(Cite as: 51 FR 15523)
NOTICES
DEPARTMENT OF COMMERCE
[C-583-604]
Preliminary Negative Countervailing Duty Determination; Certain Stainless Steel Cooking Ware from Taiwan
Thursday, April 24, 1986
*15523 AGENCY: Import Administration, Commerce.
ACTION: Notice.
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 certain stainless steel cooking ware. The estimated net subsidy is 0.005 percent ad valorem. This rate is de minimis, and therefore our preliminary countervailing duty determination is negative. We have notified the United States International Trade Commission (ITC) of our determination.
If this investigation proceeds normally, we will make our final determination by June 30, 1986.
EFFECTIVE DATE: April 24, 1986.
FOR FURTHER INFORMATION CONTACT: Jack Davies or Barbara Tillman, Office of Investigations, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 377-1785 or 377-2438.
SUPPLEMENTARY INFORMATION:
Preliminary Determination
Based upon the questionnaire responses, we preliminarily determine that the Export Loss Reserves program is countervailable. We preliminarily determine the estimated net subsidy to be 0.005 percent ad valorem. Although we have determined this program to be countervailable, the respondents received de minimis benefits during the review period, calendar year 1985. Therefore, we preliminarily 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 certain stainless steel cooking ware.
Case History
On January 21, 1986, we received a petition filed in proper form by the Fair Trade Committee of the Cookware Manufacturers Association on behalf of the U.S. industry which manufactures certain stainless steel cooking ware. In compliance with the filing requirements of s 355.26 of the Commerce Regulations (19 CFR 355.26), the petition alleged that manufacturers, producers, or exporters in Taiwan of certain stainless steel cooking ware receive, directly or indirectly, subsidies within the meaning of section 701 of the Act, and that these imports materially injure, or threaten material injury to, a U.S. industry.
We found that the petition contained sufficient grounds upon which to initiate a countervailing duty investigation, and on February 10, 1986, we initiated the investigation (51 FR 6020). We stated that we expected to issue a preliminary determination by April 16, 1986.
Since Taiwan is entitled to an injury determination under section 701(b) of the Act, the ITC is required to determine whether imports of the subject merchandise from Taiwan materially injure, or threaten material injury to, a U.S. industry. Therefore, we notified the ITC of our initiation. On March 4, 1986, the ITC determined that there is a reasonable indication that imports of certain stainless steel cooking ware from Taiwan materially injure a U.S. industry (51 FR 9541).
We presented questionnaires concerning the petitioner's allegations to the American Institute in Taiwan in Washington, DC on February 20, 1986. We received responses to the questionnaires on March 13, 19, and 31, 1986. There are five producers of the subject merchandise in Taiwan which accounted for substantially all of the exports to the United States during the review period: Golden Lion Metal Industry Co., Ltd.; Song Far Co., Ltd.; Lyi Mean Industry Co., Ltd.; Crown Manufacturing Co., Ltd.; and First Stainless Steel Industry Co., Ltd. In addition, there are seven trading companies which exported 77 percent of the subject merchandise exported by these five producers to the United States during our review period. These trading companies are D&J Industrial Co., Ltd.; Jack-Tom Industrial Co., Ltd.; Transmark International Corp.; Fairview International Corp.; Collins Co., Ltd.; Atico Corp.; and Pan-Orient Industrial Corporation.
Scope of Investigation
The products covered by this investigation are all non-electric cooking *15524 ware of stainless steel which may have one or more layers of aluminum, copper, or carbon steel for more even heat distribution. These products are provided for in item number 653.94 of the Tariff Schedules of the United States (TSUS). The products covered by this investigation are skillets, fry pans, omellette pans, sauce pans, double boilers, stock pots, sauce pots, dutch ovens, casseroles, steamers, and other stainless steel vessels, all for cooking on stove top burners, except tea kettles. Excluded from the scope of investigation are stainless steel oven ware and stainless steel kitchen ware, which are also included under the 653.94 TSUS classification.
Analysis of Programs
Throughout this notice, we refer to certain general principles applied to the facts of the current investigation. These principles are described in the "Subsidies Appendix" attached to the notice of "Cold-Rolled Carbon Steel Flat- Rolled Products from Argentina; Final Affirmative Countervailing Duty Determination and Countervailing Duty Order," which was published in the April 26, 1984, issue of the Federal Register (49 FR 18006).
Consistent with our practice in preliminary determinations, where a reponse to an allegation denies the existence of a program, receipt of benefits, or eligibility of a company or industry under a program, and the Department has no persuasive evidence showing that the response is incorrect, we accept the response for purposes of the preliminary determination. All such responses are subject to verification. If the response cannot be supported at verification, and the program is otherwise countervailable, the program will be considered a subsidy in the final determination.
For purposes of this preliminary determination, the period for which we are measuring subsidies (the review period) is calendar year 1985. Based upon our analysis of the petition and the responses to our questionnaires, we preliminarily determine the following:
I. Program Preliminarily Determined to be Countervailable
We preliminarily determine that the following program provides countervailable benefits to manufacturers, producers, or exporters in Taiwan of certain stainless steel cooking ware:
Article 31 of the Statute for Encouragement of Investment (SEI) permits exporters to establish an export loss reserve of up to one percent of the previous year's export exchange settlement to be used exclusively for compensating export losses. Companies treat the export loss reserve as a business expense and deduct it from taxable income in one year, then balance the account and carry the reserve funds forward as taxable income for the next year. Song Far Industry Co., Ltd., a producer of certain stainless steel cooking ware, reported that it used this program during the review period.
Because export loss reserves are contingent on export sales, we preliminarily determine that it confers a benefit which constitutes an export subsidy. To calculate the benefit, we treated the tax savings from the export loss reserve as a one-year interest-free loan. We compared the interest-free rate with the maximum short-term lending rate set by the Central Bank, multiplied the difference by the amount of the tax savings, then allocated the benefit over the value of Song Far's 1985 exports of all products. The estimated net subsidy is 0.005 percent ad valorem.
II. Programs Preliminarily Determined Not to be Used
We preliminarily determine that manufacturers, producers, or exporters in Taiwan of certain stainless steel cooking ware do not use the following programs:
A. Preferential Export Financing
The Export Loan Discount Regulations of the Central Bank of China permit registered exporters to apply for low-cost export loans upon presentation of a letter of credit. Authorized commercial banks provide export loans at normal commercial rates, then apply for interest rate reductions from the Central Bank. If the Central Bank approves the reduction, commercial banks correspondingly reduce the lending rate to the exporters. The responses stated that none of the companies under investigation obtained export financing under this program during the review period.
B. Preferential Income Tax Ceiling-22 Percent
Article 15 of the SEI permits capital-intensive and/or technology-intensive enterprises engaged in the basic metal production industry, heavy machinery industry, or petrochemical industry to use a marginal tax rate of 22 percent instead of the 35 percent rate required by Taiwan's income tax law. The responses stated that none of the companies under investigation claimed the 22 percent income tax rate during the review period.
C. Accelerated Depreciation and Tax Holiday
Article 6 of the SEI allows newly established "productive enterprises" either to use accelerated depreciation on fixed assets, machinery, and equipment or to select a five-year holiday on corporate income taxes. In addition, expanding firms may participate in a four-year tax holiday on increased profits from expansion or a rapid depreciation of newly purchased buildings or equipment. The responses stated that none of the companies under investigation applied for or received benefits under Article 6 of the SEI during the review period.
D. Duty Exemptions and Deferrals on Imported Equipment
Article 21 of the SEI allows productive enterprises to pay import duties and dues on selected capital equipment in a series of installments beginning one year from the date of importation. In addition, qualified enterprises are exempt from import duties on selected machinery and equipment used for the establishment or expansion of an approved project or for research and development. The responses stated that none of the companies under investigation used duty exemptions or deferrals on imported equipment during the review period.
E. Preferential Long-Term Loans
Article 84 of the SEI permits the Executive Yuan to establish and administer a special development fund to promote investments of interest to national economic development. The response stated that none of the companies under investigation obtained Article 84 loans or other assistance under Article 84 during the review period.
Verification
In accordance with section 776(a) of the Act, we will verify the data used in making our final 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 non- privileged and non-confidential 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 *15525 under an administrative protective order, without the written consent of the Deputy Assistant Secretary for Import Administration.
If our final determination is affirmative, the ITC will determine whether these imports materially injure, or threaten material injury to, a U.S. industry within 75 days after the Department makes its final affirmative determination.
Public comment
In accordance with section 355.35 of the Commerce Regulations, we will hold a public hearing, if requested, to afford interested parties an opportunity to comment on this preliminary determination at 10:00 a.m. on May 29, 1986, at the U.S. Department of Commerce, Room 1414, 14th Street and Constitution Avenue, NW., Washington, DC 20230. Individuals who wish to participate in the hearing must submit a request to the Deputy Assistant Secretary for Import Administration, Room B-099, at the above address within 10 days of the publication of this notice. 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, pre-hearing briefs with at least 10 copies of the confidential version and seven copies of the non-confidential version must be submitted to the Deputy Assistant Secretary by May 23, 1986. Oral presentations will be limited to issues raised in the briefs.
In accordance with 19 CFR 355.33(d) and 19 CFR 355.34, written views will be considered if received not less than 30 days before the final determination or, if a hearing is held, within 10 days after the hearing transcript is available.
This notice is published pursuant to section 703(f) of the Act (19 U.S.C. 1671b(f)).
Gilbert B. Kaplan,
Deputy Assistant Secretary for Import Administration.
April 16, 1986.
[FR Doc. 86-9141 Filed 4-23-86; 8:45 am]
BILLING CODE 3510-DS-M