57 FR 11065
NOTICES
DEPARTMENT OF COMMERCE
(C-549-701)
Steel Wire Nails From Thailand; Final Results of Countervailing Duty
Administrative Review and Rescission of Countervailing Duty Order, in Part
Wednesday, April 1, 1992
AGENCY: International Trade Administration/Import Administration, Department of
Commerce.
ACTION: Notice of final results of countervailing duty administrative review and rescission
of countervailing duty order, in part.
SUMMARY: On January 9, 1992, the Department of Commerce (the Department)
published the preliminary results of its administrative review of the countervailing duty
order on certain steel wire nails from Thailand for the period January 1, 1989 through
December 31, 1989 (57 FR 879). We have now completed that review and determine the total
bounty or grant to be 0.46 percent ad valorem, an amount the Department considers to be de
minimis.
EFFECTIVE DATE: April 1, 1992.
FOR FURTHER INFORMATION CONTACT:Patricia W. Stroup or Michael Rollin, Office of
Countervailing Compliance, International Trade Administration, U.S. Department of
Commerce, Washington, DC 20230; telephone (202) 377-2786.
On January 9, 1992, the Department of Commerce (the Department) published in the Federal
Register (57 FR 879) the preliminary results of its administrative review of the countervailing
duty order on certain steel wire nails from Thailand (52 FR 36987; October 2, 1987). The
Department has now completed that administrative review in accordance with section 750 of the
Tariff Act of 1930, as amended (the Act).
Scope
In our notice of Final Affirmative Countervailing Duty Determination and
Countervailing Duty Order (52 FR 36987; October 2, 1987), the merchandise covered by the
investigation was described as follows:
The products covered by this investigation are certain steel wire nails from Thailand. These
nails are: One-piece steel nails made of round wire, as currently provided for in Tariff Schedules of
the United States Annotated item numbers 646.2500, 646.2610-90, and 646.3040; two-piece steel
wire nails as currently provided for in item number 646.3200; and nails with steel wire shanks and
lead heads, as currently provided for in item number 646.3600. These products are currently
classifiable under Harmonized System item numbers 7317.00.55, 7317.00.65, 7317.00.75 and
7616.10.10.
In accordance with our preliminary determination, the Department is clarifying the scope of the
order to exclude aluminum nails imported under Harmonized Tariff Schedule (HTS) number
7616.10.10, and is rescinding that portion of the countervailing duty order covering items
which were duty-free at the time of the investigation, and remain duty-free under the Generalized
System of Preferences (GSP). The rescission covers the merchandise previously provided for in
Tariff Schedules of the United States Annotated (TSUSA) item number 646.3040, certain steel wire
nails; TSUSA item number 646.3200, two-piece steel wire nails; and TSUSA item number
646.3600, nails with steel wire shanks and lead heads. This merchandise is currently provided for
under HTS item numbers 7317.00.65 and 7317.00.75.
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Accordingly, the merchandise now covered by the countervailing duty order, and which is
the subject of this administrative review, is one-piece steel nails made of round wire, as previously
provided for in TSUSA item numbers 646.2500 and 646.2610-90. These products are currently
provided for under HTS item number 7317.00.55. The TSUSA and HTS numbers are provided for
convenience and customs purposes. The written description remains dispositive.
This administrative review covers the period January 1, 1989 through December 31, 1989, and
seven programs. One producer, K.Y. Intertrade (KYI), and one trading company, Asoke, accounted
for substantially all exports of the subject merchandise from Thailand to the United States
during the review period. Both of these companies, and the firms supplying substantially all nails to
the trading company, responded to the Department's questionnaires.
Analysis of Comments Received
We gave interested parties an opportunity to comment on the preliminary results. We received
comments from the respondents, the Royal Thai Government (RTG) and the steel wire nail
exporters, Asoke and KYI.
Comment 1: Respondents state that they were not provided an opportunity until
after issuance of the preliminary results of review to submit additional information or comments on
the Department's use in this administrative review of the short-term borrowing interest rate
benchmark first utilized in Final Affirmative Countervailing Duty Determination and
Countervailing Duty Order; Steel Wire Rope from Thailand (56 FR 46299;
September 11, 1991) (Steel Wire Rope).
Response: We disagree that respondents were not provided an opportunity to submit additional
information or comment on the benchmark used by the Department in this proceeding until after
the preliminary determination. Respondents were aware of the Department's selection of this
benchmark when it was utilized in the Steel Wire Rope investigation, and again, when the same
benchmark was used in Carbon Steel Butt-Weld Pipe Fittings from Thailand; Preliminary
Results of Countervailing Duty Administrative Review (56 FR 55283; October 25, 1991)
(Butt-Weld Pipe). Comments could have been submitted at any time, once it became apparent to
the respondents that the Department had established a preference for use of this particular
benchmark, and any new information could have been submitted at any time up to the time of the
Department's preliminary determination in this review.
With regard to the "revised" factual information submitted after our preliminary determination, in
accordance with 19 CFR 355.31(a), the Department did not consider this information for these final
results. Further, in
accordance with 19 CFR 355.31(a)(3) the Department is required to remove untimely submissions
of factual information from the administrative record, and has done so here.
Comment 2: Respondents assert that the Department erred in using the average of the minimum
loan rates (MLR) and the maximum overdraft rates (MOR) as the benchmark in the Steel Wire
Rope investigation and in this review. Respondents further claim that the benchmark calculated
by the Bank of Thailand (BOT) is a more reliable and accurate data base on which to base the
benchmark than that used by the Department in its preliminary results of this review, because the
BOT based its benchmark calculations on verified reports from the commercial banks to the central
bank, and the BOT benchmark represents the actual weighted average commercial interest rate for
short-term borrowing in Thailand during 1989. Further, respondents state that this
methodology is consistent with the Commerce Department's proposed regulation, and that
benchmarks based on the same data base and methodology have been used and verified by the
Commerce Department in preceding countervailing duty investigations and reviews
involving Thailand.
Response: As stated in the preliminary results of this review, the Department determined in Steel
Wire Rope that the MLR and MOR rates were the most appropriate rates to determine the
short-term interest benchmark. (See also, Butt-Weld Pipe, Comment 4.) In Steel Wire Rope,
the Department concluded
that the MLR and MOR rates are more representative of short-term interest rates in Thailand
for calendar years 1988 and 1989 than the weighted-average interest rate charged by commercial
banks on domestic loans, bills, and overdrafts used in previous Thai cases. Respondents submitted
no evidence on the record of this review to refute this determination. Therefore, as the benchmark
interest rate for purposes of calculating the benefit from Export Packing Credit Loans (EPCs) on
which interest was paid in 1988, we used an average of the 1988 MLR and MOR rates as calculated in
Steel Wire Rope. We used the same methodology to calculate the 1989 benchmark.
Furthermore, absent new evidence that the MLR and MOR rates are not more representative of
short-term interest rates than the benchmark calculated by the BOT, we will continue to employ the
benchmark used in this administrative review.
Finally, use of the BOT benchmark calculated by respondents, instead of the average of the MLR and
MOR rates would, in this instance, have no material effect on the outcome of the review, as both
result in de minimis rates.
Comment 3: Respondents claim that the Department has set higher standards of proof for the RTG's
new export tax rebate study (the Physically Incorporated Input Coefficient, or "PHIC" study) than
those set for export tax rebate amounts under the prior system (the Input/Output, or "I/O" study).
Respondents ask that the Department reconsider its decision that the respondents failed to prove
their case by not submitting information requested by the Department
regarding the RTG's calculations and the questionnaire responses upon which these calculations
were based.
Response: We disagree with respondents' claim that higher standards of proof were set for the PHIC
calculations than for acceptance of the I/O study previously used as a basis for calculating the
amounts of the indirect tax rebates.
In 1980, the Department devised a three-pronged test to determine whether a program, such as the
export tax program, is a non-excessive rebate of the indirect taxes levied on a specific exported
product. We first articulated our three-pronged test in the investigation involving fasteners from
India (See, Certain Fasteners from India; Final Affirmative Countervailing Duty
Determination and Countervailing Duty Order) (45 FR 48607, July 21, 1980)). That notice
stated, in part:
Thus, in determining whether the CCS program is a subsidy, the primary considerations are (1)
whether the CSS program operates for the purpose of rebating indirect taxes, (2) whether there is a
clear link between eligibility for CCS payments and the payment of indirect taxes, and (3) whether
the government has reasonably calculated and documented the actual indirect tax incidence borne
by exported fasteners and has demonstrated a clear link between such tax incidence and the
amount of the CSS payments. (Emphasis added.)
The Department has consistently applied this test in reaching its
determinations concerning indirect tax rebate programs such as this one, as well as in reaching its
determinations
*11067
regarding any studies relied upon in establishing the amounts of the taxes to be rebated under such
programs.
The information requested by the Department, but not supplied by the respondents, speaks directly
to the calculations and documentation addressed in our three-pronged test. In this case, the
Department attempted to make comparisons between certain proprietary cost and price data in the
administrative record and the cost/price ratios submitted by the RTG as the final stage calculations
upon which the amounts of indirect taxes to be rebated were based. We were unable to reconcile
the two sets of figures within reasonable parameters and, given that costs and prices may fluctuate
widely between individual firms, we requested both copies of the questionnaire responses from nail
manufacturers which the RTG had used in calculating these cost/price ratios, and copies of the
RTG's calculations of these cost/price figures. However, the respondents were unable to supply the
Department with these underlying documents, which were essential in determining not only the
reasonableness of the calculations, but in establishing the requisite linkage betweeen the actual
taxes paid and the amounts of taxes to be refunded.
Absent the documentation necessary to support and reconcile the RTG's cost/price ratios, the
Department had no alternative but to determine that the
RTG had not met, and still has not met, the criteria embodied in our three- pronged test for
purposes of this review.
Rescission of Countervailing Duty Order, In Part, and Clarification of Scope of
Countervailing Duty Order
The Department hereby rescinds that portion of the countervailing duty order covering the
merchandise previously provided for in Tariff Schedules of the United States Annotated (TSUSA)
item number 646.3040, certain steel wire nails; TSUSA item number 646.3200, two piece steel
wire nails; and TSUSA item number 646.3600, nails with steel wire shanks and lead heads. This
merchandise is currently provided for under HTS item numbers 7317.00.65 and 7317.00.75. As
explained in our preliminary determination (57 FR 879), the basis for our rescission of this portion
of the countervailing duty order is that the International Trade Commission has not made an
affirmative injury determination regarding this merchandise, as required by section 303(a)(2) of
the Act, and petitioner, by letter of November 21, 1991, formally withdrew that portion of the
petition covering this merchandise.
Further, the Department hereby clarifies the scope of the countervailing duty order to
exclude aluminum nails imported under HTS 7616.10.10.
Final Results of Review
As a result of our review, we determine the net bounty or grant on the merchandise currently
encompassed by the countervailing duty order to be 0.46 percent ad valorem during the
period January 1, 1989 through December 31, 1989. Pursuant to 19 CFR 355.7, any rate less than
0.5 percent ad valorem is de minimis.
With regard to the merchandise for which the Department has rescinded the countervailing
duty order, and for the merchandise excluded by virtue of the Department's clarification of the
scope of the order, the Department will instruct the Customs Service to liquidate, without regard to
countervailing duties, all such entries upon which liquidation has been suspended, and to
terminate the suspension of liquidation on future entries of this merchandise.
The Department will furthermore instruct the Customs Service to liquidate, without regard to
countervailing duties, all shipments of the merchandise subject to the countervailing
duty order exported on or after January 1, 1989 and on or before December 31, 1989.
The Department will also instruct the Customs Service to waive cash deposits of estimated
countervailing duties, as provided by section 751(a)(1) of the Act, on all shipments of this
merchandise which are entered, or withdrawn from warehouse, for consumption on or after the
date of publication of this notice.
This waiver of deposit requirement shall remain in effect until publication of the final results of the
next administrative review.
This administrative review and notice are in accordance with section 751(a)(1) of the Act (19 U.S.C.
1675(a)(1)), and 19 CFR 355.22.
Dated: March 27, 1992.
Marjorie A. Chorlins,
Acting Assistant Secretary for Import Administration.
(FR Doc. 92-7492 Filed 3-31-92; 8:45 am)
BILLING CODE 3510-DS-M