Preliminary Negative Countervailing Duty Determination: Disposable Lighters From Thailand

DEPARTMENT OF COMMERCE

[C-549-811]

Preliminary Negative Countervailing Duty Determination:

Disposable Lighters From Thailand

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: August 9, 1994.

FOR FURTHER INFORMATION CONTACT: Kristin M. Heim, Office of

Countervailing Investigations, Import Administration, U.S. Department

of Commerce, Room B099, 14th Street and Constitution Avenue, N.W.,

Washington, D.C. 20230; telephone (202) 482-3798.

PRELIMINARY DETERMINATION:

Case History

Since the initiation of this investigation on May 31, 1994, the

following events have occurred.

On June 1, 1994, we issued a questionnaire to the Government of

Thailand in Washington, DC., concerning petitioner's allegations.

On July 8, 1994, we received responses from the Government of

Thailand and Thai Merry Company Ltd. On July 21, 1994, we received a

supplemental questionnaire response filed jointly by both respondents.

Scope of Investigations

The products covered by this investigation are disposable pocket

lighters, whether or not refillable, whose fuel is butane, isobutane,

propane, or other liquified hydrocarbon, or a mixture containing any of

these, whose vapor pressure at 75 degrees fahrenheit (24 degrees

Celsius) exceeds a gage pressure of 15 pounds per square inch. Non-

refillable pocket lighters are imported under subheading 9613.10.0000

of the Harmonized Tariff Schedule of the United States (``HTSUS'').

Refillable, disposable pocket lighters would be imported under

subheading 9613.20.0000. Although the HTSUS subheadings are provided

for convenience and Customs purposes, our written description of the

scope of this proceeding is dispositive.

Injury Test

Although Thailand is not a ``country under the Agreement'' within

the meaning of section 701(b) of the Tariff Act of 1930, as amended

(``the Act''), the merchandise being investigated is non-dutiable under

the Generalized System of Preferences and Thailand is a contracting

party to the General Agreement on Tariffs and Trade. Thailand,

therefore, is entitled to an injury test on imports of the subject

merchandise. On June 20, 1994, the ITC preliminarily determined that

imports of the subject merchandise from Thailand materially injure, or

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

Petitioner

The petitioner is BIC Corporation. Petitioner states that it is the

sole remaining domestic producer of the subject merchandise and that it

is filing on behalf of the domestic industry.

Respondents

The Government of Thailand (``GOT'') and Thai Merry Company Ltd.

(``Thai Merry'') are respondents in this investigation. Although Thai

Merry is not the only exporter of disposable lighters to the United

States, it accounts for more than 85 percent of exports and is,

therefore, the sole company respondent.

Analysis of Programs

For purposes of this preliminary determination, the period of

investigation (``the POI'') is calendar year 1993.

Consistent with our practice in preliminary determinations, when a

response to an allegation denies the existence of a program, receipt of

benefits under a program, or eligibility of a company or industry under

a program, and the Department has no persuasive evidence showing that

the response is incorrect, we accept the response for purposes of the

preliminary determination. All such responses, however, are subject to

verification. If the response cannot be supported at verification, and

the program is otherwise countervailable, the program will be

considered a bounty or grant in the final determination.

Based upon our analysis of the petition and the responses to our

questionnaires, we preliminarily determine the following:

I. Program Preliminarily Determined to be Countervailable

Section 31 of the Investment Promotion Act

The Investment Promotion Act of 1977 (``IPA'') provides incentives

for investment to promote the development of the Thai economy. The IPA

authorizes an array of tax exemptions and exclusions. The IPA is

administered by the Board of Investment through promotion certificates.

These certificates list the various sections of the IPA under which a

company is eligible to receive benefits.

Under Section 31, companies may obtain a three-to-eight year

exemption from payment of corporate income tax on profits derived from

promoted activities, as well as deductions from net profits for losses

incurred during the tax exemption period. The 1977 IPA Act has been

amended several times and, in 1991, the GOT passed the Investment

Promotion Act No. 2 of 1991. This 1991 Act was the law in effect during

the POI. Section 16 of this law states that eligible activities for

this exemption include ``* * * activities which involve production for

export.''

Thai Merry applied for and received income tax exemptions under

section 31 of the IPA for the income tax return filed during the POI.

The approval certificate received by Thai Merry for participation in

this program states that ``the company has received a promoted status

in the business for production of gas lighters for export.''

Because Thai Merry received these benefits for exported lighters,

we preliminarily determine that this program confers an export bounty

or grant. To calculate the benefit for the POI, we divided the tax

savings by the total value of export sales, pursuant to 355.47(c)(ii)

of the Proposed Regulations (Countervailing Duties: Notice of Proposed

Rulemaking and Request for Public Comments, 54 FR 23366 (May 31,

1989)). . On this basis, we calculated a net bounty or grant of 0.23

percent ad valorem.

Because this is the only countervailable program and the rate is de

minimis, pursuant to 19 CFR 355.7 (1994), we preliminarily determine

that no benefits which constitute bounties or grants within the meaning

of the countervailing duty law are being provided to manufacturers,

producers, or exporters of disposable lighters in Thailand.

II. Programs Preliminarily Determined Not to be Used

We preliminarily determine that producers or exporters in Thailand

of the subject merchandise did not receive benefits during the POI for

exports of the subject merchandise to the United States under the

following programs:

1. Industrial Estates/Export Processing Zones

2. Preferential Short-term Loans Under the Export Packing Credit

Program

3. Tax and Duty Exemptions Under the Investment Promotion Act (sections

28, 33, 34, 36(1), 36(2), 36(3) and 36(4))

4. Tax Certificates for Exporters

5. Rediscount of Industrial Bills

6. International Trade Promotion Fund

Verification

In accordance with section 776(b) of the Act, we will verify the

information used in making our final determination.

Public Comment

In accordance with 19 CFR 355.38, we will hold a public hearing, if

requested, to afford interested parties an opportunity to comment on

this preliminary determination. Individuals who wish to request a

hearing must submit such a request within ten days of the publication

of this notice in the Federal Register to the Assistant Secretary for

Import Administration, U.S. Department of Commerce, room B099, 14th

Street and Constitution Avenue, NW., Washington, DC 20230. Interested

parties should contact the Department by telephone to learn the time

and date of the hearing.

This determination is published pursuant to section 703(f) of the

Act (19 U.S.C. 1671b(f)).

Dated: August 1, 1994.

Susan G. Esserman,

Assistant Secretary for Import Administration.

[FR Doc. 94-19423 Filed 8-8-94; 8:45 am]

BILLING CODE 3510-DS-P