an
 income tax deduction for overseas offices; (8) an income tax deduction for new brand
 names; (9) an income tax deduction for export traders; (10) an income tax deduction for
 financial assistance; (11) government bank loans; (12) private bank loans; (13) employee
 equity investment; (14) a tax credit for net local content; (15) a tax credit for net local
 value; (16) preferential loan guarantees; (17) government equity investment; (18) various
 financial services by the Export Credit Insurance and Guarantee Corporation; and (19)
 various financial and marketing assistance by the Institute for Export Development.

 Analysis of Comments Received

 We invited interested parties to comment on the preliminary results. We received written
 comments from the respondents: The Government of the Philippines, a group of
 importers, the Tuna Group of the Association of Food Industries, and a group of
 exporters, the Tuna Canners Association of the Philippines.

 Comment 1: The respondents contend that the Department overstated the benefit from
 Export Packing Credits ("EPC's") obtained by Mar Fishing Company by allocating the loan
 benefits over only exports of tuna to the United States. Since the EPC's reported by Mar
 are based on exports of all products to all markets, the denominator should be the
 company's total sales of all products.

 Department's position: We agree and have corrected our calculations. See also, our
 position to Comment 2.

 Comment 2: The respondents argue that the Department overstated the benefit of EPC's
 by using an annual weighted average interest rate benchmark for 1984 instead of the
 quarterly weighted average interest rates prevailing at the time that each EPC was
 granted.
 Since there was a rapid increase in interest rates between the first and fourth quarters of
 1984, use of quarterly rates would more accurately reflect the economic conditions at the
 time that particular EPC's were granted. A greater volume of EPC's were granted in the
 first and second quarters of 1984 than in the last two quarters.

 Department's position: We agree and have corrected our calculations. By making this
 adjustment and that noted in Comment 1, we determine the benefit from the EPC program
 to be 0.38 percent ad valorem.
 
 Comment 3. The respondents contend that the Department should calculate the amount
 of "negative benefit" from EPC's granted at rates above the benchmark and subtract that
 amount from the total benefit derived from EPC's granted at rates below the benchmark.

 Department's position: We disagree. Section 771(6) of the Tariff Act limits deductions
 from the gross subsidy to application fees, export taxes, and government-mandated
 deferred receipt of benefits.

 Final Results of Review

 After consideration of all of the comments received, we determine the total bounty or
 grant during the period of review to be 0.43 percent ad valorem. The Department
 considers any rate less than 0.50 percent ad valorem to be de minimis.
 The Department will instruct the Customs Service not to assess countervailing duties
 for shipments of this merchandise exported on or after January 1, 1984 and on or before
 December 31, 1984. The Department will instruct the Customs Service to waive cash
 deposits of estimated countervailing duties, as provided by section 751(a)(1) of the
 Tariff Act, 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 waiver
 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 § 355.10 of the Commerce Regulations (19 CFR
 355.10).
 Dated: November 28, 1986.

 Gilbert B. Kaplan,

 Deputy Assistant Secretary, Import Administration.

 [FR Doc. 86-27290 Filed 12-03-86; 8:45 am]

 BILLING CODE 3510-DS-M