95-608

60 FR 30284

NOTICES

DEPARTMENT OF COMMERCE

[C-549-501]

Certain Circular Welded Carbon Steel Pipes and Tubes From Thailand: Preliminary
Results of Countervailing Duty Administrative Review

Thursday, June 8, 1995

*30284

AGENCY: Import Administration, International Trade Administration, Department of
Commerce.

ACTION: Notice of Preliminary Results of Countervailing Duty Administrative Review.

SUMMARY: The Department of Commerce (the Department) is conducting an
administrative review of the countervailing duty order on certain circular welded carbon
steel pipe and tubes from Thailand. We preliminarily determine the net subsidy to be 0.23
percent ad valorem for Saha Thai Pipe and Tube Company (Saha Thai) and all other companies for
the period January 1, 1993, through December 31, 1993. Because the net subsidy is de minimis, if
the final results are the same as these preliminary results of administrative review, we will instruct
U.S. customs to liquidate entries without regard to countervailing duties. Interested parties
are invited to comment on these preliminary results.

EFFECTIVE DATE: June 8, 1995.

FOR FURTHER INFORMATION CONTACT: Stephen Lebowitz and Kelly Parkhill, Office of
Countervailing Compliance, Import Administration, International Trade Administration,
U.S. Department of Commerce, Room B099, 14th Street and Constitution Avenue, N.W.,
Washington, DC 20230; telephone (202) 482-1503 or 482-4126, respectively.

SUPPLEMENTARY INFORMATION

Background

On August 14, 1985, the Department published in the Federal Register (50 FR 32751) the
countervailing duty order on certain circular welded carbon steel pipes and tubes from
Thailand. On August 3, 1994, the Department published a notice of "Opportunity to Request an
Administrative Review" (59 FR 39543) of this countervailing duty order. We received a
timely request from Saha Thai.

We initiated the review, covering the period January 1, 1993, through December 31, 1993, on
September 16, 1994 (59 FR 47609). The review covers one manufacturer/exporter of the subject
merchandise and nine programs. The final results of the last administrative review in this case were
published October 9, 1991 (56 FR 50852).

Applicable Statute and Regulations

The Department is conducting this administrative review in accordance with section 751(a) of the
Tariff Act of 1930, as amended (the Act). Unless otherwise indicated, all citations to the statute and
to the Department's regulations are in reference to the provisions as they existed on December 31,
1994.

Scope of Review

On March 29, 1994, the Department clarified the Harmonized Tariff Schedule (HTS) numbers that
were applicable to the subject merchandise (see Memorandum to Susan Esserman from Susan
Kuhbach, available in the Central Records Unit, Room B099, Main Commerce Building). This
clarification was necessary because of annual changes in the HTS. The scope now reads:
Imports covered in this review are shipments of circular welded carbon steel pipes and tubes (pipes
and tubes) with an outside diameter of 0.375 inch or more but not over 16 inches, of any wall
thickness. These products, commonly referred to in the industry as standard pipe or structural
tubing, are

*30285

produced to various ASTM specifications, most notably A-120, A- 53 and A-135. During the review
period, this merchandise was classified under item numbers 7306.30.10 and 7306.30.50 of the
HTS. The HTS numbers are provided for convenience and Customs purposes. The written
description remains dispositive.

The review covers the period January 1, 1993, through December 31, 1993.

Calculation Methodology for Assessment and Cash Deposit Purposes

We calculated the net subsidy on a country-wide basis by first calculating the
subsidy rate for Saha Thai. As this was the only exporter of the subject merchandise, we used Saha
Thai's rate as the country-wide rate. Since the country-wide rate calculated using this methodology
was de minimis, as defined by 19 CFR §355.7(1994), no further calculations were necessary.

Analysis of programs

I. Program Conferring Subsidies

Export Packing Credits

Export packing credits (EPCs) are short-term loans used for pre-shipment export financing. The
loans are issued by commercial banks in baht for up to 180 days. The commercial banks are
required to charge no more than a maximum interest rate of 10 percent per annum on the loan.
Interest is paid on the due date of the loan. To obtain these loans, exporters issue promissory notes
to the lending bank. The notes must be supported by an irrevocable letter of credit, a sales
agreement, a purchase order, warehouse receipt, or issuance export bill. Commercial banks can
lend up to the amount of the shipment. The commercial banks may rediscount 50 percent of the
loan with the Bank of Thailand (BOT). On the date the loan is due, the BOT debits the
commercial
bank's account for the principal and the interest due. The commercial bank, in turn, debits the
exporter's account or extends further credit at negotiated, commercial rates to the exporter.
If the exporter fails to export the total value of the goods by the due date, the BOT automatically
charges the commercial bank a penalty retroactive to the first day of the loan. In case of
non-performance by the exporter on the due date of the loan, this penalty is passed on to the
exporter. During the period of review (POR), the penalty interest rate was 6.5 percent per annum
on the entire loan. This penalty is forgiven and the exporter receives the EPC preferential rate if it
makes the export shipment or receives payment in foreign currency for the product within 60 days
after the due date of the promissory note. Because EPCs are available only to exporters, they are
countervailable to the extent that the loans are provided at preferential rates.
To determine whether the loans are preferential, we ordinarily use as the benchmark the interest
rate for the predominant source of short-term financing in the country in question. Where there is
no single, predominant source of short-term financing, we may use a benchmark composed of the
interest rates for two or more sources of short-term financing in the country in question, weighted,
whenever possible, according to the value of the financing granted by each source. In Final
Countervailing Duty Determination and Countervailing
Duty Order: Steel Wire Rope from Thailand (56 FR 46299; Sept. 11, 1991) (Steel
Wire Rope), the Department concluded that the minimum loan rate (MLR) and the minimum
overdraft rate (MOR) as reported in the BOT Quarterly Bulletin are more representative of the
prevailing short-term interest rates in Thailand than the rates used in previous cases. Based on
that determination and on the recent United States Court of International Trade (CIT) decision in
Royal Thai Government and TTU Industrial Corp. v United States, 850 F. Supp. 44 (CIT 1994),
which said that the average rate of the MLR and MOR rates was the appropriate benchmark for
short term loans, we are using the average of the 1993 MLR and MOR rates as reported in the BOT
Quarterly Bulletin for 1993. That rate was 11.18 percent, which exceeded the maximum interest
rate on EPCs of 10 percent. Therefore, we preliminarily determine that EPC loans are preferential.
To calculate the benefit provided to Saha Thai, currently the only known producer/exporter of the
subject merchandise, [FN1] by the EPC loans during the POR, we compared the amount of interest
actually paid to the amount that would have been paid at the benchmark rate. During the
verification of the 1992 administrative review, we noted that the company had to specify the
destination of the merchandise in order to receive the EPC loans. (See, Certain Circular Welded
Carbon Steel Pipes and Tubes From Thailand: Preliminary Results of Countervailing Duty
Administrative Review (60 FR 15901; March 28, 1995).)
Because Saha Thai had to specify the destination of the subject merchandise for approval and
because they exported only the subject merchandise to the United States, we divided the benefit by
its total exports of the subject merchandise to the United States to arrive at a net bounty or grant of
0.23 percent ad valorem.

FN1 S.A.F. is an export trading company that is related to Saha Thai that began operations in 1993.
All pipe exported by S.A.F. is produced by Saha Thai. We are treating the two companies as one
corporate entity for purposes of our calculations.

II. Programs Preliminary Found Not To Be Used

We also examined the following programs and preliminarily determine that Saha Thai did not apply
for or receive benefits under these programs for the review period.
1. Tax Certificates for Exporters
2. Electricity Discounts for Exporters
3. Tax and Duty Exemptions Under Section 28 of the Investment Promotion Act
4. Repurchase of Industrial Bills
5. Export Processing Zones
6. International Trade Promotion Fund/Export Promotion Fund
7. Reduced Business Taxes for Producers of Intermediate Goods for Export Industries
8. Additional Incentives under the IPA.

Preliminary Results of Review

For the period of January 1, 1993, through December 31, 1993, we preliminarily determine the net
subsidy to be 0.23 percent ad valorem for all exporters and producers of pipe and tube from
Thailand. In accordance with 19 CFR §355.7, any rate less than 0.5% ad valorem is de minimis.
If the final results of this review remain the same as these preliminary results, the Department
intends to instruct the U.S. Customs Service to liquidate, without regard to countervailing
duties, all shipments of the subject merchandise from Thailand exported on or after
January 1, 1993, and on or before December 31, 1993.

The Department intends to instruct the Customs Service to collect cash deposits of zero percent ad
valorem of the f.o.b. invoice price on all shipments of this merchandise entered, or withdrawn from
the warehouse, for consumption on or after the date of publication of the final results of this
administrative review.

Parties to the proceeding may request disclosure of the calculation methodology and interested
parties may request a hearing not later than 10 days after the date of publication of this written
notice. Interested parties may submit written arguments in case briefs on these preliminary results
within 30 days of the date of publication. Rebuttal briefs, limited to arguments raised in case briefs,
may be submitted seven days after the time limit for filing the case brief. Any hearing, if requested,
will be held seven days after the

*30286

scheduled date for submission of rebuttal briefs. Copies of case briefs and rebuttal briefs must be
served on interested parties in accordance with 19 CFR 355.38(e).
Representatives of parties to the proceeding may request disclosure of proprietary information
under administrative protective order no later than 10 days after the representative's client or
employer becomes a party to the proceeding, but in no event later than the date the case briefs,
under 19 CFR 355.38(c), are due. The Department will publish the final results of this administrative
review including the results of its analysis of issues raised in any case or rebuttal brief or at a
hearing.
The 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: May 26, 1995.

Susan G. Esserman,

Assistant Secretary for Import Administration.

[FR Doc. 95-13983 Filed 6-7-95; 8:45 am]

BILLING CODE 3510-DS-P