(Cite as: 47 FR 57310)

NOTICES

DEPARTMENT OF COMMERCE

Preliminary Negative Countervailing Duty Determination; Fireplace Mesh

Panels From Taiwan

Thursday, December 23, 1982

*57310 AGENCY: International Trade Administration, Commerce.

ACTION: Preliminary Negative Countervailing Duty Determination.

SUMMARY: We preliminarily determine that no benefits which constitute subsidies within the meaning of the countervailing duty law are being provided to manufacturers, producers, or exporters, in Taiwan of fireplace mesh panels, as described in the "Scope of Investigation" section of this notice. Two programs were alleged to provide subsidies; a preferential income tax program and a preferential labor program. We preliminarily determine that the income tax program provides a benefit that constitutes a subsidy in this case. However, the value of this benefit is 0.012 percent, which is de minimis. We also preliminarily determine that manufacturers, producers, or exporters of fireplace mesh panels did not use the labor program during the period for which subsidization is being measured or since that time. Therefore, our preliminary determination is negative.

In accordance with section 703(f) of the Act, we will notify the U.S. International Trade Commission (ITC) of our determination. If this investigation proceeds normally, we will make our final determination by March 5, 1983.

EFFECTIVE DATE: December 23,1982.

FOR FURTHER INFORMATION CONTACT:Paul Nichols, 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) 377-5497.

SUPPLEMENTARY INFORMATION:

Preliminary Determination

Based upon our investigation, we preliminarily determine that there is no reason to believe or suspect that certain benefits which constitute subsidies within the meaning of section 731 of the Tariff Act of 1930, as amended (the Act), are being provided to manufacturers, producers, or exporters in Taiwan of fireplace mesh panels, as described in the "Scope of Investigation" section of this notice. We preliminarily determine that a preferential income tax program provides a benefit that constitutes a subsidy under the Act. However, the value of this benefit is 0.012 percent, which is de minimis. We also preliminarily determine that manufacturers, producers, or exporters of fireplace mesh panels did not use a preferential labor program during the period for which subsidization is being measured or since that time. Therefore, our preliminary determination is negative.

Case History

On July 22, 1982, we received a petition from counsel for Justesen Industries, Inc., Pacific Fireplace Furnishings, Inc., and Fall River Fireplace Co., Inc., on behalf of the U.S. industry producing fireplace mesh panels. The petition alleged that manufacturers, producers, or exporters in Taiwan of fireplace mesh panels receive benefits which constitute subsidies within the meaning of the countervailing duty law. We found the petition sufficient, and on August 18, 1982, we initiated a countervailing duty investigation (47 FR 36005). We stated that we would make our preliminary determination by October 15, 1982. However, pursuant to section 703(c)(1)(A) of the Act, we extended the period for the preliminary determination to no later than December 20, 1982.

Since Taiwan is a "country under the Agreement" within the meaning of section 701(b) the Act, Title VII of the Act applies to this investigation, and an injury determination is required. Therefore, we notified the ITC of our initiation. On September 15, 1982, the ITC preliminarily determined that there is a reasonable indication that these imports are materially injuring, or threatening to materially injure, a U.S. industry (47 FR 40726).

We presented a questionnaire concerning the allegations in the petition to the Taiwanese, in Taipei, on September 14, 1982. On October 22, 1982, we received the response to that questionnaire.

Scope of Investigation

For the purposes of this investigation, fireplace mesh panels are defined as precut, flexible mesh panels, both finished and unfinished, which are constructed of interlocking spirals of steel wire and are of a kind used in the manufacture of safety screening by U.S. manufacturers of fireplace accessories and zero-clearance fireplaces. Fireplace mesh panels are currently provided for either in item 642.89 or item 654.00 of the Tariff Schedules of the United States depending on their stage of processing.

Fuan Da Industrial Co., Ltd. (Fuan Da) and Yue Sheng Wire Mesh & Screen Co. Ltd. (Yue Sheng) are the only known producers in Taiwan of the fireplace mesh panels exported to the United States.

Analysis of Programs

The period for which subsidization is being measured is January 1, 1982 to June 30, 1982. In its response to our questionnaire, the government of Taiwan provided data for the applicable period. Additionally, we received information from Fuan Da and Yue Sheng for the period January 1, 1981 to June 30, 1982.

Based upon our analysis to date of the response and petition, we preliminarily determine the following.

I. Programs Preliminarily Determined To Confer Subsidies to Manufacturers, Producers, or Exporters of Fireplace Mesh Panels

We preliminarily determine that a subsidy is being provided to manufacturers, producers, or exporters in Taiwan of fireplace mesh panels under the program listed below:

Preferential Income Tax Rates: Article 10 of the Statute for Encouragement of Investment (SEI) was amended in 1980 and renumbered Article 15. The regulations issued to implement this article were also amended at that time. Under Article 15, certain productive enterprises which are organized as "companies limited by shares" in accordance with the Company Law are eligible for reduced *57311 income tax rates. A company limited by shares must have a minimum of seven shareholders and be registered as a share issuing corporation. Yue Sheng was not eligible for benefits under this program as it is not organized as a company limited by shares and its tax rate is the normal 35 percent. Fuan Da does qualify for Article 15 benefits and its tax rate is 25 percent.

Under the amended law and regulations, the limitation, restricting benefits to corporations existing or expanding before a certain date has been removed, and the categories of industries eligible for encouragement have been broadened by removing some restrictive criteria. However, the remaining general eligibility criteria in the regulations still appear to limit the availability of the benefits and appear to target certain categories of industries for encouragement. Based on this limited availability of the program, we preliminarily determine that Article 15 of the SEI does provide a benefit that constitutes a subsidy under the Act.

As Article 15 is a broad incentive program for increased investment in eligible industries and, for this product, does not appear to be intended as an export subsidy, we determine this program to be a domestic subsidy and thus have allocated the tax savings over total sales revenue. For programs involving income tax benefits, the Department generally determines the value of the benefit when it is known and accounted for.

In Fuan Da's case, the measure of the benefit is the difference in the tax due under the two rates for 1981, which is known and accounted for in 1982. This figure is then divided by total sales for 1981. This results in a benefit of 0.012 percent ad valorem. This rate is de minimis.

II. Programs Preliminarily Determined Not To Be Used By Manufacturers, Producers, or Exporters of Fireplace Mesh Panels

We preliminarily determine that manufacturers, producers, or exporters in Taiwan of fireplace mesh panels did not use the vocational training centers during the period for which subsidization is being measured or since that time.

Verification

In accordance with section 776(a) of the Act, we have verified all the information relied upon for our 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 nonconfidential information relating to this investigation. We will allow the ITC access to all privileged and confidential 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.

PUBLIC COMMENT

In accordance with s 355.35 of the Commerce Regulations, if requested, we will hold a public hearing to afford interested parties an opportunity to comment on these preliminary determinations at 10 a.m., January 17, 1983, at the U.S. Department of Commerce, Room 3080, 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 Assistant 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 in at least 10 copies must be submitted to the Deputy Assistant Secretary by January 10, 1982. Oral presentations will be limited to issues raised in the briefs.

All written views should be filed in accordance with 19 CFR 355.43, on or before January 24, 1983, at the above address and in at least 10 copies.

Gary N. Horlick,

Deputy Assistant Secretary, for Import Administration.

[FR Doc. 82-34732 Filed 12-22-82; 8:45 am]

BILLING CODE 3510-25-M