NOTICES

                         DEPARTMENT OF COMMERCE

                                (C-307-702)

    Certain Electrical Conductor Aluminum Redraw Rod From Venezuela; Final Results
                  of Countervailing Duty Administrative Review

                          Monday, September 14, 1992

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

 ACTION: Notice of final results of countervailing duty administrative review.

 SUMMARY: On May 28, 1992, the Department of Commerce published the preliminary
 results of its administrative review of the countervailing duty order on certain electrical
 conductor aluminum redraw rod from Venezuela (57 FR 22459; May 28, 1992). We have
 now completed that review and determine that there are no known entries during the
 period January 1, 1990 through December 31, 1990. However, because of a program-wide
 change, we are changing the rate of cash deposit of estimated countervailing duties to
 0.50 percent ad valorem.

 EFFECTIVE DATE: September 14, 1992.

 FOR FURTHER INFORMATION CONTACT:Gayle Longest or Kelly Parkhill, Office of
 Countervailing Compliance, International Trade Administration, U.S. Department of
 Commerce, Washington, DC 20230; telephone: (202) 377-2786.

 SUPPLEMENTARY INFORMATION:

 Background

 On May 28, 1992, the Department of Commerce (the Department) published in the Federal
 Register (57 FR 22459) the preliminary results of its administrative review of the
 countervailing duty order on certain electrical conductor aluminum redraw rod from
 Venezuela (53 FR 31904; August 22, 1988). The Department has now completed that
 administrative review in accordance with section 751 of the Tariff Act of 1930, as amended
 (the Act).

 Scope of Review

 Imports covered by this review are shipments of certain electrical conductor aluminum
 redraw rod (EC rod) from Venezuela, which is wrought rod of aluminum electrically
 conductive and containing not less than 99 percent of aluminum by weight. This
 merchandise is classifiable under item numbers 7604.10.3010, 7604.10.3050,
 7604.29.3010, 7604.29.3050, 7605.11.0030, 7605.11.0090, 7605.19.0000,
 7605.21.0030, 7605.21.0090 and 7605.29.0000 of the Harmonized Tariff Schedule
 (HTS). The HTS item numbers are provided for convenience and Customs purposes. The
 written description remains dispositive.
 The review covers the period January 1, 1990 through December 31, 1990 and eight
 programs.
 In its questionnaire response, the Government of Venezuela reported no shipments of the
 subject merchandise to the United States during the review period. We subsequently
 confirmed with the United States Customs Service that there were no known entries of this
 merchandise during the review period. Furthermore, at verification, we found no evidence
 of shipments of subject merchandise to the United States during the review period.

 Analysis of Comments Received

 We gave interested parties an opportunity to comment on the preliminary results. We
 received comments from SURAL, C.A., a respondent company, and the petitioner,
 Southwire Company.

 Comment 1: Petitioner argues that the elimination of the Export Bond Program should not
 result in a reduction in the cash deposit rate because the subsidy provided by that program
 has been replaced by the partial duty drawback program. To support this claim, petitioner
 cites several publications which state that the partial duty drawback program was intended
 to compensate exporters for the loss of benefits provided by the Export Bond Program.
 Moreover, since the partial duty drawback owed is a fixed amount that can be calculated
 based on the FOB value of exports, the Department need not wait for payments to be made,
 in order to determine the existence and amount of benefits under the program. Petitioner
 claims that in Final Affirmative Countervailing Duty Determination and
 Countervailing Duty Order, Certain Steel Wire Nails From New Zealand, (Steel Wire Nails
 From New Zealand), (52 FR 37196; October 5, 1987) the Department determined that a
 duty can be assessed for a subsidy that has not yet been issued.
 Respondent counters that there is no basis for petitioner's claim that the partial duty
 drawback program is a replacement for the export bond program. The press reports upon
 which this claim is based are not meaningful evidence to determine the rationale or nature
 of a government program. Furthermore, the partial duty drawback program cannot be
 found countervailable because no payments have yet been made under this program, and it
 is uncertain whether any payments will be made.
 
Department's Position: Although we found that redraw rod producers applied for benefits
 under the partial duty drawback program, the applications have yet to be processed.
 Furthermore, no payments to any exporter have been made to date under this program,	
 which was established over one year ago. This is in contrast to the program cited by
 petitioner in Steel Wire Nails From New Zealand under which the companies investigated
 were actually claiming and receiving income tax credits. In this case, although applications
 have been made, no drawback certificates have been issued by the Venezuelan government
 through the Central Bank. Until this partial duty drawback program has been implemented
 by the Venezuelan government, it is inappropriate to make a determination on its
 countervailability. We will examine this program in future reviews and make a
 determination if and when 

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 the government implements the program by issuing
 certificates.

 Comment 2: Respondent claims that the Government of Venezuela does not provide
 preferential pricing of primary aluminum used to produce export goods. The pricing policy
 for primary aluminum is established by the Corporation Venezolana de Guayana (CVG) and
 is based on market prices. There is no difference in prices of primary aluminum used to
 produce domestic or export goods. Therefore, there can be no benefit from this program,
 and the Department should adjust the deposit rate accordingly.

 Department's Position: We disagree. In the first administrative review of this
 countervailing duty order, the Department rejected identical arguments raised by
 respondent because, in Final Affirmative Countervailing Duty Determination; Certain
 Electrical Conductor Aluminum Redraw Rod from Venezuela (Final Determination) (53 FR
 24763; June 30, 1988), the Department found that the pricing formula reported in the
 questionnaire response was not, in fact, used to determine the domestic price of primary
 aluminum. Moreover, the Department found that the price for primary aluminum
 incorporated in export products included certain discounts. (see, Certain Electrical
 Conductor Aluminum Redraw Rod From Venezuela; Final Results of Countervailing
 Duty Administrative Review, (56 FR 14232; April 8, 1991), Comment 2). Since there were
 no shipments of redraw rod to the United States during the current administrative review
 period as in the prior review period, we are unable to confirm on the basis of a revised
 pricing formula that preferential pricing of inputs has been eliminated. Furthermore, we
 have no basis for adjusting the cash deposit rate without having examined the application of
 the current pricing formula.

 Comment 3: Respondent contends that the short-term FINEXPO financing program has
 undergone a significant program-wide change that the Department should recognize in this
 administrative review. As of November 22, 1990, the FINEXPO program provides
 bolivar-denominated loans tied to interest rates that are set at 90 percent of the average
 commercial lending rate charged by the six largest Venezuelan banks. Dollar-denominated
 loans are also provided on terms which tie the interest rate for one-half of the loan to the
 commercial bank's lending rate for international transactions and the other half of the loan
 to the six-month LIBOR rate plus one percent. Furthermore, the respondent argues that no
 Venezuelan producers or exporters of redraw rod used short-term FINEXPO financing
 during the review period.
 
Department's Position: We agree that there were program-wide changes in the short-term
 FINEXPO financing program during the 1990 review period. However, the new interest
 rates under the 1990 short-term FINEXPO financing are still preferential, and we have no
 basis to measure the change in the benefit from this program. Section 355.50 of the
 Department's proposed regulations (54 FR 23366; May 31, 1989) states that, in order to
 take into account a program-wide change in establishing the estimated countervailing
 duty cash deposit rate, a change needs to be measurable as well as program-wide.
 Furthermore, since there were no shipments of redraw rod to the United States during the
 current review period, the lack of use of this program during the review period does not
 provide a basis for assuming that it would not be used if shipments were resumed.

 Comment 4: Respondent claims, as in prior reviews, that official changes in aluminum
 supplier policies require a penalty fee for any late payment. Furthermore, since the
 Department did not ask any further questions on this program during verification, the
 Department should acknowledge that this program has been completely terminated and
 adjust the cash deposit rate accordingly.
 
Department's Position: In Certain Electrical Conductor Aluminum Redraw Rod From
 Venezuela; Final Results of Countervailing Duty Administrative Review (56 FR 14232;
 April 8, 1991, Comment 3), we addressed a similar comment. Respondent has not provided
 any new arguments which convince us to change our position. Furthermore, since there
 was no shipments of redraw rod to the United States during the 1990 review period, we
 were unable to examine and determine at verification if late payment fees of redraw rod
 producers on shipments of the subject merchandise to the United States are consistent with
 commercial considerations or provide a benefit through preferential interest rates.

 Final Results of Review

 As a result of our review, we determine that there are no known entries of the subject
 merchandise exported to the United States from the period January 1, 1990 through
 December 31, 1990. After reviewing all of the comments received, we recommend changing
 the rate of cash deposit of estimated countervailing duties to 0.50 percent ad valorem.
 Because of a program-wide change in the benefit from the Export Bond Program, the
 Department will instruct the Customs Service to collect a cash deposit of estimated
 countervailing duties of 0.50 percent of the f.o.b. invoice price on all shipments of this
 merchandise entered, or withdrawn from warehouse, for consumption on or after the date
 of publication of these final results of administrative review. This 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 Tariff
 Act (19 U.S.C. 1675(a)(1)) and 19 CFR 355.22.
 Dated: September 2, 1992.

 Alan M. Dunn,

 Assistant Secretary for Import Administration.

 (FR Doc. 92-22041 Filed 9-11-92; 8:45 am)

 BILLING CODE 3510-DS-M