[Federal Register Volume 64, Number 88 (Friday, May 7, 1999)]
[Notices]
[Pages 24578-24581]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-11572]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-489-807]
Certain Steel Concrete Reinforcing Bars From Turkey: Preliminary
Results of Antidumping Duty Administrative Review and New Shipper
Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: In response to a request by Ekinciler Holding A.S., Ekinciler
Demir Celik A.S., and Ferromin International Trade Corp. (collectively
``Ekinciler''), the Department of Commerce (the Department) is
conducting an administrative review of the antidumping duty order on
certain steel concrete reinforcing bars (rebar) from Turkey. In
addition, in response to a request by ICDAS Celik Enerji Tersane ve
Ulasim Sanayi A.S. (ICDAS), the Department is also conducting a new
shipper review of the antidumping duty order on rebar from Turkey. The
period of review is October 10, 1996, through March 31, 1998, for
Ekinciler and October 10, 1996, through July 31, 1998, for ICDAS.
We have preliminarily determined that sales have been made below
the normal value by the companies subject to these reviews. If these
preliminary results are adopted in the final results of these reviews,
we will instruct the Customs Service to assess antidumping duties on
all appropriate entries.
EFFECTIVE DATE: May 7, 1999.
FOR FURTHER INFORMATION CONTACT: Shawn Thompson or Irina Itkin, Import
Administration, International Trade Administration, U.S. Department of
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC
20230; telephone: (202) 482-1776 or (202) 482-0656, respectively.
SUPPLEMENTARY INFORMATION:
Unless otherwise indicated, all citations to the Tariff Act of
1930, as amended (the Act), are references to the provisions effective
January 1, 1995, the effective date of the amendments made to the Act
by the Uruguay Round Agreements Act. In addition, unless otherwise
indicated, all citations to the Department of Commerce regulations are
to 19 CFR Part 351 (1998).
Background
On April 30, 1998, the Department received a request from Ekinciler
to conduct an administrative review of the antidumping duty order on
rebar from Turkey. On May 29, 1998, the Department published in the
Federal Register a notice of initiation of an administrative review of
Ekinciler covering the period October 10, 1996, through March 31, 1998
(63 FR 29370).
Also on April 30, 1998, ICDAS requested that we conduct a new
shipper review pursuant to section 751(a)(2)(B) of the Act and 19 CFR
351.214(b). In this request, ICDAS certified that it did not export the
subject merchandise to the United States during the period covered by
the original less-than-fair-value (LTFV) investigation (the ``POI''),
and that it is not affiliated with any company which exported subject
merchandise to the United States during the POI. Pursuant to 19 CFR
351.214(b)(2)(iv), ICDAS submitted documentation establishing the date
on which it intended to first ship and enter rebar for consumption in
the United States, the volume of that shipment, and the date of the
first sale to an unaffiliated customer in the United States. Based on
the above information, the Department initiated a new shipper review
covering ICDAS (Certain Steel Concrete Reinforcing Bars from Turkey:
Initiation of New Shipper Antidumping Duty Administrative Review (63 FR
29372, May 29, 1998)). The Department is now conducting this review in
accordance with section 751 of the Act and 19 CFR 351.214.
On May 18, 1998, ICDAS agreed to waive time limits applicable to
the new shipper review and conduct the new shipper review concurrently
with the administrative review.
On May 29, 1998, we issued our questionnaire to Ekinciler and
ICDAS. On June 9, 1998, ICDAS requested that the Department expand the
period of review (POR) in the new shipper review to include June 1998,
in order to allow the Department to capture the company's first sale to
an unaffiliated party in the United States, as well as the
corresponding entry. On June 11, 1998, we expanded the POR in this
review to include June 1998.
We received a response to Sections A through C of the questionnaire
(i.e., the sections regarding sales to the home market and the United
States) from Ekinciler in July 1998 and a response to Section D (i.e.,
the section regarding cost of production (COP) and constructed value
(CV)) in August 1998. We received a response to Sections A through C of
this questionnaire from ICDAS in August 1998. ICDAS was not required to
respond to Section D.
In its August 1998 questionnaire response, ICDAS informed the
Department that it did not ship subject merchandise to the United
States until the end of June 1998. Accordingly, we expanded the POR
through July 1998 in order to capture the company's first entry. We
determined that expansion of the POR would not cause undue delay in the
completion of the review. For further discussion, see the memorandum on
this topic from Irina Itkin to Louis Apple, dated April 12, 1999.
In August and September 1998, we issued supplemental questionnaires
to Ekinciler and ICDAS, respectively. We received responses to these
questionnaires in September and October 1998.
On October 23, 1998, the Department published in the Federal
Register notices of postponement of the final results until no later
than April 30, 1999 (63 FR 56909 and 63 FR 56910).
In January and February 1999, we issued additional supplemental
questionnaires to ICDAS and Ekinciler, respectively. We received
responses to these questionnaires in January, February, and March 1999.
In February and March 1999, the Department conducted verification
of the sales data submitted by ICDAS, in accordance with section 782(i)
of the Act and 19 CFR 351.307(b)(1)(iv).
Scope of Reviews
The product covered by these reviews is all stock deformed steel
concrete reinforcing bars sold in straight lengths and coils. This
includes all hot-rolled deformed rebar rolled from billet steel,
[[Page 24579]]
rail steel, axle steel, or low-alloy steel. It excludes (i) plain round
rebar, (ii) rebar that a processor has further worked or fabricated,
and (iii) all coated rebar. Deformed rebar is currently classifiable in
the Harmonized Tariff Schedule of the United States (HTSUS) under item
numbers 7213.10.000 and 7214.20.000. The HTSUS subheadings are provided
for convenience and customs purposes. The written description of the
scope of these reviews is dispositive.
Periods of Review
The POR is October 10, 1996, through March 31, 1998, for Ekinciler
and October 10, 1996, through July 31, 1998, for ICDAS.
Level of Trade and Constructed Export Price (CEP) Offset
In accordance with section 773(a)(1)(B) of the Act, to the extent
practicable, we determine NV based on sales in the comparison market at
the same level of trade as export price (EP) or CEP. The NV level of
trade is that of the starting-price sales in the comparison market or,
when NV is based on CV, that of the sales from which we derive selling,
general and administrative expenses (SG&A) and profit. For EP, the U.S.
level of trade is also the level of the starting-price sale, which is
usually from the exporter to the unaffiliated U.S. customer. For CEP,
it is the level of the constructed sale from the exporter to the
importer.
To determine whether NV sales are at a different level of trade
than EP or CEP sales, we examine stages in the marketing process and
selling functions along the chain of distribution between the producer
and the unaffiliated customer. If the comparison-market sales are at a
different level of trade and the difference affects price
comparability, as manifested in a pattern of consistent price
differences between the sales on which NV is based and comparison-
market sales at the level of trade of the export transaction, we make a
level-of-trade adjustment under section 773(a)(7)(A) of the Act.
Finally, for CEP sales, if the NV level is more remote from the factory
than the CEP level and there is no basis for determining whether the
difference in the levels between NV and CEP affects price
comparability, we adjust NV under section 773(a)(7)(B) of the Act (the
CEP offset provision). See Notice of Final Determination of Sales at
Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate from
South Africa, 62 FR 61731 (Nov. 19, 1997).
Neither Ekinciler nor ICDAS claimed that it made home market sales
at more than one level of trade. Based on the information on the
record, no level of trade adjustment was warranted for either company.
For a detailed explanation of this analysis, see the memorandum
entitled ``Preliminary Results of Antidumping Duty Administrative
Review and New Shipper Review on Certain Steel Concrete Reinforcing
Bars from Turkey,'' dated April 30, 1999 (the ``concurrence
memorandum'').
Regarding Ekinciler, in order to determine whether NV was
established at a level of trade which constituted a more advanced stage
of distribution than the level of trade of the CEP, we compared the
selling functions performed for home market sales with those performed
with respect to the CEP transaction, which excludes economic activities
occurring in the United States, pursuant to section 772(d) of the Act.
We found that Ekinciler performed essentially the same selling
functions in its sales offices in Turkey for both home market and U.S.
sales. Therefore, Ekinciler's sales in Turkey were not at a more
advanced stage of marketing and distribution than the constructed U.S.
level of trade, which represents an F.O.B. foreign port price after the
deduction of expenses associated with U.S. selling activities. Because
we find that no difference in level of trade exists between markets, we
have not granted a CEP offset to Ekinciler. For further discussion, see
the concurrence memorandum noted above.
Comparisons to Normal Value
To determine whether sales of rebar from Turkey were made in the
United States at less than normal value, we compared the CEP or EP, as
appropriate, to the NV. Because Turkey's economy experienced high
inflation during the POR (over 70 percent), as is Department practice,
we limited our comparisons to home market sales made during the same
month in which the U.S. sale occurred and did not apply our ``90/60''
contemporaneity rule (see, e.g., Certain Welded Carbon Steel Pipe and
Tube from Turkey: Final Results and Partial Rescission of Antidumping
Administrative Review, 63 FR 35191 (June 29, 1998); and Certain
Porcelain on Steel Cookware from Mexico: Final Results of Antidumping
Duty Administrative Review, 62 FR 42496, 42503 (August 7, 1997)). This
methodology minimizes the extent to which calculated dumping margins
are overstated or understated due solely to price inflation that
occurred in the intervening time period between the U.S. and home
market sales.
We first attempted to compare products sold in the U.S. and home
markets that were identical with respect to the following
characteristics: grade, size, ASTM specification, and form. Where there
were no home market sales of merchandise that were identical in these
respects to the merchandise sold in the United States, we compared U.S.
products with the most similar merchandise sold in the home market
based on the characteristics listed above, in that order of priority.
Export Price/Constructed Export Price
For all U.S. sales by Ekinciler, we used CEP, in accordance with
section 772(b) of the Act. For all U.S. sales by ICDAS, we used EP, in
accordance with section 772(a) of the Act, because the subject
merchandise was sold directly to the first unaffiliated purchaser in
the United States prior to importation and CEP methodology was not
otherwise warranted based on the facts of record.
A. Ekinciler
We based CEP on packed prices to the first unaffiliated purchaser
in the United States. We made deductions from CEP for discounts, as
appropriate. We also made deductions for foreign brokerage and handling
expenses, inspection fees, ocean freight, marine insurance, U.S.
customs duties, discharge expenses (offset by despatch revenue),
wharfage expenses, sorting expenses, truck loading expenses, U.S.
warehousing expenses and insurance, U.S. inland freight, and U.S.
inland insurance, where appropriate, in accordance with section
772(c)(2)(A) of the Act. We based the amount of foreign brokerage and
handling expenses on the amount that Ekinciler paid to an affiliated
party, because we determined that these expenses were at arm's length.
For further discussion, see the concurrence memorandum.
We made additional deductions from CEP, where appropriate, for
Exporters' Association fees, bank charges, credit expenses, U.S.
indirect selling expenses, and U.S. inventory carrying costs, in
accordance with section 772(d)(1) of the Act. We recalculated U.S.
credit expenses using the weighted-average of the U.S. interest rates
reported in Ekinciler's response. This interest rate was based on the
actual borrowing experience of Ekinciler's affiliated parties for their
U.S.-dollar-denominated loans.
Pursuant to section 772(d)(3) of the Act, we further reduced the
starting price by an amount for profit, to arrive at CEP. In accordance
with section 772(f) of the Act, we calculated the CEP profit rate using
the expenses incurred
[[Page 24580]]
by Ekinciler and its affiliate on their sales of the subject
merchandise in the United States and the foreign like product in the
home market and the profit associated with those sales.
B. ICDAS
We based EP on packed prices to the first unaffiliated purchaser in
the United States. We made deductions for foreign inland freight
expenses, ocean freight expenses, inspection fees, and loading charges,
where appropriate, in accordance with section 772(c)(2)(A) of the Act.
Normal Value
In order to determine whether there is a sufficient volume of sales
in the home market to serve as a viable basis for calculating NV (i.e.,
the aggregate volume of home market sales of the foreign like product
is five percent or more of the aggregate volume of U.S. sales), we
compared the volume of each respondent's home market sales of the
foreign like product to the volume of U.S. sales of subject
merchandise, in accordance with section 773(a)(1)(C) of the Act. Based
on this comparison, we determined that each respondent had a viable
home market during the POR. Consequently, we based NV on home market
sales.
Both respondents made sales of rebar to affiliated parties in the
home market during the POR. Consequently, we tested these sales to
ensure that, on average, they were made at ``arm's-length'' prices, in
accordance with 19 CFR 351.403(c). To conduct this test, we compared
the unit prices of sales to affiliated and unaffiliated customers net
of all movement charges, direct selling expenses, and packing. Where
prices to the affiliated party were on average 99.5 percent or more of
the price to the unaffiliated parties, we determined that sales made at
arm's length (see 19 CFR 351.403(c) and 62 FR 27355). Accordingly, for
Ekinciler, we only included in our margin analysis those sales to the
sales to the affiliated party that were made at arm's length. Regarding
ICDAS, we did not include in our analysis any sales made to affiliated
parties because they failed the ``arm's length'' test. Because the
volume of sales by ICDAS to its affiliated parties was greater than
five percent of the company's total home market sales, pursuant to 19
CFR 351.403(d), we based our analysis on the downstream sales of the
affiliates to their unaffiliated customers.
A. Ekinciler
Pursuant to section 773(b)(2)(A)(ii) of the Act, there were
reasonable grounds to believe or suspect that Ekinciler had made home
market sales at prices below their COPs in this (the first) review
because the Department had disregarded sales below the COP for this
company in the LTFV investigation. See Notice of Final Determination of
Sales at Less Than Fair Value: Certain Steel Concrete Reinforcing Bars
from Turkey, 62 FR 9737, 9740 (Mar. 4, 1997). As a result, the
Department initiated an investigation to determine whether Ekinciler
made home market sales during the POR at prices below their respective
COPs.
We calculated the COP based on the sum of Ekinciler's cost of
materials and fabrication for the foreign like product, plus amounts
for SG&A and packing costs, in accordance with section 773(b)(3) of the
Act. We relied on Ekinciler's information as submitted, except in the
specific instances discussed below.
(1) We considered Ekinciler to be the manufacturer of all rebar
which was rolled by unaffiliated subcontractors because we find that
Ekinciler controlled the production of this merchandise. See the
memorandum on this topic from the Team to Louis Apple, dated April 30,
1999; and
(2) We revised the calculation of depreciation expenses related to
the revaluation of fixed assets in order to use the index published by
Turkish Ministry of Finance. See World Accounting, Orsini, Gould,
McAllister, & Parikh, Matthew Bender & Co., Inc., 1998, page TRK-30.
As noted above, we determined that the Turkish economy experienced
significant inflation during the POR. Therefore, in order to avoid the
distortive effect of inflation on our comparison of costs and prices,
we requested that Ekinciler submit the product-specific cost of
manufacturing (COM) incurred during each month of the POR. We
calculated a POR-average COM for each product after indexing the
reported monthly costs during the POR to an equivalent currency level
using the Turkish Wholesale Price Index from the International
Financial Statistics published by the International Monetary Fund. We
then restated the POR-average COMs in the currency values of each
respective month.
We compared the weighted-average COP figures to home market prices
of the foreign like product, as required under section 773(b) of the
Act, in order to determine whether these sales had been made at prices
below the COP. On a product-specific basis, we compared the COP to home
market prices, less any applicable movement charges and selling
expenses.
In determining whether to disregard home market sales made at
prices below the COP, we examined whether such sales were made: (1) in
substantial quantities within an extended period of time; and (2) at
prices which permitted the recovery of all costs within a reasonable
period of time in the normal course of trade. See sections
773(b)(2)(B), (C), and (D) of the Act.
Pursuant to section 773(b)(2)(C)(i) of the Act, where less than 20
percent of Ekinciler's sales of a given product were at prices less
than the COP, we did not disregard any below-cost sales of that product
because we determined that the below-cost sales were not made in
``substantial quantities.'' Where 20 percent or more of Ekinciler's
sales of a given product were at prices below the COP, we found that
sales of that model were made in ``substantial quantities'' within an
extended period of time (as defined in section 773(b)(2)(B) of the
Act), in accordance with section 773(b)(2)(C)(i) of the Act. In such
cases, we also determined that such sales were not made at prices which
would permit recovery of all costs within a reasonable period of time,
in accordance with section 773(b)(2)(D) of the Act. Therefore, for
purposes of this administrative review, we disregarded the below-cost
sales and used the remaining above-cost sales as the basis for
determining NV, in accordance with section 773(b)(1) of the Act. Where
all sales of a specific product were at prices below the COP, we
disregarded all sales of that product.
For those comparison products for which there were sales at prices
above the COP, we based NV on ex-factory, ex-warehouse or delivered
prices to home market customers. We excluded from our analysis home
market re-sales by Ekinciler of merchandise produced by unaffiliated
companies. Where appropriate, we added an amount for interest revenue
received from home market customers for delayed payment of invoices.
Also where appropriate, we made deductions from the starting price for
foreign inland freight, inland insurance, and off-site warehousing
expenses, in accordance with section 773(a)(6)(B) of the Act. We
deducted home market packing costs and added U.S. packing costs, in
accordance with section 773(a)(6) of the Act.
Where appropriate, we made adjustments to NV to account for
differences in physical characteristics of the merchandise, in
accordance with section 773(a)(6)(C)(ii) of the Act and 19 CFR 351.411.
We based this adjustment on the difference in the variable costs of
manufacturing for the foreign like product and subject merchandise,
using
[[Page 24581]]
POR-average costs as adjusted for inflation for each month of the POR,
as described above.
B. ICDAS
We based NV on the starting price to unaffiliated customers. We
made deductions for inland freight expenses (offset by freight
revenue), where appropriate, pursuant to section 773(a)(6)(B) of the
Act. Pursuant to section 773(a)(6)(C)(iii) if the Act, we also made
deductions for home market credit expenses (offset by interest
revenue), where appropriate. We recalculated home market credit
expenses using the interest rates observed at verification.
Pursuant to section 773(a)(6)(C)(iii) of the Act and 19 CFR
351.410(c), we made circumstance-of-sale adjustments by adding U.S.
credit expenses, bank charges, and Exporters' Association fees.
In addition, we deducted home market packing costs and added U.S.
packing costs, in accordance with section 773(a)(6) of the Act.
Currency Conversion
The Department's preferred source for daily exchange rates is the
Federal Reserve Bank. However, the Federal Reserve Bank does not track
or publish exchange rates for Turkish Lira. Therefore, we made currency
conversions based on the daily exchange rates from the Dow Jones News/
Retrieval Service.
Preliminary Results of the Review
We preliminarily determine that the following margins exist for the
respondents during the period October 10, 1996, through March 31, 1998
(for Ekinciler) and October 10, 1996, thorough July 31, 1998 (for
ICDAS):
------------------------------------------------------------------------
Margin
Manufacturer/producer/exporter percentage
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Ekinciler Holding A.S./Ekinciler Demir Celik A.S........ 1.50
ICDAS Celik Enerji Tersane ve Ulasim Sanayi A.S......... 10.22
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The Department will disclose to parties the calculations performed
in connection with these preliminary results within five days of the
date of publication of this notice. Interested parties may request a
hearing within 30 days of publication. Any hearing, if requested, will
be held two days after the date rebuttal briefs are filed. Interested
parties may submit cases briefs not later than 30 days after the date
of publication of this notice. Rebuttal briefs, limited to issues
raised in the case briefs, may be filed not later than 35 days after
the date of publication of this notice. The Department will issue the
final results of the administrative and new shipper reviews, including
the results of its analysis of issues raised in any such written
comments, within 120 days of publication of these preliminary results.
Upon completion of the administrative and new shipper reviews, the
Department shall determine, and the Customs Service shall assess,
antidumping duties on all appropriate entries. Pursuant to 19 CFR
351.212(b)(1), we have calculated importer-specific assessment rates
based on the ratio of the total amount of antidumping duties calculated
for the examined sales to the total entered value of those sales, where
available. Where the entered value was not available, we estimated the
entered value by subtracting international movement expenses from the
gross sales value. Pursuant to 19 CFR 351.106(c)(2), we will instruct
the Customs Service to liquidate without regard to antidumping duties
any entries for which the assessment rate is de minimis (i.e., less
than 0.50 percent). The assessment rate will be assessed uniformly on
all entries of that particular importer made during the POR. The
Department will issue appraisement instructions directly to the Customs
Service.
Further, the following deposit requirements will be effective for
all shipments of rebar from Turkey entered, or withdrawn from
warehouse, for consumption on or after the publication date of the
final results of these administrative and new shipper reviews, as
provided for by section 751(a)(2)(C) of the Act: 1) The cash deposit
rates for the reviewed companies will be the rates established in the
final results of these reviews; 2) for previously investigated
companies not listed above, the cash deposit rate will continue to be
the company-specific rate published for the most recent period; 3) if
the exporter is not a firm covered in these reviews, or the LTFV
investigation, but the manufacturer is, the cash deposit rate will be
the rate established for the most recent period for the manufacturer of
the merchandise; and 4) the cash deposit rate for all other
manufacturers or exporters will continue to be 16.06 percent, the all
others rate established in the LTFV investigation.
These deposit requirements, when imposed, shall remain in effect
until publication of the final results of the next administrative
review.
This notice serves as a preliminary reminder to importers of their
responsibility under 19 CFR 351.402(f)(2) to file a certificate
regarding the reimbursement of antidumping duties prior to liquidation
of the relevant entries during this review period. Failure to comply
with this requirement could result in the Secretary's presumption that
reimbursement of antidumping duties occurred and the subsequent
assessment of double antidumping duties. These administrative and new
shipper reviews and notice are in accordance with sections 751(a)(1)
and (a)(2)(B) of the Act (19 U.S.C. 1675(a)(1) and (a)(2)(B)) and 19
CFR 351.213 and 214.
Dated: April 30, 1999.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-11572 Filed 05-06-99; 8:45 am]
BILLING CODE 3510-DS-P