[Federal Register Volume 59, Number 1 (Monday, January 3, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 93-32072]


[[Page Unknown]]

[Federal Register: January 3, 1994]


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DEPARTMENT OF COMMERCE
[C-351-037]

 

Cotton Yarn From Brazil; 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: The Department of Commerce is conducting an administrative 
review of the countervailing duty order on cotton yarn from Brazil. We 
are terminating the review with respect to Companhia Brasileira de 
Fiacao, (CBF) and benefits received by this company are not included in 
the net subsidy rate of the Department's preliminary results.
    We preliminarily determine the net subsidy to be 0.30 percent ad 
valorem for all producers and exporters of cotton yarn from Brazil for 
the period January 1, 1992 through December 31, 1992. In accordance 
with 19 CFR 355.7, any rate less than 0.50 percent ad valorem is de 
minimis. We invite interested parties to comment on these preliminary 
results.

EFFECTIVE DATE: January 3, 1994.

FOR FURTHER INFORMATION CONTACT: Gayle Longest or Kelly Parkhill, 
Office of Countervailing Compliance, International Trade 
Administration, U.S. Department of Commerce, Washington, DC 20230; 
telephone: (202) 482-2786.

SUPPLEMENTARY INFORMATION:

Background

    On March 12, 1993, the Department of Commerce (the Department) 
published in the Federal Register a notice of ``Opportunity to Request 
Administrative Review'' (58 FR 13583) of the countervailing duty order 
on cotton yarn from Brazil (42 FR 14089; March 15, 1977) for the period 
January 1, 1992 through December 31, 1992. On March 31, 1993, the 
Government of Brazil requested an administrative review for that 
period. We initiated the review on May 6, 1993 (58 FR 26960). The 
Department is conducting this review in accordance with section 751 of 
the Tariff Act of 1930, as amended (the Act). When examining Brazilian 
customs information at verification, we found that export information 
for non-subject merchandise, combed cotton yarn, had been inadvertently 
included in the questionnaire response. Brazilian officials were not 
aware that the Harmonized Tariff Schedule (HTS) numbers that covered 
combed cotton yarn were not included in the scope of this order. At 
verification, we found that one respondent, CBF, had no shipments of 
the subject merchandise to the United States during the review period. 
Therefore, we are terminating the review with respect to this company. 
The final results of the last administrative review of this order were 
published in the Federal Register on February 2, 1993 (58 FR 6779).

Scope of Review

    Imports covered by this review are shipments of Brazilian yarn, 
carded but not combed, wholly of cotton. During the review period, such 
merchandise was classifiable under item numbers 5205.11.10, 5205.11.20, 
5205.12.10, 5205.12.20, 5205.13.10, 5205.13.20, 5205.14.10, 5205.14.20, 
5205.15.10, 5205.15.20, 5205.31.00, 5205.32.00, 5205.33.00, 5205.34.00, 
and 5205.35.00 of the HTS. The HTS item numbers are provided for 
convenience and Customs purposes. The written description remains 
dispositive.
    The review covers the period January 1, 1992 through December 31, 
1992, seven programs and the following eight producers/exporters of 
cotton yarn from Brazil: Companhia Industrial e Agricola Boyes, 
Companhia Textil do Vale, Cotonificio Guilherme Giorgi S.A., Fiacao 
Nordeste do Brasil S.A.--Finobrasa, Fiacao e Tecelagem Kanedo do Brasil 
S.A., Nisshinbo do Brasil Industria Textil Ltda., Toyobo do Brasil 
Industria Textil, and Unitika do Brasil Industria Textil Ltda.

Calculation Methodology for Assessment and Cash Deposit Purposes

    In calculating the benefits received during the review period, we 
followed the methodology described in the preamble to 19 CFR 355.20(d) 
(53 FR 52325; December 27, 1988). First, we calculated a country-wide 
rate, weight-averaging the subsidy rates of the eight companies subject 
to review to determine the overall subsidy from all countervailing 
programs benefitting exports of the subject merchandise to the United 
States. Because the overall weighted-average country-wide rate was de 
minimis, as defined by 19 CFR 355.7, we did not proceed any further in 
our analysis.

Analysis of Programs

(1) Program That Provided Benefits During the Period of Review

a. Reductions of Taxes and Import Duties Through BEFIEX
    The Commission for the Granting of Fiscal Benefits to Special 
Export Programs (BEFIEX) allows Brazilian exporters, in exchange for 
export commitments, to take advantage of several types of benefits, 
such as import duty reductions and accelerated depreciation for 
machinery used in the production of exports. Because this program 
provides tax reductions that are limited to exporters, we preliminarily 
determine that this program is countervailable. Brazilian Law 8.032 of 
April 12, 1990, eliminated this program for new projects. However, the 
Department has determined that residual benefits may continue due to 
outstanding BEFIEX contracts.
    Four cotton yarn exporters received import duty tax reductions and 
two of these cotton yarn exporters also received merchant marine 
freight tax reductions by virtue of their BEFIEX contracts during the 
review period.
    To calculate the benefit, we divided the amount of each firm's 
import duty reductions and merchant marine tax exemptions received in 
1992 by that firm's total exports in 1992. We then weight-averaged the 
benefits by each respondent's share of exports of the subject 
merchandise to the United States. On this basis, we preliminarily 
determine the benefit to be 0.30 percent ad valorem for all firms.

(2) Terminated Programs With No Residual Benefits During the Period of 
Review

a. Income Tax Reduction for Export Earnings
    This program was terminated effective April 12, 1990, by Decree Law 
8034 which established a uniform tax rate of 30 percent for domestic 
and export earnings beginning with tax year 1990. Since the last tax 
returns on which these benefits could be claimed were filed in 1991, 
there are no residual benefits from this program. (See Cotton Yarn From 
Brazil; Preliminary Results of Countervailing Duty Administrative 
Review, (56 FR 47456) and Cotton Yarn From Brazil; Final Results of 
Countervailing Duty Administrative Review, (57 FR 1454).)
b. CACEX (Carteira de Comercio Exterior) Preferential Working Capital 
Financing for Exports
    This program was terminated effective August 30, 1990, by Central 
Bank Resolution 1744. In accordance with Resolution 1744, there are no 
residual benefits from this program since all non-used portions of 
financing were cancelled when the program was eliminated. At 
verification, we saw no evidence of this financing at the companies.
c. IPI (Tax on Industrialized Products) for Imports of Machinery or 
Equipment Under Decree Law 2324
    This program was terminated effective December 28, 1989, by Decree-
Law 7988. Companies could benefit from the tax exemption until December 
31, 1990, and no residual benefits were provided after this date. At 
verification, we saw no evidence of IPI tax exemptions under Law 2324 
at the companies.

(3) Programs Not Used

    We also examined the following programs and preliminarily determine 
that the respondents did not use them during the review period:
    A. SUDENE Corporate Income Tax Reduction for Companies Located in 
the Northeast of Brazil.
    B. Preferential Export Financing under CIC-OPCRE of the Banco do 
Brasil.
    C. Preferential Financing for Industrial Enterprises by the Banco 
do Brasil (FST and EGF loans).

Verification

    As required under 19 CFR 355.36(a)(1)(iv)(B) of the Department's 
regulations, we verified Brazilian cotton yarn exporters because no 
verification had been conducted in either of the two immediately 
preceeding administrative reviews. We selected several companies for 
verification of both programs that were used and programs that were not 
used. When conducting verification of Brazilian customs information, we 
found that Brazilian officials had inadvertently reported export 
information for shipments of non-subject merchandise, combed cotton 
yarn, to the United States. According to Brazilian government records, 
CBF, a company originally included in this review, had no shipments of 
the subject merchandise to the United States during the review period. 
At the company, we examined company records and found no evidence of 
shipments of the subject merchandise to the United States during the 
review period.

Preliminary Results of Review

    As a result of our review, we preliminarily determine the net 
subsidy to be 0.30 percent ad valorem for all firms for the period 
January 1, 1992 through December 31, 1992. In accordance with 19 CFR 
355.7, any rate less than 0.5 percent ad valorem is de minimis.
    Therefore, in accordance with section 706(a)(1) of the Act (19 
U.S.C. 1671e(a)(1)), the Department intends to instruct the Customs 
Service to liquidate, upon publication of the final results of this 
review in the Federal Register, without regard to countervailing 
duties, all shipments of the subject merchandise from Brazil exported 
on or after January 1, 1992, and on or before December 31, 1992.
    The Department also intends to instruct the Customs Service not to 
collect cash deposits of estimated countervailing duties on any 
shipments of this merchandise from Brazil entered or withdrawn from 
warehouse, for consumption on or after the date of publication of the 
final results of this administrative 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 within 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). 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 Sec. 355.38(c), 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 in accordance with 
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 355.22.

    Dated: December 23, 1993.
Barbara R. Stafford,
Acting Assistant Secretary for Import Administration.
[FR Doc. 93-32072 Filed 12-30-93; 8:45 am]
BILLING CODE 3510-DS-P