68 FR 69660, December 15, 2003
DEPARTMENT OF COMMERCE
International Trade Administration
[C-357-813]
Honey From Argentina: Preliminary Results of Countervailing Duty
Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce (the Department) is conducting an
administrative review of the countervailing duty order on honey from
Argentina for the period January 1, 2001 through December 31, 2002. If
the final results remain the same as the preliminary results of this
review, we will instruct the U.S. Customs and Border Protection (CBP)
to assess countervailing duties as detailed in the ``Preliminary
Results of Administrative Review'' section of this notice. Interested
parties are invited to comment on the preliminary results of this
administrative review. (See the ``Public Comment'' section of this
notice).
EFFECTIVE DATE: December 15, 2003.
FOR FURTHER INFORMATION CONTACT: Thomas Gilgunn or Addilyn Chams-
Eddine, Office of AD/CVD Enforcement VII, Import Administration, U.S.
Department of Commerce, Room 4012, 14th Street and Constitution Avenue,
NW., Washington, DC 20230; telephone (202) 482-4236 or (202) 482-0648,
respectively.
SUPPLEMENTARY INFORMATION:
Background
On December 10, 2001, the Department published in the Federal
Register the countervailing duty order on honey from Argentina. See
Notice of Countervailing Duty Order: Honey From Argentina, 66 FR 63673.
In response to requests for an administrative review of the
countervailing duty (CVD) order on honey from Argentina from the
Government of Argentina (GOA) and the American Honey Producers
Association and Sioux Honey Association (petitioners), the Department
initiated an administrative review for the period January 1, 2001
through December 31, 2001. See Initiation of Antidumping and
Countervailing Duty Administrative Reviews and Request for Revocation
in Part, 68 FR 3009 (January 22, 2003) (Initiation Notice).
In its request for review, the GOA requested ``that the period of
review be extended to include calendar year 2002.'' In the Initiation
Notice, the Department stated that it was considering the GOA's
request. On January 24, 2002, the Department solicited comments from
the parties regarding the GOA's request. On February 3, 2003, the GOA
submitted comments in support of its request to extend the POR to
include calendar year 2002. On February 6, 2003, the petitioners
submitted comments arguing against the GOA's request for extension. On
February 10, 2003, the GOA submitted additional comments. In addition,
on February 10, 2003, the Department offered a final opportunity for
both parties to submit final comments on this issue by February 14,
2003. (See memorandum to file from Barbara E. Tillman regarding
``Countervailing Duty Order on Honey from Argentina; Telephone Calls to
Petitioner and Respondent Concerning Comments on the Period of Review
Issue in the first Administrative Review,'' dated February 13, 2003.)
No additional comments were received from either party.
Based on our analysis of the GOA's request and of the comments
received on this issue from both the petitioners and the GOA, the
Department expanded the POR to include 2002. As such, the instant
review covers calendar years, January 1, 2001 through December 31, 2001
and January 1, 2002 through December 31, 2002.\1\ (See memorandum from
Thomas Gilgunn to Joseph A Spetrini ``Honey from Argentina: Expansion
of the Period of Review in the First Administrative Review of the
Countervailing Duty Order,'' dated February 21, 2003.)
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\1\ For the purposes of these preliminary results, we have
analyzed data for the period January 1, 2001 through December 31,
2001 to determine the countervailable subsidy rate for exports of
subject merchandise made during the periods in 2001 when liquidation
of entries was suspended. In addition, we have analyzed data for the
period January 1, 2002 through December 31, 2002 to determine the
countervailable subsidy rate for exports during that period and to
establish the cash deposit rate for subsequent exports of subject
merchandise.
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On February 21, 2003, we issued a questionnaire to the GOA. On
April 14, 2003, the GOA submitted its questionnaire response. On June
10, 2003 and August 15, 2003, the Department issued supplemental
questionnaires to the GOA. The GOA submitted responses to those
supplemental questionnaires on July 14, 2003 and September 22, 2003,
respectively. The GOA also submitted additional information regarding
certain provincial programs on August 20, 2003 and September 11, 2003.
On July 23, 2003, we extended the period for the completion of the
preliminary results pursuant to section 751(a)(2)(B)(iv) of the Tariff
Act of 1930, as amended (the Act). See Notice of Extension of Time
Limit for the Preliminary Results of Countervailing Duty Administrative
Review: Honey from Argentina, 68 FR 43492 (July 23, 2003).
Verification
As provided in section 782(i) of the Act, the Department conducted
on-site verification of the GOA's questionnaire responses from October
14 through October 21, 2003. The Department's findings at verification
are detailed in two reports: ``First Administrative Review of Honey
from Argentina: Verification Report for the Argentine Internal Tax
Reimbursement/ Rebate Program (Reintegro); Honey Production, and Export
Data,'' dated November 13, 2003 (Reintegro Verification Report); and
``First Administrative Review of Honey from Argentina: Verification
Report for the Government of Argentina,'' dated November 20, 2003
(Honey Verification Report). Public versions of both reports are on
file in the Central Records Unit (CRU) located in room B-099 of the
Main Commerce Building.
Scope of the Order
The merchandise covered by this order is artificial honey
containing more than 50 percent natural honeys by weight, preparations
of natural honey containing more than 50 percent natural honeys by
weight, and flavored honey. The subject merchandise includes all grades
and colors of honey whether in liquid, creamed, combs, cut comb, or
chunk form, and whether packaged for retail or in bulk form.
The merchandise subject to this order is currently classifiable
under subheadings 0409.00.00, 1702.90, and 2106.90.99 of the Harmonized
Tariff Schedule of the United States (HTSUS). Although the HTSUS
subheadings are provided for convenience and Bureau of Customs and
Border Protection (CBP) purposes, the Department's written description
of the merchandise covered by this order is dispositive.
Subsidies Valuation Information
A. Aggregation
Under section 777A(e)(2)(B) of the Act, the Department may
calculate a
[[Page 69661]]
single country-wide rate applicable to all exporters if the Department
determines it is not practicable to determine individual
countervailable subsidy rates due to the large number of exporters or
producers involved in the investigation or review.
In the countervailing duty investigation of honey from Argentina,
the Department solicited information from the GOA on an aggregate or
industry-wide basis in accordance with section 777A(e)(2)(B) of the
Act, rather than from individual producers and exporters, due to the
large number of producers and exporters of honey in Argentina. See
Memorandum to the File, Countervailing Duty Investigation of Honey from
Argentina: Conducting the Investigation on an Aggregate Basis, dated
November 22, 2000. As noted above, in accordance with 19 CFR Sec.
351.213(b)(2), both the GOA and the petitioners requested an
administrative review of this countervailing duty order. (See
Initiation Notice.) No individual exporters requested the review
pursuant to 19 CFR Sec. 351.213(b). Accordingly, the Department has
conducted this review of the order on an aggregate basis and will
calculate a single country-wide subsidy rate for 2001 and 2002 to be
applied to all exports of the subject merchandise. See Section
777A(e)(2)(B) of the Act.
Allocation Period
In the underlying investigation, we identified the allocation
period in accordance with 19 CFR Sec. 351.524(d)(2) which directs us
to rely on the average useful life (AUL) of renewable physical assets
for the industry concerned, as listed in the Internal Revenue Service's
(IRS) 1977 Class Life Asset Depreciation Range System, as updated by
the Department of Treasury. No parties provided information or argument
about the AUL issue. Therefore, we will continue to use the 10-year AUL
as reported in the IRS tables to allocate any non-recurring subsidies
under review.
Benchmark Interest Rates and Discount Rates
In selecting benchmark interest rates for use in calculating the
benefits conferred by the various loan programs under review, we would
normally look for the interest rate a borrower had received on a
comparable commercial loan. See 19 CFR 351.505(a)(3)(i). However, since
we are conducting this review on the aggregate level, and we are not
examining individual companies, we have sought information on the
national average interest rates for comparable commercial loans. See 19
CFR 351.505(a)(3)(ii). The GOA provided information compiled by the
Central Bank of Argentina showing the national average interest rates
for various types of financing: long-term, fixed-rate, denominated in
Argentine Peso and in foreign currency. For each loan program found to
be countervailable, we have selected a benchmark from the information
provided depending upon the terms and characteristics of the particular
loan program.
We are directed by 19 CFR 351.524(d)(3) regarding the selection of
a discount rate for the purposes of allocating non-recurring subsidies
over time. Since we are conducting this investigation on an aggregate
basis under section 777A(e)(2)(B) of the Act, we are using, as the
discount rate, the average cost of long-term fixed-rate loans in
Argentina as reported by the GOA. See 19 CFR 351.524(d)(3)(i)(B).
Denominator Issues
The GOA has provided information for 2001 and 2002 relating to the
total volume of honey produced in Argentina, the volume and value in
U.S. Dollars, of total honey exports, and the volume and value in U.S.
Dollars, of exports of honey to the United States. The GOA has also
broken down, where possible, the export volumes and values according to
the province in which the honey was produced. However, the GOA was
unable to provide information relating to total domestic sales of honey
for 2001 and 2002. As a proxy for total sales information, the GOA
provided data showing the volume of honey production by province during
2001 and 2002. However, the GOA stated that it could not provide the
value of production for 2001 and 2002. Consistent with the
investigation, we calculated a proxy for the value of the total
production reported by the GOA using the volume and value data provided
for exports to the United States. See Notice of Final Affirmative
Countervailing Duty Determination: Honey from Argentina, 66 FR 50613
(October 4, 2001) (Honey Final Determination), and the accompanying
Issues and Decision Memorandum (Honey Issues Memo), at
``Denominators.'' We divided the value of Argentine honey exports to
the United States by the volume of those exports to calculate a per
kilogram value in U.S. Dollars. We then multiplied this per kilogram
value by the provincial production data provided to arrive at the value
of total Argentine honey production during 2001 and 2002. We have used
this total production value as our denominator when calculating the
subsidy from domestic subsidy programs provided by the GOA, and we have
used the relevant provincial production value as our denominator when
calculating the subsidy from domestic subsidies provided at the
provincial level. We have used the total or provincial export values,
as appropriate, as our denominators when calculating the subsidy from
programs we have determined to be export subsidies.
To determine the final subsidy from each provincial program that is
attributable to exports of honey to the United States, we applied the
following methodologies: (1) For provinces for which we have reported
data on the volume and value of honey production that was exported, we
weight-averaged the subsidies from each provincial program by
multiplying each subsidy by the province's share of total honey
exports, by value, to the United States during the POR; and (2) for
provincial domestic subsidy programs in provinces that do not have
reported exports of honey to the United States during the POR, but do
have reported honey production during the POR, and for which the GOA
did not specifically report that the province had no exports to the
United States, we divided the benefits by the value of total value of
Argentine honey production during the POR.
As noted above, Argentine honey production and exports have been
valued in U.S. Dollars. As detailed below, certain Argentine Peso-
denominated loan programs provided benefits to Argentine honey
producers and exporters in Argentine Pesos. In such instances, we
converted those Argentine Peso-denominated benefits into U.S. Dollars
using the official exchange rate data provided by the GOA.
Analysis of Programs
I. Programs Preliminarily Determined to be Countervailable
A. Federal Programs
1. Argentine Internal Tax Reimbursement/Rebate Program (Reintegro)
The Reintegro program entitles Argentine exporters to a rebate of
many internal domestic taxes levied during the production,
distribution, and sales process on many exported products. The
Reintegro program provides a cumulative stage tax rebate paid upon
export, calculated as a percentage of the ``free on board'' (FOB)
invoice price of an exported product.
In the underlying investigation, the Department found the Reintegro
to be
[[Page 69662]]
countervailable. (See Honey Issues Memo, at ``Argentine Internal Tax
Reimbursement/Rebate Program (Reintegro)).''
In its April 14, 2003, questionnaire response, the GOA stated that
it did not ``intend to provide a full defense of the reintegro program
in this review.'' Rather, the GOA stated that Resolution 220/2001,
enacted on June 18, 2001, reduced the Reintegro rate for all products
by 7 percent thereby lowering the reintegro on bulk honey to zero and
for processed honey to 5.4 percent. The GOA also maintains that
Resolution 470/2001, enacted on September 17, 2001, specifically set
the Reintegro rate for processed honey to zero. The GOA further noted
that the Reintegro level for both bulk and processed honey ``has
remained at zero since this time, including the remainder of the 2001
and the entire 2002 POR.''
Since the GOA did not provide new information regarding the
countervailability of the Reintegro, we continue to find the entire
amount of the Reintegro for bulk and processed honey to confer a
countervailable benefit. See 19 CFR Sec. 351.518(a)(4). However, we
did verify that in June 2001, the Reintegro rate applicable to bulk
honey was set to zero while the rate for processed honey was decreased
to 5 percent. We further verified that the Reintegro rate for processed
honey was then set to zero in September 2001. As such, for the purposes
of establishing the countervailable subsidy rate for 2001, we weight-
averaged the Reintegro rates in effect during that year (5.4 percent
for bulk honey and 12 percent for processed honey through June 18, 2001
and 5 percent for processed honey from June 18, 2001 through September
16, 2001) by the FOB value of exports of bulk and processed honey to
the United States during these distinct periods in 2001. Therefore, the
countervailable subsidy rate for 2001 exports to the United States
applicable to this program is 5.352 percent ad valorem.
We verified the Reintegro rate was zero throughout 2002 for both
bulk and processed honey. Thus, both the countervailable subsidy rate
for 2002 and the cash deposit rate applicable to this program are zero.
2. Factor de Convergencia (Convergence Factor)
After the completion of verifications in both the instant review
and the concurrent antidumping duty administrative review, we learned
that on the record of the administrative review of the antidumping duty
order, there was verified information relating to a GOA program called
the factor de convergencia (Convergence Factor). Under this program, as
described in public information provided by several of the respondents
in the antidumping duty administrative review, exporters could claim a
payment from the GOA for a percentage of the FOB value of the exports.
According to this public information on the record, the rate of payment
was determined according to a formula accounting for the exchange rate
between the U.S. Dollar and the Euro. See memorandum to the file
placing public information regarding the Convergence Factor from the
antidumping review on the record of this review dated December 8, 2003
(CF Public Information Memo).
Our review of the record in the countervailing duty administrative
review shows that the GOA did not report the existence of this program.
The public information in the antidumping review identified a
resolution which addressed the operational interaction between the
Reintegro and the Convergence Factor. Resolution 470/2001, dated
September 17, 2001, had been submitted, in Spanish, as Exhibit 8 to the
GOA's April 14, 2003 countervailing duty questionnaire response.
Resolution 470/2001 consists of numerous articles: one directly
addressing the Reintegro rates for honey; another addressing the
interaction between Reintegro and the Convergence Factor. However, the
only article for which a translation was provided and discussed in the
questionnaire response was the article pertaining directly to the
Reintegro rates for honey.
In addition, the GOA provided no information about this program in
response either to questions regarding changes in Reintegro or to
questions regarding ``any other forms of assistance to producers and
exporters of subject merchandise.'' See the GOA's April 14, 2003
questionnaire response. Furthermore, in response to questions at
verification regarding whether the GOA implemented any additional forms
of assistance for exporters in lieu of Reintegro payments at the time
of or since the reduction of the Reintegro rates, officials of the
Production Ministry indicated that the GOA had implemented no such
measures. (See Reintegro Verification Report.)
On November 14, 2003, we requested that the GOA provide an
explanation of why it did not report the Convergence Factor to the
Department either in the questionnaire responses or at verification. On
November 20, 2003, the GOA stated that the Convergence Factor was not a
government subsidy program but an exchange rate mechanism that applied
to all foreign trade, both imports and exports. The GOA cited earlier
cases in which the Department made clear that exchange rate policies
that apply equally to imports and exports are not countervailable
(citing to Certain Electrical Conductor Aluminum Redraw Rod from
Venezuela; Final Affirmative Countervailing Duty Determination, 53 FR
24763 (June 30, 1988); Carbon Steel Wire Rod from Czechoslovakia;
Preliminary Negative Countervailing Duty Determination, 49 FR 6773
(February 23, 1984); and Carbon Steel Wire Rod from Poland; Preliminary
Negative Countervailing Duty Determination, 49 FR 6768 (February 23,
1984)). Moreover, the GOA maintained that since the Convergence Factor
had nothing to do with the concept of rebating indirect taxes, the
Convergence Factor cannot reasonably be understood to be a replacement
for the Reintegro program. As such, given that the Convergence Factor
operated as an exchange rate mechanism for imports and exports wholly
unrelated to the rebate of indirect taxes, the GOA maintained that it
did not report the Convergence Factor to the Department because it had
no reason to believe that the Department might consider the Convergence
Factor to be a subsidy program much less a replacement of the Reintegro
program.
In addition to stating that the Convergence Factor should not be
considered a subsidy program, the GOA stated that it was willing to
answer any additional questions that the Department had regarding the
operation of the Convergence Factor. The GOA argued that it would
rather the Department request specific information regarding the
Convergence Factor than have the Department draw any adverse inferences
from a perceived lack of response. The GOA contended that the
Department's general questions seeking information on new subsidy
programs or replacement programs for the reintegro could not reasonably
have been interpreted by the GOA to be seeking information on an
exchange rate mechanism like the Convergence Factor. Moreover, the GOA
argued that it would be unreasonable for the Department to draw any
adverse inferences from the record with regard to the Convergence
Factor without providing the GOA with an opportunity to respond to
specific questions regarding the Convergence Factor.
On December 2, 2003, the petitioners submitted comments and
information regarding the GOA's November 20, 2003 letter. On December
8, 2003, the GOA submitted additional comments
[[Page 69663]]
regarding the petitioner's December 2, 2003 letter. These comments and
information were submitted too late for consideration in these
preliminary results.
Sections 776(a)(2)(A) and 776(a)(2)(B) of the Act provide for the
use of facts otherwise available when an interested party withholds
information that has been requested by the Department, or when an
interested party fails to provide the information requested in a timely
manner and in the form required.
The GOA provided no information about the Convergence Factor in
response either to questions regarding changes in the Reintegro or
questions regarding any other forms of assistance provided to producers
and exporters of subject merchandise. (See the GOA's April 14, 2003
response to the Department's initial questionnaire.) Moreover, the
record also shows that when questioned at verification regarding
whether the GOA implemented any additional forms of assistance for
exporters in lieu of Reintegro payments at the time of or since the
reduction of the Reintegro rates, GOA officials stated that there were
no such measures. (See the Reintegro Verification Report.) Therefore,
because the GOA failed to provide information on the Convergence
Factor, the Department must resort to facts otherwise available.
Section 776(b) of the Act provides that, in selecting from among
the facts available, the Department may use an inference that is
adverse to the interests of a respondent, if it determines that a party
has failed to cooperate to the best of its ability.
The GOA's stated position for not providing information on the
Convergence Factor appears to be the following: (1) The Convergence
Factor was an exchange rate mechanism that was not an additional
subsidy which provided assistance to exporters; (2) exchange rate
mechanisms have nothing to do with the Reintegro; and (3) the
Department has found exchange rate policies which apply to imports and
exports to be not countervailable.
We disagree with the GOA's contention that it could not reasonably
be expected to provide information regarding the Convergence Factor in
response to the Department's question regarding any other forms of
assistance provided to producers and exporters of subject merchandise.
Clearly, the Convergence Factor is a form of assistance that was
provided to exporters of the subject merchandise during the POR. (See
CF Public Information Memo.) As such, it is reasonable to conclude that
the GOA was obligated to provide information regarding the Convergence
Factor in response to questions regarding other forms of assistance
provided to exporters of the subject merchandise. Moreover, it is
reasonable to conclude that the GOA was aware of its obligation to
provide information regarding the Convergence Factor in response to
questions regarding other forms of assistance provided to exporters of
the subject merchandise.
We note that, in response to the Department's question regarding
any other forms of assistance provided to producers and exporters of
subject merchandise, the GOA did provide information regarding a
provincial loan program called ``Convenio Programa MIPyMES
Agropecuarios Bonaerenses 2000'' which the GOA maintained was not
countervailable. (See ``Program Preliminarily Determined to be Not
Countervailable,'' below.) Since the GOA did report information on one
program which it believed to be not countervailable, the Department can
reasonably conclude that the GOA was aware of its obligation to report
programs like the Convergence Factor even though it may believe that
the Department should find a program such as the Convergence Factor to
be not countervailable.
We also disagree with the GOA's contention that it could not
reasonably be expected to provide information regarding the Convergence
Factor in response to the Department's questions regarding possible
replacements to the Reintegro program. In response to questions
regarding the Reintegro program, the GOA provided a Spanish version of
Resolution 470/2001 with a translation of Article 6 which set the
reintegro rate for processed honey to zero. In response to the
Department's November 14, 2003 letter which mentioned Article 2 of
Resolution 470/2001, the GOA stated that Article 2 provides that
``companies accruing a credit from the difference in exchange rates
would receive less of a reintegro rebate.'' Based even on this partial
translation of Resolution 470/2001, it is clear that the operation of
the Convergence Factor and the Reintegro were interrelated.
Moreover, a more complete translation of Article 2 shows that in
cases where the Convergence Factor is larger than the corresponding
Reintegro, only the Convergence Factor should be paid in lieu of the
Reintegro. (See Memorandum placing translation of Resolution 470/2001,
Article 2 on the record of this review, dated December 8, 2003.) As
such, the record shows that both the Convergence Factor and the
Reintegro program provided credits to exporters and the amount of
credits provided by the Convergence Factor and the Reintegro program
were limited by Article 2 of Resolution 470/2001. Since the GOA enacted
Resolution 470/2001, and Article 2 of said resolution governed the
interrelationship of the Convergence Factor and the Reintegro, it is
reasonable to conclude that the GOA was obligated to provide
information regarding the Convergence Factor in response to questions
regarding possible replacements to the Reintegro.
Finally, we disagree with the GOA's contention that the existence
of the cases it cited shows that the Department will not find a
multiple exchange rate countervailable. There are several
administrative cases where the Department has found multiple exchange
rates countervailable. (See, e.g., Final Affirmative Countervailing
Duty Determination; Certain Electrical Conductor Aluminum Redraw Rod
From Venezuela, 53 FR 24763 (June 30, 1988).) The Department's
decisions regarding multiple exchange rates like the Convergence Factor
are fact specific. Since the GOA failed to provide information on the
Convergence Factor, we must resort to facts otherwise available to make
our decision regarding the countervailability of the Convergence
Factor.
The GOA was aware of its obligation to report information regarding
the Convergence Factor and had the ability to report its own program.
Therefore, the Department preliminarily concludes that the GOA failed
to cooperate to the best of its ability. Accordingly, in applying the
facts otherwise available, the Department finds that an adverse
inference is warranted, pursuant to section 776(b) of the Act.
An analysis of the public information from the companion
antidumping duty review shows the following. On June 19, 2001, GOA
Decree 803/2001 modified the relationship between the Argentine Peso
and the U.S. Dollar, as applied to import/export transactions. The
Central Bank established a ``factor de convergencia'' or convergence
factor (CF) for import/export transactions. The CF did not affect the
convertibility plan for other types of U.S. Dollar transactions. The CF
mechanism acted as an export promotion instrument. Concurrent with
implementation of the CF, the GOA reduced the Reintegro for all
products by seven percent. GOA Decree 191/2002 apparently suspended the
CF on January 29, 2002. (See CF Public Information Memo.)
Public information from the companion antidumping duty review
indicates the GOA calculated the CF for
[[Page 69664]]
exporters on a daily basis using a formula accounting for the exchange
rate between the U.S. Dollar and the Euro (i.e., exporters exchanged
their U.S. Dollars into Argentine Pesos at a rate of one Peso equals 1
U.S. Dollar + (1 U.S. Dollar + 1 Euro)/2). (See CF Public Information
Memo.) As such, Argentine exporters ultimately converted their U.S.
Dollar payments to Argentine Pesos at a rate more advantageous than the
one-to-one parity established by the Convertibility Law. In making CF
claims, exporters apparently applied the officially published CF from
the date of their export declaration to the FOB value of the goods
exported. The GOA then paid the CF proceeds directly to the exporter.
The CF program provides a payment to exporters, calculated as a
percentage of the ``free on board'' (FOB) invoice price of an exported
product. These CF payments are issued by the GOA directly to exporters
and therefore, constitute a financial contribution to recipients under
section 771(5)(D)(I) of the Act. The CF program also provides a benefit
because the exchange rate established through this program allowed
exporters to convert U.S. Dollars to Argentine Pesos at a rate more
advantageous than the official one-to-one exchange rate mandated by the
GOA's Convertibility Law. Further, since receipt of CF payments is
contingent upon export performance, CF payments are specific under
section 771(5A)(D) of the Act.
In order to calculate the countervailable subsidy for the CF
program applicable to honey exports from June 19, 2001 through December
31, 2001, we obtained the official daily CF data through a search of
GOA websites, and we calculated an average CF for the period.\2\ We
then multiplied that average CF by the FOB value of honey exports to
the United States for the same period and divided that total by the
total FOB value of honey exports to the United States in 2001. As such,
the countervailable subsidy rate for the CF program applicable to 2001
is 0.060 percent ad valorem.
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\2\ The official CF data is available from the following GOA
website: http://www.afip.gov.ar/factor/inter_consulta.asp.
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For the purposes of establishing the countervailable subsidy rate
for 2002 and the cash deposit rate of estimated countervailing duties,
we obtained the official daily CF data for the period January 1, 2002
through January 29, 2002 (the date on which Resolution 191/2002
apparently suspended the Convergence Factor) and calculated an average
CF for that period. We then applied that average CF to the total FOB
value of honey exports to the United States for the same period. We
estimated the total FOB value of honey exports to the United States for
the period January 1, 2002 through January 29, 2002 by dividing the
total FOB value of honey exports to the United States in 2002 by 365
days and multiplying the daily FOB value by 29 days. We then divided
the total CF accrued during 2002 by the total FOB value of honey
exports to the United States in 2002. Therefore, we preliminarily
determine that the countervailable subsidy rate applicable to exports
in 2002 and the rate of cash deposit of estimated countervailing duties
applicable to this program is 0.477 percent ad valorem.
Section 776(c) of the Act provides that when the Department relies
on the facts otherwise available and relies on ``secondary
information,'' the Department shall, to the extent practicable,
corroborate that information from independent sources reasonably at the
Department's disposal. The Statement of Administrative Action, H.R.
Doc. 103-316 (SAA), states that ``corroborate'' means to determine that
the information used has probative value. See SAA at 870. To
corroborate secondary information, the Department will, to the extent
practicable, examine the reliability and relevance of the information
to be used.
In the instant review, we have relied on verified public
information from the companion antidumping duty review to calculate
countervailable subsidy and cash deposit rate applicable to the CF.
Since this public information obtained from the companion antidumping
duty proceeding was contemporaneous to the instant review and verified
in the context of the companion antidumping duty review we consider it
to be reliable and to have probative value. (See CF Public Information
Memo.) We also used public information obtained from a GOA Web site:
http://www.afip. gov.ar/. Because this is information issued by the GOA
independent of this administrative review, we consider it to be
reliable and to have probative value.
3. Regional Productive Revitalization Program
The GOA established the ``Regional Productive Revitalization:
National Program for the Promotion and Development of Local Productive
Initiative'' (Regional Productive Revitalization Program) to strengthen
the economies of small and medium-sized towns in the Argentine
interior. The program was established in 1995 with funds from the
national treasury allocated for use by the provinces. Although the
program was administered at the national government level, its
objective was to address financial emergencies and regional economic
devastation in the provinces. The program discontinued granting new
credits in the beginning of 1999. However, it remains operational as
long as the loans granted are outstanding and continue to be serviced.
The Regional Productive Revitalization Program provided credit for the
acquisition of capital goods, technology, working capital, training
needs, and technical assistance. During the time the program was fully
operational, two Argentine Peso-denominated loans were made to honey
producers. Those loans were outstanding during both 2001 and 2002. The
GOA reported that under Resolution 0324, dated September 16, 2002,
borrowers were permitted to refinance their loans under this program at
terms which differed for companies that had remained current in their
payment of interest and principal and for companies which had not
remained current with their loan repayment obligations.
In the Honey Final Determination, we determined that the Regional
Productive Revitalization Program was countervailable as a regional
subsidy. See Honey Issues Memo, at ``Regional Productive
Revitalization: National Program for the Promotion and Development of
Local Productive Initiative.'' There is no new information or evidence
of changed circumstances which would warrant reconsidering this
finding.
Consistent with our approach in the Honey Final Determination, we
are treating these two loans differently for the purposes of
calculating the benefit. For the first loan, we calculated the
Argentine Peso-denominated benefit for the loan by multiplying the
average loan balance outstanding during 2001and 2002 by the difference
between the loan interest rate charged and the benchmark interest rate.
For our benchmark interest rate, we selected from the information
provided by the Central Bank of Argentina, a rate for the type of loans
that most closely resembled the terms of this program. See ``Benchmark
Interest Rates and Discount Rates'' above.
For the second loan, in the Honey Final Determination, we
considered that this loan had been forgiven during 1999, the period of
investigation POI, and treated the amount of debt forgiven as a grant
conferred in that year. See 19 CFR Sec. 351.508. There is no new
information or evidence of changed circumstances which would warrant
treating this loan differently for purposes of these preliminary
results of
[[Page 69665]]
review. Therefore, we continue to treat this loan as debt forgiven in
1999. To calculate the benefit, we have allocated the resulting
Argentine Peso-denominated grant amount over the AUL of 10 years. See
section entitled ``Allocation Period'' above. We have used an
appropriate discount rate, as discussed in the ``Benchmark Interest
Rates and Discount Rates'' section, above. Separately for 2001 and 2002
we summed the Argentine Peso-denominated benefit amounts attributable
to each loan and converted the benefit amounts to U.S. Dollars using
the official exchange rate data provided by the GOA. We then divided
the U.S. Dollar-denominated benefits by the U.S. Dollar-denominated
value of honey produced in Argentina during 2001 and 2002, as
appropriate, to calculate a countervailable subsidy rate of 0.089
percent ad valorem for 2001 and 0.005 percent ad valorem for 2002. The
cash deposit rate of estimated countervailing duties for this program
is 0.005 percent ad valorem.
4. BNA Financing for the Acquisition of Goods of Argentine Origin
The financing for the Acquisition of Goods of Argentine origin
program was established by the Banco de la Naci[oacute]n Argentina
(BNA), a bank owned by the GOA, pursuant to Annex B to the BNA Circular
No. 10715/I. This line of credit is offered by BNA to companies
purchasing capital equipment manufactured in Argentina (defined as
having a maximum foreign component of 40 percent). Financing is
provided for up to five years, in an amount equal to 80 percent of the
purchase price of the equipment not to exceed US$500,000. There was one
loan under this program to a honey producer or exporter which was
outstanding during 2001 and 2002.
A program that is ``contingent upon the use of domestic goods over
imported goods, alone, or as 1 of 2 or more conditions,'' is an import
substitution subsidy under section 771(5A)(c) of the Act. Because this
financing is available only for the purchase of Argentine origin goods,
the BNA Financing for the Acquisition of Goods of Argentine Origin is
specific as an import substitution subsidy under section 771(5A)(c) of
the Act.
Loans under this program provide a financial contribution under
section 771(5)(D) of the Act in the form of a transfer of funds. To
determine whether there is a benefit, we compared the interest rate
charged on the loan provided under this program to the commercial
interest rate for loans that most closely resemble loans under this
program. (See ``Benchmark Interest Rates and Discount Rates'' above.)
Based on this comparison, the amount that the recipient pays is less
than the amount the recipient would have paid on a comparable
commercial loan that could actually be obtained on the market. Thus,
this line of credit provides a benefit under section 771(5)(E) of the
Act.
The Republic of Argentina followed a currency board system under
its Convertibility Law of maintaining parity between the Argentine peso
and the U.S. dollar until January 2002. Thus, the exchange rate for the
year 2001 was one Argentine Peso to one U.S. dollar. On January 6,
2002, Emergency Law No. 25,561 (Law 25,561) ended the one Argentine
peso-one U.S. dollar relationship. In addition, Article 6, paragraph 2
of Law 25,561 and Decree 214/2002 established the mandatory
restructuring of foreign currency-denominated debts \3\ at a
relationship of one U.S. Dollar-one Argentine Peso. This loan was
converted from U.S. Dollars to Argentine Pesos under Law 25,567 and
Decree 214/2002.
---------------------------------------------------------------------------
\3\ Law 25,567 and Decree 214/2002 converted all foreign
currency-denominated debts except those directly related to the
financing of exports.
---------------------------------------------------------------------------
Because this is a long-term fixed-rate loan, the benefit is
calculated by multiplying the average outstanding loan balance during
2001 by the difference between the interest rate charged under the
program and the benchmark interest rate in accordance with 19 CFR Sec.
351.505(c). We then divided this benefit amount by the U.S. Dollar
value of total honey production in Argentina during 2001. Thus, for
2001, we preliminarily determine that the value of any countervailable
benefits to honey producers or exporters under this program would have
no measurable impact on the overall subsidy rate (i.e., the rate is
less than 0.001 percent ad valorem).
Because this loan was converted from U.S. Dollars to Argentine
Pesos on January 29, 2002 pursuant to Law 25,567 and Decree 214/2002,
we consider that there was, in effect, a new long-term fixed rate
Argentine Peso-denominated loan made in 2002. We calculated the
countervailable subsidy for 2002 in five steps: (1) We multiplied the
average U.S. Dollar-denominated outstanding loan balance which existed
from January 1, 2002 through January 28, 2002 by the difference between
the interest rate for loans charged under the program and the benchmark
interest rate for U.S. Dollar-denominated loans; (2) we multiplied the
average Argentine Peso-denominated outstanding loan balance which
existed from January 29, 2002 through December 31, 2002 by the
difference between the interest rate charged under the program and the
appropriate benchmark interest rate for Argentine Peso-denominated
loans made during 2002; (3) we converted the 2002 Argentine Peso-
denominated benefit into U.S. Dollars using the official annual average
exchange rate data provided by the GOA; (4) we summed the two U.S.
Dollar-denominated benefits from the two periods in 2002; and (5) we
divided this U.S. Dollar-denominated amount by the U.S. Dollar value of
total honey production in Argentina during 2002. We thus preliminarily
find the countervailable subsidy from this program to be 0.001 percent
ad valorem for 2002. The cash deposit rate of estimated countervailing
duties is 0.001 percent ad valorem.
B. Provincial Programs
1. Province of San Luis Honey Development Program
The San Luis Honey Development Program (SLHDP) promoted honey
production to supplement the income of disadvantaged people in
underdeveloped areas in the province of San Luis through credit lines.
These long-term, fixed rate, and Argentine Peso-denominated loans were
made as part of a series of annual campaigns which took place from 1994
through 1999.
In the underlying investigation, the Department found the Province
of San Luis Honey Development Program to be countervailable. See Honey
Issues Memo, at ``Province of San Luis Honey Development Program.''
There is no new information or evidence of changed circumstances which
would warrant reconsideration of this finding.
In the underlying investigation we treated loans made under this
program as loans that had been forgiven during the 1999, the POI. See
19 CFR 351.508(a). In the instant review, the GOA reported that the
Province of San Luis had undertaken significant efforts to collect
payment on these loans. We verified that the Province of San Luis had
collected a few, very small payments in 2001 and 2002. However, the
amount collected was so small that it would have no impact on the
countervailable subsidy rate. As such, we need not address whether it
is appropriate to consider these payments as repayments of the subsidy.
Therefore, consistent with our methodology in the investigation, we
have summed the amounts disbursed through the program for the years
1994 through 1999, plus the accrued interest through 1999, when
[[Page 69666]]
the loans were effectively forgiven. We summed those amounts and added
the leasing amount for 1999 and then allocated this sum over the 10-
year average useful life of assets (AUL) used in the honey industry. We
used the 1999 annual average of long-term fixed Peso-denominated
interest rates as our discount rate. See ``Benchmark Interest Rates and
Discount Rates,'' and ``Allocation Period'' sections, above.
For the purposes of establishing the countervailable subsidy rate
for 2001, we converted the Argentine Peso-denominated benefit
attributable to 2001 into U.S. Dollars using the official exchange
rates provided by the GOA. We then divided this amount by the U.S.
Dollar value of honey production in the Province of San Luis during
2001. We then determined the countervailable subsidy attributable to
subject merchandise from this program by multiplying the calculated
subsidy rate by the percentage that honey from San Luis represents of
total honey exports to the United States during 2001. Thus, the
countervailable subsidy rate attributable to this program for 2001 is
0.141 percent ad valorem.
For the purposes of establishing the countervailable subsidy rate
for 2002, and the cash deposit rate, we converted the Argentine Peso-
denominated benefit attributable to 2002 into U.S. Dollars using the
official annual average exchange rate provided by the GOA. We then
divided this amount by the U.S. Dollar value of honey production in the
Province of San Luis during 2002. We then determined the subsidy
attributable to subject merchandise from this program by multiplying
the calculated subsidy rate by the percentage that honey from San Luis
represents of total honey exports to the United States during 2002.
Thus, the countervailable subsidy rate for 2002 and cash deposit rate
applicable to this program are 0.024 percent ad valorem.
2. Province of Chaco Line of Credit Earmarked for the Honey Sector
The Chaco government's Line of Credit Earmarked for the Honey
Sector funded efforts to increase honey production in the province. The
Chaco government offered long-term, fixed rate, Argentine Peso-
denominated loans to purchase hives as well as loans to improve access
to new bee breeds and for honey extraction rooms. These loans were made
as part of a series of annual campaigns which took place in 1995, 1997,
and 1999.
In the Honey Final Determination, we determined that the leasing
component of the Honey Program was countervailable. See Honey Issues
Memo, at ``Province of Chaco Line of Credit Earmarked for the Honey
Sector.'' There is no new information or evidence of changed
circumstances which would warrant the reconsideration of this finding.
However, in the instant review, based on the results of
verification, we find it appropriate to make one change to the
calculation of the benefit arising from this program. We calculated
outstanding balances for these loans to include outstanding interest
which accrued on these loans. In order to determine whether a benefit
existed, we compared the interest rate charged on loans provided under
this program to the commercial interest rates for loans that most
closely resemble loans under this program. Because these are long-term,
fixed rate, Argentine Peso-denominated loans, we selected from
information provided by the GOA a long-term benchmark from: 1995 to
apply to the 1995 tranche; 1997 to apply to the 1997 tranche; and 1999
to apply to the 1999 tranche. Based on this comparison, there is a
difference in the amount the recipient of the loan pays on the loan and
the amount the recipient would have paid on a comparable commercial
loan that the recipient could have actually obtained on the market.
Thus, this line of credit is providing a benefit, under section
771(5)(E) (ii)of the Act.
We calculated the amount of the benefit for 2001 in the following
steps: (1) We multiplied the average outstanding Argentine Peso-
denominated loan balances for 2001 by the interest rate differential;
(2) we converted the resulting the resulting Argentine Peso-denominated
benefit into U.S. Dollars using the official annual average exchange
rates provided by the GOA; (3) we divided this U.S. Dollar-denominated
benefit by the U.S. Dollar value of honey production in the Province of
Chaco during 2001: (4) we then determined the subsidy attributable to
subject merchandise from this program by multiplying the calculated
subsidy rate by the percentage that honey from the Province of Chaco
represents of total honey exports to the United States during 2001. We
find the countervailable subsidy from this line of credit to be 0.084
percent ad valorem for 2001.
For the purposes of establishing the countervailable subsidy rate
for 2002 and the cash deposit rate of estimated countervailing duties,
we calculated the amount of the benefit for 2002 in the following
steps: (1) We multiplied the average outstanding Argentine Peso-
denominated loan balances for 2002 by the interest rate differential;
(2) we converted the resulting Argentine Peso-denominated benefit into
U.S. Dollars using the official exchange rates provided by the GOA; (3)
because the GOA was unable to demonstrate that no honey produced in
Chaco was exported to the United States in 2002, we divided this U.S.
Dollar-denominated benefit by the U.S. Dollar value of honey production
in Argentina during 2002. Thus, the countervailable subsidy rate for
2002 and cash deposit rate applicable to this program are 0.019 percent
ad valorem.
3. Buenos Aires Honey Program
In 1996, the Province of Buenos Aires created the Buenos Aires
Honey Development Program (BAHP) to increase provincial honey
production, and improve production efficiency and quality. Through the
program, the Banco de la Provincia de Buenos Aires (Banco Provincia or
BAPRO), a bank owned by the government of the Province of Buenos Aires,
provides two types of credit lines to honey producers in the province:
the Line of Credit for Working Capital; and the Line of Credit for the
Acquisition of Capital Goods. Eligibility for both credit lines
requires honey producers to enroll in the Province's Registry of Honey
Producers. In addition, the Province of Buenos Aires provided Technical
Assistance at no charge to honey producers.
In the underlying investigation, we found all three elements of the
BAHP to provide countervailable subsidies. See Honey Issues Memo, at
``Buenos Aires Honey Program.'' There is no new information or evidence
of changed circumstances which would warrant reconsideration of this
finding. However, the GOA reported, and we verified, that no Technical
Assistance was provided under the BAHP during the POR.
A. The Line of Credit for Working Capital
The Line of Credit for Working Capital enables beekeepers to
finance their operating expenses. Beekeepers applying for this loan
must have a minimum of fifteen beehives. This line offers US$15.00 per
active producing beehive with no limit on the number of beehives. The
maximum term for repayment of the loan may not exceed 180 days from the
date of the loan.
The Banco Provincia offered two different rates under this line of
credit: (i) For products that will be exported, the applicable interest
rate is the market rate applied by Banco Provincia under its line of
credit for the pre-financing of exports: (ii) for all other cases, the
applicable interest rate is the market rate that Banco Provincia
charges under
[[Page 69667]]
all other credit facilities. There were no loans for the prefinancing
of exports under this line of credit with outstanding balances in 2001
or 2002
To calculate the 2001 benefit we multiplied the average U.S.
Dollar-denominated loan balance outstanding during 2001 by the
difference between the interest rate charged by this program and the
benchmark for short-term, U.S. Dollar-denominated loans (See
``Benchmark Interest Rates and Discount Rates'' section above).
Because loans made under this program were converted from U.S.
Dollars to Argentine Pesos on January 29, 2002 pursuant to Law 25,567
and Decree 214/2002, we consider this conversion to constitute, in
effect, a new loan made in 2002. To calculate the benefit for 2002 we
did the following: (1) We multipled the U.S. Dollar-denominated
outstanding loan balances which existed from January 1, 2002 through
January 29, 2002 by the difference between the interest rate for loans
charged under the program and the appropriate benchmark interest rate
for U.S. Dollar-denominated loans; (2) we then multiplied the-averaged
Argentine Peso-denominated outstanding loan balance which existed from
January 29, 2002 through December 31, 2002 by the difference between
the interest rate charged under the program and the appropriate
benchmark interest rate for short-term, Argentine Peso-denominated
loans made during 2002; and (3) we converted the 2002 Argentine Peso-
denominated benefit into U.S. Dollars using the official exchange rate
data provide by the GOA.
B. The Line of Credit for the Acquisition of Capital Goods
The Line of Credit for the Acquisition of Capital Goods under the
BAHP was implemented by the Banco Provincia through Circular ``A'' No.
13,854 in July 1997, pursuant to an agreement between the Banco
Provincia and Banco de Inversion y Comercio Exterior S.A. (BICE), and
utilizes funding provided through the BICE Norms 006 and 006/1. The
BICE is a GOA entity, which functions as a ``second tier'' bank,
lending money to other banks (both commercial and other government-
owned or controlled banks) for the purpose of implementing government
lending programs.
Under this line of credit, beekeepers are eligible to receive long-
term financing for the acquisition of capital goods including beehives,
new nuclei, inert material, and extraction and processing material,
among other goods. Financing for this line of credit carries a maximum
repayment term of five years. Interest rates are based on LIBOR, plus a
spread added by the BICE, and a spread added by the Banco Provincia.
The spreads given by both the BICE and Banco Provincia vary depending
upon the repayment schedule of the loan. All of the loans that had
outstanding loan balances during the POR were originally provided in
U.S. Dollars; but these balances were converted to Argentine Pesos on
January 29, 2002 in accordance with Law 25,567 and Decree 214/2002.
To calculate the 2001 benefit we multiplied the average U.S.
Dollar-denominated balance outstanding during 2001 by the difference
between the interest rate charged by this program and the benchmark for
long-term U.S. Dollar-denominated loans (See ``Benchmark Interest Rates
and Discount Rates'' section above).
As discussed above, loans made under this program were converted
from U.S. Dollars to Argentine Pesos pursuant to Law 25,567 and Decree
214/2002. As such, we consider that this conversion constitutes, in
effect, the provision of new loans made in 2002. We calculated the
benefit for 2002 in the following steps: (1) We multiplied the average
U.S. Dollar-denominated outstanding loan balances which existed from
January 1, 2002 through January 28, 2002 by the difference between the
interest rate for loans charged under the program and the appropriate
benchmark interest rate for U.S. Dollar-denominated loans; (2) we
multiplied the average Argentine Peso-denominated outstanding loan
balance which existed from January 29, 2002 through December 31, 2002
by the difference between the interest rate charged under the program
and the appropriate benchmark interest rate for long-term, Argentine
Peso-denominated loans made during 2002; and (3) we converted the 2002
Argentine Peso-denominated benefit into U.S. Dollars using the official
exchange rate data provide by the GOA.
Total Countervailable Subsidy From the Buenos Aires Honey Program
To calculate the total countervailable subsidy for 2001 from the
Buenos Aires Honey program, we did the following: (1) We summed all
dollar-denominated benefits arising from Loans for Working Capital and
Loans for the Acquisition of Capital Goods; (2) we divided this total
2001 benefit by the value of honey production in the Province of Buenos
Aires during the 2001; (3) we then determined the subsidy attributable
to subject merchandise from this program by multiplying the calculated
subsidy rate by the percentage that honey from the Province of Buenos
Aires represents of total honey exports to the United States during
2001. See section entitled ``Denominator Issues'' above. Thus, we
preliminarily determine the countervailable subsidy rate from the
Buenos Aires Honey Program for 2001 is 0.047 percent ad valorem.
To calculate the total countervailable subsidy for 2002 from the
Buenos Aires Honey program, we did the following: (1) We summed all
dollar-denominated benefits arising from Loans for Working Capital and
Loans for the Acquisition of Capital Goods; (2) we divided this total
2002 benefit by the value of honey production in the Province of Buenos
Aires during the 2002; (3) we then determined the subsidy attributable
to subject merchandise from this program by multiplying the calculated
subsidy rate by the percentage that honey from the Province of Buenos
Aires represents of total honey exports to the United States during
2002. See section entitled ``Denominator Issues'' above. Thus, we
preliminarily determine the countervailable subsidy rate from the
Buenos Aires Honey Program for 2002 and the rate of cash deposit of
estimated countervailing duties applicable to this program is 0.045
percent ad valorem.
II. Program Preliminarily Determined To Be Not Countervailable
Provincial Program
Buenos Aires Micro-, Small- and Medium-Sized Businesses (MIPyMEs)
Agreement for 2000 and the Buenos Aires Agricultural MIPyMEs Agreement
for 2000
The Province of Buenos Aires provided information on two
agreements: the ``Convenio Programa MIPyMEs Bonarenses 2000'' and the
``Convenio Programa MIPyMEs Agropecarias Bonarense 2000,'' which
together comprise the MIPyMEs Agreement. This program is administered
by the Banco de la Provincia de Buenos Aires (Banco Provincia or BAPRO)
and its goal is to preserve and assist in the development of small
businesses. MIPyMEs is the acronym for Micros, Peque[ntilde]as y
Medianas Empresas (micro- small-, and medium sized businesses).
Information about these programs was provided in response to the
Department's question regarding whether the GOA, or entities owned
directly, in whole or in part, by the government, provide, directly or
indirectly, any other forms of assistance to producers or exporters of
the subject merchandise.
Under the MIPyMEs Agreement, the government of the Province of
Buenos Aires, through Banco Provincia,
[[Page 69668]]
allocated US$ 50,000 for each of the agreements made under the Special
Programs of Support of Economic Activities of the Province of Buenos
Aires for the year 2000. The programs are to offset up to 7 annual
percentage points for loans issued by Banco Provincia during the year
2000 to micro-, small-, and medium-sized companies in the agricultural,
industrial, commercial, and services sectors within the Province of
Buenos Aires. In general, under the MIPyMEs Agreement, loans are
granted for purposes of working capital and investment. The terms
(length) of the loans varied and were based on the nature of the
borrower. For the honey sector, loans can be given up to US$ 20,000 and
have an interest rate for non-export transactions \4\ in foreign
currency. The Province can defray the interest on these loans up to
four percent annually.
---------------------------------------------------------------------------
\4\ According to the questionnaire response, dated April 14,
2003, this rate typically exceeds the rate associated with loans
that pertain to foreign trade, due to the perceived higher level of
risk associated with the transactions.
---------------------------------------------------------------------------
While eligibility for this program is limited to micro-, small- and
medium-sized businesses involved in agricultural, industrial,
commercial, and services sectors within the Province of Buenos Aires,
in accordance with 19 CFR Sec. 351.502(e), a subsidy is not specific
solely because the subsidy is limited to small firms or small- and
medium-sized firms. As such, we preliminarily determine that this
program is not de jure specific. We have analyzed whether the actual
use of these credit loans give rise to de facto specificity under
section 71(5A)(D)(iii) of the Act. Based on information examined at
verification, these loans were provided to a broad range of borrowers
within numerous industries in agriculture, industry, and services.
Honey producers received significantly less than one percent of the
loans, by value, under the MIPyMEs Agreement. Thus, there is no basis
for concluding that benefits under this program are de facto specific
to an enterprise or industry or group of industries within the meaning
of section 771(5A)(D)(iii) of the Act. Moreover, we found no evidence
to indicate that these loans were provided to finance exports or import
substitution.
As a result, we preliminarily determine that the loans offered
under the MIPyMEs Agreement are not countervailable subsidies within
the meaning of the Act.
III. Programs Preliminarily Determined To Be Not Used
We preliminarily determine that Argentine producers and exporters
of honey to the United States did not apply for or receive benefits
under the following programs during the POR.
A. Federal Programs
1. BICE Norm 001: Financing of Production of Goods Destined for
Export
2. BICE Norm 007: Line of Credit Offered to Finance Industrial
Investment Projects to Restructure and Modernize the Argentine Industry
3. BNA Line of Credit to the Agricultural Producers of the
Patagonia
4. BNA Pre-Financing of Exports Regime for the Agricultural Sector
5. Production Pole Program for Honey Producers
6. Enterprise Restructuring Program
7. SGRs--Government Backed Loans Guarantees
8. Fundacion Export *AR
9. PROAPI
B. Provincial Programs
1. Province of Entre Rios Honey Program
2. Province of Chabut: Province of Chabut Law No. 4430/98
3. Province of Santiago del Estero Creditos de Confinanzas (Trust
Credits)
Preliminary Results of Administrative Review
In accordance with section 777A(e)(2)(B) of the Act, we have
calculated CVD rates on an aggregate or industry-wide basis for exports
of subject merchandise in this administrative review. We have
calculated separate rates for 2001 and for 2002. We preliminarily
determine the total net countervailable subsidy rate is 5.77 percent ad
valorem for 2001 and 0.57 percent ad valorem for 2002.
If the final results of this administrative review remain the same
as the preliminary results, the Department will instruct CBP to
liquidate shipments of honey from Argentina entered, or withdrawn from
warehouse, for consumption from January 1, 2001 through December 31,
2001 at 5.77 percent ad valorem and shipments of honey from Argentina
entered, or withdrawn from warehouse, for consumption from January 1,
2002 through December 31, 2002 at 0.57 percent ad valorem. Also, the
rate of cash deposits of estimated countervailing duties will be set at
0.57 percent ad valorem for all shipments of honey from Argentina
entered, or withdrawn from warehouse, for consumption on or after the
publication of the final results of this administrative review. The
Department will issue appropriate assessment instructions directly to
the CBP within 15 days of publication of the final results of this
review.
Public Comment
Pursuant to 19 CFR Sec. 351.224(b), the Department will disclose
to parties to the proceeding any calculations performed in connection
with these preliminary results within five days after the date of
publication of this notice. Pursuant to 19 CFR Sec. 351.309,
interested parties may submit written comments in response to these
preliminary results. Unless otherwise extended, case briefs must be
submitted within 30 days after the date of publication of this notice,
and rebuttal briefs, limited to arguments raised in case briefs, must
be submitted no later than five days after the time limit for filing
case briefs. Parties who submit argument in this proceeding are
requested to submit with the argument: (1) A statement of the issue,
and (2) a brief summary of the argument. Case and rebuttal briefs must
be served on interested parties in accordance with 19 CFR 351.303(f).
Also, pursuant to 19 CFR 351.310, within 30 days of the date of
publication of this notice, interested parties may request a public
hearing on arguments to be raised in the case and rebuttal briefs.
Unless the Secretary specifies otherwise, the hearing, if requested,
will be held two days after the date of submission of rebuttal briefs,
that is, thirty-seven days after the date of publication of these
preliminary results.
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 351.309(c)(ii), 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.
This administrative review and notice are issued and published in
accordance with section 751(a)(1) and 777(i)(1) of the Act (19 U.S.C.
1675(a)(1) and 19 U.S.C. 1677f(1)).
Dated: December 8, 2003.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 03-30902 Filed 12-12-03; 8:45 am]