[Federal Register Volume 60, Number 50 (Wednesday, March 15, 1995)]
[Notices]
[Pages 13961-13963]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-6400]
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DEPARTMENT OF COMMERCE
[C-549-811]
Final Negative Countervailing Duty Determination: Disposable
Pocket Lighters From Thailand
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: March 15, 1995.
FOR FURTHER INFORMATION CONTACT: Elizabeth A. Graham, Office of
Countervailing Investigations, Import Administration, U.S. Department
of Commerce, Room 3099, 14th Street and Constitution Avenue, N.W.,
Washington, D.C. 20230; telephone (202) 482-4105.
Final Determination. The Department of Commerce (``the
Department'') determines that no benefits which constitute subsidies
within the meaning of section 701 of the Tariff Act of 1930, as amended
(``the Act''), are being provided to manufacturers, producers, or
exporters in Thailand of disposable pocket lighters.
Case History
Since the publication of the preliminary determination in the
Federal Register, 59 FR 40525 (August 9, 1994), the following events
have occurred.
On September 13, 1994, at petitioner's request, we extended the
final determination in this investigation to coincide with the final
determination in the companion antidumping investigation (59 FR 46961).
On November 3, 1994, respondents requested that the Department
postpone the final antidumping and countervailing duty determinations.
Therefore, on November 16, 1994, the Department published in the
Federal Register a notice postponing the final antidumping and
countervailing duty determinations until no later than March 8, 1995
(59 FR 59211).
We conducted verification of the responses submitted on behalf of
the Government of Thailand (GOT) and Thai Merry Co., Ltd. (Thai Merry)
from October 17-18, and on October 28, 1994, respectively. We received
case briefs on February 23, 1995, from petitioner and respondent, and
received a rebuttal brief from respondent on March 1, 1995.
Scope of Investigation
The products covered by this investigation are disposable pocket
lighters, whether or not refillable, whose fuel is butane, isobutane,
propane, or other liquified hydrocarbon, or a mixture containing any of
these, whose vapor pressure at 75 degrees fahrenheit (24 degrees
Celsius) exceeds a gauge pressure of 15 pounds per square inch. Non-
refillable pocket lighters are imported under subheading 9613.10.0000
of the Harmonized Tariff Schedule of the United States (``HTSUS'').
Refillable, disposable pocket lighters would be imported under
subheading 9613.220.0000. Although the HTSUS subheadings are provided
for convenience and Customs purposes, our written description of the
scope of this proceeding is dispositive.
Applicable Statute and Regulations
Unless otherwise indicated, all citations to the statute and to the
Department's regulations are references to the provisions as they
existed on December 31, 1994.
References to the Countervailing Duties: Notice of Proposed
Rulemaking and Request for Public Comments, 54 FR 23366 (May 31, 1989)
(Proposed Regulations), which were withdrawn on January 3, 1995 (60 FR
80), are provided solely for further explanation of the Department's
CVD practice. The subject matter of these regulations is being
considered in connection with an ongoing rulemaking proceeding which,
among other things, is intended to conform the Department's regulations
to the Uruguay Round Agreements Act.
Injury Test
Although Thailand is not a ``country under the Agreement'' within
the meaning of section 701(b) of the Tariff [[Page 13962]] Act of 1930,
as amended (``the Act''), the merchandise being investigated is non-
dutiable under the Generalized System of Preferences and Thailand is a
contracting party to the General Agreement on Tariffs and Trade.
Thailand, therefore, is entitled to an injury test on imports of the
subject merchandise pursuant to section 303(a)(2) of the Act. On June
20, 1994, the ITC preliminarily determined that imports of the subject
merchandise from Thailand materially injure, or threaten material
injury to, a U.S. industry.
Period of Investigation
For purposes of this final determination, the period for which we
are measuring bounties or grants (the period of investigation
(``POI'')) is calendar year 1993.
Analysis of Programs
Based upon our analysis of the petition, the responses to our
questionnaires, verification and comments made by interested parties,
we determine the following:
A. Programs Determined to be Countervailable
1. Section 31 of the Investment Promotion Act
The Investment Promotion Act of 1977 (``IPA'') provides incentives
for investment to promote the development of the Thai economy. The IPA
authorizes an array of tax exemptions and exclusions. The IPA is
administered by the Board of Investment (BOI) through promotion
certificates. These certificates list the various sections of the IPA
under which a company is eligible to receive benefits.
Under section 31, companies may obtain a three-to-eight year
exemption from payment of corporate income tax on profits derived from
promoted activities, as well as deductions from net profits for losses
incurred during the tax exemption period. The 1977 IPA Act has been
amended several times and, in 1991, the GOT passed the Investment
Promotion Act No. 2 of 1991. This 1991 Act was the law in effect during
the POI. Section 16 of this law states that eligible activities for
this exemption include `` * * * activities which involve production for
export.''
We verified that Thai Merry applied for and received section 31
income tax exemptions during the POI. The approval certificate received
by Thai Merry for participation in this program states that ``the
company has received a promoted status in the business for production
of gas lighters for export.''
Because Thai Merry received these benefits for exported lighters,
we determine that this program confers an export bounty or grant. To
calculate the benefit for the POI, we divided the tax savings by the
total value of export sales, pursuant to 355.47(c)(1)(ii) of the
Proposed Regulations (Countervailing Duties: Notice of Proposed
Rulemaking and Request for Public Comments, 54 FR 23366 (May 31,
1989)). On this basis, we calculated a net bounty or grant of 0.23
percent ad valorem.
Because this is the only countervailable program and the rate is de
minimis, pursuant to 19 CFR 355.7 (1994), we determine that no benefits
which constitute bounties or grants within the meaning of the
countervailing duty law are being provided to manufacturers, producers,
or exporters of disposable pocket lighters in Thailand.
B. Programs Determined to be Not Used
We established at verification that the following programs were not
used during the POI.
A. Industrial Estates/Export Processing Zones
B. Preferential Short-term Loans Under the Export Packing Credit
Program
C. Tax and Duty Exemptions Under the Investment Promotion Act (sections
28, 33, 34, 36(1), 36(2), 36(3) and 36(4)
D. Tax Certificates for Exporters
E. Rediscount of Industrial Bills
F. International Trade Promotion Fund
Interested Party Comments
Comment 1: Petitioner asserts that the Department should
countervail government subsidies provided to two plants which provide
assembly services under subcontract to Thai Merry. These assembly
plants are not owned by Thai Merry, although the materials processed in
these facilities are the property of Thai Merry. These assembly plants
were discussed in the course of the antidumping (AD) verification, not
in the CVD verification. Petitioner believes that because one of these
plants assembles safety-lock lighters, which are only sold in the
United States, the facility may be benefitting from being located in an
export processing zone. Petitioner asserts that unless respondent can
provide proof that these facilities are not located in an export
processing zone, the Department should presume that these plants
receive subsidies and that Thai Merry benefits from such subsidies, and
should apply a countervailing duty rate to Thai Merry based on BIA.
Respondent contends that petitioner's brief should be rejected due
to the inclusion of arguments based on information not on the record of
the CVD investigation. (The fact that Thai Merry subcontracted some
assembly operations to unrelated firms was only raised in the AD
investigation.)
Respondent emphasizes that the Department verified that Thai Merry
is not located in an export processing zone and that the company did
not benefit from this program during the POI. Additionally, respondent
asserts that since the Department chose not to verify the location of
the subcontractor's assembly plants in connection with the CVD
verification, it would be unfair to assign a margin to Thai Merry based
on BIA.
DOC Position: We consider petitioner's allegation untimely and,
therefore, have not considered its allegation in this investigation.
Pursuant to Sec. 353.31(c)(i) of the Proposed Regulations, ``the
Secretary will not consider any subsidy allegation submitted by the
petitioner or other interested party, as defined in paragraph (i)(3),
(i)(4), (i)(5), or (i)(6) of section 355.2, later than: (i) In an
investigation, 40 days prior to the scheduled date of the Secretary's
preliminary determination.'' Petitioner first alleged that subsidies
could have been provided to Thai Merry's unrelated assembly plants in
its case briefs, 13 days prior to the final determination.
We further note that section 355.39 of the Proposed Regulations
does not apply in this case. Section 355.39 provides that if ``the
Secretary discovers a practice which appears to provide a subsidy with
respect to the merchandise and the practice was not alleged or examined
in the proceeding, the Secretary will examine the practice if the
Secretary concludes that sufficient time remains before the scheduled
date for the Secretary's final determination or final results of
review.'' In the context of the companion AD investigation, the
Department verified that Thai Merry subcontracts certain of its
assembly operations. The Department then verified the location and
function of these plants, and the fact that Thai Merry did not own
these assembly plants. However, in the context of this proceeding, we
did not discover ``a practice which appears to provide a subsidy.''
Therefore, the Department would not have been obligated to conduct an
examination of the situation, even had there been ``sufficient time''
to do so.
We agree with respondents that it is inappropriate to apply BIA to
Thai Merry based on an unsupported allegation that subsidies may have
been granted to the assembly plants owned by its unrelated
subcontractor(s). Petitioner has not made a sufficiently
[[Page 13963]] detailed allegation either that the assembly plants
received countervailable benefits, or how such countervailable benefits
might be accruing to Thai Merry through either of these plants.
Petitioner has acknowledged that these assembly plants are not
owned by Thai Merry. Petitioner has provided no argument as to why the
Department should countervail alleged subsidies provided to an
unrelated subcontractor of a company under investigation. Therefore, we
conclude that Thai Merry did not benefit from this program.
Verification
In accordance with section 776(b) of the Act, we verified the
information used in making our final determination. We followed
standard verification procedures, including meeting with government and
company officials, examination of relevant accounting records and
examination of original source documents. Our verification results are
outlined in detail in the public versions of the verification reports,
which are on file in the Central Records Unit (Room B-099 of the Main
Commerce Building).
ITC Notification
In accordance with section 705(d) of the Act, we will notify the
ITC of our determination. Since we have determined that no bounties or
grants are being provided to manufacturers, producers or exporters of
disposable pocket lighters in Thailand, the investigation will be
terminated upon publication of this notice in the Federal Register.
Hence, the ITC is not required to make a final injury determination
with respect to this countervailing duty proceeding.
Return of Destruction of Proprietary Information
This notice serves as the only reminder to parties subject to
Administrative Protective Order (APO) of their responsibility
concerning the return or destruction of proprietary information
disclosed under APO in accordance with 19 CFR 355.34(d). Failure to
comply is a violation of the APO.
This determination is published pursuant to section 705(d) of the
Act and 19 CFR 355.20(a)(4).
Dated: March 8, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-6400 Filed 3-14-95; 8:45 am]
BILLING CODE 3510-DS-P