Certain Textile Mill Products From Argentina; Initiation and Preliminary Results of Changed Circumstances Countervailing Duty Review, Consideration of Revocation of Order, and Intent to Revoke Order

DEPARTMENT OF COMMERCE

International Trade Administration

[C-357-404]

Certain Textile Mill Products From Argentina; Initiation and

Preliminary Results of Changed Circumstances Countervailing Duty

Review, Consideration of Revocation of Order, and Intent to Revoke

Order

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of initiation and preliminary results of changed

circumstances countervailing duty review, consideration of revocation

of order, and intent to revoke order.

-----------------------------------------------------------------------

SUMMARY: On April 2, 1996, the Department of Commerce initiated changed

circumstances reviews of the countervailing duty orders on Leather from

Argentina (55 FR 40212), Wool from Argentina (48 FR 14423), Oil Country

Tubular Goods from Argentina (49 FR 46564), and Carbon Steel Cold-

Rolled Flat Products from Argentina (49 FR 18006). The Department of

Commerce initiated these reviews in order to determine whether, in

light of the decision in Ceramica Regiomontana v. United States, 64

F.3d 1579, 1582 (Fed. Cir. 1995), the agency had the authority to

assess countervailing duties on entries of merchandise covered by these

orders occurring after September 20, 1991--the date on which Argentina

became a ``country under the Agreement'' within the meaning of former

section 303(a)(1) of the Tariff Act of 1930, as amended (the Act) (19

U.S.C. 1303(a)(1) (1988; repealed 1994)). In the final results of these

reviews, the Department of Commerce determined that, based upon the

ruling in the Ceramica case, it lacked the authority to assess

countervailing duties on unliquidated entries of merchandise covered by

the four Argentine orders occurring on or after September 20, 1991.

Final Results of Changed Circumstances Countervailing Duty Reviews and

Revocation and Amended Revocation of Countervailing Duty Orders, (62 FR

41361).

As a result of the Ceramica Regiomontana v. United States decision

and the changed circumstances reviews, the Department of Commerce is

initiating a changed circumstances review of the countervailing duty

order on Certain Textile Mill Products from Argentina (50 FR 9846) and

preliminarily determining that it does not have the authority to assess

countervailing duties on unliquidated entries of merchandise covered by

the order occurring on or after September 20, 1991. Therefore, we

intend to revoke this order with respect to all unliquidated entries of

subject merchandise entered, or withdrawn from warehouse, for

consumption during the period May 18, 1992 through December 31, 1994.

(The order has been revoked on two previous occasions. For a further

discussion of these revocations and the resulting period affected by

this preliminary determination, see the Supplementary Information

section below). We invite interested parties to comment on this notice

of initiation and preliminary results.

EFFECTIVE DATE: February 12, 1998.

FOR FURTHER INFORMATION CONTACT: Anne D'Alauro or Kelly Parkhill,

Office of CVD/AD Enforcement VI, Import Administration, International

Trade Administration, U.S. Department of Commerce, 14th Street and

Constitution Avenue, NW., Washington, DC. 20230; telephone: (202) 482-

2786.

SUPPLEMENTARY INFORMATION:

Applicable Statute and Regulations

Unless otherwise indicated, all citations to the statute are

references to the provisions effective January 1, 1995, the effective

date of the amendments made to the Act by the URAA. In addition, unless

otherwise indicated, all citations to the Department's regulations are

to the current regulations published in the Federal Register on May 19,

1997 (62 FR 27296).

History of the Countervailing Duty Order on Textile Mill Products From

Argentina

The countervailing duty order on Certain Textile Mill Products from

Argentina was issued on March 12, 1985 pursuant to former section

303(a)(1) of the Act. Under former section 303, the Department of

Commerce (the Department) could assess (or ``levy'') countervailing

duties without an injury determination on two types of imports: (i)

Dutiable merchandise from countries that were not signatories of the

1979 Subsidies Code or ``substantially equivalent'' agreements

(otherwise known as ``countries under the Agreement''), and (ii) duty-

free merchandise from countries that were not signatories of the 1947

General Agreement on Tariffs and Trade. See S. Rep. 249, 96th Cong. 1st

Sess. 103-06 (1979); H. Rep. No. 317, 96th Cong., 1st Sess. 43, 49-50

(1979). At the time this order was issued, textile mill products from

Argentina were dutiable. Also at that time, Argentina was not a

``country under the Agreement.'' In short, U.S. law did not require an

injury determination as a prerequisite to the issuance of the order,

and none was provided.

On August 13, 1990, the Department revoked the countervailing duty

order on Certain Textile Mill Products from Argentina pursuant to

Sec. 355.25(d)(4)(iii) of the Department's then-current regulations.

See Certain Textile Mill Products from Argentina (55 FR 32940). The

Department's decision to revoke the order was challenged before the

U.S. Court of International Trade (CIT). On March 24, 1992, the CIT

reversed the Department's decision, holding that a domestic interested

party had properly objected to the Department's intent to revoke the

countervailing duty order. See Belton Industries Inc. v. United States,

CIT Slip Op. 92-39 (March 24, 1992). In accordance with that decision,

on May 7, 1992, the CIT ordered the Department to rescind the

revocation and reinstate the countervailing duty order on certain

textile mill products from Argentina. Subsequently, two related appeals

were filed with the U.S. Court of Appeals for the Federal Circuit,

Belton Industries, Inc. v. United States, et al., CAFC Nos. 92-1419, -

1421, and -1451, and Belton Industries, Inc. v. United States, et al.,

CAFC Nos. 92-1452, and -1483. Because the United States withdrew its

appeal (No. 92-1421), and Argentina was not a party to the appeals, the

CIT decision became final and binding with respect to the order on

certain textile mill products from Argentina. Consequently, the

Department rescinded its revocation of the countervailing duty order on

certain textile mill products from Argentina and reinstated the order

on November 18, 1992, effective May 18, 1992. See Certain Textile Mill

Products from Argentina; Notice of Final Court Decision and Rescission

of Revocation of Countervailing Duty Order (57 FR 54368).

On March 1, 1994, the Department again published in the Federal

Register (59 FR 9727) its intent to revoke the countervailing duty

order on certain textile mill products from Argentina pursuant to 19

CFR 355.25(d)(4)(i)(1994) because no interested party had requested an

administrative review for at least four consecutive review periods. The

Department received a timely objection to the intended revocation

[[Page 7126]]

from the American Textile Manufacturers Institute (ATMI) and its member

companies as well as the Amalgamated Clothing and Textile Workers Union

(ACTWU).

The Department requested clarifying information from ATMI and ACTWU

regarding the like products their members produced. The Department

determined that ATMI and ACTWU did not qualify as interested parties

with respect to one like product category, ``Other Miscellaneous

Categories.'' Therefore, the Department revoked the order with respect

to that like product. See Certain Textile Mill Products from Argentina;

Determination to Amend Revocation, in Part, of the Countervailing Duty

Order (62 FR 41365).

As explained above, the countervailing duty order on certain

textile mill products from Argentina was issued pursuant to former

section 303. In the Uruguay Round Agreements Act of 1994 (URAA), which

amended the Act, section 303 was repealed in part because the new

Agreement on Subsidies and Countervailing Measures prohibits the

assessment of countervailing duties on imports from a member of the

World Trade Organization without an affirmative injury determination.

The URAA added section 753 to the Act, which provided domestic

interested parties with an opportunity to request an injury

investigation for orders that had been issued pursuant to former

section 303.

Because no domestic interested parties exercised their right under

section 753(a) of the Act to request an injury investigation on certain

textile mill products from Argentina, the International Trade

Commission made a negative injury determination with respect to this

order, pursuant to section 753(b)(4) of the Act. As a result, the

Department revoked this countervailing duty order, effective January 1,

1995, pursuant to section 753(b)(3)(B) of the Act. See Revocation of

Countervailing Duty Orders (60 FR 40,568).

The Ceramica Regiomontana v. United States (Ceramica) Decision

On September 6, 1995, the U.S. Court of Appeals for the Federal

Circuit (Federal Circuit) held, in a case involving imports of dutiable

ceramic tile from Mexico, that once Mexico became a ``country under the

Agreement'' on April 23, 1985 pursuant to the Understanding between the

United States and Mexico Regarding Subsidies and Countervailing Duties

(the Mexican MOU), the Department could not assess countervailing

duties on tile from that country under former section 303(a)(1) of the

Act. Ceramica, 64 F.3d at 1582. ``After Mexico became a `country under

the Agreement,' the only provision under which ITA could continue to

impose countervailing duties was section 1671.'' Id. One of the

prerequisites to the assessment of countervailing duties under 19

U.S.C. 1671 (1988), according to the Federal Circuit, is an affirmative

injury determination. See also Id. at section 1671e. However, at the

time the countervailing duty order on ceramic tile was issued, the

requirement of an affirmative injury determination under U.S. law was

not applicable. Therefore, the Federal Circuit looked to see whether

the statute contained any transition rules when Mexico became a country

under the Agreement which might provide the order on tile with the

required injury test. Specifically, the court looked at section 104(b)

of the Trade Agreements Act of 1979, Public Law 96-39 (July 20, 1979)

(1979 Act).

Section 104(b) was designed to provide an injury test for certain

countervailing duty orders issued under former section 303 prior to the

effective date of the 1979 Act (which established Title VII and, in

particular, section 701 of the Act). However, in order to induce other

countries to accede to the 1979 Subsidies Code (or substantially

equivalent agreements), the window of opportunity was intentionally

limited. In order to qualify (i) the exporting nation had to be a

country under the Agreement (e.g., a signatory of the Subsidies Code)

by January 1, 1980, (ii) the order had to be in existence on January 1,

1980 (i.e., the effective date of Title VII), and (iii) the exporting

country (or in some instances its exporters) had to request the injury

test on or before January 2, 1983.

In Ceramica, the countervailing duty order on ceramic tile was

issued in 1982 and Mexico did not become a country under the Agreement

until April 23, 1985. Therefore, in the absence of an injury test and

the statutory means (under section 104 or some other provision) to

provide an injury test, the Federal Circuit held that the Department

could not assess countervailing duties on ceramic tile and would have

to revoke the order effective April 23, 1985 (i.e., the date Mexico

became a ``country under the Agreement''). Ceramica, 64 F.3d at 1583.

On September 20, 1991, the United States and Argentina signed the

Understanding Between the United States of America and the Republic of

Argentina Regarding Subsidies and Countervailing Duties (Argentine

MOU). Section III of that agreement contains provisions substantially

equivalent to the provisions in the Mexican MOU that were before the

Federal Circuit in the Ceramica case. Therefore, on April 2, 1996, the

Department initiated changed circumstances reviews of the

countervailing duty orders on Leather from Argentina (55 FR 40212),

Wool from Argentina (48 FR 14423), Oil Country Tubular Goods from

Argentina (49 FR 46564), and Carbon Steel Cold-Rolled Flat Products

from Argentina (49 FR 18006). Each of these orders had been issued

without an injury determination. The purpose of these reviews was to

determine whether the Department had the authority, in light of the

Ceramica decision, to assess countervailing duties on entries of

merchandise covered by the orders occurring on or after September 20,

1991--the date on which Argentina became a ``country under the

Agreement'' within the meaning of 19 U.S.C. 1303(a)(1) (1988; repealed

1994). The Department has now completed these reviews. In the Final

Results of Changed Circumstances Countervailing Duty Reviews and

Revocation and Amended Revocation of Countervailing Duty Orders, (62 FR

41361) (Argentine Changed Circumstances), published in the Federal

Register on August 1, 1997, the Department determined that, based upon

the ruling in the Ceramica case, it lacked the authority to assess

countervailing duties on entries of merchandise covered by the four

Argentine orders occurring on or after September 20, 1991.

Scope of the Review

Imports covered by this review are shipments of certain textile

mill products from Argentina. The Harmonized Tariff Schedule of the

United States (HTS) item numbers covered by the order are identified in

Attachment A of this notice.

Initiation and Preliminary Results of Changed Circumstances

Countervailing Duty Review, Consideration of Revocation of Order, and

Intent to Revoke Order

Pursuant to section 751(d) of the Act, the Department may revoke a

countervailing duty order based on a review under section 751(b) of the

Act (i.e., a changed circumstances review). The Department's

regulations at 19 CFR 351.216(d) require that the Department conduct a

changed circumstances review in accordance with Sec. 351.221, if it

determines that changed circumstances sufficient to warrant a review

exist. In addition, Sec. 351.221(c)(3)(ii) allows the Department to

combine the notice of initiation of the review and the

[[Page 7127]]

preliminary results of review if it determines that expedited action is

warranted.

In accordance with Secs. 751(b)(1) and 751(d) of the Act, and

Secs. 351.216 and 351.221(c)(3) of the Department's regulations, we are

initiating this changed circumstances review. We have further

determined that expedited action is warranted and are, therefore,

combining the notices of initiation and preliminary results. Based upon

our analysis of the Ceramica decision and the Argentine Changed

Circumstances reviews, we have preliminarily determined that the order

on Certain Textile Mill Products from Argentina became entitled to an

injury test as of September 20, 1991--the date on which Argentina

became a ``country under the Agreement'' within the meaning of 19

U.S.C. 1303(a)(1) (1988; repealed 1994). Furthermore, in the absence of

an injury determination or the statutory authority to provide an injury

test, the Department does not have the authority to assess

countervailing duties on unliquidated entries of certain textile mill

products from Argentina occurring on or after September 20, 1991. As a

result, we intend to revoke this order with respect to all unliquidated

entries of subject merchandise entered, or withdrawn from warehouse,

for consumption during the period May 18, 1992 (the date on which the

order was reinstated pursuant to the Belton decision) through December

31, 1994. The Department has previously revoked the countervailing duty

order on textile mill products from Argentina for all entries occurring

on or after January 1, 1995. See Revocation of Countervailing Duty

Orders (60 FR 40568).

If our final results remain unchanged, the revocation will apply to

all unliquidated entries of subject merchandise entered, or withdrawn

from warehouse, for consumption during the period May 18, 1992 (the

date on which the Department reinstated the order pursuant to the

Belton decision) through December 31, 1994.

Therefore, we intend to instruct the U.S. Customs Service to

liquidate all unliquidated entries of the subject merchandise entered,

or withdrawn from warehouse, for consumption on or after May 18, 1992,

and on or before December 31, 1994, without regard to countervailing

duties. We also intend to instruct the U.S. Customs to refund with

interest any estimated countervailing duties collected with respect to

those unliquidated entries.

Public Comment

Interested parties may request a hearing not later than 30 days

after the date of publication of this notice. Interested parties may

submit written arguments in case briefs within 30 days of the date of

publication. Rebuttal briefs, limited to arguments raised in case

briefs, may be submitted five days after the time limit for filing the

case brief. Parties who submit argument 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 two days after the scheduled date for submission of rebuttal

briefs. Copies of case briefs and rebuttal briefs must be served on

interested parties. The Department will publish the final results of

this changed circumstances review, including the results of its

analysis of issues raised in any written comments.

This notice is published in accordance with section 751(b)(1) of

the Act (19 U.S.C. section 1675(b)(1)).

Dated: February 2, 1998.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

Appendix A (C-357-404)--HTS List for Certain Textile Mill Products From

Argentina

HTS Numbers

5111.1170, 5111.1960,1 5111.2090, 5111.3090, 5111.9090,

5112.1120, 5112.1990, 5112.2030, 5112.3030, 5112.9090, 5205.1110,

5205.1210, 5205.1310, 5205.1410, 5205.2400,2 5205.3100,

5205.3200, 5205.3300, 5207.1000, 5207.9000, 5407.9105, 5407.9205,

5407.9305, 5407.9405, 5515.1305, 5515.1310, 5801.3600, 6302.600010,

6302.600020, 6302.910005, 6302.910050, 6305.2000, 6305.9000.

---------------------------------------------------------------------------

\1\ Coverage limited to fabric, value not over $19.84/kg.

\2\ Coverage limited to yarn, not exceeding 68 nm.

---------------------------------------------------------------------------

[FR Doc. 98-3617 Filed 2-11-98; 8:45 am]

BILLING CODE 3510-DS-P