64 FR 66895 November 30, 1999
DEPARTMENT OF COMMERCE
International Trade Administration
[C-489-502]
Preliminary Results of Full Sunset Review: Welded Carbon Steel
Pipes and Tubes From Turkey
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of Preliminary Results of Full Sunset Review: Welded
Carbon Steel Pipes and Tubes from Turkey.
-----------------------------------------------------------------------
SUMMARY: On May 1, 1999, the Department of Commerce (``the
Department'') initiated a sunset review of the countervailing duty
order on welded carbon steel pipes and tubes from Turkey (63 FR 23596)
pursuant to section 751(c) of the Tariff Act of 1930, as amended (``the
Act''). On the basis of the notices of intent to participate and
adequate substantive responses filed on behalf of the domestic and
respondent interested parties, the Department is conducting a full (240
day) review. In conducting this sunset review, the Department
preliminarily finds that termination of the countervailing duty order
would be likely to lead to continuation or recurrence of a
countervailable subsidy. The net countervailable subsidy and the nature
of the subsidy are identified in the ``Preliminary Results of Review''
section of this notice.
For Further Information Contact: Kathryn B. McCormick or Melissa G.
Skinner, Office of Policy for Import Administration, International
Trade Administration, U.S. Department of Commerce, 14th Street &
Constitution Avenue, NW, Washington, D.C. 20230; telephone: (202) 482-
1930 or (202) 482-1560, respectively.
Effective Date: November 30, 1999.
Statute and Regulations
This review is being conducted pursuant to sections 751(c) and 752
of the Act. The Department's procedures for the conduct of sunset
reviews are set forth in Procedures for Conducting Five-year
(``Sunset'') Reviews of Antidumping and Countervailing Duty Orders, 63
FR 13516 (March 20, 1998) (``Sunset Regulations'') and 19 C.F.R. Part
351 (1998) in general. Guidance on methodological or analytical issues
relevant to the Department's conduct of sunset reviews is set forth in
the Department's Policy Bulletin 98:3--Policies Regarding the Conduct
of Five-year (``Sunset'') Reviews of Antidumping and Countervailing
Duty Orders; Policy Bulletin, 63 FR 18871 (April 16, 1998) (``Sunset
Policy Bulletin'').
Scope
This order covers shipments of Turkish welded carbon steel pipes
and tubes, 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 in accordance with various American Society
Testing and Materials (ASTM) specifications, most notably A-53, A-120,
A-500, or A-501. The subject merchandise was originally classifiable
under item number 416.30 of the Tariff Schedules of the United States
Annotated (``TSUSA''); currently, they are classifiable under item
numbers 7306.30.10 and 7306.30.50 of the Harmonized Tariff Schedule of
the United States (``HTSUS''). Although the TSUSA and HTSUS item
numbers are provided for convenience and customs purposes, the written
description remains dispositive.
This review covers all producers and exporters of subject
merchandise from Turkey.
History of the Order
The Department published its final affirmative countervailing duty
determination on welded carbon steel pipes and tubes from Turkey in the
Federal Register on January 10, 1986 (51 FR 1268) and issued the
countervailing duty order on March 7, 1986 (51 FR 7984). The Department
found the following programs to confer subsidies: (1) Export Tax Rebate
and Supplemental Tax Rebate; (2) Preferential Export Financing;
1 (3) Deduction from Taxable Income for Export Revenues; and
(4) Resource Utilization Support Fund (``RUSF''). The country-wide
countervailing duty rate was 18.81 percent, and after taking into
account several program-wide changes, the Department established a duty
deposit rate of 17.80 percent. The following companies were
investigated in the original investigation: the Borusan group of
companies, Mannesmann-Suemerbank Boru Endustris (``Mannesmann-
Suemerbank''), Yucel Boru ve Profil
[[Page 66896]]
Endustrisi (``Yucel Boru''), Erkboru Profil Sanayi ve Ticaret, and
Umran Spiral Welded Pipe, Inc.2
---------------------------------------------------------------------------
\1\ Short-term export financing under Decree number 84/7557 was
abolished by Decree number 84/8861, which became effective on
January 1, 1985. The Department verified that all such loans were
repaid prior to our preliminary determinations, and we took the
elimination of this program into account by excluding it from the
duty deposit rate (see Final Affirmative Countervailing Duty
Determinations; Certain Welded Carbon Steel Pipe and Tube Products
from Turkey, 51 FR 1268 (January 10, 1986)).
\2\ Because Erkboru Profil Sanayi ve Ticaret, and Umran Spiral
Welded Pipe Inc. did not export to the United States during 1984 and
the first six months of 1985, their responses were not used in the
final determination. Id.
---------------------------------------------------------------------------
The Department has conducted the following administrative reviews
since the issuance of the order:
Review Period of Review Final Results Citation
----------------------------------------------------------------------------------------------------------------
Review Period of review Final result citation
----------------------------------------------------------------------------------------------------------------
(1) 28 Oct 85-31 Dec 86........... 53 FR 9791 (March 25, 1988).
(2) 1 Jan 95-31 Dec 95............ 62 FR 43984 (August 18, 1997).
(3) 1 Jan 96-31 Dec 96............ 63 FR 18885 (April, 18, 1997).
(4) 1 Jan 97-31 Dec 97............ 64 FR 44496 (August 16, 1999).
----------------------------------------------------------------------------------------------------------------
During administrative reviews of this order, the Department
investigated programs and companies in addition to those covered in the
original investigation. In the first administrative review, covering
the 1985/86 period, the Export Revenue Tax Deduction and General
Incentives Program (``GIP'') were found to confer subsidies. The Export
Tax Rebate, with respect to the U.S. and RUSF programs, were found to
have been terminated,3 and the Department determined a rate
of 1.43 percent for Bant Boru Sanayi ve Ticaret A.S. (``Bant Boru'')
and a rate of 12.67 percent for all others (53 FR 9791, March 25,
1988). After taking into account the program terminations, the
Department established a deposit rate of 7.26 percent for all others,
and, based on a zero subsidy rate, waived duty deposit requirements for
Bant Boru.
---------------------------------------------------------------------------
\3\ See Certain Welded Carbon Steel Pipe and Tube Products from
Turkey: Preliminary Results of Countervailing Duty Administrative
Review, 52 FR 47621 (December 15, 1987).
---------------------------------------------------------------------------
In the second administrative review, the Department found that the
Pre-Shipment Export Credit program conferred a countervailable subsidy
on producers/exporters of subject merchandise.4
Additionally, the following new programs were determined to confer
subsidies: (1) Investment Allowance under the GIP; (2) Foreign Exchange
Loan Assistance; (3) Freight Program; (4) Resource Utilization Support
Premium; 5 and (5) Export Incentive Certificate Customs duty
and Other Tax Exemptions. Deduction from Taxable Income for Export
Revenues was found to have been terminated in the second administrative
review.6 The Department determined net subsidies of 4.06
percent for Erciyas Boru Sanayii ve Ticaret A.S.
(``Erbosan'').7
---------------------------------------------------------------------------
\4\ See Certain Welded Carbon Steel Pipes and Tubes and Welded
Carbon Steel Line Pipe from Turkey; Final Results of Countervailing
Duty Administrative Reviews, 62 FR 43984 (August 18, 1997).
\5\ The Department determined the benefit from this program to
be 0.05 percent. However, in the same review, the Department
verified that the GRT terminated the RUSP program in 1991, and that
GIP investment incentive certificates issued after 1991 were no
longer eligible to receive RUSP payments. See Certain Welded Carbon
Steel Pipes and Tubes and Welded Carbon Steel Line Pipe from Turkey;
Preliminary Results of Countervailing Duty Administrative Reviews,
62 FR 16782, 16787 (April 8, 1997).
\6\ See Certain Welded Carbon Steel Pipes and Tubes and Welded
Carbon Steel Line Pipe from Turkey; Final Results of Countervailing
Duty Administrative Reviews, 62 FR 43984, 43986 (August 18, 1997).
\7\ See Certain Welded Carbon Steel Pipes and Tubes and Welded
Carbon Steel Line Pipe from Turkey; Preliminary Results of
Countervailing Duty Administrative Reviews, 62 FR 16782, 16788
(April 8, 1997).
---------------------------------------------------------------------------
In the third administrative review, the Department found that the
new program, Deduction from Taxable Income for Export Revenues,
conferred a countervailable subsidy of less than 0.005 percent for
Borusan Birlesik Boru Fabrikalari A.S. (``BBBF'') and Borusan Ihracat
Ithalat ve Dagitim A.S. (``Borusan Dagitim'') (BBBF and Borusan Dagitim
are hereinafter referred to as the ``Borusan Group''.).8 The
following programs identified in previous reviews were found to confer
subsidies: (1) Investment Allowance; (2) Foreign Exchange Loan
Assistance; (3) Incentive Premium on Domestically Obtained Goods; and
(4) Pre-Shipment Export Credit (63 FR 18885, April 16, 1998). The
Freight Program was found to have been terminated in the preliminary
results of the third review.9 The Department determined a
net subsidy of 3.10 percent for the Borusan Group (63 FR 18885, April
16, 1998).
---------------------------------------------------------------------------
\8\ See Certain Welded Carbon Steel Pipes and Tubes and Welded
Carbon Steel Line Pipe from Turkey; Final Results of Countervailing
Duty Administrative Reviews, 63 FR 18885, 18887 (April 16, 1998).
\9\ See Certain Welded Carbon Steel Pipes and Tubes and Welded
Carbon Steel Line Pipe From Turkey; Preliminary Results and Partial
Recission of Countervailing Duty Administrative Reviews, 62 FR 64808
(December 9, 1997).
---------------------------------------------------------------------------
In the fourth administrative review, programs that were determined
to confer subsidies include: (1) Pre-Shipment Export Credit; (2) the
Freight Program; and (3) Foreign Exchange Loan Assistance. Export
Incentive Certificate Customs Duty & Other Tax Exemptions was found to
be terminated (64 FR 16924, April 7, 1999). The Department determined
net subsidies of 0.84 percent for Yucel Boru and its affiliated
companies, Cayirova Boru Sanayi ve Ticaret A.S., and Yucelboru Ihracat
Ithalat ve Pazarlama A.S. (collectively ``Yucel Boru Group'').
Background
On May 3, 1999, the Department published a notice of initiation of
a sunset review of the countervailing duty (``CVD'') order on welded
carbon steel pipes and tubes from Turkey (64 FR 23596), pursuant to
section 751(c) of the Act. On May 18, 1999, the Department received,
within the deadline specified in section 351.218(d)(1)(i) of the Sunset
Regulations, a notice of intent to participate on behalf of domestic
producers Allied Tube and Conduit Corp., Sawhill Tubular Division-
Armco, Inc., Century Tube, IPSCO Tubular Inc., LTV Steel Tubular
Products, Maverick Tube Corporation, Sharon Tube Company, Western Tube
and Conduit, and Whetland Tube Co. (hereinafter, collectively
``domestic interested parties'') and the Government of the Republic of
Turkey (``GRT'') and the Borusan Group (collectively ``respondent
interested parties''). The domestic interested parties claimed
interested party status under section 771(9)(C) of the Act, as domestic
producers of subject merchandise. The GRT is an interested party
pursuant to section 771(9)(B) of the Act as the government of a country
in which subject merchandise is produced and exported; the Borusan
Group is an interested party pursuant to section 771(9)(A) of the Act
as a foreign producer and exporter of subject merchandise.
The domestic interested parties participated in the original
investigation and subsequent administrative reviews of the subject
order; the GRT and Borusan Group have been actively involved in this
case since 1985, the
[[Page 66897]]
year in which the countervailing duty petition on subject merchandise
from Turkey was filed. The GRT participated in the original
investigation and the four administrative reviews; the Borusan Group
participated in the original investigation and all but the second
administrative review.
We received adequate substantive responses from the domestic and
respondent interested parties on June 2, 1999 and June 3, 1999,
respectively, within the 30-day deadline specified in the Sunset
Regulations under section 351.218(d)(3)(i). As a result, pursuant to 19
CFR 351.218(e)(2), the Department determined to conduct a full review.
In accordance with 751(c)(5)(C)(v) of the Act, the Department may
treat a review as extraordinarily complicated if it is a review of a
transition order (i.e., an order in effect on January 1, 1995).
Therefore, the Department determined that the sunset review of the
countervailing duty order on carbon steel pipe and tube from Turkey is
extraordinarily complicated, and extended the time limit for completion
of the preliminary and final results of this review until not later
than November 19, 1999 and March 28, 2000, respectively, in accordance
with section 751(c)(5)(B) of the Act.\10\
---------------------------------------------------------------------------
\10\ See Welded Carbon Steel Pipes and Tubes from Turkey:
Extension of Time Limit for Preliminary Results of Five-Year Review,
64 FR 46885 (August 27, 1999).
---------------------------------------------------------------------------
Determination
In accordance with section 751(c)(1) of the Act, the Department is
conducting this review to determine whether termination of the
countervailing duty order would be likely to lead to continuation or
recurrence of a countervailable subsidy. Section 752(b) of the Act
provides that, in making this determination, the Department shall
consider the net countervailable subsidy determined in the
investigation and subsequent reviews, and whether any change in the
program which gave rise to the net countervailable subsidy has occurred
and is likely to affect that net countervailable subsidy. Pursuant to
section 752(b)(3) of the Act, the Department shall provide to the
International Trade Commission (``the Commission'') the net
countervailable subsidy likely to prevail if the order is revoked. In
addition, consistent with section 752(a)(6), the Department shall
provide to the Commission information concerning the nature of the
subsidy and whether it is a subsidy described in Article 3 or Article
6.1 of the 1994 WTO Agreement on Subsidies and Countervailing Measures
(``Subsidies Agreement'').
The Department's preliminary determinations concerning continuation
or recurrence of a countervailable subsidy, the net countervailable
subsidy likely to prevail if the order is revoked, and nature of the
subsidy are discussed below. In addition, comments of the interested
parties on each of these issues are addressed within the respective
sections.
Continuation or Recurrence of a Countervailable Subsidy
Drawing on the guidance provided in the legislative history
accompanying the Uruguay Round Agreements Act (``URAA''), specifically
the SAA, H.R. Doc. No. 103-316, vol. 1 (1994), the House Report, H.R.
Rep. No. 103-826, pt.1 (1994), and the Senate Report, S. Rep. No. 103-
412 (1994), the Department issued its Sunset Policy Bulletin providing
guidance on methodological and analytical issues, including the basis
for likelihood determinations. The Department clarified that
determinations of likelihood will be made on an order-wide basis (see
section III.A.2 of the Sunset Policy Bulletin). Additionally, the
Department normally will determine that revocation of a countervailing
duty order is likely to lead to continuation or recurrence of a
countervailable subsidy where (a) a subsidy program continues, (b) a
subsidy program has been only temporarily suspended, or (c) a subsidy
program has been only partially terminated (see section III.A.3.a of
the Sunset Policy Bulletin). Exceptions to this policy are provided
where a company has a long record of not using a program (see section
III.A.3.b of the Sunset Policy Bulletin).
Interested Party Comments
In their substantive response, the domestic interested parties
assert that prior to the issuance of the 1985 order, there were over
30,000 tons of imports of subject merchandise from Turkish producers to
the United States (see June 2, 1999, Substantive Response of the
domestic interested parties at 3). However, according to the domestic
interested parties, imports have since dropped dramatically: in 1998,
imports amounted to only 7400 tons--a 75 percent drop from 1985
figures. Id. Moreover, the domestic interested parties note that, in
subsequent administrative reviews, subsidization of the subject
merchandise by the GRT for the benefit of Turkish producers continues.
Thus, the domestic interested parties believe that the reduction of
imports of the subject merchandise from Turkey into the United States
and the continuing existence of countervailable subsidy programs
indicate that there is a strong likelihood of continuation of a
countervailable subsidy should this order be revoked.
The respondent interested parties assert that the GRT has
eliminated or severely limited the availability of the incentive
programs that led to the initiation of the countervailing duty
investigation on standard pipe in 1985 (see June 3, 1999, Substantive
Response of respondent interested parties at 4). They note that three
programs--Export Tax Rebate and Supplemental Tax Rebate, Deduction from
Taxable Income for Export Revenue, and the Resource Utilization Support
Fund--that were found to provide countervailable benefits to Turkish
producers/exporters of pipe and tube in the original investigation were
confirmed by the Department to be terminated or eliminated in the final
results of the 1995 and 1996 reviews, and the preliminary results of
the 1997 review. Id. at 6-7. According to the GRT, only three other
programs currently confer subsidies: the Pre-Shipment Export Credit
program, which provides short term pre-shipment export loans to
exporters through intermediary commercial banks; \11\ the Foreign
Exchange Loan Assistance, which allows commercial banks to exempt
certain fees on loans used in export-related activities; \12\ and the
Deduction from Taxable Income for Export Revenues,\13\ which allows
companies to deduct 0.05 percent of their hard currency income derived
from export activities from their corporate income taxes.\14\
---------------------------------------------------------------------------
\11\ In the 1996 review, the Department determined that the net
countervailable subsidy received by the Borusan Group from the Pre-
shipment Export Credit Program was 0.22 percent.
\12\ The exempted fees include a Resource Utilization
Stabilization Fund fee of 6 percent of the loan principal, a Banking
Insurance Tax equal to 5 percent of the interest paid, and a stamp
tax equal to 0.6 percent of the principal (62 FR 64810).
\13\ A program from the original investigation, Deduction from
Taxable Income for Export Revenues was terminated in the second
review (62 FR 43984, August 18, 1997). In the third review, however,
the Department determined a new, similar program, also called
Deduction from Taxable Income for Export Revenues (63 FR 18885,
April 16, 1998).
\14\ In the 1996 review, the Department calculated a subsidy for
this program of less than 0.005 percent for the Borusan Group (see
June 3, 1999, Substantive Response of respondent interested parties
at 14).
---------------------------------------------------------------------------
Department's Determination
The Department verified the elimination of benefits provided by the
Export Tax Rebate and Supplemental Tax Rebate and the RUSF; the duty
[[Page 66898]]
deposit rate from the 1985/86 review reflects the elimination of
benefits from these two programs on importers of subject merchandise.
Specifically, we found that, effective January 1, 1987, pursuant to
Communique 87/3 of Decree 86/11237, the GRT eliminated basic and
supplemental export tax rebates on exports of iron and steel products
to the United States (52 FR 47621, December 15, 1987). Also effective
January 1, 1987, pursuant to Decree 86/11085, the GRT eliminated RUSF
payments on exports. Id.
In the preliminary results of the 1995 period of review, the
Department determined that the Resource Utilization Support Premium
(``RUSP''), which distributed benefits on a regional basis under the
umbrella of the GIP, conferred a net countervailable benefit of 0.05
percent on Erbosan. However, the GRT terminated the RUSP program in
1991, and GIP investment certificates issued after 1991 were no longer
eligible to receive RUSP payments.\15\
---------------------------------------------------------------------------
\15\ See Certain Welded Carbon Steel Pipes and Tubes and Welded
Carbon Steel Line Pipe from Turkey; Final Results of Countervailing
Duty Administrative Reviews, 62 FR 43984 (August 18, 1997).
---------------------------------------------------------------------------
As noted above, the Deduction from Taxable Income for Export
Revenues was found terminated in the second administrative review.
However, a similar program was subsequently found to confer subsidies
of less than 0.005 percent for the Borusan Group for welded pipe and
tube in the third review (63 FR 1888, April 18, 1992). In the fourth
and most recent review, the program was found ``not used'' (64 FR
44496, August 16, 1999).
Finally, two programs investigated since the original investigation
have been found to be terminated: the Freight Program was found
terminated in the third review (62 FR 65808, 64811, December 9, 1997),
and Export Incentive Certificate Customs Duty & Other Tax Exemptions
was found terminated in the 1997 review when Communique No. 96/1,
effective January 1, 1996, rescinded Communique No. 95/7, which
provided export incentive certificates for the exclusion of taxes and
duties, with no residual benefits.\16\
---------------------------------------------------------------------------
\16\ See 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, 16928
(April 7, 1999).
---------------------------------------------------------------------------
The Department finds that three of the programs that were
investigated since the original investigation continue to confer
subsidies on Turkish producers/exporters of pipe and tube. In the
second review, although the Department found that the 30 percent
minimum investment allowance under GIP is not countervailable, the
Investment Allowance program conferred benefits of 0.02 percent (62 FR
43984, August 18, 1997) on Erbosan. In the third review, the Department
determined that the net countervailable subsidies received by the
Borusan Group from Foreign Exchange Loan Assistance and Incentive
Premium on Domestically Obtained Goods were 0.43 percent and 0.01
percent, respectively (63 FR 18885, April 16, 1998). In the fourth
review, the Pre-shipment Export Credit program conferred on the Yucel
Group a subsidy of 0.84 percent (64 FR 44496, August 16, 1999).
Of the four programs, Deduction from Taxable Income for Export
Revenues, Pre-Shipment Export Credit, Incentive Premium on Domestically
Obtained Goods, and Foreign Exchange Loan Assistance that continue to
exist, only Pre-Shipment Export Credit was determined to provide a
subsidy above de minimis--1.77 percent--in the second review. Since at
least one of the existing countervailable programs continues to confer
benefits above de minimis, the Department, consistent with section
III.A.3.a of the Sunset Policy Bulletin, preliminarily determines that
termination of the subject order would likely result in the
continuation or recurrence of countervailable subsidies.
Net Countervailable Subsidy
In the Sunset Policy Bulletin, the Department stated that,
consistent with the SAA and House Report, the Department normally will
select a rate from the investigation as the net countervailable subsidy
likely to prevail if the order is revoked, because that is the only
calculated rate that reflects the behavior of exporters and foreign
governments without the discipline of an order or suspension agreement
in place. The Department noted that this rate may not be the most
appropriate rate if, for example, the rate was derived from subsidy
programs which were found in subsequent reviews to be terminated, there
has been a program-wide change, or the rate ignores a program found to
be countervailable in a subsequent administrative review.\17\
---------------------------------------------------------------------------
\17\ See section III.B.3 of the Sunset Policy Bulletin.
---------------------------------------------------------------------------
Additionally, section III.B.2 of the Sunset Policy Bulletin states
that the Department, where possible, calculates the individual
countervailable subsidy rate in an investigation for each known
exporter or producer of the subject merchandise. Although the original
investigation resulted in a country-wide rate, the Department, in
accordance with section 777A(e)(1) of the Act, will provide to the
Commission company-specific margins for those companies that were
investigated in subsequent reviews.
Interested Party Comments
In their substantive response, the domestic interested parties
assert that both the overall decrease in imports of the subject
merchandise from Turkey into the United States and the continuing
existence of countervailable subsidy programs will injure the domestic
industry. Accordingly, the Department should find that the magnitude of
the net countervailable subsidy that is likely to prevail is identical
to the net countervailable subsidy determined in the original
investigation.
The respondent interested parties assert that the Department should
exclude the amount of subsidies found to be provided in prior reviews
by the Freight Program, Incentive Premium on Domestically Obtained
Goods, Investment Allowance and Export Incentive Certificates Customs
Duty and Other Tax Exemptions programs because the benefits associated
with these programs have been terminated (see June 2, 1999, Substantive
Response of respondent interested parties, at 16). Furthermore, the
rate likely to prevail should be based upon the rate from the most
recently completed administrative review since that rate is most
representative of the current level of benefits associated with a
program. Id. Accordingly, the new margin should be 0.655 percent, the
sum of the margins from three programs in the third review: 0.43
percent from Foreign Exchange Loan Assistance; less than 0.005 percent
from the Deduction from Taxable Income for Export Revenues; and 0.22
percent from Pre-Shipment Export Credits.
Department's Determination
In the Sunset Policy Bulletin, the Department states that,
consistent with the SAA and House Report, the Department normally will
select a rate from the investigation, because that is the only
calculated rate that reflects the behavior of exporters and foreign
governments without the discipline of an order or suspension agreement
in place (see section III.B.1 of the Sunset Policy Bulletin). However,
the Department notes that the rate from the original investigation may
not be the most appropriate rate if, for example, the rate was derived
from subsidy programs which were found in subsequent reviews to be
terminated, there has been a program-wide change,
[[Page 66899]]
or the rate ignores a program found to be countervailable in a
subsequent administrative reviews (see section III.B.3 of the Sunset
Policy Bulletin).
The Department disagrees with the domestic interested parties'
argument that the rate likely to prevail should be the 17.80 percent
margin from the original investigation, because, as noted above, many
of the benefits of countervailable subsidy programs have been
eliminated. Thus, the Department determines that, as argued by the GRT,
benefits from three programs from the original investigation--Export
Tax Rebate and Supplemental Tax Rebate, Deduction from Taxable Income
for Export Revenues and the RUSF--have been terminated. Of the programs
investigated since the original investigation, benefits from the
Freight Program and Export Incentive Certificate Customs Duty & Other
Tax Exemptions were terminated.\18\ Additionally, in the 1995 review,
the Department found that the RUSP was terminated. Accordingly, the
Department will adjust the new company-specific rates to reflect the
elimination of the above programs.
---------------------------------------------------------------------------
\18\ See Certain Welded Carbon Steel Pipes and Tubes and Welded
Carbon Steel Line Pipe from Turkey; Preliminary Results of
Countervailing Duty Administrative Reviews, 64 FR 64808, 64811
(December 9, 1997) and Certain Welded Carbon Steel Pipes and Tubes
and Welded Carbon Steel Line Pipe from Turkey; Preliminary Results
of Countervailing Duty Administrative Reviews, 64 FR 44496 (August
16, 1999).
---------------------------------------------------------------------------
Of the programs investigated since the original investigation, the
Department determined that Deduction from Taxable Income for Export
Revenues conferred on the Borusan Group a subsidy of less than 0.005
percent in the 1996 review. Additionally, the benefits from the
Incentive Premium on Domestically Obtained Goods are ``recurring,''
because once a company has received an investment incentive
certificate, it becomes eligible for the Incentive Premium benefits
automatically and on a yearly basis (62 FR 64808, December 9, 1997).
Accordingly, the Department will adjust the margin to include their
respective subsidies of less than 0.005 percent and 0.01 percent for
the Borusan Group.
The Department agrees with the respondent interested parties that
two additional programs investigated since the original investigation,
Foreign Exchange Loan Assistance and Pre-Shipment Export Credit,
continue to confer benefits on Turkish producers/exporters of subject
merchandise. Thus, we will include their respective subsidies in the
company-specific margins.
Considering the termination of the Export and Supplemental Tax
Rebate and RUSF programs in the first review, and the subsequent waiver
of the duty deposit for Bant Boru, the Department will report to the
Commission a margin of 0.00 percent for Bant Boru.
The Department will report a rate of 2.89 percent for Erbosan, the
sum of 1.77 percent from the Pre-Shipment Export Credit Program; 0.02
percent from Investment Allowance under GIP; and 1.10 percent from the
Foreign Exchange Loan Assistance, from the second review.
For the Borusan Group, the Department will report to the Commission
a rate of 0.68 percent, which includes, from the third review: 0.22
percent from the Pre-Shipment Export Credit; 0.02 from Investment
Allowance under GIP; 0.43 percent from Foreign Exchange Loan
Assistance; 0.01 percent from the Incentive Premium on Domestically
Obtained Goods; and less than 0.005 percent from Deduction from Taxable
Income for Export Revenues.
For the Yucel Boru Group, the Department will report to the
Commission a rate of 0.84 percent from Pre-Shipment Export Credit in
the fourth review. Finally, the Department will report to the
Commission a rate of 2.90 percent for all others. This rate includes
1.77 percent from Pre-Shipment Export Credit; 0.02 percent from
Investment Allowance under GIP; 1.10 percent from Foreign Exchange Loan
Assistance, 0.01 from Incentive Premium on Domestically Obtained Goods,
and less than 0.005 percent from Deduction from Taxable Income for
Export Revenues.
Nature of the Subsidy
In the Sunset Policy Bulletin, the Department states that,
consistent with section 752(a)(6) of the Act, the Department will
provide to the Commission information concerning the nature of the
subsidy, and whether the subsidy is a subsidy described in Article 3 or
Article 6.1 of the Subsidies Agreement. The domestic and respondent
interested parties did not address this issue in their substantive
responses.
Deduction from Taxable Income for Export Revenues and Pre-Shipment
Export Credit fall within the definition of an export subsidy under
Article 3.1(a) of the Subsidies Agreement because the receipt of
benefit is contingent on export performance. The remaining programs,
although not falling within the definition of an export subsidy under
Article 3.1(a) of the Subsidies Agreement, could be found to be
inconsistent with Article 6 if the net countervailable subsidy exceeds
five percent, as measured in accordance with Annex IV of the Subsidies
Agreement. However, the Department has no information with which to
make such a calculation, nor do we believe it appropriate to attempt
such a calculation in the course of a sunset review. Rather, we are
providing the Commission with the following program descriptions.
Foreign Exchange Loan Assistance. The GRT Resolution Number: 94/
5782, Article 4, effective June 13, 1994, concerns the encouragement of
exportation, allowing commercial banks to exempt certain fees provided
that the loans are used in the financing of exportation and other
foreign exchange earning activities. The exempted fees include a
Resource Utilization Stabilization Fund fee of 6 percent of the loan
principle, a Banking Insurance Tax equal to 5 percent of the interested
and a stamp tax equal to 0.6 percent of the principal.\19\
---------------------------------------------------------------------------
\19\ See Certain Welded Carbon Steel Pipes and Tubes and Welded
Carbon Steel Line Pipe from Turkey; Final Results of Countervailing
Duty Administrative Reviews, 62 FR 64808 (December 9, 1997).
---------------------------------------------------------------------------
Incentive Premium on Domestically Obtained Goods. Companies holding
investment incentive certificates under the GIP are eligible for a
rebate of 15 percent VAT paid on locally-sourced machinery and
equipment. Imported machinery and equipment are subject to the VAT and
are not eligible for the rebate. These VAT rebates are countervailable
subsidies within the meaning of section 777(5)(D)(ii) of the Act
because the rebates constituted revenue foregone by the GRT, and they
provide a benefit in the amount of the VAT savings to the company.
Also, they are specific under section 771(5A)(C) because their receipt
is contingent upon the use of domestic goods rather than imported goods
(62 FR 64808, December 9, 1997).
Preliminary Results of Review
As a result of this review, the Department preliminarily finds that
revocation of the countervailing duty order would be likely to lead to
continuation or recurrence of a countervailable subsidy at the rates
listed below:
------------------------------------------------------------------------
Margin
Producer/exporter (percent)
------------------------------------------------------------------------
Bant Boru.................................................... 0.00
Erbosan...................................................... 2.89
Borusan Group................................................ 0.68
Yucel Boru Group............................................. 0.84
All Others................................................... 2.90
------------------------------------------------------------------------
[[Page 66900]]
Any interested party may request a hearing within 30 days of
publication of this notice in accordance with 19 CFR 351.310(c). Any
hearing, if requested, will be held on January 17, 2000, in accordance
with 19 CFR 351.310(d). Interested parties may submit case briefs no
later than January 10, 2000, in accordance with 19 CFR
351.309(c)(1)(i). Rebuttal briefs, which must be limited to issues
raised in the case briefs, may be filed not later than January 13,
2000. The Department will issue a notice of final results of this
sunset review, which will include the results of its analysis of issues
raised in any such comments, no later than March 28, 2000, in
accordance with section 751(c)(5)(B) of the Act.
This five-year (``sunset'') review and notice are in accordance
with sections 751(c), 752, and 777(i)(1) of the Act.
Dated: November 19, 1999.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-30967 Filed 11-29-99; 8:45 am]
BILLING CODE 3510-DS-P