27080 Federal Register / Vol. 60, No. 98 / Monday, May 22, 1995 / Notices

Preliminary Determination by the ITC

The ITC will determine by June 12,

1995, whether there is a reasonable

indication that imports of circular

welded non-alloy steel pipe from

Romania and South Africa are causing

material injury, or threatening to cause

material injury, to a U.S. industry. A

negative ITC determination on either

investigation will result in the

respective investigation being

terminated; otherwise, these

investigations will proceed according to

statutory and regulatory time limits.

This notice is published pursuant to

section 732(c)(2) of the Act.

Susan G. Esserman,

Assistant Secretary for Import

Administration.

Dated: May 16, 1995.

[FR Doc. 95–12499 Filed 5–19–95; 8:45 am]

BILLING CODE 3510–DS–P

[C–557–806]

Extruded Rubber Thread From

Malaysia; Preliminary Results of

Countervailing Duty Administrative

Review

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

ACTION: Notice of preliminary results of

countervailing duty administrative

review.

SUMMARY: The Department of Commerce

(the Department) is conducting an

administrative review of the

countervailing duty order on extruded

rubber thread from Malaysia. We

preliminarily determine the net bounty

or grant to be 1.00 percent ad valorem

for all manufacturers and exporters of

Malaysian extruded rubber thread for

the period January 1, 1993 through

December 31, 1993. If the final results

remain the same as these preliminary

results of administrative review, we will

instruct the U.S. Customs Service to

assess countervailing duties as indicated

above. Interested parties are invited to

comment on these preliminary results.

EFFECTIVE DATE: May 22, 1995.

FOR FURTHER INFORMATION CONTACT: Judy

Kornfeld or Richard Herring, Office of

Countervailing Compliance, Import

Administration, International Trade

Administration, U.S. Department of

Commerce, 14th Street and Constitution

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

telephone: (202) 482–2786.

SUPPLEMENTARY INFORMATION:

Background

On August 25, 1992, the Department

published in the Federal Register (57

FR 38472) the countervailing duty order

on extruded rubber thread from

Malaysia. On August 3, 1994, the

Department published a notice of

‘‘Opportunity to Request an

Administrative Review’’ (59 FR 39543)

of this countervailing duty order. We

received a timely request for review

from respondents Heveafil Sdn.

Bhd.(Heveafil), Filmax Sdn.

Bhd.(Filmax), Rubberflex Sdn.

Bhd.(Rubberflex), Filati Lastex

Elastofibre Sdn. Bhd.(Filati), and Rubfil

Sdn. Bhd.(Rubfil).

We initiated the review, covering the

period January 1, 1993 through

December 31, 1993, on September 16,

1994 (59 FR 47609). The review covers

5 manufacturers/exporters of the subject

merchandise and 12 programs.

Applicable Statute and Regulations

The Department is conducting this

administrative review in accordance

with section 751(a) of the Tariff Act of

1930, as amended (the Act). Unless

otherwise indicated, all citations to the

statute and to the Department’s

regulations are in reference to the

provisions as they existed on December

31, 1994. However, references to the

Department’s Countervailing Duties;

Notice of Proposed Rulemaking and

Request for Public Comments, 54 FR

23366 (May 31, 1989) (Proposed

Regulations), are provided solely for

further explanation of the Department’s

countervailing duty practice. Although

the Department has withdrawn the

particular rulemaking proceeding

pursuant to which the Proposed

Regulations were issued, the subject

matter of these regulations is being

considered in connection with an

ongoing rulemaking proceeding which,

among other things, is intended to

conform the Department’s regulations to

the Uruguay Round Agreements Act.

See 60 FR 80 (Jan. 3, 1995).

Scope of Review

Imports covered by this review are

shipments of extruded rubber thread

from Malaysia. Extruded rubber thread

is defined as vulcanized rubber thread

obtained by extrusion of stable or

concentrated natural rubber latex of any

cross sectional shape, measuring from

0.18 mm, which is 0.007 inch or 140

gauge, to 1.42 mm, which is 0.056 inch

or 18 gauge, in diameter. Such

merchandise was classifiable under item

number 4007.00.00 of the Harmonized

Tariff Schedule (HTS). The HTS item

number is provided for convenience and

Customs purposes. The written

description remains dispositive.

Calculation Methodology for

Assessment and Deposit Purposes

We calculated the net bounty or grant

on a country-wide basis by first

calculating the bounty or grant rate for

each company subject to the

administrtative review. We then weightaveraged the rate received by each

company, including those with de

minimis and zero rates, using as the

weight its share of total Malaysian

exports to the United States of subject

merchandise. We then summed the

individual companies’ weighted-average

rates to determine the bounty or grant

rate from all programs benefitting

exports of subject merchandise to the

United States.

Since the country-wide rate

calculated using this methodology was

above de minimis, as defined by 19 CFR

355.7 (1994), we proceeded to the next

step and examined the net bounty or

grant rate calculated for each company

to determine whether individual

company rates differed significantly

from the weighted-average country-wide

rate, pursuant to 19 CFR 355.22(d)(3). In

calculating the individual company

rates described above, only one rate was

calculated for Heaveafil and Filmax

because Heveafil and Filmax are related

parties.

None of the companies had net

bounty or grant rates which were

significantly different pursuant to 19

CFR 355.22(d)(3). Therefore, all

companies are assigned the countrywide rate.

Analysis of Programs

I. Programs Conferring Subsidies

A. Export Credit Refinancing (ECR)

Program

The ECR program was established in

order to promote: (1) Exports of

manufactured goods and agricultural

food products that have significant

value-added and high local content, (2)

greater domestic linkages in export

industries, and (3) easy access to credit

facilities. In order to accomplish this,

the Bank Negara Malaysia, the central

bank of Malaysia, provides order-based

and pre- and post-shipment financing of

exports through commercial banks for

periods of up to 120 and 180 days,

respectively, and certificate of

performance (CP)-based pre-shipment

financing. Order-based financing is

provided for specific sales to specific

markets. CP-based financing is a line of

credit based on the previous 12 months’
Federal Register / Vol. 60, No. 98 / Monday, May 22, 1995 / Notices 27081

export performance, and cannot be tied

to specific sales in specific markets.

The Department determined that this

program was countervailable in Final

Affirmative Countervailing Duty

Determination and Countervailing Duty

Order; Extruded Rubber Thread From

Malaysia (57 FR 38472; August 25,

1992) (Malaysian Rubber Thread Final

Determination) and Extruded Rubber

Thread From Malaysia; Final Results of

Countervailing Duty Administrative

Review (60 FR 17515; April 6, 1995)

(Final Results of First Review) because

receipt of loans under this program was

contingent upon export performance

and the loans were provided at

preferential interest rates. Heveafil,

Filmax and Rubberflex used preshipment ECR loans. Filati and Rubfil

used post-shipment ECR loans.

In order to determine whether these

loans were provided at preferential

rates, we compared the interest rate

charged to a benchmark interest rate. As

a benchmark for short-term loans, it is

our practice to select the predominant

source of short-term financing in the

country as our benchmark for short-term

loans. See section 355.44(b)(3) of the

Department’s Proposed Regulations. In

Malaysia, term loans and overdrafts

offered by commercial banks are the

most predominant form of short-term

financing. The average interest rates for

these types of financing, however, are

not individually available. Therefore,

we have used as our benchmark for ECR

loans the average commercial bank

lending rate as an estimate of these

predominant short-term lending rates.

This rate is referred to by banks as the

base lending rate (BLR). Commercial

banks then add a 1 to 2 percent spread

to the BLR. Therefore, to determine the

commercial benchmark, we used the

average of the commercial BLR rates as

published by Bank Negara, the central

bank of Malaysia, plus an average

spread of 1.5 percent. (See Final Results

of First Review.)

Based on a comparison of the ECR

rates and the benchmark rate, we find

that ECR loans continue to be provided

at preferential interest rates. To

calculate the benefit from ECR loans on

which interest was paid in 1993, we

used our short-term loan methodology

which has been applied consistently in

previous determinations and the

previous administrative review in this

case. (See Final Affirmative

Countervailing Duty Determination and

Countervailing Duty Order: Butt-Weld

Pipe Fittings from Thailand (55 FR

1695; January 18, 1990); the Malaysian

Rubber Thread Final Determination (57

FR 38474; August 27, 1992); and the

Final Results of First Review (60 FR

17515; April 6, 1995). See also section

355.44(b)(3) of the Proposed

Regulations. Because the post-shipment

ECR loans were shipment-specific, we

included in our calculations only those

loans used to finance exports of

extruded rubber thread to the United

States. Because the pre-shipment loans

were not shipment-specific, we

included all loans on which interest was

paid during the review period.

To calculate the benefit, we compared

the amount of interest actually paid on

these loans during the review period

with the amount that would have been

paid at the benchmark rate of 10.53

percent. The difference between those

amounts is the benefit. We then divided

total interest savings by total exports, in

the case of pre-shipment loans, because

they applied to all exports, or by exports

to the United States, in the case of postshipment loans, because they applied to

specific shipments of exports to the

United States. On this basis, we

preliminarily determine the net bounty

or grant from pre-shipment loans to be

0.45 percent for all manufacturers or

exporters, and from post-shipment

loans, we preliminarily determine the

rate to be 0.27 percent for all

manufacturers and exporters in

Malaysia of extruded rubber thread.

B. Pioneer Status

Pioneer status is a tax incentive

offered to promote investment in the

manufacturing, tourist, and agricultural

sectors. Pioneer status was first

introduced under the Pioneer Industries

(Relief from Income Tax) Ordinance,

1958. This ordinance was replaced by

the Investment Incentives Act (IIA) in

1968, which was subsequently replaced

by the Promotion of Investment Act

(PIA) of 1986. Under the IIA and the

PIA, the Minister of International Trade

and Industry may determine products or

activities to be pioneer products or

activities.

Companies petition for pioneer status

for products or activities that have

already been approved and listed as

pioneer products. Once a company

receives pioneer status, its profits from

the designated product or activity are

exempt from the corporate income tax

and the dividend tax for a period of five

years, with the possibility of an

extension for an additional five years.

The five-year extension was abolished

effective October 1, 1991. Furthermore,

the computation of capital allowances,

which are normally deducted against

the adjusted taxable income, is

postponed to the post-tax holiday

period.

In evaluating a project for pioneer

status, the Malaysian Industrial

Development Authority (MIDA) will

consider whether:

(1) The product is being produced on

a commercial scale suitable to the

economic requirement or development

of the country,

(2) There are prospects for further

development, and

(3) The product or activity meets the

national and strategic requirements of

Malaysia.

Specifically, MIDA officials consider

12 essential criteria to evaluate whether

a particular company should receive

pioneer status. Two of these 12 criteria

specifically address the export potential

of the proposed product or activity.

Nevertheless, companies that produce

only for the domestic market may also

receive pioneer status. Furthermore,

some companies may be rejected even

though their export potential is high.

Under certain conditions, however,

companies must agree to an export

commitment (i.e., they must agree to

export a certain percentage of their

production) to receive pioneer status.

Furthermore, an export requirement

may sometimes be applied to certain

industries after it is determined that the

domestic market is saturated and will

no longer support additional producers.

Considering the implications of this

criterion, the Department views the

pioneer program as a two-faceted

program. The first facet comprises those

instances where one or more of the 12

criteria applies, including favorable

prospects for export, but where the

export criteria do not carry

preponderant weight. The Department

found this facet of the program not

countervailable in the Malaysian Rubber

Thread Final Determination.

In cases where pioneer status is

conferred on a company because it has

been determined that the domestic

market is saturated and will no longer

support additional producers and

because that company agrees to export

a certain percentage of its production,

the program conveys an export subsidy,

regardless of the other ‘‘neutral’’ criteria

the company is required to meet. This

is because the company is clearly being

approved due to the fact it will export

and because receipt of benefits becomes

contingent on export performance. In

the investigation of this case (see

Malaysian Rubber Thread Final

Determination), we determined that

pioneer status was granted to Rubberflex

based on its obligation to export.

Therefore, we found the program

countervailable with respect to that

company. See also Final Results of First

Review. Rubberflex continues to hold

pioneer status and claimed pioneer

income during this review period.
27082 Federal Register / Vol. 60, No. 98 / Monday, May 22, 1995 / Notices

Filmax, Filati, and Rubfil also held

pioneer status. However, these

companies experienced a tax loss during

the period of review and, therefore, did

not benefit from this program.

To calculate the benefit, we

determined the tax savings from this

program during the review period and

divided that by total exports. On this

basis, we determine the net bounty or

grant from this program to be 0.28

percent ad valorem during the reveiw

period.

II. Programs Preliminarily Determined

Not To Be Used

We also examined the following

programs and preliminarily determine

that the exporters of extruded rubber

thread did not use them with respect to

exports of the subject merchandise to

the United States during the review

period:

• Investment Tax Allowance.

• Abatement of Five Percent of

Taxable Income Due to Location in a

Promoted Industrial Area.

• Allowance of a Percentage of Net

Taxable Income Based on the f.o.b.

Value of Export Sales.

• Double Deduction of Export Credit

Insurance Payments.

• Abatement of Taxable Income of

Five Percent of Adjusted Income of

Companies Due to Capital Participation

and Employment Policy Adherence.

• Preferential Financing for

Bumiputras.

• Abatement of Income Tax Based on

the Ratio of Export Sales to Total Sales.

• Industrial Building Allowance.

• Double Deduction for Export

Promotion Expenses.

III. Program Preliminarily Found to be

Terminated Abatement of Five Percent

of the Value of Indigenous Malaysian

Materials Used in Exports

This program was terminated effective

January 1, 1993, and provided no

residual benefits to manufacturers and

exporters in Malaysia of extruded

rubber thread. See Final Results of First

Review.

Preliminary Results of Review

For the period January 1, 1993,

through December 31, 1993, we

preliminarily determine that the net

bounty or grant to be 1.00 percent ad

valorem.

If the final results of this review

remain the same as these preliminary

results, the Department intends to

instruct the U.S. Customs Service to

assess countervailing duties at 1.00

percent of the f.o.b. invoice price on

shipments of the subject merchandise

exported on or after January 1, 1993,

and on or before December 31, 1993.

The Department also intends to

instruct the Customs Service to collect

a cash deposit of estimated

countervailing duties of 1.00 percent for

all firms on shipments of this

merchandise entered, or withdrawn

from warehouse, for consumption on or

after the date of publication of the final

results of this administrative review.

Parties to this proceeding may request

disclosure of the calculation

methodology and interested parties may

request a hearing not later than 10 days

after date of publication of this notice.

Interested parties may submit written

arguments in case briefs on these

preliminary results within 30 days of

the date of publication. Rebuttal briefs,

limited to arguments raised in case

briefs, may be submitted seven days

after the time limit for filing the case

brief. Any hearing, if requested, will be

held seven days after the scheduled date

for submission of rebuttal briefs. Copies

of case briefs and rebuttal briefs must be

served on interested parties in

accordance with 19 CFR 355.38(e).

Representatives of parties to the

proceeding may request disclosure of

proprietary information under

administrative protective order no later

than 10 days after the representative’s

client or employer becomes a party to

the proceeding, but in no event later

than the date the case briefs, under

section 355.38(c), are due.

The Department will publish the final

results of this administrative review

including the results of its analysis of

issues raised in any case or rebuttal brief

or at a hearing.

This administrative review and notice

are in accordance with section 751(a)(1)

of the Act (19 U.S.C. 1675(a)(1)) and 19

CFR 355.22.

Dated: May 15, 1995.

Susan G. Esserman,

Assistant Secretary for Import

Administration.

[FR Doc. 95–12500 Filed 5–19–95; 8:45 am]

BILLING CODE 3510–DS–P

[C–614–503]

Lamb Meat From New Zealand; Final

Results of Countervailing Duty

Administrative Review and Revocation

of Countervailing Duty Order

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

ACTION: Notice of final results of

countervailing duty administrative

review and revocation of countervailing

duty order.

SUMMARY: On March 1, 1995, the

Department of Commerce (the

Department) published in the Federal

Register its preliminary results of

administrative review of the

countervailing duty order on lamb meat

from New Zealand for the period April

1, 1992, through March 31, 1993. We

have completed this review and

determine the net subsidy to be 0.0013

percent ad valorem for all companies. In

accordance with 19 CFR 355.7, any rate

less than 0.5 percent ad valorem is de

minimis. We will instruct the U.S.

Customs Service to liquidate, without

regard to countervailing duties, all

shipments of this merchandise as

indicated above. In addition, because

the requirements for revocation of the

order have been met by the Government

of New Zealand (GONZ) pursuant to 19

CFR 355.25(a)(1), the Department is

revoking the countervailing duty order.

EFFECTIVE DATE: May 22, 1995.

FOR FURTHER INFORMATION CONTACT:

Gayle Longest or Kelly Parkhill at the

Office of Countervailing Compliance,

Import Administration, International

Trade Administration, U.S. Department

of Commerce, 14th Street and

Constitution Avenue, N.W.,

Washington, D.C. 20230; telephone:

(202) 482–2786.

SUPPLEMENTARY INFORMATION:

Background

On March 1, 1995, the Department

published in the Federal Register (60

FR 11072) the preliminary results of its

administrative review of the

countervailing duty order on lamb meat

from New Zealand and intent to revoke

the countervailing duty order. We

invited interested parties to comment on

the preliminary results and intent to

revoke. We received no comments.

The review covered the period April

1, 1992, through March 31, 1993. The

review involved 9 companies and the

following programs which we verified

have been terminated:

(1) Livestock Incentive Scheme (LIS)

(2) Regional Development Suspensory

Loan Scheme (RDSL)

(3) Expert Assistance Grant Scheme

(EAGS)

(4) The Export Market Development

Taxation Incentive (EMDTI)

(5) Export Suspensory Loan Scheme

(ESLS)

(6) Export Programme Grant Scheme

(EPGS / Export Programme

Suspensory Loan Scheme (EPSLS)

Scope of Review

Imports covered by this review are

shipments of lamb meat, other than

prepared, preserved, or processed, from