[Federal Register Volume 74, Number 25 (Monday, February 9, 2009)]
[Notices]
[Pages 6368-6372]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-2644]


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DEPARTMENT OF COMMERCE

International Trade Administration

(A-489-501)


Certain Welded Carbon Steel Pipe and Tube from Turkey: Notice of 
Preliminary Results of Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, U.S. 
Department of Commerce.
SUMMARY: In response to a request by domestic interested party, Allied 
Tube and Conduit Corporation (``Allied Tube''), the Department of 
Commerce (``the Department'') is conducting an administrative review of 
the antidumping duty order on certain welded carbon steel pipe and tube 
(``welded pipe and tube'') from Turkey. See Antidumping Duty Order; 
Welded Carbon Steel Standard Pipe and Tube Products From Turkey, 51 FR 
17784 (May 15, 1986) (``Antidumping Duty Order''). This review covers 
the Borusan Group\1\ (``Borusan'') and Toscelik Profil ve Sac 
Endustrisi A.S. (``Toscelik''), each a producer and exporter of the 
subject merchandise. We preliminarily determine that Borusan made sales 
below normal value (``NV''). If these preliminary results are adopted 
in our final results, we will instruct U.S. Customs and Border 
Protection (``CBP'') to assess antidumping duties based on the 
difference between the export price (``EP'') and the NV.
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    \1\ The Borusan Group includes Borusan Mannesmann Boru Sanayi ve 
Ticaret A.S. and Borusan Istikbal Ticaret T.A.S. and other 
affiliated companies.

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EFFECTIVE DATE: February 9, 2009.

FOR FURTHER INFORMATION CONTACT: Dennis McClure or Christopher Hargett, 
at (202) 482-5973 or (202) 482-4161, respectively; AD/CVD Operations, 
Office 3, Import Administration, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, 
Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Background

    On May 15, 1986, the Department published in the Federal Register 
the antidumping duty order on welded pipe and tube from Turkey. See 
Antidumping Duty Order. On May 5, 2008, the Department published a 
notice of opportunity to request an administrative review of this 
order. See Antidumping or Countervailing Duty Order, Finding, or 
Suspended Investigation; Opportunity to Request Administrative Review, 
73 FR 24532 (May 5, 2008). On May 30, 2008, in accordance with 19 CFR 
351.213(b), domestic interested parties Allied Tube requested a review 
of Borusan and Toscelik.
    On July 1, 2008, the Department published a notice of initiation of 
administrative review of the antidumping duty order on welded pipe and 
tube from Turkey, covering the period May 1, 2007, through April 30, 
2008. See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews and Request for Revocation in Part, 73 FR 37409 
(July 1, 2008).
    On July 1, 2008, the Department sent an antidumping duty 
administrative review questionnaire to Borusan and Toscelik.\2\ On July 
8, 2008, Toscelik informed the Department that it had no sales, 
shipments or entries of subject merchandise in or to the United States, 
during the period of review (``POR''). On October 10, 2008, the 
Department published a notice of intent to rescind the administrative 
review in part. See Welded Carbon Steel Pipe and Tube from Turkey: 
Notice of Intent to Rescind Antidumping Duty Administrative Review, In 
Part, 73 FR 60240 (October 10, 2008).
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    \2\ The questionnaire consists of sections A (general 
information), B (sales in the home market or to third countries), C 
(sales to the United States), D (cost of production/constructed 
value), and E (cost of further manufacturing or assembly performed 
in the United States).
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    On August 29, 2008, the Department received Borusan's Sections A-D 
questionnaire response. On October 23,

[[Page 6369]]

2008, and November 3, 2008, the Department issued supplemental Section 
D and Sections A-C questionnaires, respectively, to Borusan. On 
November 14, 2008, Borusan file a supplemental response to the 
Department's supplemental Section D questionnaire. On December 8, 2008, 
the Department received Borusan's supplemental response to the 
Department's supplemental Sections A-C questionnaire. On December 10, 
2008, the Department issued additional questions regarding Section D of 
the questionnaire. On December 11, 2008, the Department issued 
additional questions concerning Sections A-C of the questionnaire. The 
Department received Borusan's supplemental response to the Departments 
supplemental questions issued on December 10 and December 11, 2008, on 
January 7, 2009.

Scope of the Order

    The products covered by this order include circular welded non-
alloy steel pipes and tubes, of circular cross-section, not more than 
406.4 millimeters (16 inches) in outside diameter, regardless of wall 
thickness, surface finish (black, or galvanized, painted), or end 
finish (plain end, beveled end, threaded and coupled). Those pipes and 
tubes are generally known as standard pipe, though they may also be 
called structural or mechanical tubing in certain applications. 
Standard pipes and tubes are intended for the low pressure conveyance 
of water, steam, natural gas, air, and other liquids and gases in 
plumbing and heating systems, air conditioner units, automatic 
sprinkler systems, and other related uses. Standard pipe may also be 
used for light load-bearing and mechanical applications, such as for 
fence tubing, and for protection of electrical wiring, such as conduit 
shells.
    The scope is not limited to standard pipe and fence tubing, or 
those types of mechanical and structural pipe that are used in standard 
pipe applications. All carbon steel pipes and tubes within the physical 
description outlined above are included in the scope of this order, 
except for line pipe, oil country tubular goods, boiler tubing, cold-
drawn or cold-rolled mechanical tubing, pipe and tube hollows for 
redraws, finished scaffolding, and finished rigid conduit.
    Imports of these products are currently classifiable under the 
following Harmonized Tariff Schedule of the United States (``HTSUS'') 
subheadings: 7306.30.10.00, 7306.30.50.25, 7306.30.50.32, 
7306.30.50.40, 7306.30.50.55, 7306.30.50.85, and 7306.30.50.90. 
Although the HTSUS subheadings are provided for convenience and customs 
purposes, our written description of the scope of this proceeding is 
dispositive.

Product Comparisons

    We compared the EP to the NV, as described in the Export Price and 
Normal Value sections of this notice. In accordance with section 
771(16) of the Tariff Act of 1930, as amended (``the Act''), we first 
attempted to match contemporaneous sales of products sold in the United 
States and comparison market that were identical with respect to the 
following characteristics: (1) grade; (2) nominal pipe size; (3) wall 
thickness; (4) surface finish; and (5) end finish. When there were no 
sales of identical merchandise in the home market to compare with U.S. 
sales, we compared U.S. sales with the most similar merchandise based 
on the characteristics listed above in order of priority listed.

Export Price

    Because Borusan sold subject merchandise directly to the first 
unaffiliated purchaser in the United States prior to importation, and 
constructed export price (``CEP'') methodology was not otherwise 
warranted based on the record facts of this review, in accordance with 
section 772(a) of the Act, we used EP as the basis for all of Borusan's 
sales.
    We calculated EP using, as starting price, the packed, delivered 
price to unaffiliated purchasers in the United States. In accordance 
with section 772(c)(2)(A) of the Act, we made the following deductions 
from the starting price (gross unit price), where appropriate: foreign 
inland freight from the mill to port, foreign brokerage and handling, 
international freight, marine insurance, U.S. brokerage, U.S. duty, and 
other related movement charges.
    In addition, Borusan reported an amount for duty drawback which 
represents the amount of duties on imported raw materials associated 
with a particular shipment of subject merchandise to the United States 
that is exempted upon export. Borusan requested that we add the amount 
to the starting price. See page C-34 of Borusan's August 29, 2009, 
original response. To determine if a duty drawback adjustment is 
warranted, the Department has employed a two-prong test which 
determines whether: (1) the rebate and import duties are dependent upon 
one another, or in the context of an exemption from import duties, if 
the exemption is linked to the exportation of the subject merchandise; 
and (2) the respondent has demonstrated that there are sufficient 
imports of the raw material to account for the duty drawback on the 
exports of the subject merchandise. See Allied Tube and Conduit Corp. 
v. United States, Slip Op. 05-56 (May 12, 2005).
    Borusan provided specific documents to demonstrate that its 
exemption from import duties is linked to the exportation of subject 
merchandise, such as a table linking the consumption of hot-rolled 
steel sheet to the exportation of welded pipe and tube. See Exhibit C-8 
of Borusan's August 29, 2009, original response. Furthermore, Borusan 
provided documentation to demonstrate that there are sufficient imports 
of the raw material to account for the duty drawback on the exports of 
the subject merchandise. See id. Therefore, in accordance with our 
practice and determination in prior reviews, we are adding duty 
drawback to the starting price. See Notice of Final Results of 
Antidumping Duty Administrative Review: Certain Welded Carbon Steel 
Pipe and Tube From Turkey, 70 FR 73447 (December 12, 2005) (``2003-04 
Administrative Review''). See also the Department's ``Analysis 
Memorandum for the Borusan Group'' (``Borusan's calculation memo''), 
dated February 2, 2009, available in the Central Records Unit in Room 
1117 of the Main Commerce Building.

Normal Value

A. Selection of Comparison Market

    In order to determine whether there was a sufficient volume of 
sales in the home market to serve as a viable basis for calculating NV, 
we compared Borusan's volume of home market sales of the foreign like 
product to the volume of its U.S. sales of the subject merchandise, in 
accordance with section 773(a)(1)(C) of the Act. Because Borusan's 
aggregate volume of home market sales of the foreign like product was 
greater than five percent of its aggregate volume of U.S. sales of the 
subject merchandise, we determined that the home market was viable. We 
calculated NV as noted in the ``Calculation of NV Based on Comparison 
Market Prices'' section of this notice. See also Borusan's calculation 
memo.

Cost of Production Analysis

    Because the Department disregarded sales below the cost of 
production (``COP'') in the last completed review of Borusan, we have 
reasonable grounds to believe or suspect that sales of the foreign like 
product under consideration for the determination of NV in this

[[Page 6370]]

review may have been made at prices below the COP as provided by 
section 773(b)(2)(A)(ii) of the Act. Therefore, pursuant to section 
773(b)(1) of the Act, we initiated a COP investigation of sales by 
Borusan in the home market. See 2003-04 Administrative Review.

1. Calculation of COP

    In accordance with section 773(b)(3) of the Act, we calculated the 
COP based on the sum of Borusan's costs of materials and fabrication 
employed in producing the foreign like product, plus selling, general, 
and administrative expenses and the cost of all expenses incidental to 
packing and preparing the foreign like product for shipment.

2. Test of Comparison Market Sales Prices

    We compared the weighted-average COP figures to home market sales 
of the foreign like product as required by 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 the home 
market prices, less any applicable movement charges, rebates, 
discounts, packing, and direct selling expenses.

3. Results of the COP Test

    Pursuant to section 773(b)(2)(C)(i) of the Act, where less than 20 
percent of 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 sales of a given product 
during the POR were at prices less than the COP we determined such 
sales to have been made in ``substantial quantities.'' See section 
773(b)(2)(C) of the Act. Further, we determined that the sales were 
made within an extended period of time, in accordance with section 
773(b)(2)(B) of the Act, because they were made over the course of the 
POR. In such cases, because we compared prices to POR-average costs, 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, we 
disregarded below-cost sales of a given product where more than 20 
percent were sold at prices below the COP and used the remaining sales 
as the basis for determining NV, in accordance with section 773(b)(1) 
of the Act. See Borusan's calculation memo.

Calculation of NV Based on Comparison Market Prices

    For Borusan, for those comparison products for which there were 
sales at prices above the COP, we based NV on home market prices. In 
these preliminary results, we were able to match all U.S. sales to 
contemporaneous sales, made in the ordinary course of trade, of either 
an identical or a similar foreign like product, based on matching 
characteristics. In accordance with section 773(a)(1)(B)(i) of the Act, 
we have excluded certain sales sold in the comparison market which were 
exported to a third country.\3\ We calculated NV based on free on board 
(``FOB'') mill or delivered prices to unaffiliated customers, or prices 
to affiliated customers which were determined to be at arm's length 
(see discussion below regarding these sales). We made deductions, where 
appropriate, from the starting price for billing adjustments, 
discounts, rebates, and inland freight. Additionally, we added interest 
revenue. In accordance with section 773(a)(6) of the Act, we deducted 
home market packing costs and added U.S. packing costs.
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    \3\In Borusan's original response submitted on August 29, 2008, 
Borusan explained that it knows its domestic customer is going to 
export the foreign like product without modification. In the 
Department's November 3, 2008, supplemental questionnaire, the 
Department requested Borusan to identify these sales.
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    In accordance with section 773(a)(6)(C)(iii) of the Act, we 
adjusted for differences in the circumstances of sale. These 
circumstances included differences in imputed credit expenses and other 
direct selling expenses, such as the expense related to bank charges 
and factoring.\4\ We also made adjustments, where appropriate, for 
physical differences in the merchandise in accordance with section 
773(a)(6)(C)(ii) of the Act.
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    \4\ In the Department's November 3, 2008, supplemental 
questionnaire the Department requested Borusan to explain how it 
accounted for all expenses related to factoring. On pages 20 and 21 
of Borusan's December 8, 2008, supplemental response, Borusan 
explained that it revised the database to account for the difference 
between the invoice value and the funds received from the factoring 
institution. Borusan also explained that it adjusted the payment 
date and recalculated credit expense for these particular sales, 
since it reported a separate field for factoring expenses.
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Calculation of Arm's-Length Sales

    We included in our analysis Borusan's home market sales to 
affiliated customers only where we determined that such sales were made 
at arm's-length prices, i.e., at prices comparable to prices at which 
Borusan sold identical merchandise to their unaffiliated customers. 
Borusan's sales to affiliates constituted less than five percent of 
overall home market sales. To test whether the sales to affiliates were 
made at arm's-length prices, we compared the starting prices of sales 
to affiliated and unaffiliated customers net of all movement charges, 
direct selling expenses, discounts, and packing. Where the price to 
that affiliated party was, on average, within a range of 98 to 102 
percent of the price of the same or comparable merchandise sold to the 
unaffiliated parties, we determined that the sales made to the 
affiliated party were at arm's length. See Antidumping Proceedings: 
Affiliated Party Sales in the Ordinary Course of Trade, 67 FR 69186 
(November 15, 2002).

Level of Trade

    As set forth in section 773(a)(1)(B)(i) of the Act and in the 
Statement of Administrative Action (``SAA'') accompanying the Uruguay 
Round Agreements Act, at 829-831 (see H.R. Doc. No. 316, 103d Cong., 2d 
Sess. 829-831 (1994)), to the extent practicable, the Department 
calculates NV based on sales at the same level of trade (``LOT'') as 
U.S. sales, either EP or CEP. When the Department is unable to find 
sale(s) in the comparison market at the same LOT as the U.S. sale(s), 
the Department may compare sales in the U.S. and foreign markets at 
different LOTs. The NV LOT is that of the starting-price sales in the 
home market. To determine whether home market sales are at a different 
LOT than U.S. sales, we examine stages in the marketing process and 
selling functions along the chain of distribution between the producer 
and the unaffiliated customer. See Honey from Argentina: Preliminary 
Results of Antidumping Duty Administrative Review and Intent to Revoke 
Order in Part, 73 FR 79802, 79805 (December 30, 2008) (``Honey from 
Argentina''). If the comparison-market sales are at a different LOT and 
the differences affect 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 LOT of the export transaction, we 
make an LOT adjustment under section 773(a)(7)(A) of the Act. See Honey 
from Argentina, 73 FR at 79805.
    In implementing these principles, we examined information from 
Borusan regarding the marketing stages involved in the reported home 
market and EP sales, including a description of the selling functions 
performed by Borusan for the channels of distribution in the home 
market and U.S. market. In our analysis, we grouped the reported 
selling functions into the following sales function category: sales 
process and

[[Page 6371]]

marketing support, freight and delivery, inventory maintenance, and 
quality assurance/warranty service.
    For home market sales, we found that Borusan's mill-direct sales 
comprised one LOT. Furthermore, Borusan provided similar selling 
functions to each type of customer (i.e. trading companies/distributors 
and industrial end-users/construction companies), with the exception of 
rebates grouped into the sales process and marketing category which 
were given to trading companies/distributors. See pages A-18 and A-21 
of Borusan's August 29, 2008, response.
    We found that Borusan's U.S. sales were also made at only one LOT. 
Borusan reports one channel of distribution, and sales are negotiated 
on an order-by-order basis with an unaffiliated trading company. See 
page A-17 of Borusan's August 29, 2008, response.
    We then compared Borusan's home market LOT and with the U.S. LOT. 
We note the selling functions do not differ for the activities falling 
under inventory maintenance (i.e., forward inventory maintenance and 
sales from warehouse), quality assurance/warranty service (i.e., 
provide warranty service), and freight and delivery (i.e., act as agent 
or coordinate production/delivery for customer with mill and coordinate 
freight and delivery arrangement). Furthermore, we note that the 
selling functions grouped under sales process and marketing, such as 
customer advice/product information, discounts, advertising, and 
rebates only differ somewhat between the home market LOT and U.S. LOT. 
See page A-20 of Borusan's August 29, 2008, response. Therefore, we 
compared all U.S. sales to an identical home market LOT and did not 
find it necessary to make an LOT adjustment.

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 the Turkish lira. Therefore, we made 
currency conversions based on the daily exchange rates from the Dow 
Jones Business Information Services.
    Section 773A(a) directs the Department to use a daily exchange rate 
in order to convert foreign currencies into U.S. dollars, unless the 
daily rate involves a ``fluctuation.'' It is the Department's practice 
to find that a fluctuation exists when the daily exchange rate differs 
from a benchmark rate by 2.25 percent. The benchmark rate is defined as 
the rolling average of the rates for the past 40 business days. When we 
determine that a fluctuation existed, we generally utilize the 
benchmark rate instead of the daily rate, in accordance with 
established practice.

Preliminary Results of Review

    As a result of this review, we preliminarily determine that the 
following margin exists for the period May 1, 2007, through April 30, 
2008:

------------------------------------------------------------------------
                Manufacturer/Exporter                  Margin (percent)
------------------------------------------------------------------------
Borusan\5\..........................................                7.64
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\5\ The cash deposit rate calculated for Borusan applies to The Borusan
  Group, Borusan Mannesmann Boru Sanayi Ve Ticaret, A.S. and Borusan
  Istikbal Ticaret T.A.S. for CBP purposes. The Department formerly
  referred to Borusan Istikbal Ticaret T.A.S. as Istikbal Ticaret T.A.S.
  See Notice of Final Results of Antidumping Duty Administrative Review:
  Certain Welded Carbon Steel Pipe and Tube from Turkey, 70 FR 73447
  (December 12, 2005). We note that Borusan's response does not identify
  a company by the name Istikbal Ticaret T.A.S. Instead, Borusan's
  response identified their affiliate, Borusan Istikbal Ticaret T.A.S.,
  which was not involved in sales of subject merchandise to the United
  States during the POR. See Borusan's August 29, 2008, response at 33.
  Borusan also explained in its August 29, 2008, response at 5, that
  Borusan Birlesik Boru Fabrikalari San ve Tic. (``BBBF'') was renamed
  Borusan Mannesmann Boru Sanayi Ve Ticaret, A.S. prior to BBBF's name
  change.

    We will disclose the calculations used in our analysis to parties 
to this proceeding within five days of the publication date of this 
notice. See section 351.224(b) of the Department's regulations. 
Interested parties are invited to comment on the preliminary results. 
Interested parties may submit case briefs within 30 days of the date of 
publication of this notice. Rebuttal briefs, limited to issues raised 
in the case briefs, may be filed no later than 37 days after the date 
of publication of this notice. Parties who submit arguments are 
requested to submit with each argument: (1) a statement of the issue, 
(2) a brief summary of the argument, and (3) a table of authorities. 
Further, parties submitting written comments should provide the 
Department with an additional copy of the public version of any such 
comments on a diskette. Any interested party may request a hearing 
within 30 days of publication of this notice. See section 351.310(c) of 
the Department's regulations. If requested, a hearing will be held 44 
days after the publication of this notice, or the first workday 
thereafter. The Department will publish a notice of the final results 
of this administrative review, which will include the results of its 
analysis of issues raised in any written comments or hearing, within 
120 days from publication of this notice.

Assessment

    The Department will determine, and CBP shall assess, antidumping 
duties on all appropriate entries, pursuant to section 751(a)(1)(B) of 
the Act and 19 CFR 351.212(b). The Department calculated importer-
specific duty assessment rates on the basis of the ratio of the total 
antidumping duties calculated for the examined sales to the total 
entered value of the examined sales for that importer. Where the 
assessment rate is above de minimis, we will instruct CBP to assess 
duties on all entries of subject merchandise by that importer. The 
Department intends to issue assessment instructions to CBP 15 days 
after the date of publication of the final results of review.
    The Department clarified its ``automatic assessment'' regulation on 
May 6, 2003. See Antidumping and Countervailing Duty Proceedings: 
Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003). This 
clarification will apply to entries of subject merchandise during the 
period of review produced by companies included in these preliminary 
results of review for which the reviewed companies did not know their 
merchandise was destined for the United States. In such instances, we 
will instruct CBP to liquidate unreviewed entries at the all-others 
rate if there is no rate for the intermediate company(ies) involved in 
the transaction. For a full discussion of this clarification, see 
Antidumping and Countervailing Duty Proceedings: Assessment of 
Antidumping Duties, 68 FR 23954 (May 6, 2003).

Cash Deposit Requirements

    The following cash deposit rates will be effective upon publication 
of the final results of this administrative review for all shipments of 
welded pipe and tube from Turkey entered, or withdrawn from warehouse, 
for consumption on or after the publication date, as provided by 
section 751(a)(1) of the Act: (1) the cash deposit rate for the company 
listed above will be the rate established in the final results of this 
review; (2) for previously reviewed or 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 this review, a prior review, or the less-than-
fair-value (``LTFV'') investigation, but the manufacturer is, the cash 
deposit rate will be the rate established for the most recent period 
for the manufacturer

[[Page 6372]]

of the merchandise; and (4) if neither the exporter nor the 
manufacturer is a firm covered in this or any previous review or the 
LTFV investigation conducted by the Department, the cash deposit rate 
will be 14.74 percent, the ``All Others'' rate established in the LTFV 
investigation. These cash deposit requirements, when imposed, shall 
remain in effect until further notice.
    This notice serves as a preliminary reminder to importers of their 
responsibility under section 351.402(f)(2) of the Department's 
regulations to file a certificate regarding the reimbursement of 
antidumping and/or countervailing 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 and/or countervailing duties occurred and 
the subsequent assessment of double antidumping duties.
    This determination is issued and published in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: February 2, 2009.
Ronald K. Lorentzen,
Acting Assistant Secretary for Import Administration.
[FR Doc. E9-2644 Filed 2-6-09; 8:45 am]
BILLING CODE 3510-DS-S