(Cite as: 48 FR 11305)
NOTICES
DEPARTMENT OF COMMERCE
International Trade Administration
Final Negative Countervailing Duty Determination; Fireplace Mesh Panels
From Taiwan
Thursday, March 17, 1983
*11305 AGENCY: International Trade Administration, Commerce.
ACTION: Final negative countervailing duty determination.
SUMMARY: We 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. Although we found that the fireplace mesh panel industry did receive benefits under the income tax program, we found that the value of the benefit amounted to 0.012 percent of the f.o.b. value of the imported merchandise, which is de minimis. Therefore, our final determination is negative.
Based on this final determination, the countervailing duty investigation involving fireplace mesh panels from Taiwan is terminated.
In accordance with section 705(d) of the Act, we will notify the U.S. International Trade Commission (ITC) of our determination.
EFFECTIVE DATE: March 17, 1983.
FOR FURTHER INFORMATION CONTACT:
Paul Nichols, Office of Investigations, Import Adminstration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, D.C. 20230, telephone (202) 377-5497.
SUPPLEMENTARY INFORMATION:
Final Determination
Based upon our investigation, we determine that no benefits which constitute subsidies within the meaning of section 701 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. The Taiwanese fireplace mesh panel industry did receive benefits under a preferential income tax program. However, the value of this benefit is 0.012 percent of the f.o.b. value of the *11306 import merchandise, which is de minimia.
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 11, 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 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 questionnaires concerning the allegations in the petition to a representative of the American Institute in Taiwan, in Washington, on August 31, 1982, for transmission to the Taiwanese authorities and the panel producers. On October 22, 1982, we received the responses to the questionnaires. On October 28, 1982, we verified the questionnaire responses submitted by the Taiwanese authorities and the panel producers.
On December 23, 1982, we published in the Federal Register our preliminary negative determination that there was no reason to believe or suspect that benefits which constituted subsidies within the meaning of section 701 of the Act, were being provided to manufacturers, producers, or exporters in Taiwan of fireplace mesh panels (47 FR 57310).
Our notice of preliminary determination gave interested parties an opportunity to submit written and oral views. A hearing was held on February 3, 1983. The oral and written views submitted by the petitioners and the respondents have been considered in reaching our final determination.
An earlier antidumping investigation involving this merchandise has resulted in an antidumping order (47 FR 24616).
Scope of Investigation
For the purpose 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. Fireplace mesh panels are currently provided for either in item 642.87 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 during the period for which subsidization is being measured.
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 Taiwanese authorities 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 of the petition, questionnaire responses, verification, and comments received, we determine the following.
I. Programs Determined Not To Confer Countervailable Benefits to Manufacturers, Producers, or Exporters of Fireplace Mesh Panels. We determine that a countervailable benefit within the meaning of the Act is not being provided to manufacturers, producers, or exporters in Taiwan of fireplace mesh panels under the program listed below:
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 law are eligible for reduced income tax rates. Currently, 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. Its tax rate is the normal 35 percent. Fuan Da does qualify for Article 15 benefits. Therefore, its tax rate is 25 percent.
Under the amended law and regulations, limitations which previously existed, restricting benefits to corporations existing or expanding before a certain date, have been removed, and the categories of industries eligible for encouragement have been broadend by removing some restrictive criteria. Normally, any domestic subsidy program which does not target benefits or otherwise effectively predetermine the provision of benefits to an industry or a limited group of industries is determined to be generally available and, thus, not countervailable. However, the remaining eligibility criteria in the SEI regulations have not been clarified to the satisfaction of the Department and still appear to limit the availability of the benefits to certain industries or groups of industries and appear to target certain categories of industries for encouragement. Based on the information currently available on the program, we determine that Article 15 of the SEI does provide a benefit that is potentially countervailable under the Act.
As Article 15 is an incentive program for increased general investment in eligible industries and, for this product, does not appear to be tied to export performance, we treated the program as a domestic subsidy and 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 normal 35 percent tax rate and the SEI 25 percent tax rate 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. Therefore, we determine that, in this case, this program does not confer a benefit which is countervailable under the Act.
II. Programs Determined Not To Be Used By Manufacturers, Producers, or Exporters of Fireplace Mesh Panels.
We 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.
Petitioners' Comments
Comment: The petitioners argue that the period for which we are measuring subsidization is too restrictive and does not adequately address the issue of Vocational Training Centers (VTC).
DOC Response: The Act provides no time period for which the Department is *11307 to determine the existence of a subsidy. the standard is, rather, one of current subsidization. Section 701 of the Act states that if a government "is providing" a subsidy, countervailing duties will be imposed, equal to the amount of the net subsidy. "Net subsidy" is defined as the amount of the gross subsidy adjusted for allowable offsets.
A six-month period for measuring subsidization is an acceptable period in countervailing duty investigations. The Department has investigated the VTC's and verified all the information used in this determination. The Department is satisfied that the period for which subsidization is being measured is correct and allows adequate time in which to determine the countervailability of the VTC's, were we to determine that the VTC's were currently used and that such use conferred a benefit.
Comment: The petitioners commented on additional issues concerning the VTC's, including the scope of our questions to the Taiwanese authorities, their responses, and the theoretical methods for calculating a value of the alleged benefit.
DOC Response: the Department found that the VTC's are not currently used. therefore, the issues are moot and we will not address them further.
Verification
In accordance with section 776(a) of the Act, we have verified all the information relied upon for our determination. We used standard verification procedures, including examination of accounting records and randomly selected documents.
Administrative Procedures
The Department has afforded interested parties an opportunity to present oral views in accordance with section 355.35 of the Commerce Regulations. The hearing was held on February 3, 1983.
This determination does not affect the antidumping order currently in effect on this merchandise.
This notice is published pursuant to section 705 of the Act and s 355.33 of the Commerce Regulations.
Dated: March 8, 1983.
Lawrence J. Brady,
Assistant Secretary for Trade Administration.
[FR Doc. 83-6996 Filed 3-16-83; 8:45 am]
BILLING CODE 3510-25-M