[Federal Register Volume 63, Number 115 (Tuesday, June 16, 1998)]
[Notices]
[Pages 32849-32855]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-15871]


-----------------------------------------------------------------------

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

[[Page 32850]]

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

[[Page 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

[[Page 32852]]

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., non-subject 
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-to-Length Carbon Steel 
Plate from Belgium, 63 FR 2959, 2960 (January 20, 1998). Respondents 
note that in this case, the

[[Page 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

[[Page 32854]]

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

[[Page 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 Non-Alloy 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' tax-related 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 non-subject 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