[Federal Register Volume 62, Number 236 (Tuesday, December 9, 1997)]
[Notices]
[Pages 64808-64813]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-32214]


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DEPARTMENT OF COMMERCE

International Trade Administration
[C-489-502]


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

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

ACTION: Notice of preliminary results of countervailing duty 
administrative reviews.

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SUMMARY: The Department of Commerce is conducting administrative 
reviews of the countervailing duty orders on certain welded carbon 
steel pipes and tubes and welded carbon steel line pipe from Turkey. 
For information on the net subsidy for each reviewed company for each 
class or kind of merchandise, as well as for all non-reviewed 
companies, see the Preliminary Results of Reviews section of this 
notice. If the final results remain the same as these preliminary 
results of administrative reviews, we will instruct the U.S. Customs 
Service to assess countervailing duties as detailed in the Preliminary 
Results of Reviews section of this notice. Interested parties are 
invited to comment on these preliminary results. (See Public Comment 
section of this notice.)

EFFECTIVE DATE: December 9, 1997.

FOR FURTHER INFORMATION CONTACT: Stephanie Moore or Cheri Caddy, Office 
of Countervailing Duty/Antidumping Enforcement VI, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW., Washington, D.C. 
20230; telephone: (202) 482-3692 or (202) 482-2849.

SUPPLEMENTARY INFORMATION:

Background

    On March 7, 1986, the Department of Commerce (the Department) 
published in the Federal Register (51 FR 7984) the countervailing duty 
orders on certain welded carbon steel pipes and tubes (welded pipe and 
tube) and certain welded carbon steel line pipe (line pipe) from 
Turkey. On March 7, 1997, the Department published a notice of 
``Opportunity to Request Administrative Review'' (62 FR 10521) of these 
countervailing duty orders. We received timely requests for reviews 
from Borusan Birlesik Boru Fabrikalari A.S. (BBBF) and Borusan Ihracat 
Ithalat ve Dagitim A.S. (Dagitim) (Borusan Group). We also received a 
timely request from Wheatland Tube Company and Maverick Tube 
Corporation (petitioners) to conduct reviews of Erciyas Boru Sanayii ve 
Ticaret A.S. (Erbosan), Yucel Boru ve Profil Endustrisi A.S. (Yucel 
Boru), Bant Boru Sanayii ve Ticaret A.S. (Bant Boru), Erkboru Profil 
San ve Tic A.S. (Erkboru), Borusan Group, and Mannesmann--Sumerbank 
Boru Endustrisi T.A.S. (Mannesmann). We initiated the reviews covering 
the period January 1, 1996 through December 31, 1996 on April 24, 1997 
(62 FR 19988).
    In accordance with 19 CFR 355.22(a), the review on welded pipe and 
tube covers Erbosan, Yucel Boru, Bant Boru, Erkboru, and the Borusan 
Group. The review on line pipe covers Mannesmann, Yucel Boru, Bant 
Boru, and Erkboru. These reviews also cover 21 programs.
    Erbosan, Yucel Boru, Bant Boru and Erkboru reported that they did 
not export welded pipe and tube or line pipe to the United States 
during the period of review (POR). Information obtained from the U.S. 
Customs Service (Customs) confirmed the companies' statements. 
Therefore, we are rescinding the reviews with respect to Erbosan, Yucel 
Boru, Bant Boru and Erkboru. The companies subject to these reviews are 
the Borusan Group for welded pipe and tube and Mannesmann for line 
pipe. Although the Borusan Group produces both welded pipe and tube and 
line pipe, they only exported welded pipe and tube to the United States 
during the POR.

Applicable Statute

    Unless otherwise indicated, all citations to the statute are 
references to the provisions of the Tariff Act of 1930, as amended by 
the Uruguay Round Agreements Act (``URAA'') effective January 1, 1995 
(the Act). The Department is conducting these administrative reviews in 
accordance with section 751(a) of the Act.

Scope of Reviews

    Imports covered by these reviews are shipments from Turkey of two 
classes or kinds of merchandise: (1) Certain welded carbon steel pipe 
and tube, having an outside diameter of 0.375 inch or more, but not 
over 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; and (2) certain welded carbon steel line pipe with an 
outside diameter of 0.375 inch or more, but not over 16

[[Page 64809]]

inches, and with a wall thickness of not less than .065 inch. These 
products are produced to various American Petroleum Institute (API) 
specifications for line pipe, most notably API-L or API-LX. These 
products are classifiable under the Harmonized Tariff Schedule of the 
United States (HTSUS) as item numbers 7306.30.10 and 7306.30.50. The 
HTSUS item numbers are provided for convenience and Customs purposes. 
The written description remains dispositive.

Analysis of Programs

I. Programs Conferring Subsidies

A. Programs Previously Determined to Confer Subsidies
    1. Pre-Shipment Export Credit: The Export Credit Bank of Turkey 
(Turk Eximbank) provides short-term pre-shipment export loans to 
exporters through intermediary commercial banks. The program is 
designed to support export-related industries from the initial stage of 
production. Loans are made to exporters who commit to export within a 
specified period of time. Generally, loans are extended for 120 days 
for industrial goods and cover 50 to 75 percent of the FOB export 
value. During the POR, both companies under review were eligible for 
pre-shipment export loans amounting to 50 percent of the FOB value of 
exports, for a maximum of 120 days. These loans are denominated in 
Turkish Lira (TL) and repaid in TL. The interest rate charged on these 
pre-shipment loans is established by Turk Eximbank and is tied to the 
Central Bank's rediscount rate.
    In the Final Affirmative Countervailing Duty Determination: Certain 
Pasta from Turkey 61 FR 30366 (June 14, 1996) (Pasta), and in 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; April 8, 1997) and 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) (Pipe and Tube), the Department found this program 
countervailable because receipt of the loans is contingent upon export 
performance and the interest rate paid on these loans is less than the 
amount the recipient would pay on a comparable commercial loan. In 
Pasta, we found that these loans were tied to specific destinations; 
however, in the Pipe and Tube reviews, we found these loans to be 
untied. In Pipe and Tube, we verified that although an exporter files a 
loan application in which the export destination is listed, the actual 
destination of the shipments may be different from the one(s) stated in 
the loan application. The exporter has to show only that an export has 
taken place, and provide the foreign currency exchange receipts from 
the commercial bank to close out the loan with Turk Eximbank. Because 
the loans are not specifically tied to a particular destination at the 
time of approval, we determined that the pre-shipment loan program is 
an untied export loan program. Pipe and Tube at 43986. No information 
has been submitted to the record of this review to warrant 
reconsideration of that finding. Therefore, we preliminarily determine 
in these reviews that the pre-shipment loan program is an untied export 
loan program.
    Pursuant to section 771(5)(E)(ii) of the Act, a benefit shall be 
treated as conferred ``in the case of a loan, if there is a difference 
between the amount the recipient of the loan pays on the loan and the 
amount the recipient would pay on a comparable commercial loan that the 
recipient could actually obtain on the market.'' In this case, as the 
benchmark interest rate, i.e., the rate the recipient would pay on a 
comparable commercial loan that could actually be obtained by it, we 
are using company-specific interest rates on comparable commercial 
loans to calculate the benefit for any pre-shipment loans that were 
taken out by the Borusan Group or Mannesmann in 1995 and repaid in 
1996, and for any pre-shipment loans that were taken out in 1996 and 
repaid in 1996. Because the rates on commercial loans provided by the 
Borusan Group and Mannesmann include the customary Bank and Insurance 
and Services Tax (BIST) of 5 percent of the interest rate and the 
Resource Utilization Support Fund (RUSF) fee of 6 percent of the 
interest rate, we have not added these customary bank fees to the 
benchmark interest rates.
    In addition, because Turkey continues to experience persistently 
high levels of inflation, based on a Consumer Price Index rate of 
approximately 80 percent during the POR, we also preliminarily 
determine that it is appropriate to use monthly average short-term 
interest rates for our benchmark where such rates are available (see 
Pasta at page 30367; Pipe and Tube at 43987). In the previous review, 
when monthly company-specific interest rates were not available, we 
used monthly average interest rates charged by a commercial bank in 
Turkey on domestic loans during the POR (see e.g., Pipe and Tube at 
16783 and 43984). However, these commercial bank rates are unavailable 
for this POR.
    Accordingly, for Mannesmann, in those months where monthly company-
specific interest rates were not available, we used, as the benchmark 
interest rate, the weighted average interest rate for the closest month 
preceding and closest month following the month in which the company 
took out a pre-shipment loan. Using these benchmarks, we continue to 
find pre-shipment export loans to Mannesmann countervailable because 
the interest rate charged is less than the rate for comparable 
commercial loans that the company could actually obtain in the market.
    With respect to the Borusan Group, the company did not have monthly 
company-specific interest rates. However, it did obtain short-term 
commercial loans on which interest was paid quarterly. As such, we 
preliminarily determine that it is appropriate to use company-specific 
quarterly average short-term interest rates as the benchmark interest 
rates for this company, because, like the monthly rates, these rates 
incorporate the impact of high inflation. For one month in the POR, 
where quarterly commercial interest rates were not available, we used 
the rate from the following quarter as our benchmark. Using these 
benchmarks, we continue to find pre-shipment export loans to the 
Borusan Group countervailable because the interest rate charged is less 
than the rate for comparable commercial loans that the company could 
actually obtain in the market.
    To determine the benefit, we calculated the countervailable subsidy 
as the difference between actual interest paid on pre-shipment loans 
during the POR and the interest that would have been paid using the 
benchmark interest rates. This difference was divided by the company's 
total export sales during the POR. We adjusted the sales figure to 
account for foreign exchange differences (``kur farki''), which 
resulted from the changes in the U.S. dollar/Turkish lira exchange 
rates. We made the adjustments because despite Turkey's high rate of 
inflation, Turkish companies do not index any of the figures, other 
than fixed assets, in their financial statements to account for 
inflation. Therefore, if we did not make these adjustments, the result 
would be equivalent to indexing export sales for inflation and thus, 
would inflate the denominator while the program benefits (the 
numerator) would remain unindexed. Such a result would unfairly distort 
the Department's calculation. Pipe and Tube at 43988. On this basis,

[[Page 64810]]

we preliminarily determine the countervailable subsidy to be 0.19 
percent ad valorem for the Borusan Group for welded pipe and tube, and 
0.29 percent ad valorem for Mannesmann for line pipe.
    2. Investment Allowances: The General Incentives Program (GIP) is 
designed to increase investment in Turkey and to expand the Turkish 
economy. Under the GIP, companies may apply to the Undersecretariat of 
Treasury (UT) for investment incentive certificates. The investment 
incentive certificates entitle the holders to a number of specified 
benefits, such as investment allowances, related to an investment 
project. The investment allowance provides companies with a corporate 
tax exemption of between 30 percent and 100 percent of their total 
fixed investment depending upon the geographic location, sector and the 
value of the investment. During the POR, for purposes of GIP, Turkey 
was divided into three types of geographic regions: (1) Developed; (2) 
normal; and (3) priority. Companies located in any of the lesser-
developed priority regions are entitled to higher rates of deduction 
than companies located in the developed or normal regions.
    Mannesmann and the Borusan Group claimed an investment allowance on 
their corporate income tax returns filed during the POR. The Borusan 
Group is located in a region eligible for an investment allowance of 40 
percent, while Mannesmann, because it is located in a developed region, 
is only eligible for the minimum investment allowance of 30 percent, 
the minimum investment allowance provided to all companies under GIP 
regardless of location or type of industry. See e.g., Certain Welded 
Carbon Steel Pipe and Tube Products from Turkey; Preliminary Results of 
Countervailing Duty Administrative Review, 52 FR 47621, 47622 (December 
15, 1987), Certain Welded Carbon Steel Pipe and Tube Products from 
Turkey; Final Results of Countervailing Duty Administrative Review, 53 
FR 9791 (March 25, 1988), and Pipe and Tube at 16784; 43984.
    Pursuant to section 771(5A)(D), the Department previously 
determined that the minimum 30 percent investment allowance provided to 
all sectors and geographic regions within Turkey is not countervailable 
because the 30 percent investment allowance is not limited to a 
specific enterprise or industry or group thereof, nor limited to 
companies located in specific regions. However, because the Borusan 
Group received a 40 percent investment allowance, which is 10 percent 
higher than the minimum 30 percent allowance provided to all sectors 
and geographic regions within Turkey, the difference results in a 
higher tax savings to the company due to its geographic location. 
Therefore, we preliminarily determine that the 10 percent difference 
results in a countervailable subsidy. See also Industrial Phosphoric 
Acid from Israel; Preliminary Results of Countervailing Duty 
Administrative Reviews, 61 FR 8255, 8257 (March 4, 1996) and Industrial 
Phosphoric Acid from Israel; Final Results of Countervailing Duty 
Administrative Reviews, 61 FR 28841 (June 6, 1996). We also previously 
determined that the benefits under this program are ``recurring'' 
because once a company has a fixed asset investment project approved, 
it becomes eligible to deduct an investment allowance from its 
corporate income tax returns; therefore, the receipt of the benefit is 
automatic and continues year to year. Pipe and Tube at 16784 and 43984.
    To calculate the benefit for the Borusan Group, we first multiplied 
its total fixed investment by 10 percent, which is the amount the 
Borusan Group receives above the 30 percent allowance provided to all 
industries throughout Turkey. We then computed the company's tax rate. 
The company paid four separate corporate taxes. These included a 25 
percent corporate tax, an interim tax in the amount of 10 percent of 
the corporate tax, a ``stopaj'' tax equal to 10 percent of 75 percent 
of its net taxable income, and a fund tax equal to 10 percent of the 
``stopaj'' tax. The sum of these taxes equals a total corporate tax 
rate of 35.75 percent. We then multiplied the countervailable portion 
of the investment allowance deduction by the tax rate of 35.75 percent, 
and obtained the tax savings for the company. Next, we divided the tax 
savings by the company's total sales, adjusted for foreign exchange 
differences, as described above. On this basis, we preliminarily 
determine the countervailable subsidy to be 0.02 percent ad valorem for 
the Borusan Group for welded pipe and tube, and zero for Mannesmann for 
line pipe.
    3. Foreign Exchange Loan Assistance: The Government of the Republic 
of Turkey (GRT) Resolution Number: 94/5782, Article 4, effective June 
13, 1994 concerning the encouragement of exportation, allows commercial 
banks to exempt certain fees provided that the loans are used in the 
financing of exportation and other foreign exchange earning activities. 
We previously determined that this program is specific and, therefore, 
countervailable within the meaning of section 771(5A)(B), because the 
exemption of the fees is contingent upon export performance. Pipe and 
Tube at 43991.
    During the POR, in connection with merchandise exported to the 
United States, the Borusan Group received and paid interest on a 
foreign currency loan from a commercial bank and was exempted from 
paying the BIST fee of 5 percent of the interest rate and the RUSF fee 
of 6 percent of the principal. Unlike pre-shipment loans that are 
denominated in TL where the RUSF fee is 6 percent of the interest rate, 
the RUSF fee for foreign currency loans is calculated as 6 percent of 
the principal. Mannesmann did not use the foreign exchange loan 
assistance in connection with merchandise exported to the United States 
during the POR.
    We have previously determined that the BIST and RUSF fee exemptions 
are a direct transfer of funds from the GRT providing a benefit in the 
amount of the exemption. Pipe and Tube at 43991. We have also 
determined in Pipe and Tube at 16784 and 43984, that the benefits are 
recurring because once the company obtains a foreign currency loan, it 
is automatically exempted from paying the fees.
    To calculate the benefit for this program, we computed the exempted 
fees on the interest or principal, where appropriate, of the Borusan 
Group foreign currency loan. The loan is dollar denominated. Therefore, 
we converted these exempted fee amounts to TL using the exchange rate 
in effect during the month in which the loan was received, and divided 
the result by the company's total exports of the subject merchandise to 
the United States, adjusted for foreign exchange differences, as 
described above. In Pipe and Tube at 43991, we used the actual interest 
exchange rate on the foreign exchange loan documentation examined at 
verification and that was part of the record in that proceeding. 
However, in this proceeding, no information was available on the record 
regarding the actual interest exchange rate on the foreign exchange 
loan. Therefore, we preliminarily determine that the fees were 
established when the loan was granted, and calculated the benefit using 
the exchange rate in effect on that date. On this basis, we 
preliminarily determine the net subsidy to be 0.43 percent ad valorem 
for the Borusan Group for welded pipe and tube, and zero for Mannesmann 
for line pipe.
    4. Freight Program: The GRT Decree number 93/43, effective October 
13, 1993, provided freight rebate payments to exporters in the amount 
of $50 per ton for merchandise exported on Turkish vessels, and $30 per 
ton for merchandise exported on non-Turkish

[[Page 64811]]

vessels. In February 1994, pursuant to GRT Decree 94/4, the rebate was 
capped at 15 percent of the FOB value of the goods (an increase over 
the original 10 percent cap). Benefits under this program were provided 
in the form of 30 percent cash and 70 percent treasury bonds with one-
and two-year maturity dates. (In the prior review, the examined 
companies only received two year bonds). Companies were eligible to 
receive interest on bonds on the one-year anniversary date of the 
issuance of the bonds and on the date of the maturity of the bonds. The 
program was terminated on December 31, 1994, and there will be no 
payments on shipments made after January 1, 1995.
    In Pipe and Tube, we determined that these cash grants and bonds 
are countervailable export subsidies within the meaning of section 
771(5A)(B) of the Act. The cash grants and bonds are a direct transfer 
of funds from the GRT providing a benefit in the amount of the cash 
grants and bonds. We also determined that the benefits under the 
Freight Program are ``recurring,'' because once a company has exported 
and submitted documentation to the Central Bank it becomes eligible for 
the cash grants or bonds. The receipt of benefits is automatic and 
continued throughout the life of the program. (Pipe and Tube at 43990.) 
See also Allocation Section of the General Issues Appendix in Final 
Affirmative Countervailing Duty Determination: Certain Steel Products 
from Austria (58 FR 37217, 37268-69, July 9, 1993) (``General Issues 
Appendix'').
    During the POR, Mannesmann received cash under the freight rebate 
program based on exports made between October 1993 and December 1994. 
Mannesmann also received one-and two-year bonds during the POR with 
respective maturity dates of 1997 and 1998. The Borusan Group also 
received cash during the POR based on exports made between October 1993 
and December 1994. In addition, the Borusan Group received interest 
payments during the POR on bonds with maturity dates after the POR.
    The Department's practice has been to deem the benefit to be 
received at the time of export, if the benefit is calculated as a 
percentage of the FOB value and the amount of the benefit is known at 
the time of export. See e.g., Castings at 44843. Although the benefit 
under the Freight Program is calculated based on tonnage and not as a 
percentage of export value, we note that a benefit determined by the 
amount of the tonnage may also be known at the time of export.
    However, as previously determined in Pipe and Tube, the facts in 
this case establish that the exporter did not know the amount of 
benefit at the time of export. Although the freight payments were 
stated in U.S. dollars per ton, the benefit was not tied to the U.S. 
dollar. Therefore, the TL amount ultimately received by the exporter 
was not necessarily equivalent to U.S. $50 or U.S. $30 per ton. In this 
regard, the freight program at issue differs from the Export 
Performance Credit program, where the benefits received in TL were tied 
to the U.S. dollar. Under that program, we found that the exporter knew 
at the time of export the benefit to be received, because the exporter 
received the TL equivalent of the U.S. dollar amount, which was based 
upon a percentage of the FOB value at the time of export. Therefore, 
although the exporter ultimately received more TL than if the benefit 
had been paid at the time of export, due to Turkey's high level of 
inflation, the exporter still received the equivalent in TL of the U.S. 
dollar amount which was based upon the percent of FOB value and was 
known at the time of the export. Pipe and Tube at 16787 and 43984. In 
fact, in February 1995, two months after the termination of the Freight 
Program, the GRT announced that the benefit from this program would be 
based on the exchange rate that was in effect on December 31, 1994, 
regardless of when the shipments occurred. Moreover, given the high 
inflation rate in Turkey at the time of the shipments (based on a CPI 
rate of approximately 65 percent in 1993, and 114 percent in 1994), and 
the GRT's decision on the exchange rate, there was no way for the 
exporter to predict at the time of export what the benefit would be. 
This position is consistent with the Department's analysis of a similar 
program in Pasta where we determined that the benefit should be treated 
as having been bestowed when the cash was received rather than earned. 
(See discussion of Payments for Exports on Turkish Ships program in 
Pasta at 30369). As such, we previously determined that the benefits 
under this program are bestowed when the cash is received with respect 
to the cash payments, and not when the benefit is earned.
    With regard to the bonds portion of the rebate, we previously 
determined that the benefits from the bonds are bestowed on the date of 
maturity. See Pipe and Tube at 43991. This is due to the fact that, 
even though there were no restrictions on the sale or transfer of the 
bonds, because of the rate of inflation, there was no secondary market 
to allow exporters to convert their bonds to cash. Therefore, the 
exporters have no choice but to hold the bonds until maturity. See also 
Pasta at page 30368.
    The benefits under the freight program are made on a shipment-by-
shipment basis. Therefore, where a benefit is tied or can be tied to 
exports to the United States, we calculate the ad valorem subsidy rate 
by dividing the benefit by the firm's total exports to the United 
States, adjusted for foreign exchange differences. See, e.g., Notice of 
Final Results of Countervailing Duty Administrative Review: Roses and 
Other Cut Flowers from Columbia, 52 FR 48847, 48848 (December 28, 
1987). We have calculated the benefit for the Borusan Group and the 
benefit for Mannesmann from this program by dividing the total amount 
of freight rebates received during the POR by each respondent for 
exports to the United States by their total exports to the United 
States during the POR. On this basis, we preliminarily determine the 
net subsidy to be 2.61 percent ad valorem for the Borusan Group for 
welded pipe and tube, and 3.36 percent ad valorem for Mannesmann for 
line pipe.
    5. Incentive Premium on Domestically Obtained Goods: Companies 
holding investment incentive certificates under the GIP are eligible 
for a rebate of the 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. (Pasta at 30369). The Department 
determined in Pasta that these VAT rebates are countervailable 
subsidies within the meaning of section 771(5)(D)(ii) of the Act 
because the rebates constitute 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. Further, the Department determined that the benefits under the 
Incentive Premium program are ``recurring,'' because once a company has 
received an investment incentive certificate it becomes eligible for 
the Incentive Premium benefits. The receipt of benefits is automatic 
and continues from year to year.
    Mannesmann did not use this program during the POR. For the rebates 
received by the Borusan Group during the POR, we divided the amount 
received by the company's total sales during the POR, adjusted for 
foreign exchange differences. On this basis, we preliminarily determine 
that the net countervailable subsidy to be 0.01 per

[[Page 64812]]

cent ad valorem for the Borusan Group for welded pipe and tube, and 
zero for Mannesmann for line pipe.
B. Other Program Preliminarily Determined to Confer Subsidies
    Deduction from Taxable Income for Export Revenues: In 1995, the 
Ministry of Finance amended Article 19 of the Income Tax Law by issuing 
Section 1 of Article 40, to allow companies that export goods or 
services to deduct 0.5 percent of their hard currency income derived 
from these export activities from their corporate income taxes.
    We preliminary determine that this tax exemption is a 
countervailable subsidy within the meaning of section 771(5)(D)(ii) of 
the Act. The exemption represents revenue forgone by the GRT and 
provides a benefit in the amount of the tax savings to the company. 
Also, the subsidy is specific under section 771(5A)(B) because its 
receipt is contingent upon export performance. The Borusan Group and 
Mannesmann claimed this deduction on their tax returns filed during the 
POR.
    To calculate the countervailable subsidy, we divided the tax 
savings realized during the POR by the company's total export sales 
during the POR, adjusted for foreign exchange differences. On this 
basis, we preliminarily determine the countervailable subsidy from this 
program to be less than 0.005 percent ad valorem for the Borusan Group 
for welded pipe and tube, and 0.16 percent ad valorem for Mannesmann 
for line pipe.

II. Programs Preliminarily Determined to be Not Used

    We examined the following programs and preliminarily determine that 
the producers and/or exporters of the subject merchandise did not apply 
for or receive benefits under these programs during the period of 
review:

1. Resource Utilization Support Fund
2. State Aid for Exports Program
3. Advance Refunds of Tax Savings
4. Export Credit Through the Foreign Trade Corporate Companies 
Rediscount Credit Facility (Eximbank)
5. Past Performance Related Foreign Currency Export Loans (Eximbank)
6. Export Credit Insurance (Eximbank)
7. Subsidized Turkish Lira Credit Facilities
8. Subsidized Credit for Proportion of Fixed Expenditures
9. Fund Based Credit
10. Export Incentive Certificate Customs Duty & Other Tax Exemptions
11. Resource Utilization Support Premium (RUSP)
12. Regional Subsidies
    a. Additional Refunds of VAT (VAT + 10%)
    b. Postponement of VAT on Imported Goods
    c. Land Allocation (GIP)
    d. Taxes, Fees (Duties), Charge Exemption (GIP)

Preliminary Results of Review

    In accordance with 19 C.F.R. section 355.22(c)(4)(ii), we 
calculated an individual subsidy rate for each producer/exporter 
subject to each administrative review. For the period January 1, 1996 
through December 31, 1996, we preliminarily determine the net subsidy 
to be as follows:

------------------------------------------------------------------------
                                                              Assessment
                                                                 Rate   
                                                              (percent) 
------------------------------------------------------------------------
             Manufacturer/Exporter of Line Pipe                         
                                                                        
Mannesmann.................................................         3.81
                                                                        
           Manufacturer/Exporter of Pipe and Tube                       
                                                                        
Borusan Group..............................................         3.26
------------------------------------------------------------------------

    If the final results of these reviews remain the same as these 
preliminary results, the Department intends to instruct Customs to 
assess countervailing duties as indicated above. The Department also 
intends to instruct Customs to collect a cash deposit of 3.26 percent 
of the f.o.b. invoice price on all shipments of pipe and tube from the 
Borusan Group, and 3.81 percent of the f.o.b. invoice price on all 
shipments of line pipe from Mannesmann, entered, or withdrawn from 
warehouse, for consumption on or after the date of publication of the 
final results of these reviews.
    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 
section 355.22(a). Pursuant to 19 CFR section 355.22(g), 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) (interpreting 19 CFR section 353.22(e), the 
antidumping regulation on automatic assessment, which is identical to 
19 CFR section 355.22(g)). Therefore, the cash deposit rates for all 
companies except those covered by these reviews will be unchanged by 
the results of these reviews.
    We will instruct Customs to continue to collect cash deposits for 
non-reviewed companies under each order at the most recent company-
specific or country-wide rate applicable to the company under that 
order. Accordingly, the cash deposit rates that will be applied to non-
reviewed companies covered by these orders are those established in the 
most recently completed administrative proceeding, conducted pursuant 
to the statutory provisions that were in effect prior to the URAA 
amendments. See Certain Welded Carbon Steel Pipe and Tube Products from 
Turkey; Final Results of Countervailing Duty Administrative Review, 53 
FR 9791. These rates shall apply to all non-reviewed companies, 
including those companies for which the reviews are being rescinded, 
until a review of a company assigned these rates is requested. In 
addition, for the period January 1, 1996 through December 31, 1996, the 
assessment rates applicable to all non-reviewed companies covered by 
these orders are the cash deposit rates in effect at the time of entry.

Public Comments

    Parties to these proceedings may request disclosure of the 
calculation methodology and interested parties may request a hearing 
not later than 10 days after the date of publication of this notice. 
Interested parties may submit written arguments in case briefs on these 
preliminary results within 30 days of the date of publication. Rebuttal 
briefs, limited to arguments raised in case briefs, may be submitted 
seven days after the time limit for filing the case brief. Parties who 
submit argument in these proceedings 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 seven days after the 
scheduled date for submission of rebuttal briefs. Copies of case briefs 
and rebuttal briefs must be served on interested parties in accordance 
with 19 CFR section 355.38.
    Representatives of parties to these proceedings may request 
disclosure of

[[Page 64813]]

proprietary information under administrative protective order no later 
than 10 days after the representative's client or employer becomes a 
party to the proceeding, but in no event later than the date the case 
briefs, under 19 CFR section 355.38, are due. The Department will 
publish the final results of these administrative reviews, including 
the results of its analysis of issues raised in any case or rebuttal 
brief or at a hearing.
    These administrative reviews and notice are in accordance with 
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)).

    Dated: December 1, 1997.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 97-32214 Filed 12-8-97; 8:45 am]
BILLING CODE 3510-DS-P