[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