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: August 11, 1998.

FOR FURTHER INFORMATION CONTACT:

Maria K. Dybczak 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) 482-1398, or 482-3818,

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,

1996, through March 31, 1997, 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 Tariff Act of

1930, as amended (``the Act''), are references to the provisions

effective January 1, 1995, the effective date of the amendments made to

the Act by the Uruguay Round Agreements Act (``URAA''). In addition,

unless otherwise indicated, all citations to the Department's

regulations are to the regulations set forth at 19 C.F.R. part 351 (62

FR 27296, May 19, 1997).

SUPPLEMENTARY INFORMATION:

Background

On November 25, 1997, 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

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November 26, 1997, 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 23, 1997 (Initiation of Antidumping

and Countervailing Duty Administrative Reviews, 62 FR 67044 (December

23, 1997)). The Department is now conducting this review in accordance

with section 751 of the Tariff Act and 19 CFR 351.221. The Department

issued a questionnaire on January 23, 1998, and received a joint

questionnaire response from the GOS, MARIS, and AMS, on March 23, 1998.

The Department sent out two supplemental questionnaires on April 10,

and May 8, 1998, and received joint supplemental questionnaire

responses to each questionnaire on April 24, and May 22, 1998,

respectively.

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, 1996 through March 31, 1997, 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 this Economic Expansion Incentives

Act for this period of review.

According to the Export Enterprise Cettificate 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 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, as we have since the 92-93 period of review. On

this basis, we preliminarily determine the benefit from this program

during the review period to be 0.56 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 appy 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. In their response,

respondents reported 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, 1996 through March 31, 1997. We also preliminarily determine

the net bounty or grant to be 0.56 percent of the f.o.b. value of the

merchandise for the April 1, 1996 through March 31, 1997 review period.

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

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

1996 through March 31, 1997, 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

10th administrative reviews of the suspension agreement (See Certain

Refrigeration Compressors from the Republic of Singapore: Final Results

of Countervailing Duty Administrative Review, 61 FR 10315 (March 13,

1996)) was 3.00 percent. This rate was in effect from April 1, 1996

through August 27, 1996. The provisional rate, established in the

notice of the final results of the 11th administrative reviews of the

suspension agreement (See Certain Refrigeration Compressors from the

Republic of Singapore: Final Results of Countervailing Duty

Administrative Review, 61 FR 44296 (August 28, 1996)) was 2.22 percent.

This rate was in effect from August 28, 1996 through March 31, 1997. 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 two

provision rates noted above and the 0.56 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

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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 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

0.56 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 351.221.

Dated: August 3, 1998.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

[FR Doc. 98-21531 Filed 8-10-98; 8:45 am]

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