Preliminary Results of Countervailing Duty Administrative Review: Certain Refrigeration Compressors From the Republic of Singapore

DEPARTMENT OF COMMERCE

International Trade Administration

[C-559-001]

Preliminary Results of Countervailing Duty Administrative Review:

Certain Refrigeration Compressors From the Republic of Singapore

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: December 9, 1997.

FOR FURTHER INFORMATION CONTACT: Robert Bolling or Rick Johnson, Office

of Antidumping/Countervailing Duty Enforcement, Group III, Office IX,

Import Administration, U.S. Department of Commerce, Room 1874, 14th

Street and Constitution Avenue, N.W., Washington, D.C. 20230; telephone

(202) 482-3434, or 482-0165, respectively.

SUMMARY: In response to requests by the Government of the Republic of

Singapore (GOS), Matsushita Refrigeration Industries (Singapore) Pte.

Ltd. (MARIS), Asia Matsushita Electric (Singapore) Pte. Ltd. (AMS), and

the petitioner, Tecumseh Products Company (Tecumseh), the Department of

Commerce (the Department) is conducting an administrative review of the

agreement suspending the countervailing duty investigation on certain

refrigeration compressors from the Republic of Singapore. This review

covers the GOS, MARIS, and AMS. AMS was the sole exporter of the

subject merchandise to the United States during the period April 1,

1995, through March 31, 1996, the period of review (POR). We

preliminarily determine that the signatories have complied with the

terms of the suspension agreement during the POR.

Interested parties are invited to comment on these preliminary

results. Parties who submit arguments in this proceeding are requested

to submit with their argument (1) a statement of the issue and (2) a

brief summary of the argument.

Applicable Statute

Unless otherwise indicated, all citations to the statute and to the

Department's regulations are in reference to the provisions as they

existed on or after January 1, 1995, the effective date of the

amendments made to the Tariff Act of 1930 (the Tariff Act) in

accordance with the Uruguay Round Agreements Act (URAA).

SUPPLEMENTARY INFORMATION:

Background

On November 18, 1996, the GOS, MARIS, and AMS, requested an

administrative review of the agreement suspending the countervailing

duty investigation on certain refrigeration compressors from the

Republic of Singapore (Certain Refrigeration Compressors from the

Republic of Singapore: Suspension of Countervailing Duty Investigation,

(``Refrigeration Compressors'') 48 FR 51167, 51170 (November 7, 1983)).

On November 19, 1996, petitioner also requested an administrative

review of the agreement suspending the countervailing duty

investigation on certain refrigeration compressors from the Republic of

Singapore. We initiated the review on December 16, 1996 (Initiation of

Antidumping and Countervailing Duty Administrative Reviews, 61 FR

66017, (December 16, 1996)). The Department is now

[[Page 64807]]

conducting this review in accordance with section 751 of the Tariff Act

and 19 CFR 355.22. The Department issued a questionnaire on April 9,

1997, and received a joint questionnaire response from the GOS, MARIS,

and AMS, on May 27, 1997. On May 27, 1997, the Department extended the

time limit for completing these preliminary results until December 2,

1997 (Extension of Time Limit for Countervailing Duty Administrative

Review, 62 FR 28672, (May 27, 1997)). Subsequently, the Department sent

out a supplemental questionnaire on September 23, 1997 and received a

joint supplemental questionnaire response on October 7, 1997. We

conducted verification in Singapore of the questionnaire responses of

the GOS, MARIS, and AMS on October 29 and 31, 1997.

Scope of the Review

Imports covered by this review are shipments of hermetic

refrigeration compressors rated not over one-quarter horsepower from

Singapore. This merchandise is currently classified under Harmonized

Tariff Schedule (HTS) item number 8414.30.40. The HTS item number is

provided for convenience and Customs purposes. The written description

remains dispositive.

The review period is April 1, 1995 through March 31, 1996, and

includes 2 programs. The review covers one producer and one exporter of

the subject merchandise, MARIS and AMS, respectively. These two

companies, along with the GOS, are the signatories to the suspension

agreement.

Under the terms of the suspension agreement, the GOS agrees to

offset completely the amount of the net bounty or grant determined to

exist by the Department in this proceeding with respect to the subject

merchandise. The offset entails the collection by the GOS of an export

charge applicable to the subject merchandise exported on or after the

effective date of the agreement. See Refrigeration Compressors, 48 FR

51167, 51170 (November 7, 1983).

Analysis of Programs

(1) The Economic Expansion Incentives Act--Part VI

The Production for Export Programme under Part VI of the Economic

Expansion Incentives Act allows a 90-percent tax exemption on a

company's export profit if the GOS designates a company as an export

enterprise. In the investigation, the Department preliminarily found

this program to be countervailable because ``this tax exemption is

provided only to certified export enterprises.'' See Preliminary

Affirmative Countervailing Duty Determination: Certain Refrigeration

Compressors from the Republic of Singapore, 48 FR 39109, 39110 (August

29, 1983). MARIS is designated as an export enterprise and used this

tax exemption during the period of review. AMS was not designated an

export enterprise under Part VI of the Economic Expansion Incentives

Act for the period of review.

According to the Export Enterprise Certificate awarded to MARIS in

a letter dated May 12, 1981, MARIS is to receive this benefit on the

production of compressors, electrical parts and accessories for

refrigerators, and plastic refrigerators. To calculate the benefit, we

divided the tax savings claimed by MARIS under this program by the

f.o.b. value of total exports of products receiving the benefit for the

period of review.

MARIS' response to the Department's countervailing duty

questionnaire for this review, which we confirmed at verification,

shows that MARIS deducted export charges levied pursuant to the

suspension agreement in arriving at an adjusted profit figure, which

was then used to calculate exempt export profit for the review period.

In the 90-91 administrative review, the Department determined that the

amount of the export charge deduction must be added ``back to MARIS'

export profit in calculating MARIS' tax savings in order to offset the

deduction of the export charges in the review period.'' See Preliminary

Results of Countervailing Duty Review: Certain Refrigeration

Compressors from Singapore, 57 FR 31175 (July 14, 1992), affirmed in

Final Results of Countervailing Duty Review: Certain Refrigeration

Compressors from Singapore, 57 FR 46539 (October 9, 1992). Therefore,

as the Department did in the 92-93 administrative review, in

calculating the benefit from this program, we have added back this

deduction. On this basis, we preliminarily determine the benefit from

this program during the review period to be 0.23 percent of the f.o.b.

value of the merchandise.

(2) Financing Through the Monetary Authority of Singapore

Under the terms of the suspension agreement, MARIS and AMS agreed

not to apply for or receive any financing provided by the rediscount

facility of the Monetary Authority of Singapore (MAS) for shipments of

the subject merchandise to the United States. At verification, we

confirmed that, during the period of review neither MARIS nor AMS

received any financing through the MAS on subject merchandise exported

to the United States. Therefore, we preliminarily determine that both

companies have complied with this clause of the agreement.

Preliminary Results of Review

The suspension agreement states that the GOS will offset completely

with an export charge the net bounty or grant calculated by the

Department. We preliminarily determine that the signatories have

complied with the terms of the suspension agreement, including the

payment of the provisional export charges in effect for the period

April 1, 1995 through March 31, 1996. We also preliminarily determine

the net bounty or grant to be 0.23 percent of the f.o.b. value of the

merchandise for the April 1, 1995 through March 31, 1996 review period.

Following the methodology outlined in section B.4 of the agreement,

the Department preliminarily determines that, for the period April 1,

1995 through March 31, 1996, a negative adjustment may be made to the

provisional export charge rate in effect. The adjustments will equal

the difference between the provisional rate in effect during the review

period and the rate determined in this review, plus interest. The

provisional rate, established in the notice of the final results of the

90-91 administrative reviews of the suspension agreement (See Certain

Refrigeration Compressors from the Republic of Singapore: Final Results

of Countervailing Duty Administrative Review, 57 FR 46539, 46540

(October 9, 1992)) was 5.52 percent. This rate was in effect from April

1, 1995 through March 12, 1996. On March 13, 1996, the Department

established in the notice of the final results of the 92-93

administrative review of the suspension agreement a new provisional

rate of 3.00 percent (See Certain Refrigeration Compressors from the

Republic of Singapore: Final Results of Countervailing Duty

Administrative Review, 61 FR 10315 (March 13, 1996)). If the

Department's preliminary results do not change in the final, we will

notify the GOS that it may refund or credit, in accordance with section

B.4.c of the agreement, the difference between the above amounts and

the 0.23 percent, plus interest, calculated in accordance with section

778(b) of the Tariff Act, within 30 days of notification by the

Department. The Department will notify the GOS of these adjustments

after publication of the final results of this review.

Furthermore, if the final results of this review remain the same as

these

[[Page 64808]]

preliminary results, the Department intends to notify the GOS that the

provisional export charge rate on all exports to the United States with

Outward Declarations filed on or after the date of publication of the

final results of this administrative review shall be 0.23 percent of

the f.o.b. value of the merchandise.

The agreement can remain in force only as long as shipments from

the signatories account for at least 85 percent of imports of the

subject refrigeration compressors into the United States. Our

information indicates that the two signatory companies accounted for

100 percent of imports into the United States from Singapore of this

merchandise during the review period.

Parties to the proceeding may request disclosure within 5 days of

the date of publication of this notice. Any interested party may

request a hearing within 10 days of publication. Case briefs and/or

written comments from interested parties may be submitted no later than

30 days after the date of publication. Rebuttal briefs and rebuttals to

written comments, limited to issues raised in the case briefs and

comments, may be filed not later than 37 days after the date of

publication of this notice. Any hearing, if requested, will be held 44

days after the date of publication, or the first workday thereafter.

The Department will publish the final results of this administrative

review including the results of its analysis of issues raised in any

such written comments or at a hearing.

These requirements, when imposed, shall remain in effect until

publication of the final results of the next administrative review.

This administrative review and this notice are in accordance with

section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.

Dated: December 2, 1997.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

[FR Doc. 97-32212 Filed 12-8-97; 8:45 am]

BILLING CODE 3510-DS-P