51 FR 3377
NOTICES
DEPARTMENT OF COMMERCE
[C-549-503]
Preliminary Affirmative Countervailing Duty Determination; Rice From Thailand
Monday, January 27, 1986
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AGENCY: Import Administration, International Trade Administration, Commerce.
ACTION: Notice.
SUMMARY: We preliminarily determine that certain benefits which constitute bounties or grants
within the meaning of the countervailing duty law are being provided to manufacturers,
producers, or exporters in Thailand of rice. The
estimated net bounty or grant is 1.57 percent ad valorem. However, we are taking into account
several program-wide changes which occurred after our review period, but prior to this
determination, and we are adjusting the bonding rate accordingly. We are directing the U.S.
Customs Service to suspend liquidation of all entries of rice from Thailand that are entered, or
withdrawn from warehouse, for consumption on or after the date of publication of this notice, and
to require a cash deposit or bond on entries of these products in the amount equal to 1.60 percent
ad valorem.
If this investigation proceeds normally, we will make our final determination by April 3, 1986.
EFFECTIVE DATE: January 27, 1986.
FOR FURTHER INFORMATION CONTACT: Loc T. Nguyen or Mary Martin, Office of Investigations,
Import Administration, International Trade Administration, U.S. Department of
Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; Telephone (202)
377-0167 or (202) 377-2830.
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SUPPLEMENTARY INFORMATION;
Preliminary Determination
Based upon our investigation, we preliminarily determine that there is 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 Thailand of rice. The following programs are preliminarily found to confer
bounties or grants:
- Export Packing and Stocking Credits.
- Investment Promotion Act.
- Price Support and Stabilization Program.
- Marketing Organization of Farmers' Fertilizer Program.
- Paddy Rice Mortgage Program.
- Supplementary Program to Implement the Government's.
Rice Policy--Preferential Financing to Rice Millers. We preliminarily determine the estimated net
bounty or grant to be 1.57 percent ad valorem for all manufacturers, producers, or exporters in
Thailand of rice. However, we are adjusting the bonding rate to reflect several program-wide
changes that occurred after our review period. Thus, the cash deposit or bond on entries of this
product will be 1.60 percent ad valorem.
Case History
On September 24, 1985, we received a petition from the Rice Millers' Association on behalf of the
U.S. rice industry. In compliance with the filing requirements of § 355.26 of our regulations (19 CFR
355.26), the petition alleges that manufacturers, producers, or exporters in Thailand of rice
receive, directly or indirectly, benefits which constitute bounties or grants within the meaning of
section 303 of the Act.
We found that the petition contained sufficient grounds upon which to initiate a countervailing
duty investigation and, on October 15, 1985, we initiated such an investigation (50 FR 42581).
We stated that we expected to issue a preliminary determination by December 18. 1985.
On November 29, 1985, we determined this investigation to be "extraordinarily complicated" as
defined in section 703(c)(1)(B) of the Act. Therefore, we extended the period for making our
preliminary determination by 30 days until January 17, 1986.
Since Thailand is not a "country under the Agreement" within the meaning of section 701(b) of
the Act and the merchandise being investigated is dutiable, sections 303(a) (1) and (b) of the Act
apply to this investigation. Accordingly, 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 material injury to a U.S. industry.
We presented a questionnaire to the government of Thailand in Washington, DC, on October
24, 1985. The responses to our questionnaire were received on December 6 and December 30,
1985.
Scope of the Investigation
The product covered by this investigation is rice, both milled and unmilled, and includes all
varieties of rice. Rice is currently classified in the Tariff Schedules of the United States Annotated
(TSUSA) under items 130.5000, 130.5600, 130.5800, 131.3000, and 131,3300 according to the
type and level of processing.
Analysis of Programs
Throughout this notice, we refer to certain 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 response to an allegation
denies the existence of a program, receipt of benefits under a program, 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, of course, are subject to verification. If the response cannot be supported at
verification and the program is otherwise countervailable, the program will be considered a bounty
or grant in the final determination.
It is the Department's policy to take into account program-wide changes where these are
implemented after the review period, but before a preliminary determination, with the result that
the rate for cash deposit or bonding purposes is raised or lowered, as appropriate. This policy is
desirable because it promotes the expeditious elimination or curtailment of bounties or grants. The
recognition of program-wide changes also permits the Department to adjust the bonding rate to
correspond as nearly as possible to the eventual duty liability.
In this investigation we have discovered that, subsequent to the review period, but prior to this
preliminary determination, two programs have been newly instituted resulting in a fundamental
change in the bestowal of benefits. Descriptions of these program-wide changes, and of our
treatment of them, follow in this section of the notice.
For purposes of this preliminary determination, the period for which we are measuring bounties or
grants is calendar year 1984.
The Upstream Issue
In a letter dated November 1, 1985, the government of Thailand argued that the government's
provision of subsidized fertilizer to the Thai rice industry constitutes an "upstream subsidy" under
section 771A(a) of the Tariff Act of 1930, as amended, because fertilizer is an "input product" in the
production of rice. We disagree. In this case, the government of Thailand is not providing
assistance to the producers of fertilizer, but rather directly to the growers of rice, the product
under investigation, by acquiring fertilizer for distribution to the latter on a preferential basis.
On January 6, 1986, the government of Thailand once again brought up the upstream issue,
this time arguing that paddy (rice) is an upstream input of milled rice and the Department should
therefore investigate subsidies bestowed on paddy (rice) only under the upstream subsidy
provisions of the countervailing duty law. The government of Thailand further argued
that the Department should dismiss all allegations of subsidies bestowed on "paddy growing"
because the petition does not offer any evidence to satisy the statutory requirements for
countervailing upstream subsidies. We disagree. In
a case concernig an agricultural product such as this, it is inappropriate to term the raw product an
"input" into the next stage or further processed product. The primary, if not the sole, purpose of all
segments of the industry in this case is to produce a single end product--milled rice. Substantially
all of the raw agricultural product, paddy or unmilled rice, is dedicated to the production of milled
rice. The fact that beyond this stage other processed products can be made, e.g., rice wine, is
irrelevant. The key is that there is a single, continuous line of production from paddy rice to milled
rice. Therefore, we preliminarily determine that paddy rice, or unmilled rice, is not an "input" of
milled rice. Consequently, the upstream subsidy provisions of the countervailing duty law
are not applicable in this case.
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Based upon our analysis of the petition and the responses to our questionnaire, we peliminarily
determine the following:
I. Programs Determined to Confer Bounties or Grants
We preliminarily determine that bounties or grants are being provided to manufacturers,
producers, or exporters in Thailand of rice under the following programs:
A. Export Packing and Stocking Credits
Export packing and stocking credits are short-term loans used for either pre- shipment or
post-shipment financing. These loans, which are provided through commercial banks, can be
rediscounted at the Bank of Thailand through its export refinancing facility. Under the
"Regulations Governing the Rediscount of Promissory Notes Arising from Exports" (B.E. 2514), the
commercial banks, during the period for which we are measuring bounties or grants, charged the
borrower a maximum of 7 to 9 percent interest per annum and then the bank rediscounted these
loans at 5 to 7 percent interest with the Bank of Thailand. These loans are provided in baht for
up to 90 days.
Because only exporters are eligible for these loans, we preliminarily determine that they are
countervailable to the extent that they are provided at preferential rates. As specified in the
Subsidies Appendix, we used the most appropriate national average commercial method of
short-term financing as the benchmark rate for short-term loans. In its response, the government of
Thailand stated that an average interest rate charged by commercial banks in 1984 on
short-term loans, bills, and overdrafts was 14.39 percent. This average interest rate was used as the
benchmark in Circular Welded Carbon Steel Pipes and Tubes from Thailand (50 FR
32751) (Aug. 14, 1985). Comparing this average interest rate to the rate charged on export packing
and stocking credits, we find that the rate on export packing and stocking credits is
preferential, and, therefore, these loans confer bounties or grants on the products under
investigation. Applying this average commerical bank interest rate as the benchmark, we calculated
an estimated net bounty or grant of 0.872 percent ad valorem.
B. Investment Promotion Act
According to the response of the government of Thailand, the Investment Promotion Act (B.E.
2520) of 1977 provides incentives for investment to promote development of the Thai economy.
Administered by the Board of Investment, the Investment Promotion Act authorizes the exemption
of import duties and certain taxes under sections 35 and 36. Section 35 provides various tax
reductions to companies located in investment zones, set up at the discretion of the Board. Since
only companies located in these zones may receive benefits under section 35, and since we are not
yet able to determine the extent to which the government of Thailand limits which companies
can receive these benefits, they appear to be targeted to specific regions. Section 36 provides
various tax and custom duty exemptions to promote enterprises that export. The respondents
indicate that section 36 benefits were not received by producers or exporters of rice.
The response identified Mah Boonkrong Rice Mill Co., Ltd., as the only rice
firm that received benefits under the Investment Promotion Act. According to the respondents,
Mah Boonkrong Rice Mill Co. received the benefits from this program under section 35. Although
Mah Bookrong Rice Mill was not located in one of the four investment promotion zones previously
established by the Board of Investment, the Board designed the rice mill as a private investment
promotion zone, thereby granting it benefits accorded to companies located in these zones. Mah
Boonkrong Rice Mill received business tax reductions of fifty percent during the review period.
We preliminarily determine that section 35 of the Investment Promotion Act, which limits
recipients to industries located in designated regions, confers a bounty or grant within the meaning
of the countervailing duty law. Under our tax methodology, we calculate the country-wide
benefit from this program by dividing the amount of the tax reduction claimed by Mah Boonkrong
Rice Mill on its tax return filed during the review period by the total value of milled rice during the
review period. On this basis, we calculated an estimated net bounty or grant of 0.007 percent ad
valorem.
C. Price Support and Stabilization Program
The support and stabilization of the price of rice in Thailand is undertaken by two government
agencies, the Public Warehouse Organization (PWO) and the
Marketing Organization for Farmers (MOF), and one private organization, the Agricultural
Cooperative Federation of Thailand (ACFT).
1. According to the responses, the PWO, chaired by the Minister of Commerce, is charged with
carrying out activities concerning rice, agricultural products, and other products in order to
ensure that their quantity, quality, and prices are appropriate and that the supply is sufficient to
meet the demand of the state and the public. The PWO can trade for its own account or pursuant to
special instructions from the Minister of Commerce. Funds are received from the Farmers
Assistance Fund (FAF) in the form of loans repayable at an interest rate of 2 percent annually. The
PWO may sell in the domestic market or for export. The resonse states, however, that no exports by
the PWO have ever gone to the United States. Therefore, we determine that this particular program
is not used.
2. The MOF operates under the Ministry of Agriculture and Cooperatives with the objective of
assisting farmers and farmers' associations by intervening in the market for paddy rice in order to
raise the market price for paddy rice during certain periods in the harvest year. According to the
responses, the activities of the MOF are funded by the FAF, and the MOF has performed similar
functions as necessary with respect to products other than rice.
3. The ACFT is a private association of farmers operating at the district, provincial, and national
levels. Among the objectives of the ACFT are the
provision of funds to farmers in return for paddy rice which is then marketed, the provision of
fertilizer to farmers financed against paddy production, and the provision of warehouse facilities for
rice and fertilizer. In both 1984 and 1985, the ACFT received working capital loans from the FAF.
These were one year loans at two percent interest per annum. The loans were used for purchases of
fertilizer for sale to farmers and to undertake milling and marketing operations.
Respondents argue that the price support and stabilization programs cover many agricultural
products and are not countervailable because they are provided to more than a specific enterprise
or industry, or group of enterprises or industries. Furthermore, the government of Thailand
claims that these programs were financed by the FAF, which is, in turn, funded by an export
premium on rice; therefore, they should not be found to confer bounties or grants.
Based on the information provided by respondents, we find that, although some agricultural
products have benefited from these programs sporadically, we have no information that the price
support and stabilization programs are being provided to all agricultural products, nor do we find
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indications of any objective, identifiable criteria which would automatically trigger the price
support mechanism. As a matter of fact, according to the responses, price support actions by the
government-run organizations are taken only at the special instructions of the Ministry of
Commerce or at the discretion of the
Ministry of Agriculture. Therefore, based on the information received, price supports seem to be
made only to selected agricultural producers at various levels for different commodities at various
times, all at the discretion of the government. As such, we cannot conclude that these programs are
available to more than a specific enterprise or industry, or group of enterprises or industries.
Nor can we, at this time, agree with respondents that the benefits conferred by these programs
should be offset by the export premium. The Act makes very specific provisions as to what are
permissible offsets. Section 771(6) of the Act authorizes the Department, for purposes of
determining the net bounty or grant, to subtract from the gross bounty or grant the amount of:
(A) Any application fee, deposit, or similar payment paid in order to qualify for, or to receive, the
benefit of the subsidy;
(B) Any loss in the value of the subsidy resulting from its deferred receipt, if the deferral is
mandated by the government order; and
(C) Export taxes, duties, or other charges levied on the export of merchandise to the United States
specifically intended to offset the subsidy received.
This provision is the exclusive source of permissible offsets. Nothing which does not strictly fit the
descriptions under section 771(6) is allowable as an offset.
Respondents have not shown to our satisfaction that the export premium on rice
is "specifically intended to offset the subsidy received" nor is it a "payment in order to
qualify for, or to receive, the benefit of the subsidy".
In fact, the description of the fund indicates a broad-based revenue-raising measure.
Because the price support and stabilization programs are limited to a specific enterprise or
industry, or group of enterprises or industries, and because the funds provided to support these
programs are not specifically intended to offset the subsidy received, we preliminarily determine
that these programs confer bounties or grants on rice farmers. However, we preliminarily
determine that of the two government-run organizations undertaking these programs, only one, the
MOF, participated in price support and stabilization for rice exported to the United States during
the review period.
We requested information regarding the market price of rice by the MOF at the time of purchase in
1984, but respondents did not provide us with this information; therefore, to calculate benefits
received under the MOF, we took the difference between the average farm price for rice in 1983 and
the MOF support price for rice in 1983, as best information available, and multiplied it by the
amount of rice the MOF purchased in 1983. This benefit was then divided by the total value of
paddy rice for 1984, as best information available, to arrive at an ad valorem rate of 0.327 percent.
We also preliminarily determine that the preferential loans received by the
ACFT for use in price support and stabilization for rice are countervailable. To calculate the benefits
received under the ACFT, we took the total amount of loans acquired by ACFT from the FAF in 1984
and multiplied it by the difference between the two percent interest rate and the national average
interest rate. The benefits were then divided by the total value of paddy rice to arrive at an ad
valorem rate of 0.088 percent.
D. MOF Fertilizer Program
The MOF sells fertilizer to farmers, under certain conditions, at prices below market price.
According to the responses, the fertilizer sales program of the MOF is limited to selling fertilizer to
farmers certified by provincial officials as poor farmers or tenant farmers or those farmers whose
total land area is 10 rai (approximately 4 acres) or less. In addition, there is a limitation of
500 kg. per farm or 50 percent of its requirements, whichever is less. The MOF sells four types of
fertilizer, two of which are for use by rice farmers exclusively, and two of which can be used for
rice as well as other grain and vegetable crops. The government of Thailand stated that, since
eligibility for fertilizer purchases is not based on the crop for which the fertilizer is to be
used but on the status of the farmer, the two types of fertilizer which can be used for other
crops as well as rice cannot be traced
to usage for growing rice. The respondents argue that this program is not specific to rice and that
the benefits received by rice farmers are in proportion to the ratio of rice production to other
crops. Furthermore, they argue that any benefit under this program was more than offset by the
export premium on rice, the source of the funding for the program; therefore, this program is not
countervailable.
Since two out of the four types of fertilizer sold under this program can be used only for growing
rice, we believe that the benefit on these two types of fertilizer is limited to a specific
enterprise or industry, or group of enterprises or industries. Since the other two types of
fertilizer may be used not only for rice, but also for sugar cane, corn, casava, and most vegetable
crops, we preliminarily determine that the benefit on these two types is not limited to a specific
nterprise or industry, or group of enterprises or industries.
As to the respondents' argument regarding the offset, we have dealt with this issue under the "Price
Support and Stabilization Program" section of this notice.
To calculate the benefit of the MOF fertilizer program, we took the total value of the two types of
fertilizer used only for rice sold by the MOF in 1984 and multiplied it by the difference between the
market price and the preferential price at which fertilizer was sold by the MOF to the farmers.
This benefit was then divided by the total value of paddy rice in 1984 to arrive at an ad valorem rate
of 0.279 percent.
E. Paddy Rice Mortgage Program
During the review period, this program did not exist. From January 1, 1985, through September 30,
1985, however, the Bank of Agriculture and Agricultural Cooperatives (BAAC) and the PWO
participated in the paddy rice mortgage program. This program allows the grower to hold back
paddy rice sales in times of depressed seasonal prices until prices recover. Under this program, the
rice farmer can mortgage his rice for a period of five months by storing the paddy rice and
obtaining a loan from the Bank of Agriculture and Agricultural Cooperatives (BAAC) equal to 80
percent of the value of the paddy rice against warehouse receipts. The loan is made at 14 percent
interest, with half being paid by the farmer and half by the FAF. In addition, a 15 baht per month
storage fee is charged by the PWO, half paid by the farmer and half by the FAF. The purpose of the
program is to provide the farmer with income while he holds his paddy rice for sale at a time when
he can realize higher prices for his rice.
Respondents argue that the benefit received under this program is not countervailable because (1)
it is entirely offset by the export premium on
rice; (2) the program is generally available; and (3) rice prices did not increase as expected.
We have dealt with the offset and general availability issues under the *3381
"Price Support and Stabilization Program" section of this notice.
Section 771(5) defines the term subsidy to include "the provision of capital, loans or loan
guarantees on terms inconsistent with commercial considerations." There is no doubt that the loans
granted under the rice mortgage program were at terms inconsistent with commercial
considerations, since the farmer paid only half the stated interest rate which is itself lower than the
national average commercial rate. Whether the prices of rice rose enough that year for the farmer
to make a profit is totally irrelevant to determining whether the preferential loan provides a
countervailable benefit.
Because the Rice Mortgage Program is limited to a specific enterprise or industry, or group of
enterprises or industries and because the terms of the loans are inconsistent with commercial
considerations, we preliminarily determine that this program confers a bounty or grant. We have
included this program in our cash deposit rate for the reasons mentioned earlier in this notice.
To calculate the benefit of the Rice Mortgage Program, we took the total amount of the loans given
to rice farmers in 1985 times the difference in the 1985 national average commercial rate of 14.16
percent and the preferential
rate of 7 percent (paid by the farmers) times the number of days the loans were outstanding. this
benefit was added to the benefit received for rice storage. the total was then divided by the 1985
value of paddy rice to arrive at an ad valorem rate of 0.017 percent for duty deposit purposes.
F. Supplementary Program to Implement the Government's Rice Policy-- Preferential Financing to
Rice Miller
During the review period, this program did not exist, to our knowledge. In 1985, however, the
Ministry of Agriculture and Cooperatives, in conjunction with eight commercial banks, established
a program to provide low interest loans at 8.25 percent per annum to participating rice millers. One
half of the loan is from the commercial bank charged at an interest rate of up to 16.5 percent and the
other half is provided by the FAF at zero percent interest.
Under this program, a rice miller buys paddy rice from the farmer and pays an advance of 80
percent of the total value of the paddy rice based on the administered price. The rice miller also
provides the farmer with a bank guarantee against the 20 percent of the value not paid at the time of
receipt. The miller obtains a 180 day loan for the 80 percent of the value paid at an effective annual
interest rate of 8.25 percent and pays the bank one percent of the guarantee amount.
Because the Supplementary Program is limited to a specific enterprise or industry or group of
enterprises or industries, and because the terms of the loans are inconsistent with commercial
considerations, we preliminarily determine that this program confers a bounty or grant. We have
included this program in our cash deposit rate for the reasons mentioned earlier in this notice.
According to the response, 60 percent of the loans to fund this program were given by the FAF at
0.00 percent interest and 40 percent were given by the banks at 16.5 percent interest. Therefore,
to calulate the benefit, we weighted these percentages against the interest rate charged by the banks
of 16.5 percent to arrive at a preferential interest rate of 6.6 percent. We then took the difference
between the 1985 national average commercial interest rate of 14.16 percent and this preferential
rate of 6.6 percent and multiplied it by the total value of the loans, times the number of days the
loans were outstanding. This benefit was then divided by the total 1985 value of milled rice to arrive
at an ad valorem rate of 0.008 percent for duty deposit purposes.
II. Program Determined Not to be Countervailable
Construction of Roads and Irrigation Facilities for Rice Producers
The petitioner alleges that producers and exporters of rice receive benefits through the
construction of roads and irrigation facilities targeted to benefit rice producers. The government of
Thailand stated that the rehabilitation and construction of roads to facilitate the
transportation of agricultural goods is an obvious concern given the dominanant position of
agriculture in the Thai economy; however, it is only one of a number of objectives of the Thai
government. Furthermore, road construction in rice growing areas has not been among the
principal priorities of any of the highway development plans, because rise is grown predominantly
in the lowland areas which are already quite devloped. In fact, the emphasis on rural road
construction and maintenance has been concentrated in upland areas where crops such as maize,
sugar-cane, cassava, jute, and para-rubber are grown.
As for the construction of irrigation facilities, the government of Thailand stated that the
Department of Royal Irrigation of the Ministry of Agriculture and Cooperatives, whose functions
are similar to those of the U.S. Bureau of Reclamation and the U.S. Corps of Engineers, is responsible
for all irrigation development. Crops using irrigation in Thailand include rice, sugar, citrus,
vegetables, beans, and tobacco, among others.
We have consistently held that government activities regarding the construction of roads and
irrigation facilities constitute a bounty or grant
only when they are limited to a spcific enterprise or industry, or group of enterprises or industries.
Moreover, we have held that where limitations on use do not result from government activities, but
instead result from the inherent characteristics of the good or service being provided, the
government action does not confer a countervailable bounty or grant. Basic infrastructure facilities
are, by their very nature, available for use only by companies and individuals located in the
vicinity of such facilities. Roads, ports, and training centers established in a given location
obviously benefit those located in that area more than they benefit firms and individuals located in
other areas. Nevertheless, this does not mean that those located in close proximity to the
infrastructure are receiving countervailing bounties or grants. The provision of basic infrastructure
does not confer a counteravailable bounty or grant when the following three conditions are met: (1)
The government does not limit who can move into the area where the infrstructure has been built;
(2) the infrastructure that has been built is used by more than a specific enterprise or industry, or
group thereof; and (3) those that locate there have equal access or receive the benefits of the
infrastructure on equal terms.
Inasmuch as roads and irrigation facilities in Thailand are available for use by the agricultural
sector as a whole, we prliminarily determine that this program is not countervailable.
III. Programs Determined Not To Be Used
We preliminarily determine that the manufacturers, producers, or exporters in Thailand of
rice do not use the following programs which were listed in our notice of initiation.
A. Export Processing Zones
In 1979, Export Processing Zones were authorized through the "Industrial Estates Authority of
Thailand Act" (B.E. 2522). According to the responses, none of the companies responding to
our questionnaire located in the export processing zones and, thus, none receives benefits under
this program.
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B. Rediscount of Industrial Bills
The petitioner alleges that producers and exporters of rice receive preferential financing for raw
material purchases through a rediscounting of Industrial bills. According to the responses, rice
millers and growers are not eligible for this program.
C. Incentives for International Trading Firms
The petitioner alleges that the Board of Investment (BOI) grants to qualified international trading
companies: (1) Import duty exemptions and the provision of duty drawback schemes; (2) income
tax deductions of 200 percent of foreign marketing expenses; and (3) financial support from the
Bank of Thailand, including permission to hold foreign-currency accounts.
The government of Thailand responded that between 1978 and 1980, the BOI granted certain
incentives to international trading firms pursuant to the Announcement of the BOI No. 40/2521
(1978). This program was terminated on March 11, 1981, pursuant to the Announcement of the BOI
No. 1/2524 (1981). As of this effective date, if a trading company had not already been certified, it
was not eligible for certification and could not receive benefits. Only two companies that export
rice to the United States are eligible to receive benefits under this program. The government of
Thailand stated that neither of the two eligible companies received any benefits during the
review period.
According to the responses, one company held a Singapore dollar account, but none of the
companies under investigation held U.S. dollar accounts during the review period.
D. Export Promotion Fund
The petitioner alleges that producers and exporters of rice receive benefits from the Export
Promotion Fund, which is administered by the Department of Commercial Relations, aimed at
promoting rice exports. According to the responses, no projects related to rice were financed by
the Fund in 1984 and 1985.
E. Electricity Discount for Exporters
The petitioner alleges that electricity authorities in Thailand provide discounts on electricity
rates charged to producers of exported products. According to the responses, only industries
entitled to participate under the Ministry of Finance regulations in the tax certificate program
pursuant to the "Tax and Duty Compensation of Exported Goods Produced in the Kingdom Act" are
eligible for the electricity discount. Since rice producers and exporters are not entitled to
participate in the tax certificate program under the aforementioned act, they are ineligible for
electricity discounts.
F. Tax Certificates for Exporters
The petitioner alleges that the producers and exporters of rice receive tax
certificates based on the value of their exports, which may be used to pay tax liabilities. According
to the responses, the primary authority for the rebate of indirect taxes is the "Tax and Duty
Compensation of Exported Goods Produced in the Kingdom Act." Section 12 of the Act states that
"goods subect to tax and duty or fees when exported" are not eligible for rebates. Rice is subject to
an export tax and an export premium; therefore, the exporters of rice are not eligible to receive
these tax certificates.
IV. Program for Which we Need More Information
Paddy Price Raising Project
On October 22, 1985, the Council of Economic Ministers approved a new rice policy for the
1985/1986 crop year (December 1, 1985 through November 30, 1986), the "Paddy Price Raising
Project". One aspect of this project is to fix a minimum price to be paid by millers for paddy rice
delivered to the mill. Another is the provision of below market rate financing to millers meeting
certain stock requirements.
According to the response, rice mills intending to participate in the compensatory financing
program were required to register by December 1, 1985. Preliminary figures kept by the
government of Thailand show that 978 rice
millers have registered to participate. The Government estimates that about 30-40 percent of those
registered will actually qualify for financing. As of the date of the response, no benefit has been
given out. We will seek further information on how this program works, as well as any benefits
received, during verification.
V. Program That Does Not Exist
Exemption of Sales Tax for Promoted Industries
The petitioner alleged that the producers and exporters of rice receive exemptions from sales tax if
they qualify for promotion under the Promotion Investment Act. The government of Thailand
responded that there is no law providing exemptions from sales for "promoted" industries other
than the Investment Promotion Act, which is dealt with in the section of the notice entitled
"Investment Promotion Act."
Suspension of Liquidation
In accordance with section 703(d) of the Act, we are directing the U.S. Customs Service to suspend
liquidation of all entries of rice from Thailand
which are entered, or withdrawn from warehouse, for consumption on or after the date of
publication of this notice in the Federal Register and to require a 1.60 percent ad valorem cash
deposit or bond for each such entry of this merchandise.
This suspension will remain in effect until further notice.
Verification
In accordance with section 776(a) of the Act, we will verify the data used in making our final
determination. As previously stated, we will not accept for our final determination any statement in
the response that cannot be verified.
Public Comment
In accordance with § 355.35 of our 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
March 3, 1986, at the U.S. Department of Commerce, Room 3708, 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 and at least 10 copies must be submitted to the Deputy Assistant Secretary by
February 24, 1986. Oral presentations will be limited to issues raised in the briefs. All written views
should be filed in accordance with CFR 355.34, within 30 days of the publication of this notice, at
the above address in at least 10 copies.
This notice is published pursuant to section 703(f) of the Act (19 U.S.C. 1671b(f)).
Dated: January 17, 1986.
Gilbert B. Kaplan,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 86-1708 Filed 1-24-86; 8:45 am]
BILLING CODE 3510-DS-M