Certain Apparel From Argentina; Preliminary Results of Countervailing Duty Administrative Review

DEPARTMENT OF COMMERCE

[C-357-404]

Certain Apparel From Argentina; 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

apparel from Argentina. We preliminarily determine the net bounty or

grant to be zero for Agrest, S.A. (Agrest), Comercio Internacional,

S.A. (Comercio), IVA, S.A. (IVA), and Leger, S.A. (Leger), 15.87

percent ad valorem for Pulloverfin, S.A. (Pulloverfin) and 0.76 percent

ad valorem for all other companies for the period January 1, 1991

through December 31, 1991. 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 indicated

above. Interested parties are invited to comment on these preliminary

results.

EFFECTIVE DATE: August 16, 1995.

FOR FURTHER INFORMATION CONTACT: Lorenza Olivas or Judy Kornfeld,

Office of Countervailing Compliance, Import Administration,

International Trade Administration, U.S. Department of Commerce, 14th

Street and Constitution Avenue NW., Washington, D.C. 20230; telephone:

(202) 482-2786.

SUPPLEMENTARY INFORMATION:

Background

On March 12, 1985, the Department published in the Federal Register

(50 FR 9846) the countervailing duty order on certain apparel from

Argentina. On March 5, 1992, the Department published a notice of

``Opportunity to Request an Administrative Review'' (57 FR 7910) of

this countervailing duty order. We received a timely request for review

from the Amalgamated Clothing and Textile Workers Union.

We initiated the review, covering the period January 1, 1991

through December 31, 1991 (POR), on April 13, 1992 (57 FR 12797). The

review covers 5 manufacturers/exporters of the subject merchandise,

which accounted for substantially all exports of certain apparel during

the POR, and 10 programs. (See Memorandum to Barbara E. Tillman from

Team Regarding Certain Apparel from Argentina dated January 14, 1995,

on file in the public file of the Central Records Unit, Room B-099 of

the Department of Commerce).

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. However, references to the

Department's 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 countervailing duty 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 (Jan. 3, 1995).

Scope of the Review

The subject merchandise is certain apparel from Argentina. During

the review period, this merchandise was classifiable under the

following HTS numbers, which are based on the amended conversion of the

scopes of the countervailing duty order. See, Certain Textile Mill

Products From Mexico, Certain Apparel From Argentina, and Certain

Apparel From Thailand (58 FR 4151; January 13, 1993).

6104.41.00, 6104.43.10, 6104.44.10, 6104.51.00, 6104.53.10, 6104.61.00,

6104.63.15, 6105.10.00, 6105.20.20, 6106.10.00, 6106.20.10, 6106.90.10,

6109.90.20, 6110.10.20, 6110.20.20, 6111.10.00, 6112.41.00, 6112.49.00,

6115.20.00, 6115.91.00, 6115.93.10, 6115.99.14, 6116.91.00, 6116.93.15,

6201.12.20, 6202.11.00, 6202.13.30, 6202.91.10, 6202.91.20, 6202.92.20,

6202.93.40, 6203.22.30, 6203.42.40, 6204.11.00, 6204.13.10, 6204.19.10,

6204.21.00, 6204.31.20, 6204.33.40, 6204.39.20, 6204.41.20, 6204.42.30,

6204.43.30, 6204.44.30, 6204.51.00, 6204.53.20, 6204.59.20, 6204.61.00,

6204.63.25, 6204.69.20, 6205.10.20, 6206.20.30, 6206.40.25, 6209.10.00,

6209.20.10, 6209.20.50, 6209.90.30, 6211.12.30, 6211.41.00, 6214.30.00,

6214.40.00.

Best Information Available (BIA) for Pulloverfin

Section 776(c) of the Act requires the Department to use BIA

``whenever a party or any other person refuses or is unable to produce

information requested in a timely manner and in the form required, or

otherwise significantly impedes an investigation . . . .''

In this review, Pulloverfin, a producer/exporter of the subject

merchandise, did not respond to the Department's initial and

supplemental questionnaires; therefore, we are assigning Pulloverfin a

rate based on BIA. In determining what rate to use as BIA, the

Department follows a two-tiered methodology. The Department normally

assigns lower BIA rates to those respondents who cooperated in an

administrative review and rates based on more adverse assumptions to

respondents who did not cooperate. Since Pulloverfin did not cooperate,

we are assigning a BIA rate of 15.87 percent ad valorem, which is the

highest rate from any prior proceeding of this order and which is the

rate Pulloverfin received in the investigation (See, Final Affirmative

Countervailing Duty Determinations and Countervailing Orders: Certain

Textile Mill Products and Apparel from Argentina (50 FR 9846; March 12,

1985)).

[[Page 42531]]

Calculation Methodology for Assessment and Cash Deposit Purposes

In accordance with our normal practice, we calculated the net

bounty or grant on a country-wide basis by first calculating the bounty

or grant rate for each company subject to the administrative review. We

then weight-averaged the rate received by each company using as the

weight its share of total Argentine exports to the United States of

subject merchandise, including all companies, even those with de

minimis and zero rates. We then summed the individual companies'

weight-averaged rates to determine the bounty or grant rate from all

programs benefitting exports of subject merchandise to the United

States.

Since the country-wide rate calculated using this methodology was

above de minimis, as defined by 19 CFR 355.7 (1994), we proceeded to

the next step and examined the net bounty or grant rate calculated for

each company to determine whether individual company rates differed

significantly from the weighted-average country-wide rate, pursuant to

19 CFR 355.22(d)(3). All companies subject to the review had

significantly different net bounty or grant rates during the review

period pursuant to 19 CFR 355.22(d)(3). These companies are treated

separately for assessment and cash deposit purposes. All other

companies are assigned the country-wide rate.

Analysis of Programs

I. Program Previously Determined to Confer Bounties or Grants

Rebate of Indirect Taxes (Reembolso/Reintegro)

The Reembolso program provides a cumulative tax rebate paid upon

export and is calculated as a percentage of the f.o.b. invoice price of

the exported merchandise. As stated in Sec. 355.44(d)(4)(ii) of the

Proposed Regulations (54 FR 23382), the Department will find that the

entire amount of any such rebate is countervailable unless the

following conditions are met: (1) the program operates for the purpose

of rebating prior stage cumulative indirect taxes and/or import

charges; (2) the government accurately ascertained the level of the

rebate; and (3) the government reexamines its schedules periodically to

reflect the amount of actual indirect taxes and/or import charges paid.

In prior investigations and administrative reviews of the Argentine

Reembolso program, the Department determined that these conditions have

been met (See, e.g., Leather Wearing Apparel from Argentina, Final

Results of Countervailing Duty Administrative Review (56 FR 10410;

March 12, 1991); Certain Apparel from Argentina, Final Results of

Countervailing Duty Administrative Review (56 FR 41823; August 23,

1991).

However, once a rebate program meets this threshold, the Department

must still determine in each case whether there is an overrebate; that

is, the Department must still analyze whether the rebate exceeds the

total amount of indirect taxes and import duties borne by inputs that

are physically incorporated into the exported product. If the rebate

exceeds the amount of allowable indirect taxes and import duties on

physically incorporated inputs, the Department will, pursuant to

Sec. 355.44(d)(4)(i) of the Proposed Regulations, find a

countervailable benefit equal to the difference between the Reembolso

rebate rate and the allowable rate determined by the Department (i.e.,

the overrebate).

To determine whether there was an overrebate during the review

period, the Department requested the Government of Argentina (GOA) to

provide information on any changes to the Reembolso program for certain

apparel. According to the information provided, the Reembolso program

continued to be governed by Decree 1555/86, which modified the

Reembolso program and set precise and transparent guidelines to

implement the refund of indirect taxes and import charges. The decree

established three broad rebate levels covering all products and

industry sectors. The rates for levels I, II and III were 10 percent,

12.5 percent, and 15 percent, respectively. Based on the GOA's 1986

calculation of the tax incidence in the apparel industry, this industry

was classified in level II.

In April 1989, the GOA suspended cash payment of rebates under the

Reembolso program. Pursuant to the Emergency Economic Law dated

September 25, 1989 (Law 23,697), the suspension of cash payments was

continued for an additional 180 days. Rebates accrued during the

suspension period were to be paid in export credit bonds. On March 4,

1990, the entire program was suspended for 90 days by Decree 435/90.

Decree 1930/90 suspended cash payments of the reembolso for an

additional 12-month period.

Decree 612/91, dated April 10, 1991, reinstated cash payments of

the indirect tax rebates and import charges and reduced the rate for

the apparel industry from 12.5 percent to 8.3 percent. Decree 1011/91,

dated May 29, 1991, abolished Decree 1555/86 and incorporated the

reduced rebate rates introduced by Decree 612/91. Therefore, during the

POR, rebates were suspended from January 1 through April 10, 1991, and

the rebate rate was 8.3 percent from April 11 through December 31,

1991.

Using the information provided in the questionnaire response, we

calculated the allowable tax incidence for the subject merchandise

based on the 1986 study which was in effect during the review period.

We found that the rebate of indirect taxes did not exceed the total

amount of allowable cumulative indirect taxes and/or import charges

paid on physically incorporated inputs, and prior stage indirect taxes

levied on the exported product at the final stage of production.

Therefore, we preliminarily determine that there was no benefit from

this program during the POR. In future reviews, we will continue to

examine this program to determine if there is an overrebate.

II. Other Programs

We examined the following programs and preliminarily determine that

exporters of apparel did not apply for or receive benefits under them

during the review period:

Tax Deduction Under Decree 173/85

Exemption from Stamp Taxes Under Decree 186/74

Industrial Parks

Low Cost Loans for Projects Outside of Buenos Aires

Tucaman Regional Tax Incentives

Patagonion Regional Tax Incentives

Incentives for Exports from Southern Ports

Corrientes Regional Tax Incentive

Export Financing

Preliminary Results of Review

For the period January 1, 1991, through December 31, 1991, we

preliminarily determine the net bounty or grant to be zero for Agrest,

Comercio, IVA, and Leger, 15.87 percent ad valorem for Pulloverfin and

0.76 percent ad valorem for all other companies. In accordance with 19

CFR 255.7, any rate less than 0.5 percent ad valorem is de minimis.

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 countervailing duties as follows for all

shipments of the subject merchandise exported from Argentina on or

after January 1, 1991 and on or before December 31, 1991: zero for

Agrest, Comercio, IVA and Leger; 15.87 percent ad valorem for

Pulloverfin and 0.76 percent ad valorem for all other companies.

[[Page 42532]]

The Department also intends to instruct the U.S. Customs Service to

collect a cash deposit of estimated countervailing duties of zero

percent of the f.o.b. invoice price on all shipments of this

merchandise from Agrest, Comercio, IVA and Leger, and to collect a cash

deposit of 15.87 percent of the f.o.b. invoice price on all shipments

of this merchandise from Pulloverfin and 0.76 percent of the f.o.b.

invoice price on shipments of this merchandise from other companies

from Argentina entered, or withdrawn from warehouse, for consumption on

or after the date of publication of the final results of this review.

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. See 19 CFR

355.38(b). 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 written arguments 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(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, under section 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

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: August 8, 1995.

Susan G. Esserman,

Assistant Secretary for Import Administration.

[FR Doc. 95-20201 Filed 8-15-95; 8:45 am]

BILLING CODE 3510-DS-P