Federal Register / Vol. 63, No. 115 /Tuesday, June 16, 1998 / Notices 32849

Manufacturer/exporter Margin

(percent)

Hyundai ....................................... 4.01

KISCO/Union .............................. 0.71

Shinho ......................................... 3.34

SeAH ........................................... 3.51

Parties to the proceeding may request

disclosure within five days of the date

of publication of this notice. In

accordance with the methodology in

First Review Final Results we calculated

exporter/importer-specific assessment

values by dividing the total dumping

duties due for each importer by the

number of tons used to determine the

duties due. We will direct Customs to

assess the resulting per-ton dollar

amount against each ton of the

merchandise entered by these importers’

during the review period.

Furthermore, the following deposit

requirements will be effective for all

shipments of welded non-alloy steel

pipe from Korea entered, or withdrawn

from warehouse, for consumption on or

after the publication date of these final

results of administrative review, as

provided by section 751(a)(1) of the Act:

(1) The cash deposit rate for the

reviewed companies will be the rates

established in the final results of this

administrative review (except no cash

deposit will be required for those

companies whose weighted-average

margin is de minimis, i.e., less than 0.5

percent); (2) for merchandise exported

by manufacturers or exporters not

covered in this review but covered in

the original less-than-fair-value

investigation or a previous review, the

cash deposit will continue to be the

most recent rate published in the final

determination or final results for which

the manufacturer or exporter received

an individual rate; (3) if the exporter is

not a firm covered in this review, the

previous review, or the original

investigation, but the manufacturer is,

the cash deposit rate will be the rate

established for the most recent period

for the manufacturer of the

merchandise; and (4) if neither the

exporter nor the manufacturer is a firm

covered in this or any previous reviews,

the cash deposit rate will be 4.80

percent, the ‘‘all others’’ rate established

in the less-than-fair-value investigation.

See LTFV at 42942.

This notice serves as a preliminary

reminder to importers of their

responsibility to file a certificate

regarding the reimbursement of

antidumping duties prior to liquidation

of the relevant entries during this

review period. Failure to comply with

this requirement could result in the

Secretary’s presumption that

reimbursement of antidumping duties

occurred and the subsequent assessment

of double antidumping duties.

This administrative review and notice

are in accordance with sections

751(a)(1) and 777(i)(1) of the Act.

Dated: June 8, 1998.

Robert S. LaRussa,

Assistant Secretary for Import

Administration.

[FR Doc. 98–15874 Filed 6–15–98; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

International Trade Administration

[C–559–001]

Certain Refrigeration Compressors

From the Republic of Singapore: Final

Results of Countervailing Duty

Administrative Review

AGENCY: Import Administration/

International Trade Administration/

Department of Commerce.

ACTION: Notice of Final Results of

Countervailing Duty Administrative

Review.

SUMMARY: On December 9, 1997, the

Department of Commerce published the

preliminary results of its administrative

review of the agreement suspending the

countervailing duty investigation on

certain refrigeration compressors from

the Republic of Singapore.

In our preliminary results of review,

we preliminarily determined that the

signatories to the suspension agreement

complied with the terms of the

suspension agreement during the period

of review (POR). We gave interested

parties an opportunity to comment on

our preliminary results. We received

comments from petitioner and

respondents.

We have now completed this review,

the thirteenth review of this Agreement,

and determine that the Government of

the Republic of Singapore (GOS),

Matsushita Refrigeration Industries

(Singapore) Pte. Ltd. (MARIS), and Asia

Matsushita Electric (Singapore) Pte. Ltd.

(AMS), the signatories to the suspension

agreement, have complied with the

terms of the suspension agreement

during the period April 1, 1995 through

March 31, 1996. Based on our analysis

of the comments received, we have not

changed the results from those

presented in the preliminary results of

review.

EFFECTIVE DATE: June 16, 1998.

FOR FURTHER INFORMATION CONTACT:

Robert Bolling or Rick Johnson, Import

Administration, International Trade

Administration, U.S. Department of

Commerce, 14th Street and Constitution

Avenue, N.W., Washington, D.C. 20230;

telephone: (202) 482–3434 or 482–0165,

respectively.

SUPPLEMENTARY INFORMATION:

Applicable Statute and Regulations

Unless otherwise indicated, all

citations to the Tariff Act of 1930, as

amended (‘‘the Act’’), are references to

the provisions effective January 1, 1995,

the effective date of the amendments

made to the Act by the Uruguay Round

Agreements Act (‘‘URAA’’). In addition,

unless otherwise indicated, all citations

to the Department’s regulations are to

the regulations set forth at 19 CFR part

355 (April 1997).

Background

On December 9, 1997, the Department

of Commerce (the Department)

published in the Federal Register (62

FR 64806) the preliminary results of its

administrative review of the agreement

suspending the countervailing duty

investigation on certain refrigeration

compressors from the Republic of

Singapore. We received comments from

interested parties on our preliminary

results. Additionally, the Department

sent out a supplemental questionnaire

to the respondents on December 22,

1997 to obtain additional information

on testing of the subject merchandise.

Petitioner provided comments to

respondents’ subsequent January 6,

1998 submission on January 7, 1998.

See Comments 3 and 6 below. We have

now completed this administrative

review in accordance with section 751

of the Act.

Scope of the Review

Imports covered by this review are

shipments of hermetic refrigeration

compressors rated not over one-quarter

horsepower from Singapore. This

merchandise is currently classified

under Harmonized Tariff Schedule

(HTS) item number 8414.30.40. The

HTS item number is provided for

convenience and Customs purposes.

The written description remains

dispositive.

The review covers the period April 1,

1995 through March 31, 1996, and

includes three programs. The review

covers one producer and one exporter of

the subject merchandise, MARIS and

AMS, respectively.

Under the terms of the suspension

agreement, the GOS agrees to offset

completely the amount of the net

bounty or grant (subsidy) determined by

the Department in this proceeding to

exist with respect to the subject

merchandise. The offset entails the
32850 Federal Register / Vol. 63, No. 115 /Tuesday, June 16, 1998 / Notices

collection by the GOS of an export

charge applicable to the subject

merchandise exported on or after the

effective date of the agreement. See

Certain Refrigeration Compressors from

the Republic of Singapore: Suspension

of Countervailing Duty Investigation

(‘‘Suspension Agreement’’), 48 FR

51167, 51170 (November 7, 1983).

Analysis of Comments Received

Comment 1: Respondents argue that

the Department should notify the GOS

that it may refund the entire amount of

the provisional export charge collected

with respect to past imports with

respect to this POR. Additionally,

respondents argue that the Department

should establish a zero provisional

export charge for future exports of the

subject merchandise.

First, respondents argue that the

Department has consistently

maintained, with respect to both

antidumping and countervailing duty

proceedings, that there is no difference

between a de minimis and a zero

subsidy, citing, inter alia, Final Negative

Countervailing Duty Determination:

Certain Steel Products from South

Africa, (58 FR 62100, 62103, 62104

November 24, 1993). Additionally,

respondents note that the Department’s

prior regulations stated that ‘‘[a] de

minimis margin is considered a zero

margin.’’ See Countervailing Duties

Final Rule, 53 FR 52306, 52327

(December 27, 1988). Moreover,

respondents argue that the Department’s

May 1997 regulations (which the

Department notes do not govern this

review) state that a de minimis margin

is the same as ‘‘a zero margin.’’ See

Antidumping Duties, Countervailing

Duties, 62 FR 27296 (May 19, 1997)(to

be codified at 19 C.F.R. Section

351.106(b)). Respondents also note that

the Statement of Administrative Action

(‘‘the SAA’’) states that ‘‘de minimis

margins are regarded as zero margins.’’

See Statement of Administration Action,

in Uruguay Round Trade Agreements,

Texts of Agreements, Implementing Bill,

Statement of Administrative Action, and

Required Supporting Statements, H.R.

Doc. No. 103–316, 103d Cong. 2d Sess.

(1994) at 844 (the ‘‘SAA’’). Finally,

respondents argue that the Court of

International Trade (CIT) did not review

a de minimis finding on the grounds

that doing so would be to provide an

advisory opinion on a case in which no

subsidization was found. See

Georgetown Steel Corp. v. United States,

810 F. Supp. 318, 321 (Ct. Int’l Trade

1992). Therefore, respondents argue that

former and current law, current

Commerce regulations and the CIT

support the treatment of a de minimis

margin as a zero margin, and thus the

Department has no authority to impose

or establish a de minimis export charge.

Second, respondents argue that the

Department has stated that, as a matter

of policy, it is a waste of resources to

offset de minimis subsidies, because it

is costly and has a minimal impact on

the market. See Antidumping Duties

and Countervailing Duties: De Minimis

Margins and De Minimis Subsidies, 52

FR 30660, 30661 (August 17, 1987) (‘‘it

would be unreasonable for the

Department and the U.S. Customs

Service to squander their scarce

resources administering orders for

which the dumping margins and net

subsidies are below 0.5%’’).

Respondents assert that this rationale

also applies in the context of a

suspension agreement, and provides the

Department an additional reason to

modify its preliminary administrative

review results.

Lastly, respondents argue that

requiring the GOS to collect a de

minimis export charge would be

contrary to the intent of the suspension

agreement. Respondents assert that the

suspension agreement was intended to

offset the amount of the net subsidy

through an export charge, and this

charge should be neither smaller nor

greater than the duty Customs would

collect. According to respondents,

requiring the collection of a de minimis

export charge, when there would be no

countervailing duty imposed on imports

under a CVD order, would contravene

the requirement of the suspension

agreement that the export charge offset

(but not exceed) the amount of the

subsidization.

Petitioner argues that the suspension

agreement and the countervailing duty

law require that all bounties and grants

be countervailed. Petitioner asserts that

the terms of the agreement require the

GOS ‘‘to offset completely the amount of

the net bounty or grant determined by

the Department in this proceeding to

exist with respect to the subject

product.’’ See Suspension Agreement at

51169. Petitioner also argues that there

is not a de minimis threshold within the

suspension agreement governing this

proceeding.

Petitioner notes that the authorization

for suspension agreements from the

Tariff Act of 1930, as amended, section

704(b)(1), states the foreign government

or exporters of the product must agree

‘‘to eliminate the countervailable

subsidy completely or to offset

completely the amount of the net

countervailable subsidy.’’ Petitioner

argues that the language of the

suspension agreement specifically states

that the subsidy is to be ‘‘offset

completely’’ and the Department does

not have the authority to disregard that

language as respondents have requested.

Petitioner asserts that the language of

the agreement cannot be changed, and

to do so would not be consistent with

the Act.

Petitioner argues that the respondents

suggest that the regulatory and statutory

provisions setting the de minimis

standards in investigations and reviews

of contested orders prevail over the

language of the agreement and section

704(d) of the Act. Petitioner states that

the May 1997 regulations are aimed at

the conduct of investigations in

disputed cases or the review of results

in those cases. Thus, petitioner

maintains that the language of the Act

(specifically, the de minimis

provisions), cannot be applied to the

monitoring of a suspension agreement.

Moreover, petitioner asserts that the

monitoring provision in the Act (section

704(d)) is not to be used to ‘‘import’’

rules from other areas of countervailing

duty enforcement. Therefore, petitioner

argues that the provisions of the Act and

the May 1997 regulations are not

applicable to this case because the

respondents have exercised their right

to arrive at an ad hoc arrangement (i.e.,

the suspension agreement) to ‘‘modify

* * * behavior so as to eliminate

dumping or subidization * * *’’ See 19

CFR section 351.208(a), 62 FR 27388.

Petitioner rebuts respondents’

argument that the collection of the

export charge would waste the

Department’s resources, asserting that

because all parties agreed to the

suspension agreement, both the

Department and the respondents have

saved resources by avoiding the final

phase of the investigation. Lastly,

petitioner argues that respondents’

claim that requiring the GOS to collect

a de minimis export charge would be

contrary to the suspension agreement is

inconsistent with the principles of

contract interpretation; namely, only

when the contract terms are ambiguous

is it proper to look outside to divine

some intent. Since the de minimis

standard is not found in the suspension

agreement, petitioner argues that it

cannot be read into the agreement.

Petitioner asserts that respondents’

reliance upon Georgetown Steel is

misplaced because the CIT did not reject

a challenge to the de minimis

determination, but instead declined to

reach additional issues because the

Department’s de minimis calculation in

that case was not disturbed.

Furthermore, petitioner argues that

respondents have not presented any

evidence or legal argument to disregard

the meaning of the suspension
Federal Register / Vol. 63, No. 115 /Tuesday, June 16, 1998 / Notices 32851

agreement, citing a decision of the Court

of Appeals for the Federal Circuit which

stated that if the ‘‘provisions are clear

and unambiguous, they must be given

their plain and ordinary meaning . . .

and the court may not resort to extrinsic

evidence to interpret them.’’ See

McAbee Construction, Inc. v United

States, 97 F.3d 1431, 1435 (Fed. Cir.

1996)(citation omitted).

Department’s Position: We agree with

respondents. The Department’s policy

with respect to a de minimis and or a

zero subsidy is clear. The applicable

Department regulations for this review

state that ‘‘the Secretary will disregard

any aggregate net subsidy that the

Secretary determines is less than 0.5%

ad valorem or the equivalent specific

rate.’’ See 19 CFR 355.7. Additionally,

petitioner’s argument for requiring the

GOS to continue to offset the net bounty

or grant is not accurate. First, the

Department’s regulations apply equally

to administrative reviews and/or

suspension agreements. Suspension

agreements must be written in

accordance with the same statute and

regulations which govern the review of

an order. We agree with respondents

that the Department has held that if a

subsidy is de minimis there are no

benefits to constitute bounties or grants

within the meaning of the

countervailing duty law. See Certain

Steel Products from South Africa, 58 FR

62100, 62103 (November 24, 1993).

While petitioner is correct that the

suspension agreement does not have a

de minimis threshold within its text,

such language is unnecessary, precisely

because the Department’s CVD

regulations govern the review of the

agreement.

Second, petitioner’s argument that the

suspension agreement requires that the

GOS ‘‘offset completely the amount of

the net bounty or grant’’ has merit only

when that net bounty or grant is above

a de minimis level. Although the

suspension agreement does not provide

for de mimimis language in the text of

the agreement, the Department’s

regulations make it clear that, ‘‘the

Secretary will treat as de minimis any

. . . countervailable subsidy rate that is

less than 0.5 percent ad valorem, or the

equivalent specific rate.’’ See 19 CFR

Section 355.7. If the suspension

agreement were an order, the

Department would not require the U.S.

Customs Service to collect duties.

Therefore, the Department has no basis,

either through the applicable statute,

regulations, or case precedent to require

the GOS to continue collecting an

export charge for the subject

merchandise. Of course, any subsequent

review for which the Department finds

a countervailable subsidy above de

minimis would result in the resumption

of the collection of cash deposits on

subject merchandise.

Comment 2: Petitioner argues that the

Department should capture benefits

which MARIS and AMS have accrued

after the results of administrative

reviews have become final. Petitioner

asserts that the current administrative

review revealed evidence that

respondents may have received

preferential tax benefits in prior

administrative reviews that were not

included in the relevant final results for

those administrative reviews. Petitioner

asserts that under Singaporean law,

respondents have up to six years to

negotiate their final tax assessment, and

the results of an administrative review

may become final before taxes are

finalized. Therefore, petitioner

maintains that these tax benefits may

never become part of the Department’s

calculations.

Petitioner asserts that the suspension

agreement clearly states that all benefits

received by the respondents are to be

offset by payments to the GOS.

Petitioner states that Singapore’s tax

collection methodology permits and

encourages avoidance of the intended

purpose of the suspension agreement,

which is to offset completely the tax

benefit. Petitioner contends that to

correct this problem, the Department

should require respondents to submit

information on their tax liabilities made

final during any POR, regardless of

when they accrued, and then adjust the

current administrative review

calculations to reflect the benefits

received from prior administrative

reviews. In doing so, the Department

will capture any benefits that

respondents may have received from the

tax programs, and eliminate incentives

to delay finalization of tax liabilities

until after the results of the

Department’s administrative review

have become final. Petitioner contends

that following its suggested solution

would not require the Department to

reopen past inquires, but would simply

recognize that benefits become effective

when the final tax liability is

determined, i.e., in the then-current

POR.

Respondents argue that there is no

basis for the Department to reexamine

benefits allegedly provided by the GOS

in prior reviews. According to

respondents, petitioner contends that in

this administrative review it was

revealed for the first time that the

operation of the Singapore tax system

may have resulted in respondents

receiving preferential tax benefits in

prior years that were not included in the

final administrative results of prior

reviews. However, respondents argue

that the Singaporean tax system has

been in effect since before the petition

was filed, and the Singaporean tax

system allows a taxpayer to object to his

initial tax assessment and continue to

negotiate the final amount of assessment

by the GOS within a certain time period.

Thus, respondents argue that the

Department and the petitioner have

been made aware of Singapore’s tax

system prior to the current review.

Respondents also note that they have

described the tax system process in past

administrative reviews. Additionally,

respondents assert that they have

submitted provisional tax computations

in prior administrative reviews, and that

this fact should have alerted the

Department and petitioner that the tax

computations were not final. Moreover,

respondents assert that in the twelfth

administrative review, the Department

used MARIS’ (then-) most recent tax

computations to calculate the export

charge, although the tax computations

were not final. See Certain Refrigeration

Compressors from the Republic of

Singapore: Final Results of

Countervailing Duty Administrative

Review, 62 FR 36045 (July 3, 1997).

Second, respondents argue that, as a

matter of law, prior administrative

reviews cannot be reopened.

Respondents assert that under U.S. law,

each administrative review is a separate

proceeding, conducted based upon its

own record. See 19 USC Sec. 1675(a)(1).

Additionally, respondents assert that

entries covered in prior administrative

reviews cannot be assessed an

additional export charge once their

countervailable status has been

determined. See FAG Kugelfischer Geor

Schafer KgaA v. United States, 932 F.

Supp. 315 (Ct. Int’l Trade 1996).

Third, respondents argue that during

the course of this suspension agreement

and other Departmental proceedings,

the Department’s practice has been to

calculate Economic Expansion

Incentives Act (EEIA) tax benefits based

on the latest tax calculations that the

respondents submitted for that POR.

Additionally, respondents maintain that

the Department does not change a

methodology it has regularly utilized

absent some intervening change in basic

fact or law, and that neither of these

events has occurred in this case.

Lastly, respondents argue that the

suspension agreement does not allow

adjustments to an export charge once a

final export charge has been set.

Therefore, respondents argue that the

Department should continue its practice

of basing its calculation of any benefit

MARIS receives from Part VI of the
32852 Federal Register / Vol. 63, No. 115 /Tuesday, June 16, 1998 / Notices

EEIA on MARIS’ most recent tax

computation.

Department’s Position: The

Department’s analysis of the benefits

received through EEIA Part VI yielded

an ad valorem rate of 0.23 percent. We

note that, even if we were to recalculate

the margin based on the revised tax

figures, the total countervailing duty

rate calculated for AMS and MARIS

during the POR would remain de

minimis. See The Department’s

Calculation Methodology Memorandum:

Export Charge Rate Calculation for the

Final Results of the Thirteen

Administrative Review—Certain

Refrigeration Compressors from

Singapore (April 1, 1995—March 31,

1996 (June 8, 1998).

Comment 3: Petitioner argues that

respondents have failed to explain

discrepancies in reported volume and

value of sales. Petitioner asserts that

AMS sales of subject merchandise were

approximately 23% higher than MARIS’

production, although MARIS is AMS’

sole supplier. Petitioner notes that

respondents stated in their October 7,

1997 submission that the discrepancy

was due to the fact MARIS and AMS

booked their sales when made, thus

creating differences in the timing of

when a particular sale is reported, and

that AMS receives a greater price for the

compressors it sells than it pays to

MARIS. Petitioner asserts that minor

timing differences alone cannot explain

the discrepancy.

Petitioner argues that the explanation

the Department obtained at verification

did not provide an adequate reason for

this discrepancy. Petitioner notes that at

verification respondents provided

another explanation for the discrepancy

in volume and value; specifically, that

MARIS’ engineers performed tests ‘‘to

determine which compressors were 1/4

horsepower or less based on generally

accepted standard engineering

principles,’’ and that MARIS discovered

that its and its parent company’s

manuals and sales literature did not

correlate, and that some of MARIS’ sales

thus had been misclassified as subject

merchandise. However, petitioner

argues that MARIS’ data provided at

verification does not explain the

continuing discrepancy in volume and

value because a discrepancy continues

to exist from the questionnaire

responses. Petitioner asserts that

respondents have not explained why the

explanation in their October 7, 1997

response differs from the explanation

provided at verification. Additionally,

petitioner states that it is unclear when

MARIS’ engineers performed the

engineering tests to determine which

compressors were subject merchandise.

Moreover, petitioner asserts that even if

MARIS’ tests were accurate, they are not

relevant, because the agreement covers

refrigeration compressors ‘‘rated’’ not

greater than 1/4 horsepower, regardless

of whether they in fact are. Petitioner

argues that refrigeration compressors

that respondents found to be over 1/4

horsepower were nevertheless rated

(i.e., labeled, identified, advertised and

sold by MARIS and AMS) as falling

within the scope of the agreement and

therefore are subject merchandise.

Lastly, petitioner argues that the

discrepancy cannot be explained away

by the respondents testing explanation

because any knowledgeable engineer or

salesman can convert BTU ratings into

horsepower without the need for tests.

Petitioner also argues that the data

provided by respondents concerning

testing of their units and their attempt

to explain discrepancies in reported

units sold constitute new information

submitted in an untimely fashion.

Petitioner asserts that the Department

should reject this information in

accordance with its long-standing policy

of rejecting new information. See Final

Determination of Sales at Less Than

Fair Value: Certain Cut-to-Length

Carbon Steel Plate from the People’s

Republic of China, 62 FR 61964

(November 20, 1997), Final

Determination of Sales at Less Than

Fair Value: Certain Cut-to-Length

Carbon Steel Plate from the Russian

Federation, 62 FR 61787, 61790

(November 19, 1997), Certain Helical

Spring Lock Washers from the People’s

Republic of China, 62 FR 61794

(November 19, 1997), and Final Results

of Antidumping Duty Administrative

Review: Stainless Steel Bar from India,

62 FR 37030 (July 10, 1997). Therefore,

petitioner argues that the

inconsistencies in respondents’

explanations should lead the

Department to apply an adverse facts

available in this case.

Respondents argue that there is no

basis to apply facts available with

adverse inferences with regard to the

alleged discrepancies in MARIS’ and

AMS’ volume and value of sales.

Respondents assert that the

discrepancies between MARIS’ and

AMS’ volume and value of sales of

subject merchandise do not provide

insufficient data for the Department to

apply adverse facts available.

First, respondents argue that there is

no evidence that either MARIS’ or AMS’

sales figures are inaccurate.

Respondents assert that at verification

the Department verified both MARIS’

and AMS’ volume and value sales

figures by tying the figures to each

company’s general ledger, and the

Department found no discrepancies.

Second, respondents state that they

have provided the following

explanations regarding the difference

between the company figures: (1)

Differences in testing by the two

companies resulted in different

classifications for merchandise that was

rated near 1⁄4 horsepower; (2) AMS

receives a greater price for the

compressors it sells than it pays to

MARIS for the same compressors; and

(3) the sale of the same compressor can

be booked at different times, leading to

discrepancies in the amount of sales

that occur in a year. Respondents

maintain that the vast majority of the

difference was due to the

misclassification of the subject

merchandise and the majority of these

compressors were shipped to countries

other than the United States.

Third, respondents argue that there is

no basis for including compressors

greater than 1⁄4 horsepower (i.e., nonsubject merchandise) simply because

they were inaccurately rated as being

subject merchandise. Additionally,

respondent argue that the Department

should not reject as untimely new

information submitted at verification or

provided pursuant to a supplemental

questionnaire that was issued by the

Department.

Finally, respondents argue that the

cases cited by petitioners in fact show

that the Department has the discretion

to accept supplemental information.

Respondent notes that the Department

has stated that it can accept new

information at verification when (1)

‘‘the need for that information was not

evidenced previously, (2) the

information makes minor revisions to

information already on the record, or (3)

the information corroborates, supports,

or clarifies information already on the

record.’’ See Final Results of

Antidumping Administrative Review:

Titanium Sponge from the Russian

Federation, 61 FR 58525 (November 15,

1996). Respondents assert that the

Department requested additional

information from MARIS and AMS on

the alleged discrepancies due to a

request from the petitioner. Moreover,

respondents point to two Department

determinations that state it is within the

Department’s discretion to accept new

information. See Notice of Final

Determination of Sales at Less Than

Fair Value; Certain Pasta from Turkey,

61 FR 30309, 30310 (June 14, 1996), and

Notice of Final Results of Antidumping

Administrative Review; Certain Cut-toLength Carbon Steel Plate from Belgium,

63 FR 2959, 2960 (January 20, 1998).

Respondents note that in this case, the
Federal Register / Vol. 63, No. 115 /Tuesday, June 16, 1998 / Notices 32853

Department requested the additional

information after verification due to

issues raised by petitioner to ascertain

whether information provided on the

record was accurate.

Lastly, respondents argue that the

petitioner does not offer any support for

its argument that the scope of the

suspension agreement is determined

based upon how respondents ‘‘labeled,

identified, advertised and sold’’ its

compressors, and that the rating of a

compressor is an objective fact

determined by its performance, and not

by sales literature.

Department’s Position: The

Department accepts respondent’s

explanations for the discrepancy in

MARIS’ and AMS’ volume and value

figures, and the Department has verified

to its satisfaction respondent’s

explanations for the discrepancy. First,

we note that, at verification, the

Department verified the accuracy of

both MARIS’ and AMS’ volume and

values figures. The Department verified

MARIS’ and AMS’ sales figures by tying

the figures to each of the company’s

general ledger, and the Department

found no discrepancies. See Verification

Report, at pages 10–11 and 18–19,

December 1, 1997. Specifically, the

Department verified MARIS’ and AMS’

total sales of subject merchandise (i.e.,

volume and value) to the United States

by tying the figures to the company’s

books and ledgers, and the Department

found no discrepancies. See Verification

Report, at pages 12 and 18–19.

Additionally, at verification MARIS

stated that one of the reasons for the

difference between the company figures

was that MARIS preformed testing on

all of its compressors. This testing

resulted in different classifications for

merchandise that was rated near 1⁄4

horsepower. Also, MARIS stated that

AMS used a different list from MARIS’

to classify compressors. Thus, the

different classifications resulted in AMS

reporting a more inclusive amount of

compressors including those

compressors that were not subject

merchandise. Additionally, at

verification, MARIS stated that the vast

majority of compressors that petitioner

argues are not reconciled, were shipped

to countries other than the United

States. See Verification Report, at page

15. Furthermore, the Department

verified that MARIS had misclassified

compressors as subject merchandise

which were then shipped to United

States. See Verification Report, at page

15 and Verification Exhibit M–17. At

verification, the Department did not

find any discrepancies in the materials

that were reviewed using its standard

verification procedures and practices.

Admittedly, the Department did not

and cannot verify every item in a

respondent’s questionnaire response.

‘‘However, [v]erification is a spot check

and is not intended to be an exhaustive

examination of the respondent’s

business. ITA has considerable latitude

in picking and choosing which items it

will examine in detail.’’ See Monsanto

v. United States, 698 F. Supp. 275, 280

(Ct. Int’l Trade 1988). Nevertheless, the

Department did verify to its satisfaction

respondent’s explanations for the

discrepancy and did not find any

evidence that respondent’s were

attempting to mislead or withhold any

information from the Department.

Therefore, the Department has no reason

to apply adverse facts available in this

case because respondents complied

with all requests for information and

their submissions were verified to the

Department’s satisfaction.

Second, we disagree with petitioner’s

argument that the data provided by

respondents concerning the testing of

their units was new information

submitted in an untimely fashion. It is

well-established in the Department’s

regulations that we may invite

submission of factual information from

parties at any time during a proceeding.

See Section 355.31(B)(1). Furthermore,

the cases petitioner cites, as evidence

that new information should be rejected

were all cases in which new information

was submitted without the request of

the Department. Therefore, the

Department will use the information

requested after verification in our final

results of administrative review.

Finally, contrary to petitioners’

contention, the scope of the suspension

agreement is not determined based upon

how respondents may have labeled,

identified, advertised, and sold the

subject merchandise. Rather, the

language of the suspension agreement

covers those refrigeration compressors

that are in fact not over one-quarter

horsepower, and exported, directly or

indirectly, from the Republic of

Singapore to the United States. See

Suspension Agreement at 51170.

Accordingly, petitioner has not

provided supporting evidence using the

above criteria to justify any changes to

the scope of the suspension agreement.

Comment 4: Petitioner argues that

respondents have failed to explain

changes made to their tax benefit

computations. Petitioner states that at

verification MARIS amended its tax

computations in a manner which

reduced the company’s estimated tax

liability, and as a result, the benefits

accruing under the EEIA. Petitioner

argues that MARIS provided two

different explanations at verification for

the change in the tax benefit and that

both explanations cannot be correct. See

Verification Report at page 13,

December 1, 1997 (Business Proprietary

Version). Petitioner asserts that it is

critical for the Department to ascertain

MARIS’ final tax liability in order to

calculate the company’s actual tax

benefit. Also, petitioner argues that the

Department is justified in applying

adverse facts available because the

Department provided both MARIS and

AMS the opportunity to explain changes

to their tax benefit computations and

respondents failed to provide ‘‘credible’’

explanations and accurate data.

Respondents assert that the

statements they provided regarding their

tax benefit computations are consistent,

and that the movement of the warranty

provisions from the Year of Assessment

1996 to the Year of Assessment 1997

caused the increase in the warranty

claim for 1997. Therefore, the

Department should continue to base

MARIS’ tax benefit on the information

provided at verification.

Department’s Position: We agree with

respondents. At verification, the GOS

provided the Department with updated

income tax computations from MARIS,

and stated that MARIS increased its

‘‘provision for warranty’’ based on

additional warranty claims. See GOS

verification report at page 4.

Additionally, MARIS stated that an

independent accounting firm computed

and filed its taxes with the IRAS, and

that an official from the accounting firm

confirmed at verification that MARIS’

tax computations were amended

because the company’s ‘‘provision for

warranty’’ increased due to additional

warranty claims. See GOS and MARIS

Verification reports at pages 4 and 13,

respectively. The Department reviewed

MARIS’’ warranty expenses, and found

this explanation to be reasonable and

not contradicted by any other

information reviewed at verification.

See MARIS and GOS verification reports

at pages 4 and 13, respectively.

Therefore, the Department has no

evidence to support petitioner’s claim

that respondents have failed to explain

changes made to its tax benefit

computations. Therefore, for the

purposes of calculating a final margin,

we have made no adjustments.

Comment 5: Petitioner argues that the

Department should correct its

methodology to conform to its

methodology from past administrative

reviews by removing the deduction for

the base export profit. Petitioner states

that in the preliminary results, the

Department calculated an adjusted

profit applicable to export sales using a

base export profit reduction, and that
32854 Federal Register / Vol. 63, No. 115 /Tuesday, June 16, 1998 / Notices

this export profit reduction has never

been used in past administrative

reviews. Petitioner notes that no

changes have occurred in the EEIA

program to account for the Department’s

change in its calculation methodology.

Moreover, petitioner argues that

disregarding past practice in the benefit

calculation injects uncertainty into the

administrative review process, and

thereby weakens the transparency of the

administrative review process.

Respondents note that petitioner is

incorrect in stating that the Department

changed its methodology with regard to

the base export profit. Respondents state

that in past administrative reviews, the

Department has calculated an export

charge by subtracting the base export

profit figure, and that the Department

has used this methodology in other

Singaporean reviews that benefit from

Part VI of the EEIA. Moreover,

respondents assert that petitioner’s

proposal to exclude ‘‘the base export

profit reduction’’ would violate the

suspension agreement because

Singaporean law states that the base

export profit is taxed at the normal

corporate tax rate (i.e., a countervailable

benefit is not conferred on the amount

of the base export profit). Respondents

note that petitioner’s request that the

Department not subtract the base export

profit would result in the Department

countervailing a benefit not received,

thereby resulting in an export charge

that is greater than what is required to

offset the benefit that MARIS receives.

Therefore, respondents contend that the

Department should continue to subtract

the base export profit figure from its

calculations.

Department’s Position: We agree with

respondents. In prior administrative

reviews of Refrigeration Compressors,

(e.g., the 1992/1993 and 1993/1994) the

Department has maintained a line item

in its calculation methodology which

included an adjustment for base export

profit. Specifically, the Department’s

calculation of EEIA benefits included

the line item deduction ‘‘Less: Base

Export Profit.’’ See The Department’s

Calculation Methodology Memorandum:

Export Charge Rate Calculation for the

Final Results of the Tenth

Administrative Review—Certain

Refrigeration Compressors from

Singapore (April 1, 1992—March 31,

1993). The Department’s calculation for

the 1993/1994 and 1994/1995 POR also

includes the same line item deduction.

See The Department’s Calculation

Methodology Memorandum: Export

Charge Rate Calculation for the Final

Results of the Tenth Administrative

Review—Certain Refrigeration

Compressors from Singapore (April 1,

1993—March 31, 1994).

However, in the last administrative

review of Refrigeration Compressors for

the period April 1, 1994 through March

31, 1995, the Department inadvertently

neglected to subtract the base export

profit in its calculation. In that

administrative review, the respondents

submitted on the record a base export

profit amount which should have been

deducted in our calculations. See

Questionnaire Response April 25, 1996,

Exhibit A–8, Statement A–1. Neither

respondents nor petitioner commented

on this inadvertent omission. No party

raised the issue and therefore this

calculation stood in our final results of

review.

Accordingly, the Department rejects

petitioner’s argument that the base

export profit should be excluded from

the calculation because this reduction

has never been used and is a change in

the Department’s methodology.

Therefore, for the purposes of

calculating a final margin, we have

made no adjustments.

Comment 6: Petitioner argues that the

Department should reject certain

information submitted at verification

regarding MARIS’ tax liability, MARIS’

and AMS’ explanation of its sales

figures, and MARIS’ tax liability and

hence export subsidy, and apply facts

available with adverse inferences.

Petitioner asserts that respondents

participated in this review with an

intent to mislead the Department by not

providing complete and accurate

information.

First, petitioner argues that MARIS

withheld information on its tax liability

and misrepresented the reason for

withholding this information. Petitioner

points out that in the 12th

administrative review, the Department

allowed MARIS to rely on estimated

taxes due, for the purpose of calculating

tax benefits received under EEIA (Part

VI) although the IRAS had subsequently

assessed higher taxes. Petitioner asserts

that MARIS’ failure to provide

information regarding changes in its tax

situation is a violation under the

suspension agreement, which requires

that ‘‘[t]he Government of the Republic

of Singapore . . . notify the Department

in writing within 30 days prior to

granting any new benefits to producers,

manufacturers or exporters of the

subject merchandise which may be

countervailable.’’ See Suspension

Agreement at 51170. Additionally,

MARIS and AMS’s predecessor agreed

that they would ‘‘notify the Department

in writing if they . . . apply for or receive

directly or indirectly any new benefits

on the subject product.’’ See Suspension

Agreement at 51170. Petitioner

maintains that in past reviews,

respondents have made repeated

undertakings to supplement their tax

calculations as they became final and if

they incurred an additional liability. See

1994/95 administrative review Response

of the Government of Singapore, MARIS

and AMS to the Department’s

countervailing Duty Questionnaire

(Public Version) pp. III–20, III–21 (April

25, 1996), which has been placed on the

record of this review. Petitioner states

that respondents told the Department

that they would provide new tax

information when the provisional tax

figures were finalized, but never

provided these updated figures when

these figures changed. In fact, according

to petitioners, the existence of updated

tax figures was never positively

represented by respondent, but instead

was identified at verification by the

Department. Additionally, petitioner

states that respondents’ explanation

regarding the IRAS’ new calculations

(specifically, that these calculations

were made subsequent to the May 27,

1997) is misleading, given that the new

calculation was dated January 28, 1997

and paid in February, 1997.

Second, petitioner argues that MARIS

failed to provide an accurate and

adequate explanation of discrepancies

between MARIS’ and AMS’ sales

figures. Petitioner notes that

respondents offered two explanations

for this discrepancy. The first

explanation, made in early October,

1997, related to the timing of sales by

MARIS compared with those by AMS.

The second explanation, made at

verification in October 1997, was that

MARIS performed tests to determine

which compressors should be classified

as subject merchandise.

Third, petitioner argues that MARIS

provided two different explanations

(i.e., see comment 4) for changes to its

tax liability. Petitioner argues that at

verification MARIS provided a

recalculation of its tax liability for the

POR which would reduce its export

charge payable. Petitioner asserts that

the explanation the MARIS’ accountants

provided at verification is not consistent

with the explanation MARIS’

accountants provided to the GOS.

Petitioner states that, given the fact the

Singaporean tax law permits the

negotiation of the tax owed past the

Department’s final results of review, the

Department should critically examine

any unusual adjustments to MARIS tax

return.

Based on these alleged attempts to

mislead the Department, petitioner

asserts that the Department should

apply adverse facts available, by finding
Federal Register / Vol. 63, No. 115 /Tuesday, June 16, 1998 / Notices 32855

that the respondents have ‘‘failed to

cooperate by not acting to the best of

[their] ability to comply with a request

for information.’’ 19 C.F.R. Section

351.308(a). Petitioner argues that the

five criteria that the Department uses to

determine the use of facts available have

not been met in this case. These criteria

stipulate that: (1) The information is

submitted by the deadline established

for its submission; (2) the information

can be verified; (3) the information is

not so incomplete that it cannot serve as

a reliable basis for reaching the

applicable determination; (4) the

interested party has demonstrated that it

acted to the best of its ability in

providing the information and meeting

the requirements established by the

Department with respect to the

information; and (5) the information can

be used without undue difficulties. See

Final Results of Antidumping Duty

Administrative Review: Circular NonAlloy Steel Pipe from Mexico, 62 FR

37014 (July 10, 1997). Petitioner asserts

that in this case none of the criteria have

been met.

Respondents assert that petitioner’s

allegation that MARIS misstated its tax

liability and did not submit a timely

recalculation of its taxes is not relevant

to this review, but instead applies to the

prior review, for which the record is

closed. Consequently, respondents

assert the administrative record allows

no further adjustments. Second,

respondents argue that petitioner’s

allegation that there is a discrepancy

between MARIS and AMS sales figures

is without merit. Respondents assert

that there are no inaccuracies in either

company’s sales figures, and that

neither of these sales figures has any

bearing on the calculation of the export

charge. Lastly, respondents argue that

petitioner’s allegation that the

Department has no choice but to rely on

MARIS’ preliminary tax benefit

calculation because respondents offered

two conflicting explanations is

misplaced. Respondents state that the

Department reviewed MARIS’ taxrelated records at verification (which

included the warranty provision), and

that the petitioner has not provided any

information that suggests that the

warranty provision is incorrect.

Finally, respondents argue that there

is no basis for the Department to apply

adverse facts available to MARIS’ and

AMS’ sales figures because these figures

do not have a bearing in the calculation

of the export charge. Respondents assert

that the export charge is calculated

using MARIS’ total exports of all

compressors (i.e., subject and nonsubject merchandise), and the figures

petitioner contend the Department

should consider are total sales of subject

merchandise (i.e., only compressors that

are less than 1⁄4 horsepower) to all

markets. Therefore, respondents argue

that the figures petitioner has

questioned are not used in the

calculation of the export charge.

Department’s Position: We disagree

with petitioner. The Department has

determined that the use of facts

available is not warranted in this final

results of administrative review. First,

petitioner argues that the respondents

did not meet its obligations under the

suspension agreement to provide

updated tax information. The specific

example to which the petitioner cites is

from the previous administrative review

and therefore is not relevant in the

current review. With regard to

petitioner’s specific arguments

concerning this information, it is a

restatement of the argument petitioner

makes in comment 2 above.

Second, petitioner argued that MARIS

failed to provide an accurate and

adequate explanation of discrepancies

between MARIS and AMS sales figures.

The Department has determined that

MARIS has provided a sufficient

explanation for the alleged

discrepancies which the Department

verified to its satisfaction. With regard

to petitioner’s specific arguments

concerning this information submitted

by respondents, see comment 3 above.

Third, petitioner argued that MARIS

provided two different explanations for

changes to its tax liability. The

Department has determined that MARIS

explanations for its changes to its tax

liability were reasonable. With regard to

petitioner’s specific arguments

concerning this information submitted

by respondents, see comments 4 and 5

above.

Additionally, pursuant to section

776(a) and (b) of the Act, examples of

when the Department uses adverse facts

available includes when an interested

party withholds information that has

been requested by the Department or

fails to provide requested information

by a set deadline or significantly

impedes a proceeding. In this case, the

Department has determined that

respondents have not failed to cooperate

with the Department and have acted to

the best of their ability in complying

with all requests for information.

Additionally, respondents have met all

the deadlines for submission of

information (i.e., questionnaire and

supplemental questionnaire responses).

What the petitioner characterizes as

untimely information and justification

for the Department’s application of facts

available was information within the

Department’s discretion to request and

accept at any time during an

investigation or administrative review.

See 19 C.F.R. 355.31(b)(1). Therefore,

facts available is not applicable under

these circumstances.

Final Results of Review

We determine that the signatories to

the suspension agreement have

complied with the terms of the

suspension agreement, including the

payment of the provisional export

charge for the review period. From April

1, 1995 through March 31, 1996, a

provisional export charge of 1.80

percent was in effect.

We determine the net subsidy to be

0.23 percent of the f.o.b. value of the

merchandise for the April 1, 1995

through March 31, 1996 review period.

Following the methodology outlined in

section B.4 of the agreement, the

Department determines that, for the

period of review, a negative adjustment

may be made to the provisional export

charge rate in effect. Because the rate

determined from this review is de

minimis, the adjustment will equal the

entire provisional export charge in effect

for the POR, plus interest. For this

period the GOS may refund or credit, in

accordance with section B.4.c of the

agreement, the amount to the

companies, plus interest, calculated in

accordance with section 778(b) of the

Tariff Act.

Notification of Interested Parties

This notice serves as a reminder to

parties subject to administrative

protective order (APO) of their

responsibility concerning the

disposition of proprietary information

disclosed under APO in accordance

with 19 CFR 355.34(d). Timely written

notification of return/destruction of

APO materials or conversion to judicial

protective order is hereby requested.

Failure to comply with the regulations

and the terms of an APO is a

sanctionable violation.

This administrative review and notice

are in accordance with sections

751(a)(1) and 777(i)(1) of the Tariff Act

and section 355.22 of the Department’s

regulations (19 CFR 355.22 (1997)).

Dated June 8, 1998.

Robert S. LaRussa,

Assistant Secretary for Import

Administration.

[FR Doc. 98–15871 Filed 6–15–98; 8:45 am]

BILLING CODE 3510–DS–P