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.
10570 Federal Register / Vol. 60, No. 38 / Monday, February 27, 1995 / Notices

In the Final Affirmative

Countervailing Duty Determination:

Industrial Phosphoric Acid from Israel

(‘‘IPA’’) (52 FR 25447; July 7, 1987), the

Department found the investment grants

program under the ECIL to be de jure

specific and, therefore, countervailable

because the grants are limited to

enterprises located in specific regions

(i.e., Development Zones A and B). In

the course of this proceeding, the GOI

provided no new information indicating

that the grants are not limited to

particular regions. Therefore, we are

continuing to find ECIL grants to be de

jure specific.

Carmiel’s production facility is

located in Development Zone A.

According to the responses and

verification, the company received

approval, in 1983 and 1988, for grants

for two projects related to the

production of subject merchandise.

These grants were disbursed over the

period 1983–1993.

At verification, we noted that for

certain of the grant disbursements, the

Israeli Ministry of Finance subtracted a

small ‘‘computer commission.’’

Consistent with section 771(6) of the

Act and section 355.46 of

Countervailing Duties; Notice of

Proposed Regulations and Request for

Public Comments, 54 FR 23366 (May 31,

1989) (‘‘Proposed Regulations’’), we

have determined that this commission

constitutes an allowable offset.

Therefore, we have subtracted the

commission in those instances in which

Carmiel was able to document that a

commission was subtracted from a grant

amount.

It is our policy to allocate nonrecurring grants over a period equal to

the average useful life of assets in the

industry, unless the sum of grants

provided under a program in a

particular year is less than 0.50 percent

of a firm’s total sales in that year. See

Section 355.49(a) of the Department’s

Proposed Regulations and the General

Issues Appendix to the Final

Affirmative Countervailing Duty

Determination: Certain Steel Products

From Austria, 58 FR 37217, July 9, 1993.

In this instance, Carmiel has not

provided sales information for years

prior to 1989. Therefore, we have no

reason to believe that grants made

before 1989 were less than 0.50 percent

of sales in the year of receipt for these

years and, therefore, have determined

that the yearly disbursements should be

allocated over time. In 1990, the sum of

grants disbursed under the ECIL

program accounted for less than 0.5

percent of Carmiel’s total sales in that

year. Therefore, benefits for 1990 were

allocated to that year and are not

included in our calculations. For all

other years after 1989, the sum of the

grants disbursed under the ECIL

program accounted for more than 0.5

percent of Carmiel’s total sales each

year. Therefore, these benefits were

allocated over time.

For ECIL grants allocated over time,

we used a twelve year allocation period

(the average useful life of assets with

respect to the manufacture of fabricated

metal products, as determined by the

U.S. Internal Revenue Service Asset

Depreciation Range System). The

formula described in Section

355.49(b)(3) of the Proposed Regulations

for allocating grants relies on a fixed

discount rate, which is based on the cost

of long-term, fixed-rate debt of the firm

or generally in the country under

investigation. However, we confirmed at

verification that no long-term loans with

fixed interest rates (or other long-term

fixed-rate debt) were available in Israel

during the years 1983–1993. Instead, the

only long-term loans (or other long-term

debt) available to companies in Israel

utilized variable interest rates, i.e., a

fixed real interest rate added to the

Consumer Price Index (CPI) or the

dollar/shekel exchange rate.

Therefore, we have determined to

adapt the grant allocation method

described in our proposed regulations to

use variable rather than fixed interest

rates as the discount rate, given the

absence of long-term fixed interest rates

in the years these grants were disbursed.

This methodology reflects the actual

long-term options open to Israeli firms

(i.e., that long-term financing was only

available through variable rate loans)

and also ensures that the net present

value of amounts countervailed in the

year of receipt does not exceed the face

value of the grant.

In this determination, we have used

as the discount rate the rate of return on

CPI-indexed commercial bonds (the real

rate of return, as published in the Bank

of Israel Annual Reports, plus the CPI),

as no actual borrowing rates for Carmiel

were available.

We divided the benefit allocated to

1993 by Carmiel’s 1993 total sales. On

this basis, we determine the estimated

net subsidy for this program to be 2.31

percent ad valorem for the POI.

B. Long-Term Industrial Development

Loans

Prior to July 1985, companies in Israel

were eligible to receive long-term

industrial development loans funded by

the GOI. This program was used in

conjunction with ECIL; however, a

company was not required to be an

Approved Enterprise in order to receive

a development loan.

We confirmed, as the GOI reported,

that loans under this program were

provided to a number of different

industries in Israel. However, we also

confirmed that the interest rates on

these loans varied depending on the

location of the borrower. The interest

rates on loans to borrowers in

Development Zone A were lowest,

while those on loans to borrowers in the

Central Zone were highest. In previous

cases, the Department has found longterm industrial development loans in

Israel to be regional subsidies and

countervailable to the extent that the

applicable interest rates are less than

those on loans to companies in the

Central Zone (see IPA). The GOI has

provided no new information to warrant

reconsideration of this finding.

Carmiel received loans for a project

located in Zone A. These loans were

received between the year 1983–1989.

Under the terms of the program, the

interest rates on these loans have two

components—a fixed real interest rate

and a variable interest rate, the latter of

which is based on either the CPI or the

dollar/shekel exchange rate. We

confirmed at verification that Carmiel

received some loans that were linked to

the CPI and others linked to the dollarshekel exchange rate.

Because the CPI and dollar-shekel

exchange rate vary from year-to-year, we

cannot calculate a priori the payments

that will be made over the life of these

loans and, hence, we cannot calculate

the ‘‘grant equivalent’’ of the loans.

Accordingly, we have compared the

interest that would have been paid by a

company in the Central Zone, as a

benchmark, to the amount actually paid

by Carmiel during the POI (see Section

355.49(d)(1) of the Proposed

Regulations). We divided the interest

savings by Carmiel’s total sales in 1993.

On this basis, we determine the net

subsidy from this program to be 0.36

percent ad valorem during the POI.

C. Exchange Rate Risk Insurance

Scheme

Introduced in 1981, the Exchange

Rate Risk Insurance Scheme (EIS),

operated by the Israel Foreign Trade

Insurance Corporation Inc. (IFTRIC),

was designed to allow exporters to

insure themselves against the risk of

losses which might occur when the rate

of devaluation of the Israeli shekel

lagged behind the rate of inflation. The

EIS was optional and open to exporters

willing to pay a premium to IFTRIC.

Under this program, if the rate of

inflation was greater than the rate of

devaluation, the exporter was

compensated by an amount equal to the

difference between these two rates
Federal Register / Vol. 60, No. 38 / Monday, February 27, 1995 / Notices 10571

multiplied by the value-added of the

exports. If the rate of devaluation was

higher than the change in the domestic

price index, however, the exporter was

required to compensate IFTRIC.

Companies using EIS paid a premium,

calculated for each exporter as a

percentage of the insured value of

exports.

In determining whether an export

insurance program provides a

countervailable benefit, we examine

whether the premiums and other

charges are adequate to cover the

program’s long-term operating costs and

losses. See Section 355.44(d) of the

Proposed Regulations and IPA. We have

reviewed EIS data in this investigation

which showed that EIS operated at a

loss from 1981 through 1991. We

believe that this 11 year history is more

than adequate to establish that the

premiums and other charges are

‘‘manifestly inadequate’’ to cover the

long-term operating costs and losses of

the program. The Department’s

determination that this program is

countervailable is consistent with our

determination in IPA.

We confirmed at verification that this

program was terminated during our POI

by the GOI. However, we also found at

verification that the GOI will continue

to honor outstanding claims for exports

made prior to the date of termination,

August 31, 1993, as long as the claims

are made within three years of the date

of export. Because of the possibility of

residual benefits, we have not adjusted

the cash deposit rate to reflect the

termination of this program.

We have calculated the benefit during

the POI as the net amount of

compensation (compensation received

less compensation and fees paid)

Carmiel received during that period

expressly for pipe fittings exported to

the United States. We confirmed by

reviewing company records that a

certain portion of the total benefit

reported by Carmiel as having been

received during the POI was actually

received by the company in 1992.

Therefore, we have not included this

amount in our calculations for purposes

of this determination.

We divided the resulting net

compensation amount by the value of

the company’s exports of pipe fittings to

the United States during the POI. On

this basis, we determine the estimated

net subsidy from this program to be 0.19

percent ad valorem during the POI.

D. Exemption From Wharfage Fee

The Ports and Trains Authority

administers all import/export operations

and the train system in Israel. Wharfage

fees represent 45–50 percent of the

revenues of the Authority to cover its

infrastructure and overhead costs.

We confirmed at verification that

during the POI, importers were

obligated to pay wharfage fees equal to

1.5 percent ad valorem of import value

and exporters 0.2 percent ad valorem of

export value. However, we also found

that, during the POI, exporters were

exempted by a Ports and Trains

Authority decision from paying the

wharfage fee altogether. The exemption

of this fee does not relate to the

imported input (see the Rebate of

Wharfage Fees section below), but

rather to the finished product.

Government officials explained that an

exemption for exporters was made

possible by the Authority’s sound

financial position.

We determine that the exemption

from the wharfage fee provides an

export subsidy insofar as export are

allowed an exemption (unlike the other

users of the port, i.e., importers) solely

due to their status as exporters. Cf. Final

Affirmative Countervailing Duty

Determination; Certain Fresh Atlantic

Groundfish From Canada, 51 FR 10041

(Mar. 24, 1986).

In order to calculate the benefit

resulting from this program, which

provides recurring benefits, we

multiplied the total value of the

company’s exports during the POI by

the 1.5 percent ad valorem coefficient

and divided this amount by the total

value of the company’s exports.

On this basis, we determined the

estimated net subsidy from this program

to be 1.50 percent ad valorem during the

POI.

E. Rebate of Wharfage Fees

We confirmed at verification that an

additional program allows exporters,

upon export of the finished product,

rebates of the wharfage fees paid on

imports of physically incorporated

inputs. We were informed at verification

that since the Israeli Customs Service

administers the drawback system, the

GOI asked it to take responsibility for

rebating wharfage fee under this

program. Under the rebate program, a

company can receive a rebate for up to

80 percent of the wharfage fees paid on

imported inputs that are physically

incorporated into exported products.

This program provides preferential

treatment for exporters and does not

qualify for non-countervailable

treatment under section 355.44(i) of the

Proposed Regulations, as wharfage fees

do not constitute indirect taxes or

import charges. (See DOC Position to

Comment 3 below.)

To calculate the benefit provided by

this program, which provides recurring

benefits, we divided the total amount of

rebate received during the POI by the

total value of the company’s exports

during the same period.

On this basis, we determine the

estimated net subsidy from this program

to be 0.34 percent ad valorem.

F. Fund for the Promotion of Marketing

Abroad

During verification we learned that

Carmiel received benefits in 1992 under

the Fund for the Promotion of Marketing

Abroad. GOI officials explained that

under the Fund, companies apply for

three-year financing for overseas market

research projects. The company is

obligated to repay the financing (in part)

based on export earnings. We also

learned that Carmiel has been informed

that the funds approved in 1992 have

been cancelled because the company

did not timely submit its

implementation report. Consequently,

the Fund Director has asked the

company to repay the previously

received amount. As of the time of

verification, Carmiel had not yet made

any repayments.

Given the information we have

received, we determine that this

program provides benefits solely to

exporters. Consequently, we determine

that the assistance provided to Carmiel

constitutes an export subsidy. Moreover,

although Carmiel has been asked to

repay the funds, the company has yet to

repay anything. Consequently, we are

treating the amount as a short-term,

interest-free loan still outstanding as of

the end of our POI.

In order to calculate the benefit

received by Carmiel, we have used the

1992 rate for short-term financing as

outlined in a Bank of Israel Annual

Report on the record of this proceeding.

We have divided the interest savings by

Carmiel’s total export sales in 1993.

On this basis, we determine the net

subsidy from this program to be 0.23

percent ad valorem during the POI.

II. Programs Determined Not To Be

Countervailable

A. Rebate of Peace of Galilee Levy

We confirmed that the Peace of

Galilee (Shlom-Hagalil) Levy was

instituted on imports to help the

balance of payments problem in Israel

caused by incessant war with its

neighbors. We confirmed that since at

least 1986 the GOI has allowed rebates

on this levy in a manner similar to that

on the Rebate of Wharfage Fee program.

Under the rebate program, a company

can receive a rebate for 100 percent of

the levies paid on imported inputs that

are physically incorporated into

exported products.
10572 Federal Register / Vol. 60, No. 38 / Monday, February 27, 1995 / Notices

We confirmed that the company is

tasked to provide information to the GOI

regarding which inputs are physically

incorporated into its exported products,

and this information does not give rise

to an excessive rebate. We also found

that the Customs Authority is tasked

with verifying the claims made by

companies such as Carmiel.

Consequently, we find this program to

provide a nonexcessive rebate of the

levies. See Proposed Regulations at

Section 355.44(i). Therefore, we have

found this program to be not

countervailable.

III. Programs Determined Not To Be

Used

We determine that Carmiel did not

receive benefits during the POI for

exports of the subject merchandise to

the United States under the following

programs:

A. Additional Incentives under the ECIL

1. Preferential Accelerated

Depreciation

2. Tax Benefits

3. Preferential Loans

4. Industry Subsidy Payments

B. Labor Training Grants

C. Encouragement of Industrial

Research and Development (EIRD)

Grants

D. Special Export Financing Loans

E. Provision of Funds for Transportation

to Eilat Harbor

Interested Party Comments

Comment 1: With respect to the

Exchange Rate Risk Insurance Scheme,

petitioner argues that Carmiel originally

reported that it received a certain

amount during the POI based on IFTRIC

records. At verification, however

Carmiel claimed that the original figure

incorrectly included a payment received

in 1992. Petitioner argues that according

to IFTRIC records verified by the

Department, the disputed payment was

received by Carmiel during the POI.

Therefore, the Department should use

the figure originally reported by

Carmiel.

Carmiel notes that the disputed

amount was actually received by the

company in 1992. According to Carmiel,

it is the date of receipt by the company

that is controlling; hence, the benefit

from the EIS should be adjusted to

reflect only the amount received during

the POI.

DOC Position

We agree with Carmiel. We confirmed

at the verification of Carmiel that the

company actually received the disputed

amount in 1992, not during the POI. It

is unclear why IFTRIC recorded a later

date of payment. Nevertheless, we have

countervailed only the amount received

by the company under this program

during the POI.

Comment 2: Carmiel argues that since

the Department verified that the

Exchange Rate Risk Insurance Scheme

was terminated during the POI, the

deposit rate should be set at zero.

Petitioner argues that the Department

should reject Carmiel’s claim. Petitioner

notes that the Department found that,

although this program was terminated

during the POI, the GOI will continue to

honor outstanding claims as long as

they are made within three years of the

date of export. Therefore, residual

benefits from the program will continue

to be available after the POI.

DOC Position

We agree with petitioner. The

Department’s practice, as outlined in

Section 355.50(d)(1)(2) of the Proposed

Regulations, is not to adjust the cash

deposit rate when it determines that

residual benefits may continue to be

bestowed under a terminated program.

As we verified that residual benefits are

possible under this program, we have

not made an adjustment to the cash

deposit rate.

Comment 3: According to petitioner,

the Department verified that wharfage

fees, assessed in order to finance the

Ports and Trains Authority, differ for

importers and exporters, even though

the costs associated with both activities

do not differ. Moreover, for the last ten

years, exporters have been exempt from

paying a fee altogether. Since the

Department was unable to verify the

value of the wharfage fee exemption to

Carmiel, it should as best information

available (‘‘BIA’’) establish a 1.5 percent

ad valorem countervailing duty for this

program. Petitioner further argues that

the record does not indicate that these

fees cover costs that have nothing to do

with the services suggested by the term

‘‘wharfage,’’ and, therefore, do not

operate as a tax.

Respondent counters that the

wharfage fee is, in fact, a general levy

intended to cover myriad government

activities that have nothing to do with

the services suggested by the term

‘‘wharfage.’’ The fee is paid to a

government agency and is not tied to

any specific cost or service. It is a tax,

and more particularly an indirect tax on

exports. Therefore, it should not be

considered a countervailable subsidy.

DOC Position

We agree with petitioner that

wharfage fees represent fees rather than

indirect taxes. Consistent with the

concept of a fee, the wharfage fees here

are paid only by users of the port

facilities, and the funds raised are used

to pay for the costs incurred by the Port

Authority and the maintenance of those

facilities.

We note that we have not used BIA,

as petitioner suggests, to calculate the

countervailable benefit provided by this

program. Rather, as noted above, for the

exemption of the fee, we have

determined that the correct method by

which to calculate the benefit received

by Carmiel is to multiply the 1.5 percent

exemption by total export sales during

the POI, and divide the resulting

amount by the same total export sales

value.

Comment 4: Petitioner notes that,

with respect to the Rebate of the Peace

of Galilee Levy Program, the record does

not provide enough information to

determine the extent to which the rebate

provided to Carmiel is excessive.

Although remission of import duties for

imports consumed as ‘‘normal waste’’

may not be excessive, the Israeli

Customs has made no effort to identify

‘‘normal waste’’ in the production of

butt-weld pipe fittings. Therefore,

petitioner submits that, as BIA, the

entire amount rebated under this

program should be treated as a

countervailable subsidy. Petitioner

notes that in Final Affirmative

Countervailing Duty Determination: Oil

Country Tubular Goods from Israel (52

FR 1649; January 15, 1987) (‘‘OCTG’’),

the Department found that this program

did not provide an excessive rebate of

duties paid on imported inputs

physically incorporated into the

exported product. However, in this

investigation, unlike OCTG, Customs

indicated that it makes no attempt to

determine a value for the carbon steel

pipe wasted in producing subject

merchandise.

Respondent argues that this program

does not provide a countervailable

subsidy in that it is an indirect tax on

items physically incorporated into the

final exported product. In fact, in OCTG,

the Department found this program to

be not countervailable. Respondent also

argues that there is absolutely nothing

in the record of this case to suggest that,

while the rebate was ‘‘nonexcessive’’ in

OCTG, the rebate to Carmiel is

excessive. Petitioner’s attempt to make

the rebate appear excessive by focusing

on the Custom’s official’s statement

about wastage is misplaced. Such

percentages are not determined as they

are not relevant to the payments. The

rebate is based on the proportion of

export sales to home market sales. No

calculation for wastage is necessary;

Customs simply compares the tonnage

of finished product exported to the

tonnage sold in the Israeli market.
Federal Register / Vol. 60, No. 38 / Monday, February 27, 1995 / Notices 10573

DOC Position

We agree with respondent that this

program is not countervailable because

it provides a non-excessive rebate of the

levies on imported inputs that are used

in the production of subsequently

exported finished products. We

confirmed at the Israeli Customs

Department that its personnel monitor

company reports regarding which

imports are physically incorporated into

the end product and the total amount of

levies paid on such inputs. We also note

that a rebate is only given on physically

incorporated inputs. Consequently,

waste is not an issue here. For this

reason, we do not find anything in the

remarks of the Customs official at

verification that is inconsistent with our

finding here, or in OCTG.

Comment 5: With respect to the Fund

for the Promotion of Marketing Abroad,

Carmiel states that the record is clear

that it received funds for this program

in 1992 (which is outside the POI), and

that the company must refund the

money to the government since it did

not fulfill its obligations under the

program. Accordingly, Carmiel

maintains the money it received does

not constitute a countervailable subsidy

during the POI.

DOC Position

We confirmed at verification that the

company is obligated to repay the

benefit, has not yet done so. Therefore,

during the POI, Carmiel had use of

money to which it would not have

otherwise had access. Consequently, we

have found that this amount constituted

a countervailable interest-free loan

during the POI.

Comment 6: Petitioner notes that

according to the verification report,

Carmiel receives ‘‘certain advantages’’ if

90 percent of its sales represent its own

production. The exact nature of these

advantages is not, unfortunately, further

explained in the verification report.

However, the fact that these otherwise

undefined advantages are only available

to a specific class of sellers in Israel

demonstrates that the ‘‘advantages’’ are

not generally available within the

country.

Respondent argues that, as outlined in

the verification report, producing

companies in Israel are eligible for

certain benefits while trading

companies are not. Hence, in order to

preserve its status as a producing

company, Carmiel formed a trading

company. There are, however, no

additional subsidies available to

production companies other than the

ones already investigated in this case.

DOC Position

We agree with respondent. We found

no evidence at verification to suggest

that Carmiel received any additional

benefits than those already noted above.

The company explained that it formed

a trading company in order to preserve

its ‘‘producing company status.’’

Consequently, we find no reason to

pursue this issue any further.

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, and

examination of relevant accounting

records and original source documents.

Our verification results are outlined in

detail in the public versions of the

verification reports, which are on file in

the Central Records Unit (Room B–099

of the Main Commerce Building).

Suspension of Liquidation

In accordance with our affirmative

preliminary determination, we

instructed the U.S. Customs Service to

suspend liquidation of all entries of

carbon steel butt-weld pipe fittings from

Israel, 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.

This final countervailing duty

determination was aligned with the

final antidumping duty determination of

certain carbon steel butt-weld pipe

fittings from Israel, pursuant to section

705(a)(1) of the Act.

Under Article 5, paragraph 3 of the

GATT 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

suspension of liquidation on the subject

merchandise beginning September 30,

1994, but to continue suspension of

liquidation of all entries, or withdrawals

from warehouse, for consumption of the

subject merchandise entered from June

1 through September 29, 1994. We will

reinstate 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 for such entries of merchandise

in the amount indicated below.

Certain Carbon Steel Butt-Weld Pipe Fittings

Country-Wide Ad Valorem Rate: 4.93 percent

ITC Notification

In accordance with section 705(c) of

the Act, we will notify the ITC of our

determination. In addition, 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 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 canceled. 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 carbon

steel butt-weld pipe fittings from Israel.

Return or Destruction of Proprietary

Information

This notice serves as the only

reminder to parties subject to

Administrative Protective Order (APO)

of their responsibility concerning the

return or destruction of proprietary

information disclosed under APO in

accordance with 19 CFR 355.34(d).

Failure to comply is a violation of the

APO.

This determination is published pursuant

to section 705(d) of the Act and 19 CFR

355.20(a)(4).

Dated: February 16, 1995.

Barbara R. Stafford,

Acting Assistant Secretary for Import

Administration.

[FR Doc. 95–4718 Filed 2–24–95; 8:45 am]

BILLING CODE 3510–DS–M

United States-Canada Free-Trade

Agreement, Article 1904 Binational

Panel Reviews; Notice of Decision of

Panel

AGENCY: North American Free-Trade

Agreement (NAFTA) Secretariat, United

States Section, International Trade

Administration, Department of

Commerce.

ACTION: Notice of Decision of Binational

Panel.

SUMMARY: By a decision dated February

13, 1995, the Binational Panel reviewing

the final affirmative injury

determination made by the Canadian