# Ceramic Tile from Mexico; Preliminary Results of Countervailing Duty Administrative Review > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A94-27918 ## Record - **Collection:** Federal Register - **Document type:** Uncategorized Document - **Published:** November 10, 1994 ## Text DEPARTMENT OF COMMERCE [C-201-003] Ceramic Tile from Mexico; 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 ceramic tile from Mexico. The review period is January 1, 1992 through December 31, 1992. We preliminarily determine the total bounty or grant to be zero or de minimis for 32 companies, and 2.55 percent ad valorem for all other companies during this review period. In accordance with 19 CFR 355.7, any rate less than 0.5 percent ad valorem is de minimis. We invite interested parties to comment on these preliminary results. EFFECTIVE DATE: November 10, 1994. FOR FURTHER INFORMATION CONTACT: Gayle Longest or Kelly Parkhill, Office of Countervailing Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202) 482-2786. SUPPLEMENTARY INFORMATION: Background On April 28, 1993, the Department published a notice of ``Opportunity to Request Administrative Review'' (58 FR 25802) of the countervailing duty order on ceramic tile from Mexico. We received a request for review from Ceramica Regiomontana, S.A., (Ceramica) a Mexican exporter of the subject merchandise. We initiated the review on June 25, 1993 (58 FR 34414). The review period is January 1, 1992 through December 31, 1992. This review involves 33 companies and 10 programs. On February 7, 1994, the Government of Mexico submitted a request for partial revocation for 14 companies with their questionnaire response. According to 19 CFR 355.25(b)(3), a request for revocation can only be submitted in the fifth and subsequent anniversary months of an order. Since the anniversary month for the review period January 1, 1992 through December 31, 1992 is May 1993, and the request was submitted on February 7, 1994, the request was untimely. Therefore, the Department is unable to consider partial revocation for these 14 companies in this administrative review. The Department is conducting this review in accordance with section 751 of the Tariff Act of 1930 (the Act), as amended. The final results of the last administrative review of this order were published in the Federal Register on January 19, 1994 (59 FR 2823). Scope of Review Imports covered by this review are shipments of Mexican ceramic tile, including non-mosaic, glazed, and unglazed ceramic floor and wall tile. During the review period, such merchandise was classifiable under the Harmonized Tariff Schedule (HTS) item numbers 6907.10.0000, 6907.90.0000, 6908.10.0000, and 6908.90.0000. The HTS item numbers are provided for convenience and Customs purposes. The written description remains dispositive. Calculation Methodology for Assessment and Cash Deposit Purposes In calculating the benefits received during the review period, we followed the methodology described in the preamble to 19 CFR 355.20(d) (53 FR 52306, and 52325; December 27, 1988). We calculated a country- wide rate, weight-averaging the benefits received by the 33 companies subject to review to determine the overall subsidy from all programs benefitting exports of the subject merchandise to the United States. In weight-averaging the benefits, we used each firm's share of exports to the United States as weights. Because the overall weighted-average country-wide rate was above de minimis, as defined by 19 CFR 355.7, we proceeded to the next step in our analysis and examined the ad valorem rate we had calculated for each company for all programs combined, to determine whether individual company rates differed significantly from the weighted-average country- wide rate. Thirty-two companies received aggregate benefits which were zero or de minimis (significantly different within the meaning of 19 CFR 355.22(d)(3)(ii)). Therefore, these companies were treated separately for assessment and cash deposit purposes. Ceramica's rate was not significantly different from the weighted- average country-wide rate. Since Ceramica was the only company receiving subsidies greater than de minimis, the all other rate was calculated based on the unweighted aggregate benefits that Ceramic received from all countervailing programs. Analysis of Programs (1) BANCOMEXT Financing for Exporters Effective January 1, 1990, the Mexican Treasury Department eliminated the Fondo para el Fomento de las Exportaciones de Productos Manufacturados (FOMEX) loan program and transferred the FOMEX trust to the Banco Nacional de Comercio Exterior, S.N.C. (BANCOMEXT). BANCOMEXT offers short-term financing to producers or trading companies engaged in export activities; any company generating foreign currency through exports is eligible for financing under this program. The BANCOMEXT program operates much like its predecessor, FOMEX. BANCOMEXT provides two types of financing, both in U.S. dollars, to exporters: working capital loans (pre-export loans), and loans for export sales (export loans). In addition, BANCOMEXT may provide financing to foreign buyers of Mexican goods and services. The Department has previously found this program to confer an export subsidy to the extent that the loans are provided at preferential terms (See Ceramic Tile From Mexico; Preliminary Results of Countervailing Duty Review (57 FR 5997; February 19, 1992) and Ceramic Tile From Mexico; Final Results of Countervailing Duty Review (57 FR 24247; June 8, 1992)). In this review the Government of Mexico provided no new information or evidence of changed circumstances that would lead the Department to alter that determination. We found that the annual interest rates that BANCOMEXT charged to borrowers for certain loans on which interest payments were due during the review period were lower than commercial rates. The BANCOMEXT dollar-denominated loans under review were granted at annual interest rates ranging from 7.1 percent to 9.8 percent. As discussed in Certain Steel Products from Mexico; Final Countervailing Duty Determination (58 FR 37357; July 9, 1993), because loans are funded by BANCOMEXT through commercial banks in dollars and indexed to dollars for repayment, we used a dollar benchmark. As the benchmark for BANCOMEXT pre-export and export dollar-denominated loans granted in 1992, we used the average of the quarterly weighted-average effective interest rates published in the Federal Reserve Bulletin, which resulted in an annual benchmark of 7.18 percent in 1992. We consider the benefits from short-term loans to occur at the time the interest is paid. Because interest on BANCOMEXT pre-export loans is paid at maturity, we calculated benefits based on loans that matured during the review period; these were obtained between March 1992 and May 1992. Interest on BANCOMEXT export loans is paid in advance; we therefore calculated benefits based on BANCOMEXT loans received during the review period. Two exporters of ceramic tile products used BANCOMEXT pre-export and export financing. Because we found that the exporters were able to tie their BANCOMEXT loans to specific sales, we measured the benefit only from the BANCOMEXT loans tied to sales of the subject merchandise to the United States. To determine the benefit for each exporter, we multiplied the difference between the interest rate charged to exporters for these loans and the benchmark interest rate by the outstanding principal and then multiplied this amount by the term of the loan divided by 365. Because one company's monthly sales figures are indexed to account for inflation, we adjusted that company's benefit amounts to be on the same terms as the sales figures. On this basis, we preliminarily determine the benefit from this program to be 0.01 percent ad valorem for Internacional de Ceramica and zero for all other companies listed in the preliminary results of review section of this notice. (2) PITEX The Program for Temporary Importation of Products used in the Production of Exports (PITEX) was established by a decree published in the Diario Oficial on May 9, 1985, and amended in the Diario Oficial on September 19, 1986, and May 3, 1990. The program is jointly administered by the Ministry of Commerce and Industrial Development (SECOFI) and the Customs Administration. Under PITEX, exporters with a proven export record may receive authorization to temporarily import products to be used in the production of exports for up to five years without having to pay the import duties normally imposed on those imports. PITEX allows for the exemption of import duties for the following categories of merchandise used in export production: raw materials, packing materials, fuels and lubricants, machinery used to manufacture products for export, and spare parts and other machinery. The importer must post a bond or other security to guarantee the reexportation of the temporary imports. Because it is only available to exporters, the Department previously found in Certain Textile Mill Products From Mexico; Final Results of Countervailing Duty Administrative Review (56 FR 50859; October 9, 1991) and Ceramic Tile From Mexico; Final Results of Countervailing Duty Administrative Review (57 FR 24247; June 8, 1992) that PITEX provides countervailable benefits to the extent that it provides duty exemptions on imports of merchandise not physically incorporated into exported products. The Government of Mexico provided no new information or evidence of changed circumstances that would lead the Department to alter that determination. During the review period, Ceramica used the PITEX program for imports of machinery and spare parts which are not physically incorporated into exported products. To calculate the benefit from this program, we calculated the duties that should have been paid on the non-physically incorporated items that were imported under the PITEX program during the review period. We then divided that amount by the company's total exports. On this basis, we preliminarily determine the benefit from this program to be zero for the 32 companies listed in the preliminary results of review section of this notice and 2.55 percent ad valorem for all other companies. (3) Other Programs We also examined the following programs and preliminarily determine that exporters of the subject merchandise did not use them during the review period: (A) Other BANCOMEXT preferential financing; (B) Other Dollar-Denominated Financing Programs; (C) Fiscal Promotion Certificates (CEPROFI); (D) Import duty reductions and exemptions; (E) State tax incentives; (F) Article 15 Loans; (G) NAFINSA FONEI-type financing; and (H) NAFINSA FOGAIN-type financing. Preliminary Results of Review We preliminarily determine that the following 32 companies received zero or de minimis benefits during the 1992 review period. In accordance with 19 CFR 355.7, any rate less than 0.5 percent ad valorem is de minimis. (1) Adrian Sifuentes Jimenez. (2) Agustin Cedillo Ruiz. (3) Alejandro Estrada Silva. (4) Apolonio Arias Vasquez. (5) Arturo Leija Lucio. (6) Aurelio Cedillo Ruiz. (7) Azuelejos Decorativos Carrillo, S.A. (8) Efrain Medina Carrillo. (9) Emilio Pacheco. (10) Faustino Nuncio Silva. (11) Ima Regiomontana, S.A. de C.V. (12) Industrias Intercontinental, S.A. de C.V. (13) Internacional de Ceramica, S.A. de C.V. (14) Javier Leija Lucio. (15) Jesus Gallegos Olivares. (16) Jesus Jimenez Lucio. (17) Jose Arellano Valdez. (18) Jose Dolores Hernandez. (19) Jose Silva Romero. (20) Juan Cortex Coronel. (21) Leopoldo Montiel Rincon. (22) Luis Najera Flores. (23) Luis Paulino Flores. (24) Norberto Cuellar Zuniga. (25) O.H. Internacional, S.A. de C.V. (26) Pedro Lopez Alonso. (27) Raul Leija. (28) Recubrimientos Mezquital, S.A. de C.V. (29) Ricardo Berrones. (30) Taller de Azuelejos Coloniales. (31) Vicente Jalomo Reyna. (32) Zenon Cortez Coronel. In addition, we preliminarily determine the total bounty or grant to be 2.55 percent ad valorem for all other companies during the period January 1, 1992 through December 31, 1992. If the final results of this review remain the same as these preliminary results, the Department intends to instruct the Customs Service to liquidate, without regard to countervailing duties, shipments of this merchandise from Mexico exported by the 32 companies listed above for the period on or after January 1, 1992, and on or before December 31, 1992, and to assess countervailing duties of 2.55 percent of the f.o.b. invoice price of shipments from all other companies for the same period. 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. Pursuant to 19 CFR 355.38(c), 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. 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 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 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)) and 19 CFR 355.22. Dated: November 4, 1994. Susan G. Esserman, Assistant Secretary for Import Administration. [FR Doc. 94-27918 Filed 11-9-94; 8:45 am] BILLING CODE 3510-DS-P --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A94-27918. Public record. Not legal advice.