[Federal Register Volume 64, Number 229 (Tuesday, November 30, 1999)]
[Notices]
[Pages 66895-66900]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-30967]


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DEPARTMENT OF COMMERCE

International Trade Administration
[C-489-502]


Preliminary Results of Full Sunset Review: Welded Carbon Steel 
Pipes and Tubes From Turkey

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

ACTION: Notice of Preliminary Results of Full Sunset Review: Welded 
Carbon Steel Pipes and Tubes from Turkey.

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SUMMARY: On May 1, 1999, the Department of Commerce (``the 
Department'') initiated a sunset review of the countervailing duty 
order on welded carbon steel pipes and tubes from Turkey (63 FR 23596) 
pursuant to section 751(c) of the Tariff Act of 1930, as amended (``the 
Act''). On the basis of the notices of intent to participate and 
adequate substantive responses filed on behalf of the domestic and 
respondent interested parties, the Department is conducting a full (240 
day) review. In conducting this sunset review, the Department 
preliminarily finds that termination of the countervailing duty order 
would be likely to lead to continuation or recurrence of a 
countervailable subsidy. The net countervailable subsidy and the nature 
of the subsidy are identified in the ``Preliminary Results of Review'' 
section of this notice.

For Further Information Contact: Kathryn B. McCormick or Melissa G. 
Skinner, Office of Policy for Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street & 
Constitution Avenue, NW, Washington, D.C. 20230; telephone: (202) 482-
1930 or (202) 482-1560, respectively.

Effective Date: November 30, 1999.

Statute and Regulations

    This review is being conducted pursuant to sections 751(c) and 752 
of the Act. The Department's procedures for the conduct of sunset 
reviews are set forth in Procedures for Conducting Five-year 
(``Sunset'') Reviews of Antidumping and Countervailing Duty Orders, 63 
FR 13516 (March 20, 1998) (``Sunset Regulations'') and 19 C.F.R. Part 
351 (1998) in general. Guidance on methodological or analytical issues 
relevant to the Department's conduct of sunset reviews is set forth in 
the Department's Policy Bulletin 98:3--Policies Regarding the Conduct 
of Five-year (``Sunset'') Reviews of Antidumping and Countervailing 
Duty Orders; Policy Bulletin, 63 FR 18871 (April 16, 1998) (``Sunset 
Policy Bulletin'').

Scope

    This order covers shipments of Turkish welded carbon steel pipes 
and tubes, having an outside diameter of 0.375 inch or more, but not 
more than 16 inches, of any wall thickness. These products, commonly 
referred to in the industry as standard pipe and tube or structural 
tubing, are produced in accordance with various American Society 
Testing and Materials (ASTM) specifications, most notably A-53, A-120, 
A-500, or A-501. The subject merchandise was originally classifiable 
under item number 416.30 of the Tariff Schedules of the United States 
Annotated (``TSUSA''); currently, they are classifiable under item 
numbers 7306.30.10 and 7306.30.50 of the Harmonized Tariff Schedule of 
the United States (``HTSUS''). Although the TSUSA and HTSUS item 
numbers are provided for convenience and customs purposes, the written 
description remains dispositive.
    This review covers all producers and exporters of subject 
merchandise from Turkey.

History of the Order

    The Department published its final affirmative countervailing duty 
determination on welded carbon steel pipes and tubes from Turkey in the 
Federal Register on January 10, 1986 (51 FR 1268) and issued the 
countervailing duty order on March 7, 1986 (51 FR 7984). The Department 
found the following programs to confer subsidies: (1) Export Tax Rebate 
and Supplemental Tax Rebate; (2) Preferential Export Financing; 
1 (3) Deduction from Taxable Income for Export Revenues; and 
(4) Resource Utilization Support Fund (``RUSF''). The country-wide 
countervailing duty rate was 18.81 percent, and after taking into 
account several program-wide changes, the Department established a duty 
deposit rate of 17.80 percent. The following companies were 
investigated in the original investigation: the Borusan group of 
companies, Mannesmann-Suemerbank Boru Endustris (``Mannesmann-
Suemerbank''), Yucel Boru ve Profil

[[Page 66896]]

Endustrisi (``Yucel Boru''), Erkboru Profil Sanayi ve Ticaret, and 
Umran Spiral Welded Pipe, Inc.2
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    \1\ Short-term export financing under Decree number 84/7557 was 
abolished by Decree number 84/8861, which became effective on 
January 1, 1985. The Department verified that all such loans were 
repaid prior to our preliminary determinations, and we took the 
elimination of this program into account by excluding it from the 
duty deposit rate (see Final Affirmative Countervailing Duty 
Determinations; Certain Welded Carbon Steel Pipe and Tube Products 
from Turkey, 51 FR 1268 (January 10, 1986)).
    \2\  Because Erkboru Profil Sanayi ve Ticaret, and Umran Spiral 
Welded Pipe Inc. did not export to the United States during 1984 and 
the first six months of 1985, their responses were not used in the 
final determination. Id.
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    The Department has conducted the following administrative reviews 
since the issuance of the order:
    Review Period of Review Final Results Citation

----------------------------------------------------------------------------------------------------------------
   Review            Period of review                                Final result citation
----------------------------------------------------------------------------------------------------------------
        (1)   28 Oct 85-31 Dec 86...........  53 FR 9791 (March 25, 1988).
        (2)   1 Jan 95-31 Dec 95............  62 FR 43984 (August 18, 1997).
        (3)   1 Jan 96-31 Dec 96............  63 FR 18885 (April, 18, 1997).
        (4)   1 Jan 97-31 Dec 97............  64 FR 44496 (August 16, 1999).
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    During administrative reviews of this order, the Department 
investigated programs and companies in addition to those covered in the 
original investigation. In the first administrative review, covering 
the 1985/86 period, the Export Revenue Tax Deduction and General 
Incentives Program (``GIP'') were found to confer subsidies. The Export 
Tax Rebate, with respect to the U.S. and RUSF programs, were found to 
have been terminated,3 and the Department determined a rate 
of 1.43 percent for Bant Boru Sanayi ve Ticaret A.S. (``Bant Boru'') 
and a rate of 12.67 percent for all others (53 FR 9791, March 25, 
1988). After taking into account the program terminations, the 
Department established a deposit rate of 7.26 percent for all others, 
and, based on a zero subsidy rate, waived duty deposit requirements for 
Bant Boru.
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    \3\ See Certain Welded Carbon Steel Pipe and Tube Products from 
Turkey: Preliminary Results of Countervailing Duty Administrative 
Review, 52 FR 47621 (December 15, 1987).
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    In the second administrative review, the Department found that the 
Pre-Shipment Export Credit program conferred a countervailable subsidy 
on producers/exporters of subject merchandise.4 
Additionally, the following new programs were determined to confer 
subsidies: (1) Investment Allowance under the GIP; (2) Foreign Exchange 
Loan Assistance; (3) Freight Program; (4) Resource Utilization Support 
Premium; 5 and (5) Export Incentive Certificate Customs duty 
and Other Tax Exemptions. Deduction from Taxable Income for Export 
Revenues was found to have been terminated in the second administrative 
review.6 The Department determined net subsidies of 4.06 
percent for Erciyas Boru Sanayii ve Ticaret A.S. 
(``Erbosan'').7
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    \4\ See Certain Welded Carbon Steel Pipes and Tubes and Welded 
Carbon Steel Line Pipe from Turkey; Final Results of Countervailing 
Duty Administrative Reviews, 62 FR 43984 (August 18, 1997).
    \5\  The Department determined the benefit from this program to 
be 0.05 percent. However, in the same review, the Department 
verified that the GRT terminated the RUSP program in 1991, and that 
GIP investment incentive certificates issued after 1991 were no 
longer eligible to receive RUSP payments. See Certain Welded Carbon 
Steel Pipes and Tubes and Welded Carbon Steel Line Pipe from Turkey; 
Preliminary Results of Countervailing Duty Administrative Reviews, 
62 FR 16782, 16787 (April 8, 1997).
    \6\ See Certain Welded Carbon Steel Pipes and Tubes and Welded 
Carbon Steel Line Pipe from Turkey; Final Results of Countervailing 
Duty Administrative Reviews, 62 FR 43984, 43986 (August 18, 1997).
    \7\ See Certain Welded Carbon Steel Pipes and Tubes and Welded 
Carbon Steel Line Pipe from Turkey; Preliminary Results of 
Countervailing Duty Administrative Reviews, 62 FR 16782, 16788 
(April 8, 1997).
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    In the third administrative review, the Department found that the 
new program, Deduction from Taxable Income for Export Revenues, 
conferred a countervailable subsidy of less than 0.005 percent for 
Borusan Birlesik Boru Fabrikalari A.S. (``BBBF'') and Borusan Ihracat 
Ithalat ve Dagitim A.S. (``Borusan Dagitim'') (BBBF and Borusan Dagitim 
are hereinafter referred to as the ``Borusan Group''.).8 The 
following programs identified in previous reviews were found to confer 
subsidies: (1) Investment Allowance; (2) Foreign Exchange Loan 
Assistance; (3) Incentive Premium on Domestically Obtained Goods; and 
(4) Pre-Shipment Export Credit (63 FR 18885, April 16, 1998). The 
Freight Program was found to have been terminated in the preliminary 
results of the third review.9 The Department determined a 
net subsidy of 3.10 percent for the Borusan Group (63 FR 18885, April 
16, 1998).
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    \8\ See Certain Welded Carbon Steel Pipes and Tubes and Welded 
Carbon Steel Line Pipe from Turkey; Final Results of Countervailing 
Duty Administrative Reviews, 63 FR 18885, 18887 (April 16, 1998).
    \9\ See Certain Welded Carbon Steel Pipes and Tubes and Welded 
Carbon Steel Line Pipe From Turkey; Preliminary Results and Partial 
Recission of Countervailing Duty Administrative Reviews, 62 FR 64808 
(December 9, 1997).
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    In the fourth administrative review, programs that were determined 
to confer subsidies include: (1) Pre-Shipment Export Credit; (2) the 
Freight Program; and (3) Foreign Exchange Loan Assistance. Export 
Incentive Certificate Customs Duty & Other Tax Exemptions was found to 
be terminated (64 FR 16924, April 7, 1999). The Department determined 
net subsidies of 0.84 percent for Yucel Boru and its affiliated 
companies, Cayirova Boru Sanayi ve Ticaret A.S., and Yucelboru Ihracat 
Ithalat ve Pazarlama A.S. (collectively ``Yucel Boru Group'').

Background

    On May 3, 1999, the Department published a notice of initiation of 
a sunset review of the countervailing duty (``CVD'') order on welded 
carbon steel pipes and tubes from Turkey (64 FR 23596), pursuant to 
section 751(c) of the Act. On May 18, 1999, the Department received, 
within the deadline specified in section 351.218(d)(1)(i) of the Sunset 
Regulations, a notice of intent to participate on behalf of domestic 
producers Allied Tube and Conduit Corp., Sawhill Tubular Division-
Armco, Inc., Century Tube, IPSCO Tubular Inc., LTV Steel Tubular 
Products, Maverick Tube Corporation, Sharon Tube Company, Western Tube 
and Conduit, and Whetland Tube Co. (hereinafter, collectively 
``domestic interested parties'') and the Government of the Republic of 
Turkey (``GRT'') and the Borusan Group (collectively ``respondent 
interested parties''). The domestic interested parties claimed 
interested party status under section 771(9)(C) of the Act, as domestic 
producers of subject merchandise. The GRT is an interested party 
pursuant to section 771(9)(B) of the Act as the government of a country 
in which subject merchandise is produced and exported; the Borusan 
Group is an interested party pursuant to section 771(9)(A) of the Act 
as a foreign producer and exporter of subject merchandise.
    The domestic interested parties participated in the original 
investigation and subsequent administrative reviews of the subject 
order; the GRT and Borusan Group have been actively involved in this 
case since 1985, the

[[Page 66897]]

year in which the countervailing duty petition on subject merchandise 
from Turkey was filed. The GRT participated in the original 
investigation and the four administrative reviews; the Borusan Group 
participated in the original investigation and all but the second 
administrative review.
    We received adequate substantive responses from the domestic and 
respondent interested parties on June 2, 1999 and June 3, 1999, 
respectively, within the 30-day deadline specified in the Sunset 
Regulations under section 351.218(d)(3)(i). As a result, pursuant to 19 
CFR 351.218(e)(2), the Department determined to conduct a full review.
    In accordance with 751(c)(5)(C)(v) of the Act, the Department may 
treat a review as extraordinarily complicated if it is a review of a 
transition order (i.e., an order in effect on January 1, 1995). 
Therefore, the Department determined that the sunset review of the 
countervailing duty order on carbon steel pipe and tube from Turkey is 
extraordinarily complicated, and extended the time limit for completion 
of the preliminary and final results of this review until not later 
than November 19, 1999 and March 28, 2000, respectively, in accordance 
with section 751(c)(5)(B) of the Act.\10\
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    \10\ See Welded Carbon Steel Pipes and Tubes from Turkey: 
Extension of Time Limit for Preliminary Results of Five-Year Review, 
64 FR 46885 (August 27, 1999).
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Determination

    In accordance with section 751(c)(1) of the Act, the Department is 
conducting this review to determine whether termination of the 
countervailing duty order would be likely to lead to continuation or 
recurrence of a countervailable subsidy. Section 752(b) of the Act 
provides that, in making this determination, the Department shall 
consider the net countervailable subsidy determined in the 
investigation and subsequent reviews, and whether any change in the 
program which gave rise to the net countervailable subsidy has occurred 
and is likely to affect that net countervailable subsidy. Pursuant to 
section 752(b)(3) of the Act, the Department shall provide to the 
International Trade Commission (``the Commission'') the net 
countervailable subsidy likely to prevail if the order is revoked. In 
addition, consistent with section 752(a)(6), the Department shall 
provide to the Commission information concerning the nature of the 
subsidy and whether it is a subsidy described in Article 3 or Article 
6.1 of the 1994 WTO Agreement on Subsidies and Countervailing Measures 
(``Subsidies Agreement'').
    The Department's preliminary determinations concerning continuation 
or recurrence of a countervailable subsidy, the net countervailable 
subsidy likely to prevail if the order is revoked, and nature of the 
subsidy are discussed below. In addition, comments of the interested 
parties on each of these issues are addressed within the respective 
sections.

Continuation or Recurrence of a Countervailable Subsidy

    Drawing on the guidance provided in the legislative history 
accompanying the Uruguay Round Agreements Act (``URAA''), specifically 
the SAA, H.R. Doc. No. 103-316, vol. 1 (1994), the House Report, H.R. 
Rep. No. 103-826, pt.1 (1994), and the Senate Report, S. Rep. No. 103-
412 (1994), the Department issued its Sunset Policy Bulletin providing 
guidance on methodological and analytical issues, including the basis 
for likelihood determinations. The Department clarified that 
determinations of likelihood will be made on an order-wide basis (see 
section III.A.2 of the Sunset Policy Bulletin). Additionally, the 
Department normally will determine that revocation of a countervailing 
duty order is likely to lead to continuation or recurrence of a 
countervailable subsidy where (a) a subsidy program continues, (b) a 
subsidy program has been only temporarily suspended, or (c) a subsidy 
program has been only partially terminated (see section III.A.3.a of 
the Sunset Policy Bulletin). Exceptions to this policy are provided 
where a company has a long record of not using a program (see section 
III.A.3.b of the Sunset Policy Bulletin).

Interested Party Comments

    In their substantive response, the domestic interested parties 
assert that prior to the issuance of the 1985 order, there were over 
30,000 tons of imports of subject merchandise from Turkish producers to 
the United States (see June 2, 1999, Substantive Response of the 
domestic interested parties at 3). However, according to the domestic 
interested parties, imports have since dropped dramatically: in 1998, 
imports amounted to only 7400 tons--a 75 percent drop from 1985 
figures. Id. Moreover, the domestic interested parties note that, in 
subsequent administrative reviews, subsidization of the subject 
merchandise by the GRT for the benefit of Turkish producers continues. 
Thus, the domestic interested parties believe that the reduction of 
imports of the subject merchandise from Turkey into the United States 
and the continuing existence of countervailable subsidy programs 
indicate that there is a strong likelihood of continuation of a 
countervailable subsidy should this order be revoked.
    The respondent interested parties assert that the GRT has 
eliminated or severely limited the availability of the incentive 
programs that led to the initiation of the countervailing duty 
investigation on standard pipe in 1985 (see June 3, 1999, Substantive 
Response of respondent interested parties at 4). They note that three 
programs--Export Tax Rebate and Supplemental Tax Rebate, Deduction from 
Taxable Income for Export Revenue, and the Resource Utilization Support 
Fund--that were found to provide countervailable benefits to Turkish 
producers/exporters of pipe and tube in the original investigation were 
confirmed by the Department to be terminated or eliminated in the final 
results of the 1995 and 1996 reviews, and the preliminary results of 
the 1997 review. Id. at 6-7. According to the GRT, only three other 
programs currently confer subsidies: the Pre-Shipment Export Credit 
program, which provides short term pre-shipment export loans to 
exporters through intermediary commercial banks; \11\ the Foreign 
Exchange Loan Assistance, which allows commercial banks to exempt 
certain fees on loans used in export-related activities; \12\ and the 
Deduction from Taxable Income for Export Revenues,\13\ which allows 
companies to deduct 0.05 percent of their hard currency income derived 
from export activities from their corporate income taxes.\14\
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    \11\ In the 1996 review, the Department determined that the net 
countervailable subsidy received by the Borusan Group from the Pre-
shipment Export Credit Program was 0.22 percent.
    \12\ The exempted fees include a Resource Utilization 
Stabilization Fund fee of 6 percent of the loan principal, a Banking 
Insurance Tax equal to 5 percent of the interest paid, and a stamp 
tax equal to 0.6 percent of the principal (62 FR 64810).
    \13\ A program from the original investigation, Deduction from 
Taxable Income for Export Revenues was terminated in the second 
review (62 FR 43984, August 18, 1997). In the third review, however, 
the Department determined a new, similar program, also called 
Deduction from Taxable Income for Export Revenues (63 FR 18885, 
April 16, 1998).
    \14\ In the 1996 review, the Department calculated a subsidy for 
this program of less than 0.005 percent for the Borusan Group (see 
June 3, 1999, Substantive Response of respondent interested parties 
at 14).
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Department's Determination

    The Department verified the elimination of benefits provided by the 
Export Tax Rebate and Supplemental Tax Rebate and the RUSF; the duty

[[Page 66898]]

deposit rate from the 1985/86 review reflects the elimination of 
benefits from these two programs on importers of subject merchandise. 
Specifically, we found that, effective January 1, 1987, pursuant to 
Communique 87/3 of Decree 86/11237, the GRT eliminated basic and 
supplemental export tax rebates on exports of iron and steel products 
to the United States (52 FR 47621, December 15, 1987). Also effective 
January 1, 1987, pursuant to Decree 86/11085, the GRT eliminated RUSF 
payments on exports. Id.
    In the preliminary results of the 1995 period of review, the 
Department determined that the Resource Utilization Support Premium 
(``RUSP''), which distributed benefits on a regional basis under the 
umbrella of the GIP, conferred a net countervailable benefit of 0.05 
percent on Erbosan. However, the GRT terminated the RUSP program in 
1991, and GIP investment certificates issued after 1991 were no longer 
eligible to receive RUSP payments.\15\
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    \15\ See Certain Welded Carbon Steel Pipes and Tubes and Welded 
Carbon Steel Line Pipe from Turkey; Final Results of Countervailing 
Duty Administrative Reviews, 62 FR 43984 (August 18, 1997).
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    As noted above, the Deduction from Taxable Income for Export 
Revenues was found terminated in the second administrative review. 
However, a similar program was subsequently found to confer subsidies 
of less than 0.005 percent for the Borusan Group for welded pipe and 
tube in the third review (63 FR 1888, April 18, 1992). In the fourth 
and most recent review, the program was found ``not used'' (64 FR 
44496, August 16, 1999).
    Finally, two programs investigated since the original investigation 
have been found to be terminated: the Freight Program was found 
terminated in the third review (62 FR 65808, 64811, December 9, 1997), 
and Export Incentive Certificate Customs Duty & Other Tax Exemptions 
was found terminated in the 1997 review when Communique No. 96/1, 
effective January 1, 1996, rescinded Communique No. 95/7, which 
provided export incentive certificates for the exclusion of taxes and 
duties, with no residual benefits.\16\
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    \16\ See Certain Welded Carbon Steel Pipes and Tubes and Welded 
Carbon Steel Line Pipe from Turkey; Preliminary Results of 
Countervailing Duty Administrative Reviews, 64 FR 16924, 16928 
(April 7, 1999).
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    The Department finds that three of the programs that were 
investigated since the original investigation continue to confer 
subsidies on Turkish producers/exporters of pipe and tube. In the 
second review, although the Department found that the 30 percent 
minimum investment allowance under GIP is not countervailable, the 
Investment Allowance program conferred benefits of 0.02 percent (62 FR 
43984, August 18, 1997) on Erbosan. In the third review, the Department 
determined that the net countervailable subsidies received by the 
Borusan Group from Foreign Exchange Loan Assistance and Incentive 
Premium on Domestically Obtained Goods were 0.43 percent and 0.01 
percent, respectively (63 FR 18885, April 16, 1998). In the fourth 
review, the Pre-shipment Export Credit program conferred on the Yucel 
Group a subsidy of 0.84 percent (64 FR 44496, August 16, 1999).
    Of the four programs, Deduction from Taxable Income for Export 
Revenues, Pre-Shipment Export Credit, Incentive Premium on Domestically 
Obtained Goods, and Foreign Exchange Loan Assistance that continue to 
exist, only Pre-Shipment Export Credit was determined to provide a 
subsidy above de minimis--1.77 percent--in the second review. Since at 
least one of the existing countervailable programs continues to confer 
benefits above de minimis, the Department, consistent with section 
III.A.3.a of the Sunset Policy Bulletin, preliminarily determines that 
termination of the subject order would likely result in the 
continuation or recurrence of countervailable subsidies.

Net Countervailable Subsidy

    In the Sunset Policy Bulletin, the Department stated that, 
consistent with the SAA and House Report, the Department normally will 
select a rate from the investigation as the net countervailable subsidy 
likely to prevail if the order is revoked, because that is the only 
calculated rate that reflects the behavior of exporters and foreign 
governments without the discipline of an order or suspension agreement 
in place. The Department noted that this rate may not be the most 
appropriate rate if, for example, the rate was derived from subsidy 
programs which were found in subsequent reviews to be terminated, there 
has been a program-wide change, or the rate ignores a program found to 
be countervailable in a subsequent administrative review.\17\
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    \17\ See section III.B.3 of the Sunset Policy Bulletin.
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    Additionally, section III.B.2 of the Sunset Policy Bulletin states 
that the Department, where possible, calculates the individual 
countervailable subsidy rate in an investigation for each known 
exporter or producer of the subject merchandise. Although the original 
investigation resulted in a country-wide rate, the Department, in 
accordance with section 777A(e)(1) of the Act, will provide to the 
Commission company-specific margins for those companies that were 
investigated in subsequent reviews.

Interested Party Comments

    In their substantive response, the domestic interested parties 
assert that both the overall decrease in imports of the subject 
merchandise from Turkey into the United States and the continuing 
existence of countervailable subsidy programs will injure the domestic 
industry. Accordingly, the Department should find that the magnitude of 
the net countervailable subsidy that is likely to prevail is identical 
to the net countervailable subsidy determined in the original 
investigation.
    The respondent interested parties assert that the Department should 
exclude the amount of subsidies found to be provided in prior reviews 
by the Freight Program, Incentive Premium on Domestically Obtained 
Goods, Investment Allowance and Export Incentive Certificates Customs 
Duty and Other Tax Exemptions programs because the benefits associated 
with these programs have been terminated (see June 2, 1999, Substantive 
Response of respondent interested parties, at 16). Furthermore, the 
rate likely to prevail should be based upon the rate from the most 
recently completed administrative review since that rate is most 
representative of the current level of benefits associated with a 
program. Id. Accordingly, the new margin should be 0.655 percent, the 
sum of the margins from three programs in the third review: 0.43 
percent from Foreign Exchange Loan Assistance; less than 0.005 percent 
from the Deduction from Taxable Income for Export Revenues; and 0.22 
percent from Pre-Shipment Export Credits.

Department's Determination

    In the Sunset Policy Bulletin, the Department states that, 
consistent with the SAA and House Report, the Department normally will 
select a rate from the investigation, because that is the only 
calculated rate that reflects the behavior of exporters and foreign 
governments without the discipline of an order or suspension agreement 
in place (see section III.B.1 of the Sunset Policy Bulletin). However, 
the Department notes that the rate from the original investigation may 
not be the most appropriate rate if, for example, the rate was derived 
from subsidy programs which were found in subsequent reviews to be 
terminated, there has been a program-wide change,

[[Page 66899]]

or the rate ignores a program found to be countervailable in a 
subsequent administrative reviews (see section III.B.3 of the Sunset 
Policy Bulletin).
    The Department disagrees with the domestic interested parties' 
argument that the rate likely to prevail should be the 17.80 percent 
margin from the original investigation, because, as noted above, many 
of the benefits of countervailable subsidy programs have been 
eliminated. Thus, the Department determines that, as argued by the GRT, 
benefits from three programs from the original investigation--Export 
Tax Rebate and Supplemental Tax Rebate, Deduction from Taxable Income 
for Export Revenues and the RUSF--have been terminated. Of the programs 
investigated since the original investigation, benefits from the 
Freight Program and Export Incentive Certificate Customs Duty & Other 
Tax Exemptions were terminated.\18\ Additionally, in the 1995 review, 
the Department found that the RUSP was terminated. Accordingly, the 
Department will adjust the new company-specific rates to reflect the 
elimination of the above programs.
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    \18\ See Certain Welded Carbon Steel Pipes and Tubes and Welded 
Carbon Steel Line Pipe from Turkey; Preliminary Results of 
Countervailing Duty Administrative Reviews, 64 FR 64808, 64811 
(December 9, 1997) and Certain Welded Carbon Steel Pipes and Tubes 
and Welded Carbon Steel Line Pipe from Turkey; Preliminary Results 
of Countervailing Duty Administrative Reviews, 64 FR 44496 (August 
16, 1999).
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    Of the programs investigated since the original investigation, the 
Department determined that Deduction from Taxable Income for Export 
Revenues conferred on the Borusan Group a subsidy of less than 0.005 
percent in the 1996 review. Additionally, the benefits from the 
Incentive Premium on Domestically Obtained Goods are ``recurring,'' 
because once a company has received an investment incentive 
certificate, it becomes eligible for the Incentive Premium benefits 
automatically and on a yearly basis (62 FR 64808, December 9, 1997). 
Accordingly, the Department will adjust the margin to include their 
respective subsidies of less than 0.005 percent and 0.01 percent for 
the Borusan Group.
    The Department agrees with the respondent interested parties that 
two additional programs investigated since the original investigation, 
Foreign Exchange Loan Assistance and Pre-Shipment Export Credit, 
continue to confer benefits on Turkish producers/exporters of subject 
merchandise. Thus, we will include their respective subsidies in the 
company-specific margins.
    Considering the termination of the Export and Supplemental Tax 
Rebate and RUSF programs in the first review, and the subsequent waiver 
of the duty deposit for Bant Boru, the Department will report to the 
Commission a margin of 0.00 percent for Bant Boru.
    The Department will report a rate of 2.89 percent for Erbosan, the 
sum of 1.77 percent from the Pre-Shipment Export Credit Program; 0.02 
percent from Investment Allowance under GIP; and 1.10 percent from the 
Foreign Exchange Loan Assistance, from the second review.
    For the Borusan Group, the Department will report to the Commission 
a rate of 0.68 percent, which includes, from the third review: 0.22 
percent from the Pre-Shipment Export Credit; 0.02 from Investment 
Allowance under GIP; 0.43 percent from Foreign Exchange Loan 
Assistance; 0.01 percent from the Incentive Premium on Domestically 
Obtained Goods; and less than 0.005 percent from Deduction from Taxable 
Income for Export Revenues.
    For the Yucel Boru Group, the Department will report to the 
Commission a rate of 0.84 percent from Pre-Shipment Export Credit in 
the fourth review. Finally, the Department will report to the 
Commission a rate of 2.90 percent for all others. This rate includes 
1.77 percent from Pre-Shipment Export Credit; 0.02 percent from 
Investment Allowance under GIP; 1.10 percent from Foreign Exchange Loan 
Assistance, 0.01 from Incentive Premium on Domestically Obtained Goods, 
and less than 0.005 percent from Deduction from Taxable Income for 
Export Revenues.

Nature of the Subsidy

    In the Sunset Policy Bulletin, the Department states that, 
consistent with section 752(a)(6) of the Act, the Department will 
provide to the Commission information concerning the nature of the 
subsidy, and whether the subsidy is a subsidy described in Article 3 or 
Article 6.1 of the Subsidies Agreement. The domestic and respondent 
interested parties did not address this issue in their substantive 
responses.
    Deduction from Taxable Income for Export Revenues and Pre-Shipment 
Export Credit fall within the definition of an export subsidy under 
Article 3.1(a) of the Subsidies Agreement because the receipt of 
benefit is contingent on export performance. The remaining programs, 
although not falling within the definition of an export subsidy under 
Article 3.1(a) of the Subsidies Agreement, could be found to be 
inconsistent with Article 6 if the net countervailable subsidy exceeds 
five percent, as measured in accordance with Annex IV of the Subsidies 
Agreement. However, the Department has no information with which to 
make such a calculation, nor do we believe it appropriate to attempt 
such a calculation in the course of a sunset review. Rather, we are 
providing the Commission with the following program descriptions.
    Foreign Exchange Loan Assistance. The GRT Resolution Number: 94/
5782, Article 4, effective June 13, 1994, concerns the encouragement of 
exportation, allowing commercial banks to exempt certain fees provided 
that the loans are used in the financing of exportation and other 
foreign exchange earning activities. The exempted fees include a 
Resource Utilization Stabilization Fund fee of 6 percent of the loan 
principle, a Banking Insurance Tax equal to 5 percent of the interested 
and a stamp tax equal to 0.6 percent of the principal.\19\
---------------------------------------------------------------------------

    \19\ See Certain Welded Carbon Steel Pipes and Tubes and Welded 
Carbon Steel Line Pipe from Turkey; Final Results of Countervailing 
Duty Administrative Reviews, 62 FR 64808 (December 9, 1997).
---------------------------------------------------------------------------

    Incentive Premium on Domestically Obtained Goods. Companies holding 
investment incentive certificates under the GIP are eligible for a 
rebate of 15 percent VAT paid on locally-sourced machinery and 
equipment. Imported machinery and equipment are subject to the VAT and 
are not eligible for the rebate. These VAT rebates are countervailable 
subsidies within the meaning of section 777(5)(D)(ii) of the Act 
because the rebates constituted revenue foregone by the GRT, and they 
provide a benefit in the amount of the VAT savings to the company. 
Also, they are specific under section 771(5A)(C) because their receipt 
is contingent upon the use of domestic goods rather than imported goods 
(62 FR 64808, December 9, 1997).

Preliminary Results of Review

    As a result of this review, the Department preliminarily finds that 
revocation of the countervailing duty order would be likely to lead to 
continuation or recurrence of a countervailable subsidy at the rates 
listed below:

------------------------------------------------------------------------
                                                                 Margin
                      Producer/exporter                        (percent)
------------------------------------------------------------------------
Bant Boru....................................................       0.00
Erbosan......................................................       2.89
Borusan Group................................................       0.68
Yucel Boru Group.............................................       0.84
All Others...................................................       2.90
------------------------------------------------------------------------


[[Page 66900]]

    Any interested party may request a hearing within 30 days of 
publication of this notice in accordance with 19 CFR 351.310(c). Any 
hearing, if requested, will be held on January 17, 2000, in accordance 
with 19 CFR 351.310(d). Interested parties may submit case briefs no 
later than January 10, 2000, in accordance with 19 CFR 
351.309(c)(1)(i). Rebuttal briefs, which must be limited to issues 
raised in the case briefs, may be filed not later than January 13, 
2000. The Department will issue a notice of final results of this 
sunset review, which will include the results of its analysis of issues 
raised in any such comments, no later than March 28, 2000, in 
accordance with section 751(c)(5)(B) of the Act.
    This five-year (``sunset'') review and notice are in accordance 
with sections 751(c), 752, and 777(i)(1) of the Act.

    Dated: November 19, 1999.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-30967 Filed 11-29-99; 8:45 am]
BILLING CODE 3510-DS-P