28844 Federal Register / Vol. 61, No. 110 / Thursday, June 6, 1996 / Notices

Rotem’s so-called ‘‘linkage’’ argument

must be rejected.

Department’s Position: We disagree

with respondents. Rotem received the

ECIL grants in shekels and the

Department appropriately allocated the

grant amounts to the review periods

according to our variable rate grant

methodology, which accounted for the

hyperinflation rates that existed in Israel

when some of the grants were provided.

See Final Affirmative Countervailing

Duty Determination: Certain Carbon

Steel Butt-Weld Pipe Fittings from

Israel, 60 FR 10569 (February 27, 1995).

The fact that Rotem records the grant

values in their books in dollars is

irrelevant. As we explained in the

General Issues Appendix at 37,263, ‘‘the

countervailable subsidy (and the

amount of the subsidy to be allocated

over time) is fixed at the time the

government provides the subsidy.’’ We

continued that ‘‘the statute does not

permit the amount of the subsidy,

including the allocated subsidy stream,

to be reevaluated based upon

subsequent events in the marketplace.’’

Id. As a result, we cannot alter our grant

allocations based on the fluctuations in

the value of the shekel against the U.S.

dollar.

Comment 4: Respondents argue that

the Department’s calculation

methodology ignores the fact that

Rotem’s fixed assets are reduced for tax

purposes by the value of the grants.

Thus, respondents argue, because the

true value of the grants is eroded by a

concomitant tax increase, the grant

benefit should be reduced by 36

percent, the current tax rate.

Petitioners argue that the tax impact

of the subsidy received by Rotem is

irrelevant and that Rotem’s argument to

have the tax impact considered is

flawed because it seeks to have the

Department consider subsequent

economic events. Petitioners state that

the critical factor in countervailing duty

law is not subsequent economic impact

or continuing competitive benefit, but

rather the receipt of a subsidy.

Therefore, petitioners argue, the tax

effect should not be considered.

Department’s Position: We disagree

with respondents. In calculating the

amount of a countervailable benefit, the

Department’s long-standing practice is

to ignore the secondary tax

consequences of the benefit. See

§ 355.46(b) of the 1989 Proposed

Regulations. See also, e.g., Final

Affirmative Countervailing Duty

Determinations: Certain Steel Products

from Belgium, 58 FR 37273 (July 9,

1993), and, Final Affirmative

Countervailing Duty Determination;

Fresh and Chilled Atlantic Salmon from

Norway, 56 FR 7678 (February 25,

1991). Thus, the tax effect of the grants

received by Rotem is not pertinent to

the Department’s calculation of the

benefit.

Comment 5: Respondents argue that

the Department’s rounding of the

countervailing duty rates in the 1992

and 1993 reviews is either inconsistent

or incorrect. Rotem’s rate for 1992, 3.84

percent, is rounded to two decimal

places. In contrast, Rotem’s rate for

1993, 5.50 percent, is either rounded to

only one decimal place, or incorrectly

rounded to two decimal places from

5.494 percent. Therefore, respondents

argue that the Department change either

the 1992 rate to 3.8 percent, or the 1993

rate to 5.49 percent.

Department’s Position: We agree with

the respondents. We have now

accurately rounded the rate for the 1993

review to be 5.49 percent.

Comment 6: Respondents argue that

the benefit rate from the Exchange Rate

Risk Insurance Scheme (EIS) should not

be included in the cash deposit rate

because the program was terminated in

1993. Respondents point to information

submitted by the GOI in the

questionnaire response demonstrating

that the EIS was terminated in 1993.

Petitioners rebut that Rotem’s receipt

of residual EIS benefits will depend on

such variables as the date of export

shipment, the date of delivery, the date

of payment, and the length of time

necessary for EIS processing and

payment. According to petitioners, in

view of these uncertainties, which

preclude the determination of a fixed

date for the actual termination of EIS

benefits to Rotem, the Department

should continue to include EIS benefits

in the cash deposit rate.

Department’s Position: The

Department’s practice, as outlined in

section 355.50(d)(1)(2) of the 1989

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. The Department noted in the

1991 review of IPA from Israel that the

EIS was terminated in 1993. See

Industrial Phosphoric Acid from Israel;

Final Results of Countervailing Duty

Administrative Review, 59 FR 5176

(February 3, 1994). In that review, we

included the rate from the EIS in the

cash deposit rate because residual

benefits continued to be available. The

Department has verified that the GOI

will continue to honor outstanding

claims as long as they are made within

three years of the date of export. See,

Final Affirmative Countervailing Duty

Determination: Certain Carbon Steel

Butt-Weld Pipe Fittings from Israel, 60

FR 10573 (February 27, 1995).

Therefore, because residual benefits

continue to be available under this

program, we have not adjusted the cash

deposit rate.

Final Results of Review

For the period January 1, 1992

through December 31, 1992, we

determine the net subsidy to be 3.84

percent ad valorem for all firms. For the

period January 1, 1993 through

December 31, 1993, we determine the

net subsidy to be 5.49 percent ad

valorem for all firms.

The Department will instruct the U.S.

Customs Service to assess the following

countervailing duties:

Manufacturer/exporter Period Rate

All companies ... 1992 ................. 3.84

All companies ... 1993 ................. 5.49

The Department will also instruct the

U.S. Customs Service to collect a cash

deposit of estimated countervailing

duties, as provided by section 751(a)(1)

of the Act, of 5.49 percent of the f.o.b.

invoice price on all shipments of the

subject merchandise from Israel entered,

or withdrawn from warehouse, for

consumption on or after the date of

publication of the final results of this

review.

This notice serves as a reminder to

parties subject to administrative

protective order (APO) of their

responsibility concerning the

disposition of proprietary information

disclosed under APO in accordance

with 19 CFR 355.34(d). Timely written

notification of return/destruction of

APO materials or conversion to judicial

protective order is hereby requested.

Failure to comply with the regulations

and the terms of an APO is a

sanctionable violation.

This administrative review and notice

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

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

CFR 355.22.

Dated: May 23, 1996.

Paul L. Joffe,

Acting Assistant Secretary for Import

Administration.

[FR Doc. 96–14155 Filed 6–5–96; 8:45 am]

BILLING CODE 3510–DS–P
Federal Register / Vol. 61, No. 110 / Thursday, June 6, 1996 / Notices 28845

[C–508–605]

Industrial Phosphoric Acid From

Israel; 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 industrial

phosphoric acid from Israel. For

information on the net subsidy for the

reviewed company, as well for all nonreviewed companies, please see the

Preliminary Results of Review section of

this notice. 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 detailed in the

Preliminary Results of Review section of

this notice. Interested parties are invited

to comment on these preliminary

results.

EFFECTIVE DATE: June 6, 1996.

FOR FURTHER INFORMATION CONTACT:

Norma Curtis or Cameron Cardozo,

Office of Countervailing Compliance,

Import Administration, International

Trade Administration, U.S. Department

of Commerce, 14th Street and

Constitution Avenue, NW., Washington,

DC 20230; telephone: (202) 482–2786.

SUPPLEMENTARY INFORMATION:

Background

On August 19, 1987, the Department

published in the Federal Register (52

FR 31057) the countervailing duty order

on industrial phosphoric acid from

Israel. On August 1, 1995, the

Department published a notice of

‘‘Opportunity to Request an

Administrative Review’’ (60 FR 39150)

of this countervailing duty order. We

received timely requests for review, and

we initiated the review, covering the

period January 1, 1994 through

December 31, 1994, on September 15,

1995 (60 FR 47930).

In accordance with § 355.22(a) of the

Department’s Interim Regulations, this

review covers only the producer and/or

exporter of the subject merchandise for

which a review was specifically

requested (see Antidumping and

Countervailing Duties: Interim

Regulations; Request for Comments, 60

FR 25130 (May 11, 1995) (Interim

Regulations)). Accordingly, this review

covers Rotem Amfert Negev Ltd.

(Rotem). This review also covers nine

programs.

As explained in the November 22,

1995 and January 11, 1996, Memoranda

from the Assistant Secretary for Import

Administration for the Record Re:

Deadlines Affected by the November/

December–January Closure of the Import

Administration, which are on file in the

public file of the Central Records Unit,

Room B–099 of the Department of

Commerce, all deadlines were extended

to take into account the partial

shutdowns of the Federal Government

from November 15 through November

21, 1995, and December 15, 1995,

through January 6, 1996. Therefore, the

deadline for these preliminary results is

no later than May 30, 1996, and the

deadline for the final results of this

review is no later than 120 days from

the date on which these preliminary

results are published in the Federal

Register.

Applicable Statute and Regulations

Unless otherwise indicated, all

citations to the statute are references to

the provisions of the Tariff Act of 1930,

as amended by the Uruguay Round

Agreements Act (URAA) effective

January 1, 1995 (the Act). The

Department is conducting this

administrative review in accordance

with section 751(a) of the Act.

References to the Countervailing Duties;

Notice of Proposed Rulemaking and

Request for Public Comments, 54 FR

23366 (May 31, 1989) (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 1989 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 URAA. See Advance Notice of

Proposed Rulemaking and Request for

Public Comments, 60 FR 80 (January 3,

1995); Antidumping Duties;

Countervailing Duties: Notice of

Proposed Rulemaking and Request for

Public Comments, 61 FR 7308 (February

27, 1996).

Scope of the Review

Imports covered by this review are

shipments of industrial phosphoric acid

(IPA) from Israel. Such merchandise is

classifiable under item number

2809.20.00 of the Harmonized Tariff

Schedule (HTS). The HTS item number

is provided for convenience and

Customs purposes. The written

description remains dispositive.

Privatization

Israeli Chemicals Ltd. (ICL), the

parent company which holds one

hundred percent of Rotem’s shares, was

partially privatized in 1992 and 1993.

The percentages of ICL’s shares

privatized were twenty percent and five

percent respectively. In the

questionnaire responses, the

Government of Israel and Rotem

reported that ICL was also partially

privatized in 1994. We have determined

that the partial privatization of ICL

represents a partial privatization of each

of the companies in which ICL holds an

ownership interest. See Final Results of

Countervailing Duty Administrative

Reviews; Industrial Phosphoric Acid

from Israel published concurrently with

this notice (Final Results).

In this review and prior reviews of the

subject merchandise, the Department

has found that Rotem and/or its

predecessor, Negev Phosphates Ltd.,

received non-recurring countervailable

subsidies prior to these partial

privatizations. Further, the Department

has found that a private party

purchasing all or part of a governmentowned company can repay prior nonrecurring subsidies on behalf of the

company as part or all of the sales price

(see the General Issues Appendix

appended to the Final Countervailing

Duty Determination; Certain Steel

Products from Austria, 58 FR 37262

(July 9, 1993) (General Issues

Appendix)). Therefore, to the extent that

a portion of the sales price paid for a

privatized company can be reasonably

attributed to prior subsidies, that

portion of those subsidies are repaid.

This methodology was applied in the

1992 and 1993 reviews. In the

questionnaire response for 1994,

respondents reported that the

Government of Israel sold less than 0.5

percent of its shares in ICL. Because this

percentage of shares privatized is so

small, the percentage of subsidies

potentially repaid through this

privatization could have no measurable

impact on Rotem’s overall net subsidy

rate. Therefore, we have not applied our

repayment methodology which is

described in the General Issues

Appendix. (See May 23, 1996

memorandum to Paul L. Joffe regarding

applicability of the Department’s

privatization methodology in the instant

review, which is on file in the public

file of the Central Records Unit, Room

B–099 of the Department of Commerce.)
28846 Federal Register / Vol. 61, No. 110 / Thursday, June 6, 1996 / Notices

Analysis of Programs

I. Programs Previously Determined to

Confer Subsidies

(A) Encouragement of Capital

Investments Law (ECIL) Grants

The ECIL grants program was

established to attract capital to Israel. In

order to be eligible to receive various

benefits under the ECIL, including

investment grants, capital grants,

accelerated depreciation, reduced tax

rates, and certain loans, the applicant

must obtain approved enterprise status.

Approved enterprise status is granted by

the Investment Center of the Israeli

Ministry of Industry and Trade.

Investment grants are given for the

amount representing a percentage of the

cost of the approved investment. The

amount of the grant benefits received by

approved enterprises depends on the

geographic location of the eligible

enterprise. For purposes of the ECIL

program, Israel is divided into three

zones—Development Zone A,

Development Zone B, and the Central

Zone—each with a different funding

level.

Since 1978, only investment projects

outside the Central Zone have been

eligible to receive grants. The Central

Zone comprises the geographic center of

Israel, including its largest and most

developed population centers. In Final

Affirmative Countervailing Duty

Determination: Industrial Phosphoric

Acid from Israel, 52 FR 25447 (July 7,

1987) (IPA Investigation), the

Department found the ECIL grants

program to be de jure specific and thus

countervailable because the grants are

limited to enterprises located in specific

regions. In this review, no new

information or evidence of changed

circumstances has been submitted to

warrant reconsideration of this

determination.

Rotem is located in Development

Zone A, and received ECIL investment,

drawback, and capital grants in

disbursements over a period of years for

several projects. In this review we have

followed the methodology developed in

IPA Investigation to determine the

benefits from the ECIL grants. However,

consistent with the Final Results, we are

utilizing a calculation methodology that

conforms with the use of variable rather

than fixed interest rates in the years

these grants were disbursed. This

methodology reflects the actual longterm options open to Israeli firms, and

also ensures that the net present value

of the amount countervailed in the year

of receipt does not exceed the face value

of the grant. In accordance with General

Issues Appendix, we allocated these

grants over ten years (the average useful

life of renewable physical assets in the

chemical manufacturing industry, as

determined under the U.S. Internal

Revenue Service Asset Depreciation

Range System).

Section 355.49(b)(2) of the

Department’s 1989 Proposed

Regulations requires the use of a

discount rate based on the cost of fixedrate long-term debt for the firm under

review or generally in the country under

review. However, Rotem had no fixedrate long-term debt during the years in

which it received ECIL grants.

Moreover, in Final Results, the

Department determined that no longterm loans with fixed interest rates (or

other long-term debt) were available in

Israel during that period; the only longterm loans (or other long-term debt)

available to companies in Israel were

provided at variable interest rates.

Consistent with Final Results, as the

discount rate we have used the rate of

return on CPI-indexed commercial

bonds (as published in the Bank of

Israel Annual Reports, plus the CPI).

To calculate the benefit, we summed

the benefits from these projects for 1994.

We then divided the results by Rotem’s

sales of IPA during the review period.

On this basis, we preliminarily

determine the net subsidy from this

program to be 6.53 percent ad valorem

for 1994.

(B) Long-term Industrial Development

Loans

Prior to July 1985, approved

enterprises were eligible to receive longterm industrial development loans

funded by the Government of Israel

(GOI). During the original investigation,

we verified that these loans were

project-specific. They were disbursed

through the Industrial Development

Bank of Israel (IDBI) and other

industrial development banks which no

longer exist.

The long-term industrial development

loans were provided to a diverse

number of industries, including

agricultural, chemical, mining, machine,

and others. However, the interest rates

on loans vary depending on the

Development Zone in which the

borrower is located. The interest rates

on loans to borrowers in Development

Zone A are lowest, while those on loans

to borrowers in the Central Zone are

highest. Therefore, loans to companies

in Zone A are provided on preferential

terms relative to loans received by

companies in the heavily populated and

developed Central Zone. In IPA

Investigation, the Department found

long-term industrial development loans

to be regional subsidies and

countervailable to the extent that they

are provided at interest rates which are

lower than those applied on loans

provided to companies located in the

Central Zone. In this review, no new

information or evidence of changed

circumstances has been submitted to

warrant reconsideration of this

determination. Rotem had loans

outstanding under this program during

the review period. The loans carry the

Zone A interest rates because of Rotem’s

location. Therefore, we determine that

Rotem received countervailable benefits

under this program because the interest

rates paid by Rotem are lower than

those which would apply in the Central

Zone.

As was determined in the Final

Affirmative Countervailing Duty

Determination: Certain Carbon Steel

Butt-Weld Pipe Fittings from Israel, 60

FR 10569 (February 27, 1995), under the

terms of this 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. All of Rotem’s loans were

linked to the dollar/shekel exchange

rate. Because the dollar-shekel exchange

rate varies from year-to-year, we were

unable to apply the Department’s

methodology described in the 1989

Proposed Regulations because we

cannot calculate a priori the payments

due over the life of these loans, and

hence cannot calculate the ‘‘grant

equivalent’’ of the loans. Therefore, in

accordance with § 355.49(d)(1) of the

1989 Proposed Regulations, 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 Rotem during the

review period. We then calculated the

interest savings during the period of

review. We summed the benefits and

divided the total by Rotem’s sales of IPA

during the review period. On this basis,

we preliminarily determine the net

subsidy from this program to be 0.002

percent ad valorem for 1994.

(C) Encouragement of Industrial

Research and Development Grants

(EIRD)

Rotem received several grants under

this program during the review period.

In IPA Investigation, we determined that

these grants are countervailable. In this

review, no new information or evidence

of changed circumstances has been

submitted to warrant reconsideration of

this determination. We followed the

methodology developed in IPA

Investigation in determining the benefits

from the EIRD funding.
Federal Register / Vol. 61, No. 110 / Thursday, June 6, 1996 / Notices 28847

During the 1994 review period, Rotem

received three EIRD grants. The EIRD

grants issued to Rotem on February 1,

1994 and April 7, 1994 benefited a

research project concerning green acid,

which is used as an input in the

production of IPA as well as other

products. The EIRD grant issued to

Rotem on August 1, 1994 benefited a

research project concerning phosphate,

which can be used to produce IPA as

well as other products. We view these

grants as ‘‘non-recurring’’ grants based

on the analysis set forth in the

‘‘Allocation’’ section of the General

Issues Appendix (58 FR 37226) because

these benefits are exceptional, and

Rotem cannot expect to receive benefits

on an ongoing basis from review period

to review period. Since the total value

of the grants received in 1994 was less

than 0.50 percent of all Rotem’s sales,

we divided the total amount of the 1994

grants by Rotem’s total sales of all

products. On this basis, we

preliminarily determine the benefit from

this program to be 0.06 percent ad

valorem.

II. Programs Preliminarily Determined

To Be Not Used

We examined the following programs

and preliminarily determine that the

producer and/or exporter of the subject

merchandise did not apply for or

receive benefits under these programs

during the period of review:

A. Exchange Rate Risk Insurance

Scheme;

B. Reduced Tax Rates under ECIL;

C. ECIL Section 24 loans;

D. Labor Training Grants;

E. Dividends and Interest Tax Benefits

under Section 46 of the ECIL; and

F. ECIL Preferential Accelerated

Depreciation.

Preliminary Results of Review

In accordance with § 355.22(c)(4)(ii)

of the Department’s Interim Regulations,

we have calculated an individual

subsidy rate for each producer/exporter

subject to this administrative review.

For the period January 1, 1994 through

December 31, 1994, we preliminarily

determine the net subsidy for Rotem to

be 6.59 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 the following countervailing

duties:

Net Subsidies—

Producer/Exporter

Net

Subsidy

Rate %

Rotem Amfert Negev Ltd. ............... 6.59

The Department also intends to instruct

the U.S. Customs Service to collect cash

deposits of estimated countervailing

duties, at the rate indicated above, on

the f.o.b. invoice price for all shipments

of the subject merchandise from the

reviewed company, entered, or

withdrawn from warehouse, for

consumption on or after the date of

publication of the final results of this

review.

The URAA replaced the general rule

in favor of a country-wide rate with a

general rule in favor of individual rates

for investigated and reviewed

companies. The procedures for

countervailing duty cases are now

essentially the same as those in

antidumping cases, except as provided

for in section 777A(e)(2)(B) of the Act.

Requests for administrative reviews

must now specify the companies to be

reviewed. See § 355.22(a) of the Interim

Regulations. The requested review will

normally cover only those companies

specifically named. Pursuant to 19 CFR

355.22(g), for all companies for which a

review was not requested, duties must

be assessed at the cash deposit rate, and

cash deposits must continue to be

collected at the rate previously ordered.

As such, the countervailing duty cash

deposit rate applicable to a company

can no longer change, except pursuant

to a request for a review of that

company. See Federal-Mogul

Corporation and The Torrington

Company v. United States, 822 F.Supp.

782 (CIT 1993) and Floral Trade Council

v. United States, 822 F.Supp. 766 (CIT

1993) (interpreting 19 CFR 353.22(e),

the antidumping regulation on

automatic assessment, which is

identical to 19 CFR 355.22(g)).

Therefore, the cash deposit rates for all

companies except those covered by this

review will be unchanged by the results

of this review.

We will instruct Customs to continue

to collect cash deposits for nonreviewed companies at the most recent

company-specific or country-wide rate

applicable to the company. Accordingly,

the cash deposit rates that will be

applied to all non-reviewed companies

covered by this order are those

established in the most recently

completed administrative proceeding.

These rates shall apply to all nonreviewed companies until a review of a

company assigned these rates is

requested. In addition, for the period

January 1, 1994 through December 31,

1994, the assessment rates applicable to

all non-reviewed companies covered by

this order are the cash deposit rates in

effect at the time of entry.

Public Comment

Parties to the proceeding may request

disclosure of the calculation

methodology and interested parties may

request a hearing not later than 10 days

after the 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. Parties who submit argument

in this proceeding are requested to

submit with the argument (1) a

statement of the issue and (2) a brief

summary of the argument. 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.

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 19

CFR 355.38, 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)).

Dated: May 29, 1996.

Paul L. Joffe,

Acting Assistant Secretary for Import

Administration.

[FR Doc. 96–14156 Filed 6–5–96; 8:45 am]

BILLING CODE 3510–DS–P

Minority Business Development

Agency

Minority Business Development

Centers; Florida

AGENCY: Minority Business

Development Agency, Commerce.

ACTION: Notice; Solicitation of Business

Development Center Applications for

Jacksonville, Orlando, Tampa, and West

Palm Beach.

SUMMARY: In accordance with Executive

Order 11625 and 15 U.S.C. 1512, the

Minority Business Development Agency

(MBDA) is soliciting competitive

applications from organizations to

operate the Minority Business

Development Centers (MBDC) listed in

this document.