NOTICES
DEPARTMENT OF COMMERCE
[C-357-004]
Carbon Steel Wire Rod from Argentina; Preliminary Results of Countervailing
Duty Administrative Review
Friday, June 7, 1991
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AGENCY: International Trade Administration/Import Administration
Department of Commerce.
ACTION: Notice of Preliminary Results of Countervailing Duty Administrative
Review.
SUMMARY: The Department of Commerce has conducted an administrative review of the
agreement suspending the countervailing duty investigation on carbon steel wire rod
from Argentina. The review covers the period January 1, 1989 through December 31,
1989 and three programs. We preliminarily determine that the Government of
Argentina and the exporter of carbon steel wire rod have complied with the terms of the
suspension agreement. We invite interested parties to comment on these results.
EFFECTIVE DATE: June 7, 1991.
FOR FURTHER INFORMATION CONTACT:Robert Bolling or Barbara Williams, Office of
Agreements Compliance, International Trade Administration, U.S. Department of
Commerce, Washington, DC 20230; telephone (202) 377-3793.
SUPPLEMENTARY INFORMATION:
Background
On August 31, 1990, the Department of Commerce ("the Department") published a notice
of "Intent to Terminate the Suspended Investigation" (55 FR 35704) of the revised
agreement suspending the countervailing duty investigation on carbon steel wire rod
from Argentina (51 FR 44649; December 11, 1986). On September 13, 1990, the
petitioners, Atlantic Steel Co., Bethlehem Steel Corp., Georgetown Steel Corp., North Star
Steel Texas, Inc., and Raritan River Steel Company, objected to termination. On
September 28, 1990, the petitioners requested an administrative review of the
suspension agreement. We initiated the review on October 26, 1991, covering the period
January 1, 1989 through December 31, 1989 (55 FR 43153). The Department has now
conducted this review in accordance with section 751 of the Tariff Act of 1930, as
amended ("the Tariff Act").
Scope of Review
Imports covered by this review are shipments of carbon steel wire rod from Argentina.
During the period of review, such merchandise was classifiable under items 7213.20.00,
7213.31.30, 7213.39.00, 7213.41.30, 7213.50.00, and 7313.49.00 of the Harmonized
Tariff Schedule (HTS). The HTS item numbers are provided for convenience and Customs
purposes. The written description remains dispositive.
Acindar Industria Argentina de Aceros, S.A. ("Acindar"), is the only known exporter of
Argentina carbon steel wire rod to the United States. The review covers the period
January 1, 1989 through December 31, 1989 and three programs: (1) The Reembolso; (2)
Pre-Export Financing; and (3) Post-Export Financing.
Analysis of Programs
(1) Reembolso
The reembolso is a rebate of indirect taxes on the production of exported goods, the
amount of which may reflect total or partial repayment of those taxes. Under the terms of
the suspension agreement, the Argentine government agreed not to provide any
reembolso overrebates on exports of carbon steel
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wire rod to the United States.
In the suspension agreement, the Department determined that the portion of the
reembolso that constituted an allowable rebate of indirect taxes was 7.6 percent of the
f.o.b. invoice price for carbon steel wire rod. During that period, rebate rates were
calculated by the Argentine government for each product or industry sector. On October
16, 1986, Decree 1555/86 modified the reembolso program by grouping industries into
three categories and setting new rebate levels for each category. Decree 1555 set the
levels at 10 percent for Level I, 12.5 percent for Level II, and 15 percent for Level III.
Based on this decree, carbon steel wire rod is included in Level I and, therefore, was
eligible to receive a rebate of 10 percent in the review period.
In its questionnaire response, Acindar provided a study of indirect tax incidence on
inputs that are physically incorporated into the exported product. While eligible for a
10.0 percent rebate, during verification we examined the tax incidence study and found
that Acindar did not exceed the 7.6 percent of allowable tax incidence stated in the
suspension agreement.
Therefore, we preliminarily determine that no overrebate of indirect taxes occurred and
that this program did not provide any counteravailable benefit to the carbon steel wire
rod exporter during the review period. Accordingly, we preliminarily determine that the
Government of Argentina and the exporter of carbon steel wire rod have complied with
the terms of the agreement.
(2) Pre-Export Financing
Prior to this review period, Circular RF-153 authorized pre-export financing for
short-term loans to the exporters of the subject merchandise. The funds were provided
by the Central Bank of Argentina and distributed through commercial banks.
On June 3, 1988, the Central Bank of Argentina issued Communique A-1205, which
combined past financing programs--pre-export financing, financing, and post- export
financing. Under Communique A-1205 pre-export financing loans are for 150 days and
the funds are distributed in the same manner as under RF-153. In its questionnaire
response, the Argentine government stated that Communique A- 1205 excluded from the
pre-export financing program exports of wire rod to the United States by excluding tariff
item number 73.10.01.00. On January 1, 1990, the financing system under Communique
A-1205 was partially suspended, and on March 8, 1991, Communique A-1807 totally
suspended pre-export financing.
During verification, we found that exports of wire rod during the review period were
registered under the Argentine tariff item number 73.15.10.00.00. Central Bank of
Argentina officials stated that Communique A-1205 was intended to disqualify all
carbon steel wire rod exports destined for the United States from eligibility for the
pre-export financing program and that tariff item number 73.15.10.00.00 was
inadvertently left off of the Communique. In addition, we examined a letter from the
Secretary of Trade to the President of the Central Bank, which was written when the
suspension agreement was published, requesting that all carbon steel wire rod exports to
the United States be excluded from export financing programs.
During verification, we examined Acindar's accounting records that found that the
Government of Argentina did not provide and Acindar did not receive pre- export
financing for exports of wire rod to the United States during the review period. Therefore,
we preliminarily determine that the Government of Argentina and the exporter of
carbon steel wire rod have complied with the terms of the agreement.
(3) Post-Export Financing
Communique A-228 authorized post-export financing for short-term loans to exporters
of the subject merchandise. The funds were provided by the Central Bank of Argentina
and distributed through commercial banks.
On June 3, 1988, the Central Bank of Argentina issued Commuinique A- 1205, which
combined past financing programs--pre-export financing, financing, and post-export
financing. Under Communique A-1205, post-export financing loans are for 180 days and
the funds are distributed in the same manner as under A-228. In its questionnaire
response, the Argentine government stated that Communique A-1205 excluded from the
post-export financing program exports of wire rod to the United States by excluding tariff
item numbers 73.10.01.00 and 73.15.07.00. On January 1, 1990, the financing system
under Communique A- 1205 was partially suspended, and on March 8, 1991,
Communique A-1807 totally suspended post-export financing.
As explained in the pre-export financing section, during verification we found that
exports of wire rod during the review period were registered under the Argentine tariff
item number 73.15.10.00.00. When we requested information on why tariff item number
73.15.07.00 was included in Communique A-1205 for post- export financing, the
Argentine government explained that the Central Bank's Communique for this tariff item
number was an administrative error and the correct tariff item number should be
73.15.10.00.00. Central Bank officials stated, again, that the intent of Communique
A-1205 was to exclude from financing program eligibility all carbon steel wire rod
exports destined for the United States.
During verification, we examined Acindar's accounting records and found that the
Government of Argentina did not provide and Acindar did not receive post- export
financing for exports of wire rod to the United States during the review period. Therefore,
we preliminarily determine that the Government of Argentina and the exporter of
carbon steel wire rod have complied with the terms of the agreement.
Other Programs
Although not covered by the suspension agreement, we examined the following programs
and preliminarily determined that Acindar did not use them or did not receive a benefit
during the review period:
Exemption from Stamp Taxes;
Incentives for Southern Ports;
Incentives for Northern Ports;
Low-Cost Financing for Trading Companies;
Tax Deduction Under Decree 173/85;
Regional Tax Incentives;
Industrial Parks;
Capital Tax Exemption;
Grants for Increased Exports Under the Program Especial de Exportaciones ("PEEX"); and
Foreign Exchange Insurance (Debt Restructuring).
Preliminary Results of Review
As a result of our review, we preliminarily determine that the Government of Argentina
and Acindar, the only exporter of wire rod to the United States during the period January
1, 1989 through December 31, 1989, complied with the terms of the suspension
agreement.
Interested parties may submit written comments on these preliminary results within 30
days of the date of publication of this notice and may request disclosure and/or a hearing
within 10 days of the date of publication. Any hearing, if requested, will be held 14 days
after the date of publication or the first workday thereafter. Rebuttal briefs and rebuttals
to written comments, limited to issues in those comments,
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must be filed not later
than 37 days after the date of publication. Any request for an administrative protective
order must be made no later than five days after the date of publication. The Department
will publish the final results of its analysis of issues raised in any such written comments
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: May 31, 1991.
Eric I. Garfinkel,
Assistant Secretary for Import Administration.
[FR Doc. 91-13556 Filed 6-6-91; 8:45 am]
BILLING CODE 3510-DS-M