[Federal Register: August 29, 1996 (Volume 61, Number 169)]
[Notices]
[Page 45402-45404]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
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DEPARTMENT OF COMMERCE
[C-559-001]
Certain Refrigeration Compressors From the Republic of Singapore;
Preliminary Results of Countervailing Duty Administrative Review
AGENCY: International Trade Administration/Import Administration/
Department of Commerce.
ACTION: Notice of Preliminary Results of Countervailing Duty
Administrative Review.
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SUMMARY: In response to a request by the petitioner, Tecumseh Products
Company (Tecumseh), the Department of Commerce (the Department) is
conducting an administrative review of the agreement suspending the
countervailing duty investigation on certain refrigeration compressors
from the Republic of Singapore. This review covers the Government of
the Republic of Singapore (GOS), Matsushita Refrigeration Industries
(Singapore) Pte. Ltd. (MARIS), and Asia Matsushita Electric (Singapore)
Pte. Ltd. (AMS), AMS was the sole exporter of the subject merchandise
to the United States during the period of review (POR) April 1, 1994,
through March 31, 1995. We preliminarily determine that the signatories
have complied with the terms of the suspension agreement during the
POR.
Interested parties are invited to comment on these preliminary
results. Parties who submit arguments in this proceeding are requested
to submit with their argument (1) a statement of the issue and (2) a
brief summary of the argument.
EFFECTIVE DATE: August 29, 1996.
FOR FURTHER INFORMATION CONTACT: Robert Bolling or Jean Kemp, AD/CVD
Enforcement, Group III, International Trade Administration, U.S.
Department of Commerce, Washington, D.C. 20230; telephone: (202) 482-
3793.
APPLICABLE STATUTE: Unless otherwise indicated, all citations to the
statute and to the Department's regulations are in reference to the
provisions as they existed on or after January 1, 1995, the effective
date of the amendments made to the Tariff Act of 1930 (the Tariff Act)
in accordance with the Uruguay Round Agreements Act (URAA).
SUPPLEMENTARY INFORMATION:
Background
On November 1, 1995, the Department published in the Federal
Register (60 FR 55540) a notice of ``Opportunity to Request an
Administrative Review'' of the agreement suspending the countervailing
duty investigation on certain refrigeration compressor from
[[Page 45403]]
the Republic of Singapore. On November 30, 1995, the petitioner,
Tecumseh, requested an administrative review of the agreement
suspending the countervailing duty investigation on certain
refrigeration compressors from the Republic of Singapore (48 FR 51167,
November 7, 1983). We initiated the review, covering the period April
1, 1994, through March 31, 1995, on December 15, 1995 (60 FR 64413).
The Department is now conducting this review in accordance with section
751 of the Tariff Act and 19 CFR 355.22. The Department sent out a
questionnaire on March 4, 1995, and received a joint questionnaire
response from the GOS, MARIS, and AMS, on April 25, 1996. Subsequently,
the Department sent out a supplemental questionnaire on May 17, 1996
and received a joint supplemental questionnaire response on May 31,
1996.
Scope of the Review
Imports covered by this review are shipments of hermetic
refrigeration compressors rated not over one-quarter horsepower from
Singapore. This merchandise is currently classified under Harmonized
Tariff Schedule (HTS) item number 8414.30.40. The HTS item number is
provided for convenience and Customs purposes. The written description
remains dispositive.
The review period is April 1, 1994 through March 31, 1995, and
includes 3 programs. The review covers one producer and one exporter of
the subject merchandise, MARIS and AMS, respectively. These two
companies, along with the GOS, are the signatories to the suspension
agreement.
Under the terms of the suspension agreement, the GOS agrees to
offset completely the amount of the net bounty or grant determined by
the Department in this proceeding to exist with respect to the subject
merchandise. The offset entails the collection by the GOS of an export
charge applicable to the subject merchandise exported on or after the
effective date of the agreement. See Certain Refrigeration Compressors
from the Republic of Singapore: Suspension of Countervailing Duty
Investigation, 48 FR 51167, 51170 (November 7, 1983).
Analysis of Programs
(1) The Economic Expansion Incentives Act--Part VI
The Production for Export Programme under Part VI of the Economic
Expansion Incentives Act allows a 90-percent tax exemption on a
company's export profit if the GOS designates a company as an export
enterprise. In the investigation, the Department preliminarily found
this program to be countervailable because ``this tax exemption is
provided only to certified export enterprises.'' See Preliminary
Affirmative Countervailing Duty Determination: Certain Refrigeration
Compressors from the Republic of Singapore, 48 FR 39109, 39110 (August
29, 1983). MARIS is designated as an export enterprise and used this
tax exemption during the period of review. AMS was not designated an
export enterprise under Part VI of the Economic Expansion Incentives
Act for the period of review.
According to the Export Enterprise Certificate awarded to MARIS in
a letter dated May 12, 1981, MARIS is to receive this benefit on the
production of compressors, electrical parts and accessories for
refrigerators, and plastic refrigerators. To calculate the benefit, we
divided the tax savings claimed by MARIS under this program by the
f.o.b. value of total exports of products receiving the benefit, for
the period of review.
MARIS' response to the Department's countervailing duty
questionnaire for this review indicated that MARIS deducted export
charges levied pursuant to the suspension agreement in arriving at an
adjusted profit figure, which was then used to calculate exempt export
profit for the review period. In the 90-91 administrative review, the
Department determined that the amount of the export charge deduction
must be added ``back to MARIS' export profit in calculating MARIS' tax
savings in order to offset the deduction of the export charges in the
review period.'' See Preliminary Results of Countervailing Duty Review:
Certain Refrigeration Compressors from Singapore, 57 FR 31175 (July 14,
1992), affirmed in Final Results of Countervailing Duty Review: Certain
Refrigeration Compressors from Singapore, 57 FR 46539 (October 9,
1992). Therefore, as the Department did in the 92-93 administrative
review, in calculating the benefit from this program, we have added
back this deduction. On this basis, we preliminarily determine the
benefit from this program during the review period to be 1.23 percent
of the f.o.b. value of the merchandise.
(2) Finance & Treasury Center (FTC)
The Finance & Treasury Center Program allows for the taxation at a
concessionary rate of ten percent on certain income earned by companies
providing treasury, investment, or financial services in Singapore for
their subsidiaries/affiliates outside Singapore. The FTC program under
Section 43E of the Singapore Income Tax Act has been in effect since
April 1, 1989 (since Singapore tax ``year of assessment 1991'').
According to the response, applications to the FTC program had been
received and approved by March 31, 1995 for 14 companies, including
AMS. Every company which has applied to the program has been accepted.
MARIS did not participate in the program for the period of review.
The Department examined this program in the 92-93 review and found
it to be de facto specific, and therefore countervailable. (See Certain
Refrigeration Compressors from the Republic of Singapore: Final Results
of Countervailing Duty Administrative Review (``Final Results''), 61 FR
10315-8 (March 13, 1996)). The Department also stated in its
preliminary results for the 92-93 review that, ``(b)ecause it is
probable that participation in the FTC program by MNCs in Singapore
could change over time, in future reviews we may re-examine the
circumstances which have led the Department to find the program de
facto specific, should any new information about the program's
specificity arise.'' (See Certain Refrigeration Compressors from the
Republic of Singapore: Preliminary Results of Countervailing Duty
Administrative Review (``Preliminary Results''), 59 FR 59749 (November
18, 1994
During the 92-93 review, the Department found that 10 enterprises,
representing five industries, were participating in the program (See
Preliminary Results at 59750 (November 18, 1994)). For this review, the
number of firms/enterprises participating in the FTC program for this
review has increased to 14, and the number of industries participating
has increased to eight. In performing our analysis of this program, the
Department found that the overall increase in the number of firms/
enterprises (i.e., 10 to 14) and industries (i.e., 5 to 8)
participating in the FTC program was neglible. Section 771
(5A)(D)(iii)(I) of the Tariff Act provides that, where there are
reasons to believe that a subsidy may be specific as a matter of fact,
the subsidy is specific if one or more of four factors exist. The first
factor is whether the actual recipients of the subsidy, whether
considered on an enterprise or industry basis, are limited in number.
Given the large number of multi-national companies operating in
Singapore, the Department continues to find the FTC program de facto
specific, and therefore countervailable, because only a small group of
firms/enterprises representing
[[Page 45404]]
only eight industries actually used the FTC program.
To calculate the benefit, we divided the tax savings attributable
to the subject merchandise under this program by the value of all AMS
product sales for the period of review. On this basis, we preliminarily
determine the benefit from this program during the review period to be
0.01 percent of the f.o.b. value of the merchandise.
(3) Financing through the Monetary Authority of Singapore
Under the terms of the suspension agreement, MARIS and AMS agreed
not to apply for or receive any financing provided by the rediscount
facility of the Monetary Authority of Singapore for shipments of the
subject merchandise to the United States. We determined during the
review that neither MARIS nor AMS received any financing through the
Monetary Authority of Singapore on the subject merchandise exported to
the United States during the review period. Therefore, we preliminarily
determine that both companies have complied with this clause of the
agreement.
Preliminary Results of Review
The suspension agreement states that the GOS will offset completely
with an export charge the net bounty or grant calculated by the
Department. As a result of our review, we preliminarily determine that
the signatories have complied with the terms of the suspension
agreement, including the payment of the provisional export charges in
effect for the period April 1, 1994 through March 31, 1995. We also
preliminarily determine the net bounty or grant to be 1.24 percent of
the f.o.b. value of the merchandise for the April 1, 1994 through March
31, 1995 review period.
Following the methodology outlined in section B.4 of the agreement,
the Department preliminarily determines that, for the period April 1,
1994 through March 31, 1995, a negative adjustment may be made to the
provisional export charge rate in effect. The adjustments will equal
the difference between the provisional rate in effect during the review
period and the rate determined in this review, plus interest. The
provisional rate, established in the notice of the final results of the
90-91 administrative reviews of the suspension agreement (See Certain
Refrigeration Compressors from the Republic of Singapore; Final Results
of Countervailing Duty Administrative Review, 57 FR 46540 (October 9,
1992)) was 5.52 percent. The GOS may refund or credit, in accordance
with section B.4.c of the agreement, the difference between that amount
and 1.24 percent, plus interest, calculated in accordance with section
778(b) of the Tariff Act, within 30 days of notification by the
Department. The Department will notify the GOS of these adjustments
after publication of the final results of this review.
If the final results of this review remain the same as these
preliminary results, the Department intends to notify the GOS that the
provisional export charge rate on all exports to the United States with
Outward Declarations filed on or after the date of publication of the
final results of this administrative review shall be 1.24% percent of
the f.o.b. value of the merchandise.
The agreement can remain in force only as long as shipments from
the signatories account for at least 85 percent of imports of the
subject refrigeration compressors into the United States. Our
information indicates that the two signatory companies accounted for
100 percent of imports into the United States from Singapore of this
merchandise during the review period.
Parties to the proceeding may request disclosure within 5 days of
the date of publication of this notice. Any interested party may
request a hearing within 10 days of publication. Case briefs and/or
written comments from interested parties may be submitted no later than
30 days after the date of publication. Rebuttal briefs and rebuttals to
written comments, limited to issues raised in the case briefs and
comments, may be filed not later than 37 days after the date of
publication of this notice. Any hearing, if requested, will be held 44
days after the date of publication, or the first workday thereafter.
The Department will publish the final results of this administrative
review including the results of its analysis of issues raised in any
such written comments or at a hearing.
These requirements, when imposed, shall remain in effect until
publication of the final results of the next administrative review.
This administrative review and this notice are in accordance with
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.
Dated: August 22, 1996.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-22127 Filed 8-28-96; 8:45 am]
BILLING CODE 3510-DS-P