NOTICES
DEPARTMENT OF COMMERCE
International Trade Administration
[C-435-001]
Carbon Steel Wire Rod From Poland; Preliminary Negative Countervailing Duty
Determination
Thursday, February 23, 1984
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February 16, 1984.
AGENCY: International Trade Administration/Import Administration, Commerce.
ACTION: Notice.
SUMMARY: We preliminarily determine that Congress did not exempt nonmarket
economy countries from the countervailing duty law. However, based on the facts
presented in the record, we preliminarily find that no benefits which constitute bounties
or grants within the meaning of the countervailing duty law are being provided to
manufacturers, producers, or exporters in Poland of carbon steel wire rod. Therefore,
we have not ordered the U.S. Customs Service to suspend liquidation. If this investigation
proceeds normally, we will make our final determination by May 1, 1984.
EFFECTIVE DATE: February 23, 1984.
FOR FURTHER INFORMATION CONTACT: Laura Campobasso, 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) 377-3174.
SUPPLEMENTARY INFORMATION:
Preliminary Determination
Based upon our investigation to date, we preliminarily determine that nonmarket
economy countries are not exempt per se from the countervailing duty law. Yet, in
this case there is no reason to believe or suspect that certain 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 manufacturers, producers or exporters in Poland of
carbon steel wire rod. For the purposes of this investigation, the following programs are
preliminarily found not to confer bounties or grants:
--a multiple exchange rate system whereby different rates are applied to (1) commercial
transactions with capitalist countries, (2) commercial transactions with socialist
countries, and (3) non-commercial transactions and tourism;
--a currency retention program that allows exporting companies to keep 20 percent of
their hard-currency export earnings;
--
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price equalization payments to the foreign trade organizations and the industrial
enterprises involved in foreign trade, to compensate them for losses incurred when the
Foreign Trade Ministry sells goods for less than their domestic price; and
--adjustment coefficients that increase the effective exchange rate.
Case History
On November 23, 1983, we received a petition from counsel for Atlantic Steel Company,
Continental Steel Company, Georgetown Steel Corporation and Raritan Steel Company,
filed on behalf of the United States industry producing carbon steel wire rod. In
compliance with the filing requirements of § 355.26 of the Commerce Regulations (19 CFR
355.26), petitioners allege that manufacturers, producers or exporters in Poland of
carbon steel wire rod receive, directly or indirectly, benefits which constitute bounties or
grants within the meaning of section 303 of the Act.
On December 13, 1983, we initiated a countervailing duty investigation on those
allegations. We stated we would issue a preliminary determination on or before February
16, 1984.
On December 16, 1983, we presented a questionnaire concerning the allegations in the
petition to the government of Poland in Washington, D.C. We received a response on
January 16, 1984
Poland is not a "country under the Agreement" within the meaning of section 701(b) of
the Act. Therefore, section 303 of the Act applies to this investigation. Under this section,
because the merchandise under investigation is dutiable, the domestic industry is not
required to allege that, and the U.S. International Trade Commission is not required to
determine whether, imports of this product cause or threaten to cause material injury to
a U.S. industry.
Scope of Investigation
For the purpose of this investigation, the term "carbon steel wire rod" covers a coiled,
semi-finished, hot-rolled carbon steel product of approximately round solid cross
section, not under 0.20 inch nor over 0.74 inch in diameter, not tempered, not treated,
not partly manufactured; and valued over 4 cents per pound, as currently provided for in
item 607.17 of the Tariff Schedules of the United States. The period for which we are
measuring alleged subsidization is January 1 to December 31, 1983.
Applicability of the Act
This proceeding raises the issue, not yet decided, whether section 303 (or the
countervailing duty provisions of title VII) applies to a nonmarket economy country.
Based upon our review of the countervailing duty provisions of the Act, their
legislative history, and briefs filed in the conference on novel issues held November 3-4,
1983, in connection with our countervailing duty investigation of textiles, apparel and
related products from the People's Republic of China (PRC) (48 FR 46600, and 46092,
1983), we believe that Congress did not exempt nonmarket economy countries from
section 303 of the Act. By its terms, that section applies to "any country, dependency,
colony, province, or other political subdivision of government" (emphasis added).
Some participants in the conference on novel issues in the PRC case's argued that,
nonetheless, the countervailing duty law effectively excludes nonmarket economy
countries. Briefly, the argument is that the countervailing duty law, based as it is on
market principles, is aimed at neutralizing the results of government intervention in an
otherwise free market. Such intervention is viewed as unfair if it confers a competitive
advantage. Moreover, such intervention can affect the allocation of resources within an
economy, and consequently international trade, by providing assistance to
comparatively inefficient producers. In nonmarket economy countries, on the other
hand, government intervention is the rule rather than the exception. There can be no
misallocation of resources according to market principles since there is no free market.
Under such conditions, arguably, there is no identifiable or measurable deviation from
private market behavior.
The answer to the question of whether our countervailing duty law applies to
nonmarket or state-controlled economies is not clear, as is evident from the diversity of
opinion on this issue. Yet the weight of informed opinion and our narrow reading of the
Act disposes us to not exclude nonmarket or state-controlled economies from its
application without further review in each particular case. Therefore, we will proceed to
examine the particular allegations and facts in this case.
Analysis of Programs
In initiating a countervailing duty proceeding on carbon steel wire rod from Poland,
we undertook to investigate whether certain practices by the government of Poland
confer bounties or grants within the meaning of section 303 of the Act. As stated above,
we investigated similar programs in the countervailing duty proceedings on textiles,
apparel and related products from the PRC. However, since petitioners withdrew the
petition in that case, this our first opportunity to determine preliminarily whether
practices by a government of a so-called nonmarket economy country confer
countervailable benefits.
The administration of the countervailing duty law since 1890 has relied on identifying
and quantifying the benefits which arise when producers or their products receive
differential treatment. Export bounties or grants arise, for example, when export sales are
benefited over domestic sales. When the benefits are not contingent upon export, we
identify domestic benefits based in part on differential treatment of an industry or group
of industries within that country.
If an industry or industry group is treated preferentially, we need to quantify any benefit
conferred. In our countervailing duty cases to date-- which have all involved
products from market economies--we have used prices or costs to calculate benefits. In
market economies, government subsidies generally cause changes in prices facing a
firm--the prices paid for goods or services purchased, or the prices received for sale of a
product. In our investigations, we usually seek the price the firm would have paid or
received absent government intervention or preferentiality. Any difference between that
"benchmark" price, based on operation of a market, and what the firm pays or receives as
a result of the government intervention is a subsidy. For example, for a government loan,
the amount of the subsidy is determined by comparing the terms of the government loan
with the terms of the loan that could be obtained in the borrowing market.
Our reliance on prices to quantify subsidies is based on the economic theory that prices
are the signals to which firms react. For example, receiving a higher price, and hence
higher profits, for export sales will induce a firm to increase its exports. In imposing
countervailing duties, we seek to remove any incremental revenue brought about by
government intervention, and thus neutralize the effect of that intervention on the price
signal.
Recognizing that prices--the subsidized price and the "benchmark" price--are the tools we
use to identify subsidies and to calculate the benefits arising from them, we approach this
investigation with a certain amount of apprehension. We know through our
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experience in administering the antidumping law that prices in nonmarket economy
countries usually are economically unrealistic. It is because nonmarket economy prices
are suspect that the Congress directed us not to use them in antidumping investigations.
In nonmarket economies, central planners typically set the prices of goods without any
regard to their economic value. As such, these prices do not reflect scarcity or
abundance. For example, when a product is scarce in a market economy, its price will
increase. In a nonmarket economy, however the price of the scarce good will not go up
unless the central planners mandate a new, higher price. Even if we can identify an
internally set price, that price does not have the same meaning as a price in a market
economy.
Furthermore, to the extent that a firm's activity is centrally directed, prices and profits do
not stimulate increased production. A decision to increase or decrease output must be
consistent with the central plan. There is no apparent correlation between the demand,
price and production when the latter two factors are centrally controlled.
Thus, our traditional tools--prices--are of questionable value in determining whether the
programs alleged by petitioners are bounties or grants within the meaning of the Act.
Recognizing this, we have analyzed the programs used in two steps. First, we have asked
whether the program would confer a subsidy in a market economy. Second, we have
asked whether our first conclusion would differ if the program were conducted in a
nonmarket economy country.
Our analysis of the specific allegations follow:
I. Programs Preliminarily Determined Not To Confer Bounties or Grants
We preliminarily determine that the following programs do not confer bounties or grants
within the meaning of the Act upon the manufacturers, producers or exporters in Poland
of carbon steel wire rod:
A. Multiple Exchange Rates
Petitioners allege that the government of Poland employs a multiple exchange rate
system. They identify seven different exchange rates: a basic valuta- zloty rate, an
effective valuta-zloty, an effective rate, a resident travel rate, a nonresident investment
rate, a tourist rate and a black market rate. Petitioners contend that such a multiple
exchange rate constitutes, in and of itself, a countervailable benefit.
The Polish government responded that it sets only one rate of exchange vis-a- vis the U.S.
dollar, and applies that rate uniformly to all exports and imports to and from capitalist
countries. Between the member states of the Council of Mutual Economic Assistance
(CMEA), which include Bulgaria, Czechoslovakia, Hungary, Rumania, Poland, Mongolia,
Cuba, Vietnam, USSR and East Germany (all of which are nonmarket economies), trade is
conducted in transferable rubles, which have no interrelation with the U.S. dollar rate of
exchange.
For purposes of analysis, we have separated these exchange rates into three categories:
Non-trade rates, possibly including the official exchange rate; and exchange rate for trade
with capitalist countries; and an alleged exchange rate for trade with socialist countries.
Petitioners have asked us to compare the exchange rate for trade with capitalist countries
with the official rate.
1. The exchange rate trade with capitalist countries and the official exchange rate may be
the same. Based upon historical information submitted by petitioners, in 1979 the
effective or trade rate was 31.16 zloties to the U.S. dollar (31.16:1), while the official rate
was 3.32:1. However, petitioners' information also indicates that the official rate was
inoperative.
More recent information (submitted by petitioners and respondent) indicates that a
higher rate applies to trade with capitalist countries (both imports and exports), and this
rate is also characterized by the Bank of America as the official exchange rate. Hence,
comparing the official rate and the rate for trade with capitalist countries would yield no
bounty or grant, since these rates are apparently identical.
2. The exchange rate for trade with capitalist countries does not confer a bounty or grant
even if different from the official (non-trade) rate. Our experience in investigating the use
of multiple exchange rates has been limited to market economy countries. Certain of our
findings have been reviewed by the courts. Based on our earlier determinations and
judicial precedent, we believe that when trade (importation and exportation) takes place
at a uniform rate, no countervailable benefit is conferred.
The most recent findings that are pertinent to this issue have arisen in investigations of
the Mexican dual exchange rate, where there is a controlled rate and a free rate. In our
final affirmative determination on carbon black from Mexico (48 FR 29567), we stated:
We verified that Mexican reporters of carbon black who receive U.S. dollars for their
products must deposit these dollars in accounts where they are exchanged for pesos at a
Mexican government "controlled" rate. Currently, the controlled rate is significantly less
than the "free" rate of exchange. Thus, the program appears to harm rather than benefit
Mexican exporters.
Thus, we have found that when dollar earnings are repatriated at a lower rate (compared
to some higher rate), the exporter appears to have been harmed. We must then ask, if the
exporter repatriated his dollar at a rate higher than another rate, would he be benefitted
Petitioners have cited two cases where the Department of the Treasury found differential
exchange rates applied to export transactions to confer countervailable subsidies. The
first was F.W. Woolworth v. United States, 115 F. 2d 348 (CCPA 1940), where the U.S.
importer was able to purchase the goods in question with a combination of registered
Reichsmarks and "free" Reichsmarks. The different marks were bought at different costs to
the U.S. purchaser.
The second case raised by petitioners was Wool Tops from Uruguay (18 FR. 2653, 1953).
At that time, Uruguayan government maintained a multiple exchange rate system
whereby exporters of different goods repatriated their dollar earnings at different
exchange rates; i.e., different rates applied to different goods.
In both F.W. Woolworth and Uruguayan Wool Tops, different exchange rates were applied
to trade transactions. In F.W Woolworth, different rates were applied to the same
transaction. In Wool Tops, different rates were applied depending on the good exported.
In calculating the bounty or grant which arose in the Wool Tops case, Treasury compared
the exchange rate applicable to wool tops with the weighted average of all the exchange
rates applicable to other merchandise trade. When this determination was reviewed by
the court, the Court of Customs and Patent Appeals ("CCPA") disagreed with Treasury's use
of 1953 exchange rates and 1951 trade levels, but did not disapprove of its essential
methodology. Energetic Worsted Corp. v. United States, 53 CCPA 36 (1966). Implicit in
Treasury's methodology is that if trade (importation and exportation) occurred at a
uniform rate, no subsidy would arise.
To the extent that a uniform trade rate differs from a non-trade rate (or rates), the
economic effect would be identical
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to a devaluation or revaluation of the currency.
If the uniform trade rate were less than the non- trade rate, it would be equivalent to a
revaluation. If the uniform trade rate were higher than the non-trade rate, it would be
equivalent to a devaluation.
As recognized by the CCPA in United States v. Hammond Lead Products, Inc., 440 F.2d
1024, 1030 (1971), a devaluation in a market economy stimulates exports, but,
nevertheless, does not confer a subsidy:
Nothing, at least in the short range, stimulates exports more than a devaluation of the
currency. After a devaluation, the exporter gets more home currency for each article he
exports, and with it can purchase more goods and services at home, and he obtains these
benefits largely at the expense of a producer for the home market who now gets paid in
devalued currency. Yet we do not assess countervailing duties against countries
which devalue their currency.
The purpose of an exchange rate is to provide equilibrium between one country's
economy and the world economy. When an exchange rate is overvalued, strain is placed
on the entire economy. If uncorrected, the problem progressively worsens until the
country becomes unable to pay for necessary imports. Devaluation restores the
necessary international equilibrium. Thus, it is an economy-wide adjustment, and as such
is not a bounty or grant.
Based on our experience and judicial precedent, we do not believe that, in a market
economy country, a multiple exchange rate system including both a non- trade exchange
rate (or rates) and a uniform exchange rate applied to trade transactions confers a bounty
or grant within the meaning of the Act. To the extent that the uniform exchange rate
applied to trade has any meaning in a nonmarket economy country, like Poland, the
economic effects would be identical to those in a market economy. The divergence
between a trade rate and non- trade rate (or rates) would be equivalent to a devaluation
or revaluation, and hence we would not find the multiple exchange rate to confer a
subsidy.
Moreover, we are doubtful that the exchange rate is meaningful to Polish enterprises. The
exchange rate is a price--it is the dollar price of a zloty or the zloty price of a dollar. Like
any other price in a nonmarket economy country, this price can be set without regard to
economic value.
Furthermore, we have no reason to believe that the exchange rate has any effect on the
decision to export. A central plan determines what and how much will be exported. As
such, a devaluation will not stimulate exports over domestic sales in Poland or
otherwise distort trade.
Therefore, we have concluded that if the exchange rate was meaningful, Poland's
multiple exchange rate system--in applying a unified rate for trade with capitalist
countries--would not confer a subsidy. Furthermore, to the extent that the exchange rate
does not affect the decision to export, it would not confer a subsidy. Thus we
preliminarily determine that the coexistence of a uniform trade exchange rate and
non-trade rates in Poland does not confer a bounty or grant within the meaning of the
Act.
3. The existence of a separate exchange rate for trade with socialist countries does not
confer a bounty or grant. Petitioners have identified separate exchange rates for Polish
transactions with capitalist countries and for Polish transactions with socialist countries.
They contend that this favors exports to the U.S. over exports to the USSR. In its
response the Polish government confirmed that trade between the CMEA member states
is conducted in transferable rubles.
In analyzing whether such a system confers a bounty or grant, we cannot find a market
analogy for different exchange rates applied to different currency zones. No market
economy participates in any extensive way in the CMEA transferable ruble system.
The existence of different rates for trade with market and nonmarket economies is not at
all surprising. In effect, Poland is selling its carbon steel wire rod for two different things:
(1) western hard currencies which are convertible; and (2) socialist, non-convertible
currencies. Convertible currencies and non-convertible currencies are by definition
different. Hence, we would not expect them to have the same price.
Furthermore, we have concluded that the transferable rule is not actually an exchange
rate at all. It is an accounting unit used as a collective currency between the CMEA
countries. Its purchasing power is secured by planned trade and stable prices during the
year.
The use of a collective currency, rather than a national currency ensures the quality of
these trading partners. Without it, one country possibly could achieve dominance and
compel the other countries to adapt to its economy.
The system operates with the help of the International Bank for Economic Cooperation
(IBEC). Settlements in the collective currency are made by transferring resources from
the account of one country in the IBEC to that of another. Therefore, actual cash is
unnecessary since the process is carried out completely through the account books.
The credit nature of the transferable ruble is exhibited in that the value of the goods in
transferable rubles is credited to the exporter's account in IBEC; the goods' importer must
repay this value with countershipments of other goods and services. The transferable
ruble is secure against inflation and any adverse non-socialist influence because it is only
issued as an international payment in the amount the member country really needs to
pay for the goods and service. The repayment by shipments of goods once the credit has
been exended must take place in a certain time period. This ensures the return of
resources loaned and keeps the accounts balanced.
Therefore: (1) The transferable ruble is not an actual exchange rate; (2) there is no means
by which to convert this ruble into one of the CMEA currencies or into Western currency;
(3) it is predominantly used for trade within the CMEA countries on a barter basis, (trade
which is based on need rather than the market prices); and (4) its primary purpose is to
keep the balance of payments between the CMEA countries on an even base, through
internal settlements. Thus, we preliminarily determine that a multiple exchange rate, as
described in the instant case does not confer a bounty or grant within the meaning of the
Act.
B. Currency Retention Scheme
Petitioners allege that Polish government maintains a currency retention scheme. This
program allows Polish exporting companies to keep an average of 20 percent of their
hard foreign currency. Petitioners argue that because it is the exporters who retain these
hard currency funds for their own use, the scheme provides an incentive to increase
exports. Petitioners further state that the officials in Poland view the scheme as an
"important export incentive".
The Polish government responded that Poland does allow enterprises to retain part of
their hard currency earnings from exports of goods and services. The foreign exchange
earnings are accumulated in a special account in a domestic bank, and may be used by the
enterprise to finance imports. The Council of Ministers defines the levels of hard currency
retained and how the funds will be used for particular enterprises. The Ministry of Foreign
Trade establishes the rate of retention for a given year for particular enterprises.
Whether Polish officials characterize the establishment of a currency
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retention
scheme as an incentive to export is not determinative. As the CCPA has stated:
Neither form nor nomenclature being decisive in determining whether a bounty or grant
has been conferred, it is the economic result of the foreign government's action which
controls (emphasis added).
United States v. Zenith Radio Corp., 64 CCPA 130, 138-9, 562 F.2d 1209, 1216 (1977),
aff'd, 437 U.S. 443 (1978).
As petitioners have pointed out, currency retention schemes which involve a bonus on
exports are enumerated in Annex A to the Agreement on Interpretation of Articles VI,
XVI, XXIII of the General Agreement on Tariffs and Trade ("GATT Subsidies Code").
Therefore, they are included as subsidies under the provisions of 19 U.S.C. sections
1677(5) and 1303.
We have never countervailed a currency retention program and have no precedent to
guide us. Therefore, we must first determine whether a currency retention program in a
market economy country would confer a bounty or grant.
The value of owning foreign currency is that it allows the owner to purchase foreign
goods. Foreign currency is a claim on foreign goods. This would be true in a nonmarket
economy country as well as in a market economy country.
When foreign currency holdings are limited, two possible benefits could arise: (1) The
foreign currency could possibly be sold--at a premium--to others desiring foreign goods;
or (2) by holding the foreign currency, the owner would not have to apply to monetary
authorities to obtain it. The record in this investigation lacks any evidence that Polish
enterprises sell their retained hard currency at a premium. Consequently, the only
advantage of having foreign exchange is a lessening of the process for securing permission
to use foreign exchange (i.e., a reduction in "red tape"). In other words, the enterprise
does not have to apply for the hard foreign currency, but rather has direct access to an
account already containing it.
Because there is no reasonable basis for quantifying such an advantage, such alleged
benefits do not constitute a bounty or grant. As the CCPA stated in Hammond Lead,
supra, at 1028:
If the Court does not know how to calculate the bounty or grant, how does it know there
was one
The record in this investigation lacks any evidence of amounts of benefits allegedly
conferred on the product under investigation. Further, we are unaware of any reasonable
methodology to quantify any benefit presumed to arise from the mere reduction of "red
tape." Therefore, we conclude that because any attempt to quantify the alleged benefit
would be arbitrary and capricious, the Polish currency retention scheme does not confer
a bounty or grant.
Of course, as required by the Act, we will verify information relating to currency
retention prior to our final determination.
C. Price Equalization Payments
Petitioners contend further subsidies are provided to exporters through price
equalization payments. Payments allegedly are made to the foreign trade organizations
and those industrial enterprises involved in foreign trade to compensate them for losses
incurred when the Foreign Trade Ministry sells their goods for less than their domestic
price. The payments come in the form of both direct price equalization payments and
subject payments, the latter provided to compensate enterprises for particular lines of
production planned to be unprofitable.
The government of Poland denies that any bounties or grants are conferred through
price equalization payments, but does not clearly deny that such a program exists.
As discussed above, prices in a nonmarket economy country are typically administered;
they are set by the government without regard to the market value of the goods. When
taken in isolation, such a system is potentially sustainable. However, once that
nonmarket economy country participates in international trade, especially with market
economy countries where prices reflect value, it becomes apparent that the
government-set prices are artificial or distorted.
Application of a uniform exchange rate does nothing to remove the discrepancies that
exist between the market and nonmarket prices. Instead, the market-determined prices of
imports have to be translated into the nonmarket economy's internal prices. Similarly,
internal prices must be translated into world market prices when the nonmarket
economy's goods are exported. Otherwise, either the nonmarket economy country will
not be able to export because its internal prices exceed market prices, or it will forego
profits because internal prices are significantly lower than market prices.
The information provided in the record indicates that nonmarket economy countries use
different mechanisms to translate or equate the market-determined external prices and
the centrally administered domestic prices. For example, trade adjustment coefficients
multiply a static exchange rate for all goods to ensure competitiveness for each good.
Price equalization payments are added to the static exchange rate to achieve the same
result.
A price equalization scheme, when perfectly administered, would function much like an
exchange rate system designed to maintain or preserve the artificial internal prices of the
nonmarket economy country. Government payments would exist solely to equate the
revenue earned on an export transaction with revenue earned on domestic transactions.
In such a system, we would expect the level of payment to vary as often and to the extent
that the world market price does. Similarly, the payment would have to be altered if the
administered domestic price was changed.
At this point, we ask ourselves whether a similar system in a market economy country
would be countervailable. Governments of market economy countries typically set or
administer the prices of some goods. When those prices are set above the world market
price, producers of those goods have no incentive to export (at least until domestic
demand is satisfied) unless the government raises the price they receive for their exports
to at least the level of the domestic price. The government can raise the price these
producers receive from selling abroad by a direct payment on export.
Clearly, we would contervail such payments by the government of a market economy.
Implicit in our decision to do so is, however, our recognition that the export payments
work to stimulate production which is not economically justifiable. Economic theory tells
us that when a price is set too high, too much of the good will be produced. The artificially
high price allows economically inefficient, high-cost producers to make a profit they
would otherwise not make. The payments that the government makes on exports, which
are necessary to induce the producers to sell abroad, are the evidence that economically
inefficient production is occurring.
In a nonmarket economy country, we cannot assume that an export price payment
evidences the existance of economically inefficient production. As discussed above,
domestic prices in a nonmarket economy do not affect an enterprise's decision of what
and how much to produce and to export. Not only is the price for its output centrally set,
but its costs, which are the prices paid for inputs, are also centrally determined. With
administrated costs and prices,
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profits are effectively administrated as well.
We cannot even assume that profits have meaning in a nonmarket economy system. When
resources are allocated centrally--i.e., enterprises are told how much to produce and how
to distribute their production--it is the central authorities who determines whether
"revenues" cover "losses".
The prices attributed to inputs and the prices attributed to output, whether for the
domestic or export market, are virtually accounting devices.
Where prices and profits do not have some economic meaning, we cannot find programs
like Poland's price equalization scheme to confer a subsidy. Thus we preliminarily
determine that Poland's price equalization payments do not confer a bounty or grant
within the meaning of the Act.
Program Preliminarily Determined Not To Be Used
Adjustment Coefficient
Petitioners further allege that Poland uses "adjustment coefficients" or "exchange
multipliers" (hereinafter referred to as "coefficients") to adjust its varied exchange rates
depending on the industry involved and the currency regime of the trading partner.
Petitioners argue that the exchange rate is multiplied by these coefficients to convert the
foreign currency earned in a given transaction into Polish zloties. Through the use of
these coefficients, the Polish government allegedly promoted certain exports.
The Polish government responded that it does not apply adjustment coefficients or
foreign trade multiplies to foreign currency earned.
On the basis we preliminarily determine that adjustment coefficients do not confer a
bounty or grant within the meaning of the Act. Uses of a foreign government's response in
our preliminary determination is consistent with our normal practice. As required by the
Act in all investigations, we intend to verify the information provided by the Polish
governemnt using our normal procedures. If we are not able to verify the Polish
assertions, we will of course use the best information available in reaching our final
determination.
Verification
In accordance with section 776(a) of the Act, we intend to verify all information used in
reaching our final determination.
Public Comment
In accordance with section 355.35 of the Commerce Department Regulations, if
requested, we will hold a public hearing to afford interested parties an opportunity to
comment on this preliminary determination at 10 a.m. on March 19, 1984, at the U.S.
Department of Commerce, Room 3092, 14th Street and Constitution Avenue, NW.,
Washington, D.C. 20230. Individuals who wish to participate in the hearing must submit a
request to the Deputy Assistance Secretary for Import Administration, Room 3099B, at
the above address within 10 days of this notice's publication. 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, prehearing
briefs must be submitted to the Deputy Assistant Secretary by March 13, 1984. Oral
presentations will be limited to issues raised in the briefs. All written views should be filed
in accordance with 19 CFR 355.46 at the above address and in at least 10 copies.
Dated: February 16, 1984.
Alan F. Holmer,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 84-4761 Filed 2-22-84; 8:45 am]
BILLING CODE 3510-DS-M