Ni-Resist Piston Inserts From Argentina: Preliminary Affirmative Countervailing Duty Determination, 31914-31918 [E9-15830]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 74, Number 127 (Monday, July 6, 2009)]
[Notices]
[Pages 31914-31918]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-15830]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-357-819]


Ni-Resist Piston Inserts From Argentina: Preliminary Affirmative 
Countervailing Duty Determination

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

SUMMARY: The Department of Commerce (the Department) preliminarily 
determines that countervailable subsidies are being provided to a 
producer and exporter of Ni-resist piston inserts from Argentina. For 
information on the estimated subsidy rate, see the ``Suspension of 
Liquidation'' section of this notice.

DATES: Effective Date: July 6, 2009.

FOR FURTHER INFORMATION CONTACT: Kristen Johnson, AD/CVD Operations, 
Office 3, Import Administration, International Trade Administration, 
U.S. Department of Commerce, Room 4014, 14th Street and Constitution 
Avenue, NW., Washington, DC 20230; telephone: (202) 482-4793.

SUPPLEMENTARY INFORMATION:

Case History

    On January 26, 2009, the Department received the petition for the 
imposition of countervailing duties filed in proper form by the 
petitioner.\1\ This investigation was initiated on February 17, 2009. 
See Ni-Resist Piston Inserts From Argentina and the Republic of Korea: 
Initiation of Countervailing Duty Investigations, 74 FR 8054 (February 
23, 2009) (Initiation Notice), and accompanying Argentina Initiation 
Checklist.\2\ On March 20, 2009, the Department postponed the deadline 
for the preliminary determination by 65 days to no later than June 29, 
2009. See Ni-Resist Piston Inserts From Argentina and the Republic of 
Korea: Notice of Postponement of Preliminary Determination in the 
Countervailing Duty Investigations, 74 FR 11910 (March 20, 2009).
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    \1\ Petitioner is Korff Holdings, LLC d/b/a Quaker City 
Castings.
    \2\ A public version of this and all public memoranda is on file 
in the Central Records Unit (CRU), room 1117 in the main building of 
the Commerce Department.
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    Normally for an investigation, the Department selects a 
respondent(s) based on U.S. Customs and Border Protection (CBP) data 
for U.S. imports during the period of investigation (POI). In this 
case, the Harmonized Tariff Schedule of the United States (HTSUS) 
category that includes subject merchandise is broad and includes 
products other than products subject to this investigation. We thus 
determined that such CBP data would not be informative to our 
respondent selection. In the petition, petitioner identified Clorindo 
Appo SRL (Clorindo) as the sole Argentine producer/exporter of subject 
merchandise to the United States during the POI. We did not receive 
comments from interested parties on respondent selection. Therefore, we 
selected Clorindo as the mandatory respondent in this investigation. 
See Memorandum from the Team through Melissa Skinner, Director, AD/CVD 
Operations Office 3, to John M. Andersen, Acting Deputy Assistant 
Secretary for Antidumping and Countervailing Duty Operations, titled 
``Respondent Selection'' (March 4, 2009).
    On March 4, 2009, we issued the initial countervailing duty (CVD) 
questionnaire to the Government of Argentina (GOA) and Clorindo. On 
March 4 and 27, 2009, petitioner submitted new subsidy allegations. On 
March 20 and April 6, 2009, the

[[Page 31915]]

Department initiated investigations of newly alleged subsidy programs 
pursuant to section 775 of the Tariff Act of 1930, as amended (the 
Act). See Memorandum to Melissa G. Skinner, Director, AD/CVD Operations 
Office 3, from Kristen Johnson, trade analyst, AD/CVD Operations Office 
3, titled ``New Subsidy Allegations'' (March 20, 2009), and Memorandum 
to Melissa G. Skinner, Director, AD/CVD Operations Office 3, from 
Kristen Johnson, trade analyst, AD/CVD Operations Office 3, titled 
``Additional New Subsidy Allegations'' (April 6, 2009). Questionnaires 
regarding these newly alleged subsidies were issued to the GOA and 
Clorindo on March 20 and April 6, 2009, respectively. The GOA and 
Clorindo submitted questionnaire responses to the March 4, 2009, 
initial questionnaire and March 20, 2009, new subsidy allegations 
questionnaire on April 24 and May 6, 2009,\3\ respectively.
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    \3\ On May 1, 2009, counsel for Clorindo was instructed to re-
file the company's questionnaire response dated April 24, 2009, 
because the document contained information not germane to this 
investigation. See Letter from Melissa G. Skinner, Director, AD/CVD 
Operations Office 3, to Peter Koenig of Squire, Sanders, and 
Dempsey, dated May 1, 2009. Mr. Koenig re-filed Clorindo's 
questionnaire response on May 6, 2009.
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    On May 6 and May 7, 2009, the GOA and Clorindo, respectively, 
submitted their questionnaire responses to the April 6, 2009, 
additional new subsidies questionnaire. We issued a supplemental 
questionnaire to the GOA and Clorindo on May 4, 2009, and received the 
GOA's supplemental questionnaire response on May 28, 2009, and 
Clorindo's response on June 1, 2009. On May 29, 2009, we issued a 
second supplemental questionnaire to the GOA and received the 
questionnaire response on June 17, 2009. On June 3, 2009, we issued a 
second supplemental questionnaire to Clorindo and received the 
questionnaire response on June 17, 2009.

Scope of the Investigation

    The scope of this investigation includes all Ni-resist piston 
inserts regardless of size, thickness, weight, or outside diameter. Ni-
resist piston inserts may also be called other names including, but not 
limited to, ``Ring Carriers,'' or ``Alfin Inserts.'' Ni-resist piston 
inserts are alloyed cast iron rings, with or without a sheet metal 
cooling channel pressed and welded into the interior of the insert. Ni-
resist piston inserts are composed of the material known as Ni-resist, 
of the chemical composition: 13.5%-17.5% Ni (nickel), 5.5%-8.0% Cu 
(copper), 0.8%-2.5% Cr (chromium), 0.5%-1.5% Mn (manganese), 1.0%-3.0% 
Si (silicon), 2.4%-3.0% C (carbon). The cast iron composition is 
produced primarily to the material specifications of the American 
Society for Testing and Materials (ASTM), ASTM A-436 grade 1.
    The scope of this investigation does not include piston rings nor 
any other product manufactured using the Ni-resist material. The 
subject imports are properly classified under subheading 8409.99.91.90 
of the HTSUS, but have been imported under HTSUS 7326.90. The HTSUS 
subheadings are provided for convenience and customs purposes. The 
written description is dispositive of the scope of this investigation.

Scope Comments

    In accordance with the Preamble to the Department's regulations 
(see Antidumping Duties; Countervailing Duties, 62 FR 27296, 27323 (May 
19, 1997) (Preamble)), in the Initiation Notice, we set aside a period 
of time for parties to raise issues regarding product coverage, and 
encouraged all parties to submit comments within 20 calendar days of 
publication of the Initiation Notice. The Department did not receive 
scope comments from any interested party.

Injury Test

    Because Argentina is a ``Subsidies Agreement Country'' within the 
meaning of section 701(b) of the Act, the International Trade 
Commission (the ITC) is required to determine whether imports of the 
subject merchandise from Argentina materially injure, or threaten 
material injury to, a U.S. industry. On March 25, 2009, the ITC 
published its preliminary determination finding that there is a 
reasonable indication that an industry in the United States is 
materially injured by reason of imports from Argentina of the subject 
merchandise. See Ni-Resist Piston Inserts from Argentina and Korea; 
Determinations, Investigation Nos. 701-TA-460-461 (Preliminary), 74 FR 
12898 (March 25, 2009).

Period of Investigation

    The period of investigation for which we are measuring subsidies is 
January 1, 2008, through December 31, 2008, which corresponds to 
Argentina's most recently completed fiscal year. See 19 CFR 
351.204(b)(2).

Company History

    Clorindo, a privately-owned company, started operations as a car 
and truck motors repair shop in the mid 1950's. In 1974, the company 
was incorporated and later in the 1980's, the company added to its 
product line the Ni-resist piston insert. Clorindo is the only producer 
and exporter of Ni-resist piston inserts in Argentina. Currently, the 
only product manufactured by Clorindo is the Ni-resist piston insert.

Analysis of Programs

I. Programs Preliminarily Determined To Be Countervailable

A. Tax Relief Under the Reintegro
    Pursuant to Decree No. 1011/91, the GOA established the Reintegro, 
which entitles Argentine exporters of new and unused goods manufactured 
in Argentina to a rebate of domestic indirect taxes that are levied 
during the production and distribution process of the finished export 
products.\4\\\ The Reintegro provides a cumulative tax rebate paid upon 
export, calculated as a percentage of the FOB value of the export less 
the CIF value of imported raw materials. The Reintegro rate is applied 
only to the domestic value of the exported product and no rebates are 
given on imported inputs. The taxes refunded are the domestic indirect 
taxes (e.g., statistical tax, national fund for electricity tax, and 
stamp tax) imposed on local production.
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    \4\ The GOA established a rebate system in 1971, which was known 
as the Reembolso. Under the Reembolso, exporters could recover 
import duties and indirect taxes on items physically incorporated 
into the final product. In May 1991, the GOA issued Decree 1011/91, 
which renamed the Reembolso as the Reintegro, and modified the legal 
structure of the program. Under Decree 1011/91, the Reintegro 
rebates indirect taxes only. The Department has previously examined 
the Reintegro and Reembolso. See, e.g., Final Affirmative 
Countervailing Duty Determination: Honey From Argentina, 66 FR 50613 
(October 4, 2001), and accompanying Issues and Decision Memorandum 
at ``Argentine Internal Tax Reimbursement/Rebate Program 
(Reintegro);'' and Final Negative Countervailing Duty Determination: 
Certain Cold-Rolled Carbon Steel Flat Products From Argentina, 67 FR 
62106 (October 3, 2002), and accompanying Issues and Decision 
Memorandum at ``Reintegro.''
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    All exporters are eligible to receive a rebate of indirect taxes 
under the Reintegro. There is no application process for the rebate 
because the provision of the rebate is automatic once the export is 
conducted and the shipping documents completed and examined by the 
customs authorities. During the POI, Clorindo was entitled to a rebate 
of 5.25 percent on each export of subject merchandise to the United 
States.\5\ Exports of subject merchandise are classified under the 
Argentine tariff schedule subheading 7326.90.00.900J (Other Iron and 
Steel Manufactures).\6\
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    \5\ See Decree No. 509/2007 at Exhibit 1 of GOA supplemental 
questionnaire response (SQR) (May 28, 2009).
    \6\ See GOA initial questionnaire response (IQR) at 1 (April 24, 
2009).

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[[Page 31916]]

    We preliminarily determine that the Reintegro confers a financial 
contribution in the form of a direct transfer of funds from the GOA to 
Clorindo under section 771(5)(D)(i) of the Act and that the Reintegro 
is specific under section 771(5A)(A) of the Act because it is 
contingent upon export performance.
    To determine whether a benefit exists for a tax rebate program, the 
Department normally examines whether the amount remitted or rebated 
exceeds the amount of prior-stage cumulative indirect taxes paid on 
inputs consumed in the production of the exported subject merchandise, 
making normal allowances for waste. See 19 CFR 351.518(a)(2). If the 
amount rebated exceeds the amount of the prior-stage cumulative 
indirect taxes paid on inputs consumed in the production, the excess 
amount is a countervailable benefit. Id.
    However, there is an exception to this rule under 19 CFR 
351.518(a)(4)(i) and(ii), which states that the Department will 
consider the entire amount of the tax rebate or remission to confer a 
benefit unless: (1) The government in question has in place and applies 
a system or procedure to confirm which inputs are consumed in the 
production of the exported product and in what amounts, and to confirm 
which indirect taxes are imposed on these inputs, and the system or 
procedure is reasonable, effective for the purposes intended, and is 
based on generally accepted commercial practices in the country of 
export; or (2) If the government in question does not have a system or 
procedure in place, if the system or procedure is not reasonable, or if 
the system or procedure is instituted and considered reasonable, but is 
found not to be applied or not be applied effectively, the government 
in question has carried out an examination of actual inputs involved to 
confirm which inputs are consumed in the production of the exported 
product, in what amounts, and which indirect taxes are imposed on the 
inputs.
    In our questionnaires, we asked the GOA to describe the system or 
procedure that it has in place to establish the appropriate level of 
Reintegro for the subject merchandise. The GOA stated that while it has 
no written procedures or guidelines for the operation of this rebate 
system, it does follow a methodology for establishing the Reintegro 
rates.\7\ The GOA reported that it first identifies, based on industry 
chamber studies, all the inputs (national or import origin) and other 
items required to manufacture the product. The GOA stated that it then 
determines on a percentage-wide basis the amount required of each input 
and establishes the average amount of each input required to 
manufacture the exported product. In addition, for each component and 
other items a cost structure provided by the suppliers is built-in to 
calculate the tax content for them.\8\
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    \7\ Id. at 5-6.
    \8\ \\ Id. at 6.
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    The GOA added that the industry chamber studies are supplemented by 
an Input-Output Matrix (IOM) administered by the Ministry of Economy. 
The IOM is a set of matrices (i.e., supply, utilization, margins, 
transport, import, etc.) that reflect the interactions among different 
sectors of the Argentine economy. In addition, the GOA explained that 
there are fiscal matrices that show the taxes paid by each sector of 
the economy. Based on this methodology and the government's budgetary 
constraints, the GOA stated that the Ministries of Economy and 
Production set the Reintegro rebate rates.\9\
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    \9\ \\ Id.
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    We asked the GOA to provide that portion of the IOM and fiscal 
matrices that are relevant to the subject merchandise or subheading 
7326.90.00.09J. The GOA, however, did not submit the requested 
information, stating that such information is exclusively for internal 
use.\10\ We also asked the GOA to explain how it concluded that the 
appropriate rate of rebate for subheading 7326.90.00.09J is 5.25 
percent. The GOA stated that the only criterion which should be 
followed is that the rebate rate must not be higher than the percentage 
of the indirect tax incidence calculated by the industry chamber.\11\
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    \10\ \\ See GOA SQR at 6 (May 28, 2009).
    \11\ \\ Id. at 5.
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    Concerning the rebate rate for the subject merchandise, the GOA 
stated that it used the indirect tax incidence study prepared in 2002, 
by the Asociacion de Industriales Metalurgicos de la Republica 
Argentina (ADIMRA) for tariff subheading 7326.90.00.900J (Other Iron 
and Steel Manufactures).\12\ In preparing its study, the GOA stated 
that ADIMRA researched a number of industries whose products are 
classified under this tariff subheading and gathered information from 
sector and regional enterprise chambers.\13\ The study lists the inputs 
and other items required to produce products exported under the tariff 
subheading, which, in addition to Ni-resist piston inserts, include 
such products as metallic boxes, stirrups, towel-heaters, ashtrays, and 
hooks.\14\ The ADIMRA study calculated an indirect tax incidence of 
5.35 percent.
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    \12\ \\ See GOA IQR at 7-8 (April 24, 2009).
    \13\ \\ See GOA SQR at 4 (May 28, 2009).
    \14\ Id. at 5.
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    In our questionnaires, we requested both the GOA and Clorindo to 
explain how the company's cost of production and indirect tax incidence 
data were incorporated into the ADIMRA study. Clorindo stated that it 
did not submit its table of indirect tax burden to any government 
agency or industry organization.\15\ Clorindo reported that its table 
of indirect tax burden\16\ was prepared in April 2009,\17\ for the 
purpose of this investigation. The GOA stated that the ADIMRA study and 
Clorindo's table of indirect tax burden coincide with each other 
because the GOA provided a copy of an ADIMRA study to Clorindo which 
then calculated the tax incidence for its merchandise according to its 
own cost and productive structure.\18\
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    \15\ See Clorindo SQR at 6 (June 1, 2009).
    \16\ Id. at Exhibit 8.
    \17\ \\ Id. at 6.
    \18\ \\ See GOA SQR at 3 (May 28, 2009) and at 1 (June 17, 
2009).
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    Because Clorindo, the only Argentine producer/exporter of Ni-resist 
piston inserts, did not provide information used in the ADIMRA 2002 
study for tariff subheading 7326.90.00.900J, upon which the GOA relied 
to set the Reintegro rate, the ADIMRA study is neither representative 
of the cost structure for the subject merchandise nor reflective of the 
indirect taxes incurred in the production of the subject merchandise. 
The ADIMRA study is void of the actual inputs involved in the 
production of the subject merchandise to confirm which inputs are 
consumed in the production of Ni-resist piston inserts, in what 
amounts, and which indirect taxes are imposed on those inputs.
    Therefore, the GOA's methodology for establishing the Reintegro 
rate by first identifying, based on industry chamber studies, all the 
inputs and other items required to manufacture the exported product, 
next calculating percentages and average amounts of each of those 
inputs, and then computing an approximate effective indirect tax 
incidence, failed to incorporate data for Ni-resist piston inserts. The 
identification of inputs and indirect tax incidence reported in the 
ADIMRA study are not reflective of and were not tested against 
Clorindo's actual information or experience. As such, we preliminarily 
determine that the 5.25 percent Reintegro rate set by the GOA

[[Page 31917]]

for the reimbursement of domestic indirect taxes for exported products 
under tariff subheading 7326.90.00.900J has no relationship to the 
actual production process and indirect taxes paid by Clorindo. We 
further preliminarily determine that the absence of cost of production 
and indirect tax incidence data for Ni-resist piston inserts in the 
government's Reintegro methodology demonstrates that the GOA lacks a 
system and procedure for the establishment of the appropriate level of 
Reintegro rebate applicable to exports of the subject merchandise.
    Other than the ADIMRA study, the GOA did not provide any 
information to demonstrate that it carried out a reasonable examination 
of actual inputs involved to confirm which inputs are consumed in the 
production of Ni-resist piston inserts, in what amounts, and which 
indirect taxes are imposed on those inputs. The GOA reported that it 
does not conduct audits of companies which receive Reintegro rebates to 
confirm that the rebate rate assigned for a particular tariff 
subheading is appropriate.\19\
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    \19\ \\ See GOA SQR at 2 (June 17, 2009).
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    We, therefore, preliminarily determine that the GOA has not met the 
requirements for non-countervailability as set forth in 19 CFR 
351.518(a)(4)(i) and (ii). As such, we preliminarily determine that the 
entire amount of the Reintegro rebate received by Clorindo for its 
exports of Ni-resist piston inserts to be countervailable. Because we 
preliminarily find the entire amount of the Reintegro for Ni-resist 
piston inserts to be countervailable, we need not address the 
Reintegro's countervailability under 19 CFR 351.518(a)(2).
    Because the Reintegro is calculated as a percentage of the FOB 
value of the exports, the percentage rebated serves as the subsidy 
rate. Thus, we preliminarily determine that Reintegro provided a 
countervailable subsidy of 5.25 percent ad valorem to Clorindo during 
the POI.
B. Provincial Stamp Tax Exemption
    The GOA and Clorindo reported that the company received stamp tax 
exemptions during the POI. The GOA stated that a stamp tax is applied 
to documented legal transactions, such as contracts, credit 
instruments, and property rights, and is administered by the provincial 
tax authority, which can also establish a stamp tax exemption.\20\ On 
the record, however, there is conflicting information about the type of 
stamp tax exemption Clorindo received and under which provincial law 
that exemption was provided.
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    \20\ \\ See GOA SQR at 12 (May 28, 2009).
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    In its June 17, 2009, questionnaire response at ``Stamp Tax 
Exemptions in the Province of Santa Fe,'' the GOA reported that there 
are three stamp tax exemptions: (1) Article 183.29 of the Santa Fe 
Fiscal Code, which provides a full stamp tax exemption on (a) credits 
granted to finance import and export transactions and (b) currency 
exchange transactions subject to the specific tax on the purchase and 
sale of foreign currency; (2) Article 183.38 of the Santa Fe Fiscal 
Code, which provides a full tax stamp exemption on all active financial 
and related transactions, as well as insurance transactions, with 
financial and insurance entities, when related to mining, industrial, 
construction, and farming sectors; and (3) Law 11,257 of June 2005, 
which states that contracts not entitled to the benefits under Article 
183.29 and Article 183.38 are subject to a 50 percent reduction of the 
stamp tax on the transaction value.
    The GOA stated that there is no application process or special 
procedure to benefit from the stamp tax exemptions. The GOA explained 
that a transaction which meets the criteria established in Article 
183.29 or 183.38 of the Fiscal Code or in Law 11,257 is automatically 
exempt (fully or partially, respectively) from the tax.\21\ The GOA, 
however, did not provide a complete copy and translation of Article 
183.29, Article 183.38, or Law 11, 257, which would outline the 
eligibility criteria of the laws.
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    \21\ See GOA at ``Stamp Tax Exemption in the Province of Santa 
Fe'' (June 17, 2009).
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    In its May 6, 2009, questionnaire response, Clorindo reported that 
any industrial manufacturer located in the province of Santa Fe is 
fully exempt from the stamp tax (i.e., 0.10 percent on the transaction 
value that is split between the transaction parties) and cited to 
Article 183.29 of the Santa Fe Fiscal Code.\22\ Subsequently, in its 
June 1, 2009, questionnaire response, Clorindo reported that the stamp 
tax exemptions which it received for ``import/export financing and 
approved credit agreements'' were provided for under provincial Law 
11,123, which exempts from the stamp tax all active financial and 
related transactions with financial and insurance entities when related 
to mining, industrial, construction, and farming sectors. The GOA in 
its June 17, 2009, questionnaire response stated that Law 11,123 
modified the provincial tax and introduced Article 183.38 of the Santa 
Fe Fiscal Code. Clorindo later reported, in its June 17, 2009, 
questionnaire response (at 2), that a certain portion of the total 
amount of the import/export financing and approved credit agreements 
was related to export transactions and/or export related contracts.
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    \22\ See Clorindo IQR at 15 (May 6, 2009).
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    Based on the record evidence, we preliminarily find that Clorindo 
received a certain amount of stamp tax exemptions under Article 183.29. 
We preliminarily determine that the stamp tax exemptions provided under 
Article 183.29 are specific under section 771(5A)(A) of the Act because 
the exemptions are contingent upon export performance. We also 
preliminarily determine that a financial contribution is provided under 
section 771(5)(D)(ii) of the Act in the form of revenue foregone. A 
benefit is conferred in the form of a tax exemption.
    To calculate the benefit, we divided that portion of Clorindo's 
stamp tax exemption related to export transactions and/or export 
related contracts by the company's total export sales value for 2008. 
On this basis, we preliminarily determine the net countervailable 
subsidy under this program to be 0.17 percent ad valorem.
    At verification, we will seek further clarification of the laws 
under which the stamp tax exemptions are provided in Santa Fe, 
including eligibility criteria, and under which of the laws Clorindo 
received its stamp tax exemptions during the POI.

II. Program Preliminarily Determined To Be Not Countervailable

A. Provincial Turnover Tax Exemption
    Article 160 (paragraph ``n'') of the Santa Fe Fiscal Code (Law 
3456) established a turnover tax exemption for all the industrial 
activities and primary production of manufacturing companies located 
within the territory of Santa Fe Province.\23\ The GOA described the 
turnover tax as a general tax, which is an ``accumulative tax'' because 
taxes are levied on goods and services (if not exempted) at each stage 
of the production process, whether subject to

[[Page 31918]]

transformation or not. The turnover tax is levied on the total sales 
value.\24\
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    \23\ See GOA SQR at ``Provincial Turnover Tax'' (June 17, 2009). 
The GOA reported that the turnover tax exemption was first 
established by Provincial Decree 3848 of 1993, within the framework 
of the ``Federal Pact for Employment, Production, and Economic 
Growth'' (the Federal Pact). The Federal Pact was launched by the 
federal government aimed at fostering employment, production, and 
growth throughout the country. One of the main objectives of the 
Federal Pact was to modify the turnover tax exemption. The exemption 
was later modified and its current version is Article 160 (paragraph 
``n'') of the Santa Fe Province Tax Code (Law 3456).
    \24\ See GOA SQR at 13 (May 28, 2009).
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    The turnover tax exemption is administered and regulated by the Tax 
Provincial Administration of the Government of Santa Fe. There is no 
application process or special procedure to benefit from the tax 
exemption. The GOA reported that any transaction that meets the 
criteria outlined in Article 160 (paragraph ``n'') of the Tax Code is 
automatically exempt from the tax. Eligibility for the tax exemption is 
not contingent upon export performance or use of domestic over imported 
goods and is not limited to certain enterprises or industries.
    As a manufacturing company located in the province of Santa Fe, 
Clorindo was eligible for and received turnover tax exemptions on its 
domestic sales during the POI.\25\ Specifically, Clorindo was exempt 
from paying the general tax rate of 1.50 percent for industrial 
activity in Santa Fe.\26\
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    \25\ See Clorindo SQR at 15-17 (June 1, 2009).
    \26\ Id. at 17 and Clorindo SQR at 4 and Exhibit E (June 17, 
2009).
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    We preliminarily determine that the turnover tax exemption provided 
under Article 160 of the Fiscal Code is not specific and, hence, does 
not provide a countervailable benefit. Information on the law provided 
by the GOA and Clorindo \27\ demonstrates that the turnover tax 
exemption is available to all companies involved in industrial 
activities and manufacturing production within Santa Fe Province and, 
therefore, is not specific under section 771(5A)(D) of the Act.
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    \27\ See GOA SQR at ``Provincial Turnover Tax'' (June 17, 2009) 
and Clorindo SQR at Exhibit C2 (June 17, 2009) and SQR at 15 (June 
1, 2009).
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III. Programs Preliminarily Determined To Be Not Used

    We preliminarily determine that Clorindo did not apply for or 
receive benefits during the POI under the programs listed below:
    A. Subsidiary Fund for Regional Tariff Compensation to Final Users
    B. Banco de Inversion y Comercio Exterior S.A. (BICE) Pre-Export 
Financing
    C. BICE Post-Export Financing
    D. Banco de la Nacion Argentina (BNA) Pre-Export Financing to Small 
and Medium Size Enterprises (SMEs)
    E. BNA Pre-Export Financing under ``Pre-Export Argentinas''
    F. BNA Export Financing to SMEs
    G. BNA Export Financing (for all exporters)
    H. BNA Investment Financing for SMEs under the Credit Lines to 
Assist SMEs
    I. BNA Working Capital Credit under ``Finance Companies to 
Exporters''
    J. BNA Working Capital Credit to SMEs under Credit Lines to Assist 
SMEs
    K. BNA Financing of Imports to SMEs under Credit Lines to Assist 
SMEs
    L. BNA Import Financing under ``Finance Companies to Exporters''
    M. Repro (Production Recovery Plan)
    N. Fund for Argentine Technology (FONTAR) Non-Repayable 
Contributions
    O. FONTAR Tax Credit Program
    P. FONTAR Regional Credits
    Q. FONTAR Credits to Enterprises for Technological Development
    R. Fund for Scientific and Technological Research (FONCyT) 
Research-Oriented Science and Technology (PICT)
    S. FONCyT Research and Development Projects (PID)

Verification

    In accordance with section 782(i)(1) of the Act, we intend to 
verify the information submitted by Clorindo and the GOA prior to 
making our final determination.

Suspension of Liquidation

    In accordance with section 703(d)(1)(A)(i) of the Act, we have 
calculated an individual rate for Clorindo, the only company under 
investigation. We preliminarily determine the total estimated net 
countervailable subsidy rate is 5.42 percent ad valorem. The All Others 
rate is 5.42 percent ad valorem, which is the rate calculated for 
Clorindo.
    In accordance with sections 703(d)(1)(B) and (2) of the Act, we are 
directing CBP to suspend liquidation of all entries of the subject 
merchandise from Argentina that are entered or withdrawn from 
warehouse, for consumption on or after the date of the publication of 
this notice in the Federal Register, and to require a cash deposit or 
bond for such entries of the merchandise in the amounts indicated 
above.

ITC Notification

    In accordance with section 703(f) of the Act, we will notify the 
ITC of our determination. In addition, we are making available to the 
ITC all non-privileged and non-proprietary information relating to this 
investigation. We will allow the ITC access to all privileged and 
business proprietary information in our files, provided the ITC 
confirms that it will not disclose such information, either publicly or 
under an administrative protective order, without the written consent 
of the Assistant Secretary for Import Administration.
    In accordance with section 705(b)(2) of the Act, if our final 
determination is affirmative, the ITC will make its final determination 
within 45 days after the Department makes its final determination.

Disclosure and Public Comment

    In accordance with 19 CFR 351.224(b), the Department will disclose 
to the parties the calculations for this preliminary determination 
within five days of its announcement. Case briefs for this 
investigation must be submitted no later than one week after the 
issuance of the last verification report. See 19 CFR 351.309(c) (for a 
further discussion of case briefs). Rebuttal briefs, which must be 
limited to issues raised in the case briefs, must be filed within five 
days after the deadline for submission of case briefs. See 19 CFR 
351.309(d). A list of authorities relied upon, a table of contents, and 
an executive summary of issues should accompany any briefs submitted to 
the Department. Executive summaries should be limited to five pages 
total, including footnotes.
    In accordance with 19 CFR 351.310(c), we will hold a public 
hearing, if requested, to afford interested parties an opportunity to 
comment on this preliminary determination. Individuals who wish to 
request a hearing must submit a written request within 30 days of the 
publication of this notice in the Federal Register to the Assistant 
Secretary for Import Administration, U.S. Department of Commerce, Room 
1870, 14th Street and Constitution Avenue, NW., Washington, DC 20230. 
Parties will be notified of the schedule for the hearing and parties 
should confirm the time, date, and place of the hearing 48 hours before 
the scheduled time. Requests for a public hearing should contain: (1) 
Party's name, address, and telephone number; (2) the number of 
participants; and (3) to the extent practicable, an identification of 
the arguments to be raised at the hearing.
    This determination is issued and published pursuant to sections 
703(f) and 777(i) of the Act and 19 CFR 351.221(b)(4).

    Dated: June 29, 2009.
John M. Andersen,
Acting Deputy Assistant Secretary for Antidumping and Countervailing 
Duty Operations.
[FR Doc. E9-15830 Filed 7-2-09; 8:45 am]
BILLING CODE 3510-DS-P