10564 Federal Register / Vol. 60, No. 38 / Monday, February 27, 1995 / Notices

preliminary determination of sales at

less than fair value in the above-cited

investigation (60 FR 438, January 4,

1995).

On January 11, 1995, the petitioner

alleged that the Department made a

significant ministerial error in the

preliminary determination in the abovementioned investigation and requested

that the Department correct this

ministerial error accordingly.

In its submission, the petitioner

alleged that the Department made a

ministerial error in its calculation of the

foreign market value (FMV) for SC

Vanadium-Tulachermet (Tulachermet).

This FMV was used for comparison to

sales made by both Tulachermet and

Odermet, Ltd. The petitioner’s

allegation deals with the valuation of

vanadium slag, the principal raw

material used to produce the subject

merchandise.

On January 19, 1995, the Department

received comments from Odermet, Ltd.

and Tulachermet in response to the

petitioner’s January 11, 1995 letter

regarding a ministerial error. Odermet

submitted additional comments on

January 26, 1995. However, standard

Department practice with respect to

preliminary determinations, does ‘‘not

permit parties to comment on another

party’s allegations of significant

ministerial errors’’. (See the

Department’s Proposed Rules 57 FR

1133 (January 10, 1992). Any party

objecting to the Department’s

amendment, will have the opportunity

to present its arguments in its

administrative case briefs and at the

hearing.

On January 23, 1995, the Department

determined that the petitioner’s

allegation regarding the ministerial error

in our calculation of FMV for

Tulachermet, requires correction in an

amended preliminary determination

(See January 23, 1995, Memorandum

from Gary Taverman to Barbara R.

Stafford).

Amendment of Preliminary

Determination

The Department does not normally

amend preliminary determinations

since these determinations are only

estimated margins subject to verification

and may change for the final

determination. It is, however, the

Department’s practice to amend

preliminary determinations in those

instances involving a significant

ministerial error. (See Amendment to

Preliminary Determination of Sales at

Less Than Fair Value: Fresh Cut Roses

From Columbia, 59 FR 51554, 51555

(October 12, 1994) (Roses); and

Amendment to Preliminary

Determination of Sales at Less Than Fair

Value: Sweaters Wholly or in Chief

Weight of Man-Made Fiber from Hong

Kong, 55 FR 19289–90 (May 9, 1990)).

The Department has defined

‘‘significant ministerial errors’’ as those

unintentional errors which result in a

change of the estimated margin of at

least 5 absolute percentage points but

not less than 25 percent of the

calculated margin. See Roses. In this

case, these criteria have been met.

In its questionnaire response,

Tulachermet reported its consumption

of vanadium slag, the principal input

used to produce the intermediate

product vanadium pentoxide, on the

basis of net vanadium content. The

Department used as a surrogate value a

price quote for vanadium slag expressed

in terms of net vanadium pentoxide

content. The petitioner alleges that the

Department made a significant

ministerial error in not converting the

consumption factor or surrogate value to

reflect the different basis of the

surrogate value to the factor consumed.

The Department agrees with

petitioner that the reported factor

should have been adjusted to a

vanadium pentoxide basis. The

Department did not intend to apply a

surrogate value to consumption factor

expressed in an incompatible unit of

measure. Furthermore, correcting this

ministerial error will result in a change

in the estimated margin of greater than

5 absolute percentage points and greater

than 25 percent of the original estimated

margin. Therefore, pursuant to the

Department’s practice, the error

constitutes a significant ministerial error

and the Department is amending the

preliminary determination accordingly.

The calculations have been corrected by

applying the methodology from the

petition for converting the consumption

factor for vanadium slag from units of

net vanadium content to units of net

vanadium pentoxide content. The

recalculation affects the margin

percentage for Tulachermet, Odermet,

and the all others rate for non-Russian

exporters.

Suspension of Liquidation

In accordance with section 733(d)(2)

of the Act, the Department will direct

the U.S. Customs Service to continue to

require cash deposit or posting of bond

on all entries of subject merchandise

from the Russian Federation at the

newly calculated rates, that are entered,

or withdrawn from warehouse, for

consumption on or after the date of the

original preliminary determination

publication notice in the Federal

Register (60 FR 438, January 4, 1995).

The suspension-of-liquidation will

remain in effect until further notice.

The revised estimated margins are as

follows:

Manufacturer/Producer/Exporter

Weighted

average

margin

percent

All exporters located in Russia including SC VanadiumTulachermet .............................. 94.92

Galt Alloys, Inc. ............................ 40.46

Gesellschaft fu ̈r Elektrometallurgie

m.b.H./Shieldalloy Metallurgical

Corporation/Metallurg, Inc. ....... 49.18

Marc Rich Co., AG/Glencore

International AG ........................ 108.00

Odermet, Ltd. ............................... 60.09

Wogan Resources, Ltd. ................ 108.00

All others not located in Russia ... 82.29

ITC Notification

In accordance with section 733(f) of

the Act, we have notified the

International Trade Commission (ITC) of

the amended preliminary

determination. If our final

determination is affirmative, the ITC

will determine whether imports of the

subject merchandise are materially

injuring, or threaten material injury to,

the U.S. industry, before the later of 120

days after the date of the original

preliminary determination (December

27, 1995) or 45 days after our final

determination.

Public Comment

Public hearings in this proceeding

will be held to afford interested parties

an opportunity to comment on

arguments raised in case or rebuttal

briefs. The tentative schedule for the

case briefs, rebuttal briefs, and hearings

for this proceeding is described in the

preliminary determination. We will

make our final determination by May

19, 1995.

Dated: February 17, 1995.

Susan G. Esserman,

Assistant Secretary for Import

Administration.

[FR Doc. 95–4728 Filed 2–24–95; 8:45 am]

BILLING CODE 3510–DS–P

[C–533–812]

Final Affirmative Countervailing Duty

Determination: Certain Carbon Steel

Butt-Weld Pipe Fittings From India

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: February 27, 1995.

FOR FURTHER INFORMATION CONTACT:

Susan M. Strumbel, Office of
Federal Register / Vol. 60, No. 38 / Monday, February 27, 1995 / Notices 10565

Countervailing Investigations, Import

Administration, U.S. Department of

Commerce, Room 3099, 14th Street and

Constitution Avenue, N.W.,

Washington, D.C. 20230; telephone

(202) 482–1442.

Final Determination

The Department of Commerce (‘‘the

Department’’) determines that benefits

which constitute subsidies within the

meaning of section 701 of the Tariff Act

of 1930, as amended (‘‘the Act’’), are

being provided to manufacturers,

producers, or exporters in India of

certain carbon steel butt-weld pipe

fittings. For information on the

estimated net subsidies, please see the

Suspension of Liquidation section of

this notice.

Case History

Since the publication of the

preliminary determination in the

Federal Register, 59 FR 28337 (June 1,

1994), the following events have

occurred.

On June 27, 1994, at petitioner’s

request, we extended the final

determination in this investigation to

coincide with the final determination in

the companion antidumping

investigation (59 FR 32955).

On June 30, 1994, petitioner requested

that the Department postpone its

preliminary determination in the

antidumping investigation. Therefore,

on July 26, 1994, the Department

published in the Federal Register a

notice postponing the preliminary

antidumping determination and,

therefore, also the final countervailing

duty determination (59 FR 37961).

On October 5, 1994, respondents

requested that the Department postpone

the final antidumping and

countervailing duty determinations.

Therefore, on November 14, 1994, the

Department published in the Federal

Register a notice postponing the final

antidumping and countervailing duty

determinations until no later than

February 16, 1995 (59 FR 56461).

We conducted verification of the

responses submitted on behalf of the

Government of India (GOI), Karmen

Steels of India (Karmen) and

Sivanandha Pipe Fittings Ltd.

(Sivanandha) from November 4 through

November 7, 1994. We received case

briefs on January 24 from petitioner and

respondents, and received rebuttal

briefs from petitioner on January 31,

1995.

Scope of Investigation

The products covered by this

investigation are certain carbon steel

butt-weld pipe fittings (‘‘pipe fittings’’)

having an inside diameter of less than

fourteen inches (355 millimeters),

imported in either finished or

unfinished condition. Pipe fittings are

formed or forged steel products used to

join pipe sections in piping systems

where conditions require permanent

welded connections, as distinguished

from fittings based on other methods of

fastening (e.g., threaded, grooved, or

bolted fittings). Butt-weld fittings come

in a variety of shapes which include

‘‘elbows,’’ ‘‘tees,’’ ‘‘caps,’’ and

‘‘reducers.’’ The edges of finished pipe

fittings are beveled, so that when a

fitting is placed against the end of a pipe

(the ends of which have also been

beveled), a shallow channel is created to

accommodate the ‘‘bead’’ of the weld

which joins the fitting to the pipe. These

pipe fittings are currently classifiable

under subheading 7307.93.3000 of the

Harmonized Tariff Schedule of the

United States (‘‘HTSUS’’).

Although the HTSUS subheading is

provided for convenience and customs

purposes, our written description of the

scope of this proceeding is dispositive.

Applicable Statue and Regulations

Unless otherwise indicated, all

citations to the statute and to the

Department’s regulations are references

to the provisions as they existed on

December 31, 1994. References to the

Countervailing Duties: Notice of

Proposed Rulemaking and Request for

Public Comments, 54 FR 23366 (May 31,

1989) (Proposed Regulations), are

provided solely for further explanation

of the Department’s CVD 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 (January 3, 1995).

Injury Test

Because India is a ‘‘country under the

Agreement’’ within the meaning of

section 701(b) of the Act, the U.S.

International Trade Commission (‘‘ITC’’)

is required to determine whether

imports of pipe fittings from India

materially injure, or threaten material

injury to, a U.S. industry. On April 20,

1994, the ITC preliminarily determined

that there is a reasonable indication that

an industry in the United States is being

materially injured or threatened with

material injury by reason of imports

from India of the subject merchandise

(59 FR 18825).

Period of Investigation

For purposes of this final

determination, the period for which we

are measuring subsidies (the period of

investigation (‘‘POI’’)) is the

respondents’ fiscal year: April 1, 1993 to

March 31, 1994.

Non-Responding Company

Since Tata did not respond to our

countervailing duty questionnaire, we

have used best information available

(‘‘BIA’’) in accordance with section

355.37(a) of the Department’s

regulations. As BIA, we have used

information provided in the petition

except where we have calculated a rate

for a given program in a previous

countervailing duty investigation or

administrative review for India which is

higher than that provided in the

petition. We did not include in the BIA

subsidy rate for Tata programs for which

we have no basis to calculate a benefit

(i.e., programs for which rates are not

calculated in the petition, programs not

previously investigated, or programs

previously found not used). Based on

this approach, we calculated a BIA rate

for Tata of 61.56 percent ad valorem.

Calculation of Country-Wide Rate

In determining the benefits to the

subject merchandise from the various

programs described below, we used the

following calculation methodology. We

first calculated a country-wide rate for

each program. This rate comprised the

ad valorem benefit received by each

firm weighted by each firm’s share of

exports of the subject merchandise to

the United States. The program rates

were then added together to arrive at the

country-wide rate.

Pursuant to 19 CFR 355.20(d) of the

Department’s regulations, we compared

the total ad valorem benefit received by

each firm to the country-wide rate for all

programs. The rates for Karmen,

Sivanandha and Tata were significantly

different from the country-wide rate.

Therefore, all three companies received

company-specific rates. The countrywide rate will be assigned to all other

manufacturers, producers and exporters.

Karmen’s Exports of Refurbished Pipe

Fittings

Karmen has an arrangement with a

Singaporean company, under which the

Singaporean company supplies Karmen

with rusty pipe fittings. Karmen

reconditions and refurbishes these pipe

fittings and ships them directly to the

Singaporean company’s U.S. customer.

For purposes of the preliminary

determination, we considered this

refurbished merchandise to be covered

by this proceeding. However, we stated
10566 Federal Register / Vol. 60, No. 38 / Monday, February 27, 1995 / Notices

that we would seek additional

information concerning: (1) The nature

and extent of the processing operation,

and (2) the extent to which the

refurbished pipe fittings are being

subsidized.

For purposes of this final

determination, we are treating the

‘‘sales’’ of Singaporean pipe as outside

of the scope of our investigation and,

hence, not subject to any potential

countervailing duty order on butt-weld

pipe fittings from India. Karmen

essentially performs a tolling service for

its Singaporean customer. Moreover,

Karmen does not ‘‘substantially

transform’’ these pipe fittings.

Substantial transformation generally

refers to a degree of processing or

manufacturing resulting in a new and

different article. Through that

transformation, the new article becomes

a product of the country in which it was

processed or manufactured. See ColdRolled Steel from Argentina, 58 FR

37062, 37065 (1993) (Appendix I). The

Department makes these determinations

on a case-by-case-basis. See, e.g., Certain

Fresh Cut Flowers from Colombia, 55

FR 20491, 20299 (1990); Limousines

from Canada, 55 FR 11036, 11040

(1990).

In determining whether Karmen

substantially transformed these pipe

fittings, we examined whether the

degree of processing or manufacturing

resulted in a new and different article.

Karmen receives rusty pipe fittings from

Singapore, it removes the rust, paints

the fitting, and forwards it to the

Singaporean company’s customer. We

do not consider this refurbishing

process as substantially transforming

the subject merchandise because it

remains a pipe fitting after

refurbishment. Therefore, because

Karmen does not substantially transform

the merchandise, we do not consider it

as falling within the scope of this

investigation.

However, we have also determined

that the benefits received by Karmen

under two of the countervailable export

subsidy programs discussed below (preshipment financing and income tax

deductions under 80HHC) cannot be

limited exclusively to Karmen’s export

sales of new pipe fittings (i.e., all

Karmen’s export sales excluding the

Singaporean transactions). In neither

instance is there any indication that

Karmen is precluded from receiving

these benefits on its refurbishing

operations. Therefore, we have included

the fee Karmen receives for refurbishing

the Singaporean pipe fittings as part of

the denominator for calculating the ad

valorem subsidy rate. This is consistent

with past practice. When we cannot

specifically tie the receipt of an export

subsidy to a subset of export sales, such

as exports of the subject merchandise,

we divide the total value of the export

subsidy received by the total value of

exports. (See, e.g., Final Results of

Countervailing Duty Administrative

Review: Certain Iron-Metal Castings

from India, 56 FR 52521, (October 21,

1991), Final Affirmative Countervailing

Duty Determination; Certain Electrical

Conductor Aluminum Redraw Rod from

Venezuela, 53 FR 24763, 24767 (June

30, 1988) (Redraw Rod)). (For a further

discussion of this issue, please refer to

the Interested Party Comments section

of this notice).

Analysis of Programs

Based upon our analysis of the

petition, the responses to our

questionnaires, verification and

comments made by interested parties,

we determine the following:

A. Programs Determined To Be

Countervailable

1. Preferential Pre-Shipment Financing

Pre-shipment financing is extended to

exporters prior to shipment as working

capital for purchasing raw materials,

processing, packing, warehousing,

transporting and shipping. Any exporter

showing a confirmed export order or a

letter of credit is eligible for this

program. Generally, the loans are

extended for 180 days. We verified that

both Karmen and Sivanandha had loans

on which interest was paid during the

POI under this program.

Because only exporters are eligible for

loans under this program, we determine

that they are countervailable to the

extent they are provided at a

preferential interest rate. See, e.g.,

Redraw Rod. As our commercial

benchmark interest rate, we used 16.50

percent, which is the rate reported by

the GOI as the annual average

commercial interest rate on short-term

financing during the POI. We compared

this benchmark rate to the interest rate

charged on pre-shipment loans and

found that the interest rate charged was

lower than the benchmark rate.

Therefore, we determine that loans

provided under this program are

countervailable.

To calculate the benefit, we followed

the short-term loan methodology which

has been applied consistently in our

past determinations and is described in

more detail in the Subsidies Appendix

accompanying Cold-Rolled Carbon Steel

Flat-Rolled Products from Argentina:

Final Affirmative Countervailing Duty

Determination and Countervailing Duty

Order, 49 FR 18006 (April 26, 1984); see

also, Alhambra Foundry v. United

States, 626 F. Supp. 402 (CIT 1985).

We compared the amount of interest

paid during the POI to the amount of

interest that would have been paid at

the benchmark rate. The difference

between these two amounts is the

benefit. We then divided the benefit by

total exports. On this basis, we

determine the estimated net subsidy

from this program to be 0.47 percent ad

valorem for Karmen, 0.44 percent ad

valorem for Sivanandha and 5.27

percent ad valorem for Tata.

2. Income Tax Deductions Under

Section 80HHC

Income tax benefits are available to

exporters in India under Section 80HHC

of the Income Tax Act of 1961. This

program allows exporters to reduce their

taxable income by the profits or export

subsidies earned on exports. Both

Karmen and Sivanandha claimed

deductions under this program on their

income tax returns filed in the POI.

Since tax deductions under Section

80HHC are available only to exporters,

we determine that this program is

countervailable. To calculate the

benefit, we multiplied the amount of the

deduction claimed by each company by

the corporate income tax rate and

divided the result by total exports. On

this basis, we determine the estimated

net subsidy from this program to be 2.10

percent ad valorem for Karmen, 2.73

percent ad valorem Sivanandha and

15.82 percent ad valorem for Tata.

3. International Price Reimbursement

Scheme

The International Price

Reimbursement Scheme (‘‘IPRS’’) was

established to compensate Indian

exporters for the difference between the

domestic price of inputs and their world

market price. We verified that, as of

April 1, 1993, the input product used in

the production of pipe fittings (seamless

carbon steel pipe), was no longer

eligible for IPRS benefits. However,

residual benefits could be received after

that date and, in fact, Karmen received

residual benefits under this program

during the POI for exports of pipe

fittings shipped prior to the POI.

Respondents maintain that the IPRS

program is permissible within the

framework of Item (d) of the Illustrative

List of Export Subsidies annexed to the

Agreement on the Interpretation and

Application of Article VI, XVI and XXIII

of the General Agreement on Tariffs and

Trade (Subsidies Code), (1979).

Pursuant to the remand determination

in Final Results of Redetermination

Pursuant to Court Remand, Creswell

Trading Company, Inc., et al. v. United
Federal Register / Vol. 60, No. 38 / Monday, February 27, 1995 / Notices 10567

States, Slip. Op. 94–65 (Creswell

Trading), the IPRS program must be

examined in light of Item (d).

To conduct the analysis with respect

to Item (d) of the Illustrative List, we

examined whether the IPRS program

involves a consistently applied

calculation methodology for

determining the difference between the

higher domestic and lower international

price of a product available to exporters

and whether the pricing and other data

used in this methodology are regularly

updated to reflect accurately the price

differential at the time of the purchase

of the product.

We verified that India’s IPRS program

utilizes a clearly defined and

consistently applied methodology for

calculating the difference between the

higher domestic and lower international

price of seamless carbon steel pipe

available to their exporters. We also

verified that the price schedules for both

domestic and international prices are

updated periodically. Therefore, we

determine that the basic terms and

conditions of the provision of carbon

steel pipe under the IPRS program are

not ‘‘more favourable than those

commercially available on world

markets’’ to Indian exporters. However,

we have also determined that the IPRS

rebate is ‘‘excessive,’’ because the

government failed to include ocean

freight in its calculation of the world

market price.

Item (d) is concerned with the

government’s provision of goods to

exporters on terms more favorable than

those ‘‘commercially available on world

markets to their exporters.’’ Indian

exporters who purchase seamless

carbon steel pipe on the world market

would necessarily also incur the cost of

delivering the pipe to India. Therefore,

the commercially available alternative is

the price of seamless carbon steel pipe

itself, from sources outside of India,

plus a delivery charge to India.

The international prices used by the

GOI in its calculations of IPRS rebates

are stated in F.O.B. (port of origination)

terms and, thus, do not reflect the

delivery of foreign seamless carbon steel

pipe to India. Consequently, we added

delivery costs to the price of foreignsourced seamless carbon steel pipe and

compared the delivered domestic price

to a delivered world market price. On

this basis, we determine that the IPRS

rebates received by the Indian pipe

fittings producers are excessive in the

amount of the delivery charges

necessary to transport carbon steel pipe

to India. The excess amount is a

countervailable subsidy because the

rebate enabled the pipe fittings

exporters to pay a lower price for carbon

steel pipe than that commercially

available on world markets.

To calculate Karmen’s benefit, we

divided the amount of ocean freight

necessary to ship seamless carbon steel

pipe to India by Karmen’s total exports

of pipe fittings. We did not include in

the denominator the fees Karmen

receives for refurbishing Singaporean

pipe because refurbished pipe fittings

are not eligible for the IPRS. On this

basis, we determine the estimated net

subsidy from this program to be 7.05

percent ad valorem for Karmen, 0.00

percent ad valorem for Sivanandha and

32.66 percent ad valorem for Tata.

B. Programs Determined not to Provide

Benefits During the POI Advance

Licenses and Advance Customs

Clearance Permits (‘‘ACCP’s’’)

Under the GOI’s Duty Exemption

Scheme, inputs used in the production

of exports may enter the country dutyfree. Two mechanisms under the Duty

Exemption Scheme are Advance

Licenses and Advance Custom

Clearance Permits (‘‘ACCPs’’).

Sivanandha used Advance Licenses to

import seamless carbon steel pipes in

the POI. Advance Licenses permit the

importation of goods duty free provided

that the imports are used in the

production of merchandise

subsequently exported.

Karmen used ACCPs during the POI.

ACCPs allow exporters to import

merchandise duty free for the purpose

of jobbing, restoration, reconditioning

and other servicing, provided that such

merchandise is re-exported. Karmen

used its ACCPs to import the

aforementioned pipe fittings from

Singapore.

We consider the use of Advance

Licenses and ACCP’s to be the

equivalent of a duty-drawback program

(see Final Affirmative Countervailing

Duty Determination: Steel Wire Rope

from India, 56 FR 46292 (September 11,

1991)). Under § 355.44(i)(4)(1) of the

Department’s proposed regulations (see

Countervailing Duties; Notice of

Proposed Rulemaking and Request for

Public Comments, 54 FR 23366 (May 31,

1989), the non-excessive drawback of

import duties is not countervailable if

the imported products are physically

incorporated into exported products.

According to the questionnaire

responses and verification, the products

imported under Advance Licenses are

physically incorporated into pipe

fittings which are subsequently reexported. The products imported under

the ACCP’s were refurbished and also

re-exported. Therefore, we determine

that Advance Licenses and ACCP’s did

not provide a countervailable benefit in

the POI.

C. Programs Determined To Be Not Used

We established at verification that the

following programs were not used

during the POI.

A. Preferential Post-Shipment Financing

B. Additional and Replenishment

Licenses

C. Market Development Assistance

D. Export Promotion, Capital Goods

Scheme

E. Benefits for 100 Percent ExportOriented Units

F. Benefits Provided to Export

Processing Zones

Interested Party Comments

Comment 1: Karmen argues that it

would be inappropriate to subtract the

fees received for its refurbishing

operations from the denominator but to

leave the subsidies resulting from the

refurbishing in the numerator. Karmen

argues that the job-working fees

received for the Singaporean

transactions must be included in the

denominator to calculate its subsidy

rate. Karmen contends that the benefits

from the two subsidies we preliminarily

found countervailable, the 80HHC tax

program and the pre-shipment export

financing, resulted significantly from

the transactions involving Singaporean

pipe.

Petitioner argues that the transactions

involving the refurbished pipe fittings

do not constitute a sale for the purposes

of this investigation. Furthermore,

petitioner disagrees that the refurbished

pipe fittings contributed to Karmen’s

benefits under either of the abovementioned programs.

DOC’s Position: As noted above, we

have determined that the benefits from

the pre-shipment export financing and

80HHC programs cannot be tied solely

to Karmen’s export sales, exclusive of

the income received for refurbishing

Singaporean pipe. During verification,

we were told by Karmen officials that

they did not use pre-shipment export

financing for shipments of refurbished

pipe fittings, but based on our analysis

of the information submitted regarding

this program, there is no reason to

believe that Karmen could not have

used the financing for these shipments.

We do not typically narrow our export

subsidy denominator to less than total

exports unless the benefits provided can

be exclusively linked to a smaller subset

of export sales. Therefore, consistent

with our past practice, we divided the

benefit amount by the value of Karmen’s

total exports, including the fees it

received for refurbishing.
10568 Federal Register / Vol. 60, No. 38 / Monday, February 27, 1995 / Notices

With respect to the 80HHC program,

our past practice has been to divide the

value of the benefits by total exports in

the POI. Pursuant to our general tax

methodology, we consider tax benefits

to be ‘‘received’’ when a company files

the return. Consequently, the benefit

used in our calculation usually relates

to sales activity in the year prior to the

POI. As a result, the sales denominator

we use in our subsidy calculation is

rarely, if ever, the sales from the same

fiscal year covered by the tax return.

The only basis to exclude sales from the

denominator is to determine that they

are incapable of generating the tax

benefit in question. The only issue then,

in this investigation, is whether the fees

Karmen receives for its refurbishing

operations can generate 80HHC benefits.

The 80HHC benefits Karmen claimed

on the tax return filed during the POI

(covering a pre-POI period) were not

generated by Karmen’s refurbishing

operations because Karmen did not

refurbish any Singaporean pipe during

the fiscal year covered by the tax return.

However, we verified that the fees

received by Karmen for its refurbishing

operations during the POI did generate

80HHC benefits on the tax return which

covers the POI. It is clear that the

refurbishing fees received by Karmen

qualify for 80HHC benefits. The only

reason 80HHC benefits generated by the

refurbishing operations are not in the

80HHC subsidy calculation in this

investigation is the Department’s tax

methodology which mandates the use of

the tax return filed during the POI.

Comment 2: Respondents argue that

the benchmark interest rate of 16.5

percent used in the Department’s

preliminary determination is the

appropriate benchmark rate and should

also be used in the Department’s final

determination. They state that this

interest rate is the national average

commercial rate for comparable loans.

They contend that the 18.75 percent

interest rate listed in the Department’s

verification reports is a companyspecific rate and therefore should not be

used. They further state that the 18.75

percent interest rate is for a loan that

has a one year term while pre-shipment

financing has a much shorter term.

Finally, they argue that pre-shipment

export financing is a low risk form of

credit because the exporter has to show

a purchase order prior to receiving

financing.

DOC’s Position: We agree that the

18.75 percent interest rate is a companyspecific rate. When selecting a shortterm interest rate benchmark the

Department’s first choice is a national

average rate rather than a companyspecific rate. See, Subsidies Appendix.

The questionnaire response of the GOI

stated that the annual average interest

rate on short-term financing in India

during the POI was 16.5 percent.

According to the Reserve Bank of India,

the minimum commercial short-term

rate on loans above 200,000 rupees in

India during the POI was 15.00 percent.

Information from the May 1994 edition

of International Financial Statistics

indicates that the average short- and

medium-term interest rate in India

during the POI was approximately 15.59

percent. Given the information on the

record, we used as our benchmark the

rate provided by the GOI.

Comment 3: Respondents argue that

the Department should uphold its

preliminary finding that the IPRS

program is non-countervailable.

DOC’s Position: Based on verification

and the recent remand determination in

Creswell Trading, we have determined

that the IPRS program provided a

countervailable benefit during the POI.

Verification

In accordance with section 776(b) of

the Act, we verified the information

used in making our final determination.

We followed standard verification

procedures, including meeting with

government and company officials,

examination of relevant accounting

records and examination of original

source documents. Our verification

results are outlined in detail in the

public versions of the verification

reports, which are on file in the Central

Records Unit (Room B–99 of the Main

Commerce Building).

Suspension of Liquidation

In accordance with our affirmative

preliminary determination, we

instructed the U.S. Customs Service to

suspend liquidation of all entries of

butt-weld pipe fittings from India,

which were entered or withdrawn from

warehouse for consumption, on or after

June 1, 1994, the date our preliminary

determination was published in the

Federal Register.

After the preliminary determination,

this final countervailing duty

determination was aligned with the

final antidumping duty determination

on certain carbon steel butt-weld pipe

fittings from India, pursuant to section

606 of the Trade and Tariff Act of 1984

(section 705(a)(1) of the Act).

Under article 5, paragraph 3 of the

Subsidies Code, provisional measures

cannot be imposed for more than 120

days without final affirmative

determinations of subsidization and

injury. Therefore, we instructed the U.S.

Customs Service to discontinue the

suspension of liquidation on the subject

merchandise on or after September 30,

1994, but to continue the suspension of

liquidation of all entries, or withdrawals

from warehouse, for consumption of the

subject merchandise entered between

June 1, 1994, and September 29, 1994.

We will reinstate the suspension of

liquidation, under section 703(d) of the

Act, if the ITC issues a final affirmative

injury determination, and will require a

cash deposit of estimated countervailing

duties in the amounts indicated below:

Karmen Steels of India: 9.62 percent ad

valorem

Sivanandha Pipe Fittings Ltd.: 3.16 percent

ad valorem

Tata Iron & Steel Limited: 61.56 percent ad

valorem

All-Others: 29.40 percent ad valorem

ITC Notification

In accordance with section 705(d) of

the Act, we will notify the ITC of our

determination. In addition, pursuant to

section 705(c) we are making available

to the ITC all nonprivileged and

nonproprietary information relating to

this investigation. We will allow the ITC

access to all privileged and business

proprietary information in our files,

provided the ITC confirms that it will

not disclose such information, either

publicly or under an administrative

protective order, without the written

consent of the Deputy Assistant

Secretary for Investigations, Import

Administration.

If the ITC determines that material

injury, or threat of material injury, does

not exist, these proceedings will be

terminated and all estimated duties

deposited or securities posted as a result

of the suspension of liquidation will be

refunded or cancelled. If, however, the

ITC determines that such injury does

exist, we will issue a countervailing

duty order directing Customs officers to

assess countervailing duties on buttweld pipe fittings from India.

Return of Destruction of Proprietary

Information

This notice serves as the only

reminder to parties subject to

Administrative Protective Order (APO)

of their responsibility concerning the

return or destruction of proprietary

information disclosed under APO in

accordance with 19 CFR 355.34(d).

Failure to comply is a violation of the

APO.

This determination is published

pursuant to section 705(d) of the Act

and 19 CFR 355.20(a)(4).
Federal Register / Vol. 60, No. 38 / Monday, February 27, 1995 / Notices 10569

Dated: February 16, 1995.

Barbara S. Stafford,

Acting Assistant Secretary for Import

Administration.

[FR Doc. 95–4721 Filed 2–24–95; 8:45 am]

BILLING CODE 3510–DS–P

[C–508–808]

Final Affirmative Countervailing Duty

Determination: Certain Carbon Steel

Butt-Weld Pipe Fittings From Israel

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: February 27, 1995.

FOR FURTHER INFORMATION CONTACT:

Gary Bettger or Jennifer Yeske, Office of

Countervailing Investigations, Import

Administration, U.S. Department of

Commerce, Room B099, 14th Street and

Constitution Avenue, NW., Washington,

DC 20230; telephone (202) 482–2239 or

482–0189, respectively.

Final Determination

The Department of Commerce (‘‘the

Department’’) determines that benefits

which constitute subsidies within the

meaning of Section 701 of the Tariff Act

of 1930, as amended (‘‘the Act’’), are

being provided to manufacturers,

producers, or exporters in Israel of

certain carbon steel butt-weld pipe

fittings (‘‘pipe fittings’’). For information

on the estimated net subsidy, please see

the Suspension of Liquidation section of

this notice.

Case History

Since the publication of the notice of

the preliminary determination in the

Federal Register (59 FR 28340, June 1,

1994), the following events have

occurred.

On June 1, 1994, petitioner requested

that the final determination in this

investigation be postponed and aligned

with the date for the final determination

in the companion antidumping

investigation of the same subject

merchandise from Israel. On June 27,

1994, the Department published in the

Federal Register a notice postponing

and aligning the publication of the final

determination in this investigation (59

FR 32955).

On October 5, 1994, Pipe Fittings

Carmiel, Ltd. (‘‘Carmiel’’), the sole

company respondent, requested that the

Department postpone the final

antidumping and countervailing duty

determinations. Therefore, on November

14, 1994, the Department published in

the Federal Register a notice postponing

the final antidumping and

countervailing duty determinations

until no later than February 16, 1995 (59

FR 56461).

We conducted verification of the

responses submitted by the Government

of Israel (‘‘GOI’’) and Carmiel from

November 27 through December 4,

1994. Both respondents and petitioner

submitted case and rebuttal briefs on

January 24 and January 31, 1995,

respectively.

Scope of Investigation

The products covered by this

investigation are certain carbon steel

butt-weld pipe fittings having an inside

diameter of less than fourteen inches

(355 millimeters), imported in either

finished or unfinished condition. Pipe

fittings are formed or forged steel

products used to join pipe sections in

piping systems where conditions

require permanent welded connections,

as distinguished from fittings based on

other methods of fastening (e.g.,

threaded, grooved, or bolted fittings).

Butt-weld fittings come in a variety of

shapes which include ‘‘elbows,’’

‘‘tees,’’‘‘caps,’’ and ‘‘reducers.’’ The

edges of finished pipe fittings are

beveled, so that when a fitting is placed

against the end of a pipe (the ends of

which have also been beveled), a

shallow channel is created to

accommodate the ‘‘bead’’ of the weld

which joins the fitting to the pipe. These

pipe fittings are currently classifiable

under subheading 7307.93.3000 of the

Harmonized Tariff Schedule of the

United States (HTSUS). Although the

HTSUS subheading is provided for

convenience and customs purposes, our

written description of the scope of this

proceeding is dispositive.

Applicable Statute and Regulations

Unless otherwise indicated, all

citations to the statute and to the

Department’s regulations are references

to the provisions as they existed on

December 31, 1994. References to the

Countervailing Duties: Notice of

Proposed Rulemaking and Request for

Public Comments, 54 FR 23366 (May 31,

1989) (Proposed Regulations), are

provided solely for further explanation

of the Department’s CVD 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 (January 3, 1995).

Injury Test

Because Israel is a ‘‘country under the

Agreement’’ within the meaning of

section 701(b) of the Act, the U.S.

International Trade Commission (‘‘ITC’’)

must determine whether imports of the

subject merchandise from Israel

materially injure, or threaten material

injury to, a U.S. industry. On April 20,

1994, the ITC published its

preliminarily determination that there is

a reasonable indication that industries

in the United States are being materially

injured or threatened with material

injury by reasons of imports from Israel

of the subject merchandise (59 FR

18825).

Period of Investigation

For purposes of this final

determination, the period for which we

are measuring subsidies (the period of

investigation (the ‘‘POI’’)) is calendar

year 1993.

Analysis of Programs

Based upon our analysis of the

petition, responses to our

questionnaires, verifications and

comments made by interested parties,

we determine the following:

I. Programs Determined To Be

Countervailable

A. Grants under the Encouragement of

Capital Investments Law of 1959

(‘‘ECIL’’)

The ECIL program was established to

develop the production capacity of the

Israeli economy by providing

investment grants for industrial projects.

In order to be eligible to receive benefits

under the ECIL, an applicant first must

obtain ‘‘Approved Enterprise’’ status,

which is granted by the Investment

Center of the Israeli Ministry of Industry

and Trade.

Among the benefits provided under

ECIL are investment grants. The amount

of an investment grant is calculated as

a percentage of the total approved

investment in fixed assets, and this

percentage depends on the geographic

location of the enterprise. For purposes

of the ECIL program, Israel is divided

into three zones—the Central Zone,

Development Zone A and Development

Zone B. The Central Zone comprises the

geographic center of Israel, including its

largest and most developed population

centers. Companies in the Central Zone

could not receive grants under this

program at all in 1988, and only at a

much lower rate than companies in

Development Zones A and B in 1983,

with Development Zone A companies

receiving a higher level of funding than

those in Development Zone B.