Certain Welded Carbon Steel Pipes and Tubes from Turkey; Final Results of Countervailing Duty Administrative Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of final results of countervailing duty administrative review.

SUMMARY:

On April 6, 2000, the Department of Commerce (the Department) published in the Federal Register its preliminary results of administrative review of the countervailing duty order on certain welded carbon steel pipes and tubes (pipes and tubes) from Turkey for the period January 1, 1998 through December 31, 1998 (65 FR 18070). The Department has now completed this administrative review in accordance with section 751(a) of the Tariff Act of 1930, as amended (the Act). For information on the net subsidy for each reviewed company, and for all non-reviewed companies, please see the Final Results of Review section of this notice. We will instruct the U.S. Customs Service (Customs) to assess countervailing duties as detailed in the Final Results of Review section of this notice.

EFFECTIVE DATE:

August 11, 2000.

FOR FURTHER INFORMATION CONTACT:

Michael Grossman or Darla Brown, Office of AD/CVD 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:

Background

Pursuant to 19 CFR 351.213(b), this review covers only those producers or exporters of the subject merchandise for which a review was specifically requested. Accordingly, this review covers Borusan Birlesik Boru Fabrikalari A.S. (BBBF) and Borusan Ihracat Ithalat ve Dagitim A.S. (Dagitim), an affiliated trading company that exports BBBF-produced subject merchandise to the United States (see Treatment of Trading Company section below). This review covers the period January 1, 1998 through December 31, 1998 and twenty-one (21) programs.

We published the preliminary results on April 6, 2000 (65 FR 18070). We invited interested parties to comment on the results. We received no comments from any of the parties.

Applicable Statute

Unless otherwise indicated, all citations to the statute are references to the provisions of the Act as amended by the Uruguay Round Agreements Act (URAA) effective January 1, 1995. The Department is conducting this administrative review in accordance with section 751(a) of the Act. All citations to the Department's regulations reference 19 CFR Part 351 (1999), unless otherwise indicated.

Scope of the Review

Imports covered by this review are shipments from Turkey of certain welded carbon steel pipe and tube, having an outside diameter of 0.375 inch or more, but not more than 16 inches, of any wall thickness. These products, commonly referred to in the industry as standard pipe and tube or structural tubing, are produced to various American Society for Testing and Materials (ASTM) specifications, most notably A-53, A-120, A-135, A-500, or A-501. These products are classifiable under the Harmonized Tariff Schedule of the United States (HTSUS) as item number 7306.30.10. The HTSUS item numbers are provided for convenience and Customs purposes. The written description remains dispositive.

Treatment of Trading Company

During the period of review (POR), BBBF exported subject merchandise to the United States through Dagitim, a trading company. A questionnaire response was required from Dagitim because the subject merchandise may be subsidized by means of subsidies provided to both the producer and the exporter. All subsidies conferred on the production and exportation of subject merchandise benefit the subject merchandise even if it is exported to the United States by an unaffiliated trading company rather than by the producer itself. Therefore, the Department calculates countervailable subsidy rates on the subject merchandise by cumulating subsidies provided to the producer, with those provided to the exporter. See 19 CFR 351.525.

Under section 351.107 of the Department's Regulations, when the subject merchandise is exported to the United States by a company that is not the producer of the merchandise, the Department may establish a “combination” rate for each combination of an exporter and supplying producer. However, as noted in the “Explanation of the Final Rules” (the Preamble to the Department's Regulations), there may be situations in which it is not appropriate or practicable to establish combination rates when the subject merchandise is exported by a trading company. In such situations, the Department will make exceptions to its combination rate approach on a case-by-case basis. See Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296, 27303 (May 19, 1997).

In this review, we determine that it is not appropriate to establish combination rates. This determination is based on the fact that the subsidies conferred upon the subject merchandise were received by the producer only. Therefore, combination rates would serve no practical purpose. Instead, we have only calculated one rate, for BBBF, the producer of the subject merchandise.

Calculation of Benefits

Despite a persistently high rate of inflation in Turkey, Turkish companies do not index any of the figures (other than fixed assets) in their financial statements to account for inflation. During the POR, Turkey continued to experience high inflation. Indexing the benefit and the sales figures will neutralize any potential distortion in our subsidy calculations caused by high inflation and the timing of the receipt of the subsidy.

Therefore, to calculate the ad valorem subsidy rates, we indexed the benefits (numerator) in the month of receipt and indexed the monthly sales (denominator) for each program, as we did in Certain Welded Carbon Steel Pipes and Tubes and Welded Carbon Steel Line Pipe from Turkey; Final Results of Countervailing Duty Administrative Reviews, 64 FR 44496 (August 16, 1999) (1997 Final Results). See, for discussion, Certain Welded Carbon Steel Pipes and Tubes and Welded Carbon Steel Line Pipe from Turkey; Preliminary Results of Countervailing Duty Administrative Reviews, 64 FR 16924 (April 7, 1999) (1997 Preliminary Results). We indexed the sales values and the benefits using the Wholesale Price Index (WPI) for manufacturing companies in 1998, as reported by the Central Bank of Turkey.

Analysis of Programs

There were no comments submitted to the Department with respect to our preliminary results of review; therefore, based upon the questionnaire responses we determine the following:

I. Programs Conferring Subsidies

A. Programs Previously Determined To Confer Subsidies

1. Pre-Shipment Export Credit

In the preliminary results, we found that this program conferred countervailable subsidies on the subject merchandise. Our review of the record has not led us to change any findings or calculations. Accordingly, the net subsidy for this program is 0.12 percent ad valorem for BBBF, which remains unchanged from the preliminary results.

2. VAT Support Program (Incentive Premium on Domestically Obtained Goods)

In the preliminary results, we found that this program conferred countervailable subsidies on the subject merchandise. Our review of the record has not led us to change any findings or calculations. Accordingly, the net subsidy for this program is 0.08 percent ad valorem for BBBF, which remains unchanged from the preliminary results.

II. Program Determined To Be Not Countervailable

Special Importance Sector Under Investment Allowances

In the preliminary results, we determined that the enabling legislation does not expressly limit access to an enterprise or industry; therefore, the subsidy is not de jure specific (specific as a matter of law). In addition, we determined that this program is not de facto specific and, therefore, is not countervailable. Our review of the record has not led us to change any findings or calculations. Therefore, our determination for this program remains unchanged.

III. Programs Determined To Be Not Used

We have determined that the producers and/or exporters of the subject merchandise did not apply for or receive benefits under the following programs during the POR:

A. Freight Program

B. Foreign Exchange Loan Assistance

C. Resource Utilization Support Fund

D. State Aid for Exports Program

E. Advance Refunds of Tax Savings

F. Export Credit Through the Foreign Trade Corporate Companies Rediscount Credit Facility (Eximbank)

G. Past Performance Related Foreign Currency Export Loans (Eximbank)

H. Export Credit Insurance (Eximbank)

I. Subsidized Turkish Lira Credit Facilities

J. Subsidized Credit for Proportion of Fixed Expenditures

K. Fund Based Credit

L. Investment Allowances (in excess of 30 percent minimum)

M Resource Utilization Support Premium (RUSP)

N. Deduction from Taxable Income for Export Revenues

O. Regional Subsidies

1. Additional Refunds of VAT (VAT + 10 percent)

2. Postponement of VAT on Imported Goods

3. Land Allocation (GIP)

4. Taxes, Fees (Duties), Charge Exemption (GIP)

Final Results of Review

In accordance with section 705(c)(1)(B)(i) of the Act, we calculated an ad valorem subsidy rate for BBBF. For the period January 1, 1998 through December 31, 1998, we determine the net subsidy for BBBF to be 0.20 percent ad valorem, which is de minimis.

As provided for in 19 CFR 351.106(c)(1), any rate less than 0.5 percent ad valorem in an administrative review is de minimis. Accordingly, no countervailing duties will be assessed. The Department will instruct Customs to liquidate, without regard to countervailing duties, shipments of the subject merchandise from BBBF exported on or after January 1, 1998, and on or before December 31, 1998. Also, the cash deposit required for this company will be zero.

Because the URAA replaced the general rule in favor of a country-wide rate with a general rule in favor of individual rates for investigated and reviewed companies, the procedures for establishing countervailing duty rates, including those for non-reviewed companies, are now essentially the same as those in antidumping cases, except as provided for in section 777A(e)(2)(B) of the Act. The requested review will normally cover only those companies specifically named. See 19 CFR 351.213(b). Pursuant to 19 CFR 351.212(c), for all companies for which a review was not requested, duties must be assessed at the cash deposit rate, and cash deposits must continue to be collected, at the rate previously ordered. As such, the countervailing duty cash deposit rate applicable to a company can no longer change, except pursuant to a request for a review of that company. See Federal-Mogul Corporation and The Torrington Company v. United States, 822 F. Supp. 782 (CIT 1993) and Floral Trade Council v. United States, 822 F. Supp. 766 (CIT 1993). Therefore, the cash deposit rates for all companies except those covered by this review will be unchanged by the results of this review.

We will instruct Customs to continue to collect cash deposits for non-reviewed companies at the most recent company-specific or country-wide rate applicable to the company. Accordingly, the cash deposit rates that will be applied to non-reviewed companies covered by this order will be the rate for that company established in the most recently completed administrative proceeding conducted under the URAA. If such a review has not been conducted, the rate established in the most recently completed administrative proceeding pursuant to the statutory provisions that were in effect prior to the URAA amendments is applicable. See Certain Carbon Steel Products from Sweden; Final Results of Countervailing Duty Administrative Review, 62 FR 16549 (April 7, 1997). This rate shall apply to all non-reviewed companies until a review of a company assigned this rate is requested. In addition, for the period January 1, 1998 through December 31, 1998, the assessment rates applicable to all non-reviewed companies covered by this order are the cash deposit rates in effect at the time of entry.

This notice serves as a reminder to parties subject to administrative protective order (APO) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.

This administrative review and notice are issued and published in accordance with section 751(a)(1) and 777(i)(1) of the Act.