NOTICES
DEPARTMENT OF COMMERCE
[C-357-005]
Certain Cold-Rolled Carbon Steel Flat-Rolled Products From Argentina;
Preliminary Results of Countervailing Duty Administrative Review
Friday, January 4, 1991
AGENCY: International Trade Administration/Import Administration, Commerce.
ACTION: Notice of preliminary results of countervailing duty administrative review.
SUMMARY: The Department of Commerce has conducted an administrative review of the
countervailing duty order on certain cold-rolled carbon steel flat-rolled products
from Argentina. We preliminarily determine the total bounty or grant for the period
January 1, 1987 through December 31, 1987 to be 0.77 percent ad valorem. We invite
interested parties to comment on these preliminary results.
EFFECTIVE DATE: January 4, 1991.
FOR FURTHER INFORMATION CONTACT: Lorenza Olivas or Maria MacKay, Office of
Countervailing Compliance, International Trade Administration, U.S. Department
of Commerce, Washington, DC 20230; telephone: (202) 377-2786.
SUPPLEMENTARY INFORMATION:
Background
On April 7, 1988, the Department of Commerce (the Department) published in the Federal
Register a notice of "Opportunity to Request Administrative Review" (53 FR 11540) of the
countervailing duty order on certain cold-rolled carbon steel flat-rolled products
from Argentina (49 FR 18006; April 26, 1984). On May 2, 1988, USX Corporation
requested an administrative review of the order. We initiated the review, covering the
period January 1,
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1987 through December 31, 1987, on May 23, 1988 (53 FR
18324). The Department has now conducted this review in accordance with section 751 of
the Tariff Act of 1930, as amended (the Tariff Act). This is the first administrative review
since the publication of the order.
Scope of Review
The United States, under the auspices of the Customs Cooperation Council, has developed
a system of tariff classification based on the international harmonized system of Customs
nomenclature. On January 1, 1989, the United States fully converted to the Harmonized
Tariff Schedule (HTS) as provided for in section 1201 et seq. of the Omnibus Trade and
Competitiveness Act of 1988. All merchandise entered, or withdrawn from warehouse, for
consumption on or after that date is now classified solely according to the appropriate
HTS item number(s).
Analysis of Programs
(1) Rebate Upon Export of Indirect Taxes Paid (Reembolso).
The reembolso is a tax rebate paid upon export and is calculated as a percentage of the
f.o.b. invoice price of the exported merchandise. In the final countervailing duty
determination, we determined that: (1) The reembolso is intended to operate as a rebate
of both indirect taxes and import duties; (2) the government conducted a study of
indirect tax incidence on inputs that are physically incorporated into the exported
product; and, (3) the rebate schedules are periodically revised to reflect the amount of
actual duties and indirect taxes paid.
On October 16, 1986, Decree 1555/86 modified the reembolso program "to make the tax
regime permanent and independent from other macroeconomic variables, responding
exclusively to the concept of the refund of indirect taxes." The new decree set more
precise and transparent guidelines to implement the refund of indirect taxes within the
context of the new law. Rather than different rebate rates for each product or industry
sector, there are now only three broad rebate levels. The rate for level I is 10 percent,
level II is 12.5 percent, and level III is 15 percent. Based on the government's 1986
calculation of the tax incidence in the cold-rolled carbon steel industry, certain
cold-rolled carbon steel flat-rolled products are classified in level II and received a 12.5
percent rebate in the review period.
Imports covered by the review are shipments of Argentine cold-rolled carbon steel
flat-rolled products, whether or not corrugated or crimped, whether or not painted or
varnished and whether or not pickled, not cut, not pressed, and not stamped to
non-rectangular shape, not coated or plated with metal; over 12 inches in width, and
0.1875 inch or more in thickness, as provided for during the review period in item
607.8320 of the Tariff Schedules of the United States (TSUSA); or over 12 inches in width
and under 0.1875 inch in thickness, whether or not in coils, provided for during the
review period in items 607.8350, 607.8355 or 607.8360 of the TSUSA. Such
merchandise is currently classifiable under the following HTS item numbers:
7209.11.00
7209.12.00
7209.13.00
7209.14.00
7209.21.00
7209.22.00
7209.23.00
7209.24.00
7209.31.00
7209.32.00
7209.33.00
7209.34.00
7209.41.00
7209.42.00
7209.43.00
7209.44.00
7209.90.00
7210.70.00
7211.30.50
7211.41.00
7211.49.50
7211.90.00
7212.40.50
The TSUSA and HTS item numbers are provided for convenience and Customs purposes.
The written description remains dispositive.
The review covers the period January 1, 1987 through December 31, 1987 and thirteen
programs.
The Department will determine that the reembolso does not confer a bounty or grant if
the tax rebate does not exceed the total amount of allowable indirect taxes and import
duties borne by inputs that are physically incorporated in the exported product, and
indirect taxes levied at the final stage.
We calculated the allowable tax incidence based on the 1986 study. We find that indirect
taxes on physically-incorporated inputs and final stage indirect taxes on certain
cold-rolled carbon steel flat-rolled products amounted to 13.60 percent during the
review period. Because the rebate of indirect taxes did not exceed the total amount of
indirect taxes paid, we preliminarily determine that there was no overrebate of indirect
taxes for the review period and, therefore, no benefit from this program during the review
period.
(2) Export Financing Under OPRAC 1, Circular RF-21
Under Circular RF-21, short-term export financing is provided by authorized commercial
banks to exporters of promoted goods. Upon receipt of foreign bills of exchange, the
commercial banks provide exporters with short- term loans for up to 80 percent of the
invoiced value of the exports covered by the bill. The loans are denominated in U.S.
dollars but are provided in australs at the exchange rate prevailing on the date of the loan
and are repaid in australs at the exchange rate prevailing on the date of repayment. The
maximum interest rates for these loans are set by the Central Bank. Because only
exporters are eligible to receive these loans, we preliminarily determine that these loans
are counteravailable to the extent that they are provided to exporters at preferential
rates. Only one company has RF-21 loans outstanding during the review period.
To calculate the benefit, we compared the amount of interest paid on each loan during the
review period with the amount that would have been paid on comparable short-term
commercial loans available in Argentina during the review period, adjusting for the
exchange rate differentials. We used as our benchmark the average of the monthly
regulated and non-regulated 1987 interest rates published by the Fundacion de
Investigaciones Economicas Latinoamericanas (FIEL). We allocated the benefit over the
company's total exports of the subject merchandise to the United States and then weight-
averaged the resulting by the company's share of the total Argentine exports of this
merchandise to the United States. On this basis, we preliminarily determine the benefit
from this program to be 0.41 percent ad valorem during the review period.
(3) Pre-financing of Exports under Circualr RF-153
In 1987, OPRAC-1, under Circular RF-153, authorized pre-export short-term loans to
exporters of the subject merchandise for up to 65 percent of the f.o.b. value of the
exported merchandise at an annual interest rate of one percent. The loans are
denominated in australs but indexed to U.S. dollars. The funds are provided by the
Central Bank of Argentina and disbursed by private commercial banks. The interest on
pre-export loans is payable at the end of each calendar quarter or when principal
payments are made. Because only exporters are eligible to recieve these loans, we
preliminarily determine that these loans are counteravailable to the extent that they are
provided to exporters at preferential rates. Only one company had loans outstanding
during the review period.
To calculate the benefit, we used the same methodology and the same benchmark as for
the RF-21 loans. We allocated the benefit over the company's
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total exports of the
subject merchandise to the United States and then weight-averaged the resulting benefit
by the company's share of total exports of this merchandise to the United States. On this
basis, we preliminarily determine the benefit from this program to be 0.36 percent ad
valorem during the review period.
(4) Other programs
We examined the following programs and preliminarily determine that exporters of
certain cold-rolled carbon steel flat-rolled products did not use them during the review
period:
- Medium and long-term loans under Law 22.510
- Preferential pricing for purchases of inputs
- Purchase of oil residue coal at preferential prices
- Capital and income tax exemptions
- Incentives for trade (stamp tax exemption under Decree 716)
- Equity infusions and capitalization
- Capital grants
- Government loan guarantees
- Incentives for export
- Forgiveness of debt
Preliminary Results of Review
As a result of our review, we preliminarily determine the total bounty or grant to be 0.77
percent ad valorem for all firms for the period January 1, 1987 through December 31,
1987.
The Department intends to instruct the Customs Service to assess countervailing
duties of 0.77 percent of the f.o.b. invoice price on all shipments of this merchandise
exported on or after January 1, 1987 and on or before December 31, 1987.
Further, the Department intends to instruct the Customs Service to collect cash deposits
of estimated countervailing duties, as provided by section 751(a)(1) of the Tariff Act,
of 0.77 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 the
final results of this 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 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
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). Any request
for disclosure under administrative protective order must be made no later than five days
after the date of publication. 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.
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: December 27, 1990.
Francis J. Sailer,
Acting Assistant Secretary for Import Administration.
[FR Doc. 91-100 Filed 1-3-91; 8:45 am]
BILLING CODE 3510-DS-M