[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
------------------------------------------------------------------------
Ekinciler Holding A.S./Ekinciler Demir Celik A.S........            1.50
ICDAS Celik Enerji Tersane ve Ulasim Sanayi A.S.........           10.22
------------------------------------------------------------------------

    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