[Federal Register Volume 60, Number 59 (Tuesday, March 28, 1995)]
[Notices]
[Pages 15901-15903]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-7613]



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DEPARTMENT OF COMMERCE
[C-549-501]


Certain Circular Welded Carbon Steel Pipes and Tubes From 
Thailand: 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.

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SUMMARY: The Department of Commerce (the Department) is conducting an 
administrative review of the countervailing duty order on certain 
circular welded carbon steel pipe and tubes from Thailand. We have 
preliminary determined the net subsidy to be 0.73 percent ad valorem 
for Saha Thai Pipe and Tube Company and all other companies for the 
period January 1, 1992, through December 31, 1992. If the final results 
remain the same as these preliminary results of administrative review, 
we will instruct U.S. customs to assess countervailing duties as 
indicated above.
    Interested parties are invited to comment on these preliminary 
results.

EFFECTIVE DATE: March 28, 1995.

FOR FURTHER INFORMATION CONTACT: Penelope Naas and Gary Bettger, Office 
of Countervailing Investigations, Import Administration, U.S. 
Department of Commerce, Room B099, 14th Street and Constitution Avenue, 
N.W., Washington, DC 20230; telephone (202) 482-3534 or 482-2239, 
respectively.

SUPPLEMENTARY INFORMATION:

Background

    On August 3, 1993, the Department of Commerce (the Department) 
published in the Federal Register a notice of ``Opportunity to Request 
an Administrative Review'' (58 FR 41239) of the countervailing duty 
order on pipes and tubes from Thailand (50 FR 32751; August 14, 1985). 
On August 31, 1993, the respondents, the Royal Thai Government (RTG) 
and Saha Thai Pipe and Tube Company (Saha Thai), requested an 
administrative review of this order. We initiated a review of the 
period January 1, 1992, through December 31, 1992, on September 30, 
1993 (58 FR 51053). The review covers one manufacturer/exporter of the 
subject merchandise and nine programs. The final results of the last 
administrative review in this case were published October 9, 1991 (56 
FR 50852). [[Page 15902]] 

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.

Scope of Review

    On March 29, 1994, the Department clarified the Harmonized Tariff 
Schedule (HTS) numbers that were applicable to the subject merchandise 
(see Memorandum to Susan Esserman from Susan Kuhbach, available in the 
Central Records Unit, Room B099, Main Commerce Building). This 
clarification was necessary because of annual changes in the HTS.
    The scope now reads:
    Imports covered in this review are shipments of circular welded 
carbon steel pipes and tubes (pipes and tubes) with an outside diameter 
of 0.375 inch or more but not over 16 inches, of any wall thickness. 
These products, commonly referred to in the industry as standard pipe 
or structural tubing, are produced to various ASTM specifications, most 
notably A-120, A-53 and A-135. During the review period, this 
merchandise was classified under item numbers 7306.30.10 and 7306.30.50 
of the HTS. The HTS numbers are provided for convenience and Customs 
purposes. The written description remains dispositive.
    The review covers the period January 1, 1992, through December 31, 
1992.

Analysis of Programs

Export Packing Credits

    Export packing credits (EPCs) are short-term loans used for pre-
shipment export financing. The loans are issued by commercial banks in 
baht for up to 180 days. The banks are required to charge no more than 
a maximum interest rate of ten percent per annum on the loan. Interest 
is paid on the due date of the loan. To obtain these loans, exporters 
issue promissory notes to the lending bank. The notes must be supported 
by an irrevocable letter of credit, a sales agreement, a purchase 
order, warehouse receipt, or issuance export bill. Commercial banks can 
lend up to the amount of the shipment. They then can rediscount 50 
percent of the loan with the Bank of Thailand (BOT). On the date the 
loan is due, the BOT debits the commercial bank's account for the 
principal and the interest due. The commercial bank then debits the 
exporter's account or extends further credit at negotiated, commercial 
rates to the exporter. If the terms of the loan are not met, the BOT 
charges the commercial bank a penalty retroactive to the first day of 
the loan.
    In case of non-performance by the exporter on the due date of the 
loan, the exporter is charged an additional penalty interest rate of 
6.5 percent on the entire loan. This penalty is forgiven and the 
exporter receives the EPC preferential rate if it makes the export 
shipment or receives payment in foreign currency for the product within 
60 days after the due date of the promissory note. Because EPCs are 
available only to exporters, they are countervailable to the extent 
that the loans are provided at preferential rates.
    To determine whether the loans are preferential, we ordinarily use 
the predominant source of short-term financing in the country in 
question. Where there is no single, predominant source of short-term 
financing, we may use a benchmark composed of the interest rates for 
two or more sources of short-term financing in the country in question, 
weighted, whenever possible, according to the value of the financing 
granted by each source. In Final Countervailing Duty Determination and 
Countervailing Duty Order: Steel Wire Rope from Thailand (56 FR 46299; 
Sept. 11, 1991) (Steel Wire Rope), the Department concluded that the 
minimum loan rate (MLR) and the minimum overdraft rate (MOR) as 
reported in the BOT Quarterly Bulletin are more representative of the 
prevailing short-term interest rates in Thailand than the rates used in 
previous cases. Based on that determination and on the recent United 
States Court of International Trade (CIT) decision in Royal Thai 
Government and TTU Industrial Corp. v United States, 850 F. Supp. 44 
(CIT 1994), which said that the average rate of the MLR and MOR rates 
was the appropriate benchmark for short term loans, we are using the 
average of the 1992 MLR and MOR rates as reported in the BOT Quarterly 
Bulletin for 1992. That rate was 12.19 percent, which exceeded the 
maximum interest rate on EPCs of 10 percent. Therefore, we 
preliminarily determine that EPC loans are preferential.
    To calculate the benefit provided to Saha Thai, currently the only 
known producer/exporter of the subject merchandise, by the EPC loans 
during the period of review (POR), we compared the amount of interest 
actually paid to the amount that would have been paid at the benchmark 
rate. At verification, we noted that the company had to specify the 
destination of the merchandise in order to receive the EPC loans. 
Because Saha Thai had to specify the destination of the subject 
merchandise at approval and because they exported only the subject 
merchandise to the United States, we divided the benefit by its total 
exports of the subject merchandise to the United States to arrive at a 
net bounty or grant of 0.73 percent ad valorem.

Programs Preliminarily Determined Not Used

    We also examined the following programs and preliminarily determine 
that Saha Thai did not apply for or receive benefits under these 
programs for the review period.

1. Tax Certificates for Exporters
2. Tax and Duty Exemptions Under Section 28 of the Investment Promotion 
Act
3. Repurchase of Industrial Bills
4. Export Processing Zones
5. International Trade Promotion Fund/Export Promotion Fund
6. Electricity Discounts for Exporters
7. Reduced Business Taxes for Producers of Imediate Goods for Export 
Industries
8. Additional Incentives under the IPA

Preliminary Results of Review

    As a result of our review, we preliminarily determine the net 
subsidy for the period of January 1, 1992, through December 31, 1992, 
to be 0.73 percent ad valorem for all exporters and producers of pipe 
and tube from Thailand.
    Therefore, the Department intends to instruct the Customs Service 
to assess countervailing duties of 0.73 percent ad valorem on the 
f.o.b. invoice price on all shipments of this merchandise from Thailand 
entered, or withdrawn from warehouse, for consumption on or after 
January 1, 1992, and on or before December 31, 1992.
    Further, the Department intends to instruct the Customs Service to 
collect cash deposits on shipments of 0.73 percent ad valorem on the 
f.o.b. invoice price on all shipments of this merchandise entered, or 
withdrawn from the warehouse, for consumption on or after the date of 
publication of the final results of this administrative review.
    Parties to the proceeding may request disclosure of the calculation 
methodology and interested parties may request a hearing not later than 
ten days after the date of publication of this written 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 [[Page 15903]] 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 ten 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 19 CFR 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. 
The 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: March 16, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-7613 Filed 3-27-95; 8:45 am]
BILLING CODE 3510-DS-P