[Federal Register Volume 76, Number 110 (Wednesday, June 8, 2011)]
[Notices]
[Pages 33204-33210]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-14032]


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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 interested parties, 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 Initiation of 
Antidumping and Countervailing Duty Administrative Reviews and Requests 
for Revocation in Part, 75 FR 37759 (June 30, 2010) (``Review 
Initiation'').\1\ This review covers the Borusan Group \2\ 
(collectively

[[Page 33205]]

``Borusan'') and Toscelik.\3\ We preliminarily determine that Borusan 
and Toscelik 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. The preliminary results are listed below in the section titled 
``Preliminary Results of Review.''
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    \1\ Tubeco Pipe and Steel Corporation was mistakenly listed as a 
company for which the Department received a request for review.
    \2\ The Borusan Group includes Borusan Mannesmann Boru Sanayi ve 
Ticaret A.S., Borusan Birlesik Boru Fabrikalari San ve Tic., Borusan 
Istikbal Ticaret T.A.S., Boruson Holding A.S., Boruson Gemlik Boru 
Tesisleri A.S., Borusan Ihracat Ithalat ve Dagitim A.S., and Borusan 
Ithicat ve Dagitim A.S.
    \3\ Toscelik Profil ve Sac Endustrisi A.S., Toscelik Metal 
Ticaret A.S., and Tosyali Dis Ticaret A.S. (collectively 
``Toscelik'').

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DATES: Effective Date: June 8, 2011.

FOR FURTHER INFORMATION CONTACT: Dennis McClure or Victoria Cho, at 
(202) 482-5973 or (202) 482-5075, 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; Welded Carbon Steel Standard Pipe and Tube 
Products From Turkey, 51 FR 17784 (May 15, 1986) (``Antidumping Duty 
Order''). On May 3, 2010, 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, 75 FR 
23236 (May 3, 2010). On May 28, 2010, in accordance with 19 CFR 
351.213(b)(2), Borusan and Toscelik requested reviews. On June 1, 2010, 
in accordance with 19 CFR 351.213(b)(1), domestic interested party U.S. 
Steel requested reviews of Borusan and Toscelik.
    On June 30, 2010, 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 of review (``POR'') of May 1, 
2009, through April 30, 2010. See Review Initiation.
    On July 13, 2010, the Department sent antidumping duty 
administrative review questionnaires to Borusan and Toscelik.\4\ We 
received Borusan's and Toscelik's Sections A-D questionnaire response 
in September 2010. We issued supplemental section A, B, C, and D 
questionnaires, to which Borusan and Toscelik responded during November 
and December, 2010, and February 2011.
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    \4\ 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 January 19, 2011, the Department extended the time period for 
issuing the preliminary results of the administrative review from 
January 31, 2011, to May 31, 2011. See Certain Welded Carbon Steel Pipe 
and Tube from Turkey: Extension of Time Limit for Preliminary Results 
of Antidumping Duty Administrative Review, 76 FR 3083 (January 19, 
2011).

Period of Review

    The POR covered by this review is May 1, 2009, through April 30, 
2010.

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 and Toscelik 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 and Toscellik's sales.
    We calculated EP using, as the 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, and international freight.
    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-35 of Borusan's September 3, 2010, 
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

[[Page 33206]]

are sufficient imports of the raw material to account for the duty 
drawback on the exports of the subject merchandise. See Allied Tube & 
Conduit Corp. v. United States, 29 C.I.T. 502, 506 (Ct. Int'l Trade 
2005). See also Certain Steel Concrete Reinforcing Bars From Turkey; 
Preliminary Results of Antidumping Duty Administrative Review and New 
Shipper Review and Notice of Intent to Revoke in Part, 72 FR 25253, 
25256 (May 4, 2007), unchanged in Certain Steel Concrete Reinforcing 
Bars From Turkey; Final Results of Antidumping Duty Administrative 
Review and New Shipper Review and Determination To Revoke in Part, 72 
FR 62630 (November 6, 2007).
    After analyzing the facts on the record of this case, we find that 
Borusan has adequately demonstrated that import duties for raw 
materials and rebates granted on exports are linked under the 
Government of Turkey's duty drawback scheme. See Borusan's September 3, 
2010, Section C response at 35-38. Additionally, Borusan has provided 
evidence that its imports of hot-rolled coil are sufficient to account 
for the duty drawback claimed on the export of subject merchandise. See 
id. Therefore, consistent with our determination in the 2007-2008 
administrative review, we are granting Borusan a duty drawback 
adjustment for purposes of the preliminary results. See Certain Welded 
Carbon Steel Pipe and Tube from Turkey: Notice of Preliminary Results 
of Antidumping Duty Administrative Review, 74 FR 6368 (February 9, 
2009), unchanged in Certain Welded Carbon Steel Pipe and Tube From 
Turkey: Notice of Final Results of Antidumping Duty Administrative 
Review, 74 FR 22883 (May 15, 2009) (``2007-08 Administrative Review'').

Normal Value

A. Selection of Comparison Market

    To determine whether there was a sufficient volume of sales in the 
comparison market, i.e., Turkey, to serve as a viable basis for 
calculating NV, we compared Borusan's and Toscelik's home market sales 
volumes of the foreign like product to their U.S. sales volume of the 
subject merchandise, in accordance with section 773(a)(1) of the Act. 
For each company, the aggregate home market sales volume of the foreign 
like product was greater than five percent of the U.S. sales volume of 
the subject merchandise. Therefore, we determine that the home market 
was viable for comparison purposes for Borusan and Toscelik.

B. Affiliated Party Transactions and Arm's Length Test

    We included in our analysis Borusan's and Toscelik'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 and Toscelik sold identical merchandise to their 
unaffiliated customers. Borusan's and Toscelik'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 prices to that affiliated party were, 
on average, within a range of 98 to 102 percent of the prices of 
comparable merchandise sold to unaffiliated parties, we determined that 
the sales made to the affiliated party were at arm's-length. See Notice 
of Preliminary Results and Partial Rescission of Antidumping Duty 
Administrative: Ninth Administrative Review of the Antidumping Duty 
Order on Certain Pasta From Italy, 71 FR 45017, 45020 (August 8, 2006) 
(unchanged in Notice of Final Results of the Ninth Administrative 
Review of the Antidumping Duty Order on Certain Pasta From Italy, 72 FR 
7011 (February 14, 2007)); 19 CFR 351.403(c). See also Memorandum from 
Dennis McClure to The File, ``Analysis Memorandum for Toscelik Profil 
ve Sac Endustrisi A.S.'' (``Toscelik Sales Calculation Memo'') and 
Memorandum from Victoria Cho to The File, ``Analysis Memorandum for the 
Borusan Group'' (``Borusan Sales Calculation Memo'') dated May 31, 
2011. Conversely, where we found that the sales to an affiliated party 
did not pass the arm's-length test, then all sales to that affiliated 
party have been excluded from the NV calculation. See id. See also 
Antidumping Proceedings: Affiliated Party Sales in the Ordinary Course 
of Trade, 67 FR 69186, 69187 (November 15, 2002).

C. 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 a 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 and Toscelik regarding the marketing stages involved in the 
reported home market and EP sales, including a description of the 
selling functions performed by Borusan and Toscelik for the channels of 
distribution in the home market and U.S. market. See Borusan's 
September 3, 2010, Section A response and Toscelik's September 3, 2010, 
Section A response. We analyzed the selling functions, as noted below, 
by grouping them into the following selling function activities: sales 
process and 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-17-18 and 
Exhibit A-6 of Borusan's September 3, 2010, 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-20-22 of Borusan's September 3, 2010, 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

[[Page 33207]]

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-17-23 of 
Borusan's September 3, 2010, response. Therefore, we determined that 
Boursan's single LOT in the U.S. market is comparable with the LOT in 
the home market and did not find it necessary to make a LOT adjustment.
    In the home market, Toscelik reported that they sold through one 
channel of distribution: Ex works. Toscelik also reported that they 
sold to one customer category, distributors. Toscelik reported the 
following selling activities in the home market: (1) Packing, (2) Order 
Input/Processing, (3) Direct Sales Personnel, (4) Sales/Marketing 
Support, and (5) Warranty Service. See Toscelik's section A-D 
antidumping questionnaire response (``Toscelik QR response''), dated 
September 3, 2010, at Exhibit 6. We found Toscelik's home market sales 
constitute one level of trade.
    In the U.S. market, Toscelik made direct sales on an EP basis 
through one channel of distribution to unaffiliated trading companies. 
Toscelik identified the following selling activities in the U.S. 
market: (1) Packing, (2) Order Input/Processing, (3) Direct Sales 
Personnel, and (4) Sales/Marketing Support. Id. We found that 
Toscelik's sales to the United States were made to one LOT. Further, we 
find only minor differences between the sole home market LOT and that 
of Toscelik's U.S. LOT. Accordingly, we preliminarily determine that 
Toscelik's home market LOT and U.S. LOT are comparable, and that a LOT 
adjustment is not appropriate for Toscelik in this case.

D. Cost-Averaging Methodology

    The Department's normal practice is to calculate an annual 
weighted-average cost for the POR. See Certain Pasta From Italy: Final 
Results of Antidumping Duty Administrative Review, 65 FR 77852 
(December 13, 2000), and accompanying Issues and Decision Memorandum at 
Comment 18, and Notice of Final Results of Antidumping Duty 
Administrative Review: Carbon and Certain Alloy Steel Wire Rod from 
Canada, 71 FR 3822 (January 24, 2006), and accompanying Issues and 
Decision Memorandum at Comment 5 (explaining the Department's practice 
of computing a single weighted-average cost for the entire period). 
However, we recognize that possible distortions may result if we use 
our normal annual-average cost method during a period of significant 
cost changes. In determining whether to deviate from our normal 
methodology of calculating an annual weighted-average cost, we evaluate 
the case-specific record evidence using two primary factors: (1) The 
change in the cost of manufacturing (``COM'') recognized by the 
respondent during the POR must be deemed significant; (2) the record 
evidence must indicate that sales during the shorter averaging periods 
could be reasonably linked with the cost of production (``COP'') or 
constructed value (``CV'') during the same shorter averaging periods. 
See Stainless Steel Sheet and Strip in Coils From Mexico: Final Results 
of Antidumping Duty Administrative Review, 75 FR 6627 (February 10, 
2010) (``SSSS from Mexico''), and accompanying Issues and Decision 
Memorandum at Comment 6 and Stainless Steel Plate in Coils From 
Belgium: Final Results of Antidumping Duty Administrative Review, 73 FR 
75398 (December 11, 2008) (``SSPC from Belgium''), and accompanying 
Issues and Decision Memorandum at Comment 4.
1. Significance of Cost Changes
    In prior cases, we established 25 percent as the threshold (between 
the high- and low- quarter COM) for determining that the changes in COM 
are significant enough to warrant a departure from our standard annual 
average cost approach. See SSPC from Belgium at Comment 4. In the 
instant case, record evidence shows that both Borusan and Toscelik 
experienced significant changes (i.e., changes that exceeded 25 
percent) between the high and low quarterly COM during the POR for the 
highest sales volume welded pipe and tube products. See Memorandum from 
Laurens van Houten to Neal M. Halper, Director of Office of Accounting, 
``Cost of Production and Constructed Value Calculation Adjustments for 
the Preliminary Results--Borusan Mannesmann Boru Sanayi ve Ticaret 
A.S.'' (``Borusan Cost Calculation Memo'') and Memorandum from Laurens 
van Houten to Neal M. Halper, Director of Office of Accounting, ``Cost 
of Production and Constructed Value Calculation Adjustments for the 
Preliminary Results--Toscelik Profil ve Sac Endustrisi S.A.,'' 
(``Toscelik Cost Calculation Memo'') dated May 31, 2011. This change in 
COM is attributable primarily to the price volatility for hot-rolled 
carbon steel coil used in the manufacture of welded pipe and tube. See 
id. We found that prices for hot-rolled carbon steel coil changed 
significantly throughout the POR and, as a result, directly affected 
the cost of the material inputs consumed by Borusan and Toscelik. See 
id.
2. Linkage Between Cost and Sales Information
    Consistent with past precedent, because we found the changes in 
costs to be significant, we evaluated whether there is evidence of a 
linkage between the cost changes and the sales prices during the POR. 
See SSSS from Mexico at Comment 6 and SSPC from Belgium at Comment 4. 
Absent a surcharge or other pricing mechanism, the Department may 
alternatively look for evidence of a clear pattern that changes in 
selling prices reasonably correlate to changes in unit costs. See SSPC 
from Belgium at Comment 4. To determine whether a reasonable 
correlation existed between the sales prices and their underlying costs 
during the POR, for each respondent, we compared weighted-average 
quarterly prices to the corresponding quarterly COM for the control 
numbers (``CONNUMs'') with the highest volume of sales in the 
comparison market and the United States. Our comparison revealed that 
sales and costs for a majority of the selected CONNUMs for Borusan 
showed reasonable correlation. See Borusan's Cost Calculation Memo. 
After reviewing this information and determining that changes in 
selling prices reasonably correlate to changes in unit costs, we 
preliminarily determine that there is linkage between Borusan's 
changing costs and sales prices during the POR. See id. See also SSSS 
from Mexico at Comment 6 and SSPC from Belgium at Comment 4. Because we 
have found significant cost changes in COM as well as reasonable 
linkage between costs and sales prices, we have preliminarily 
determined that a quarterly costing approach is appropriate for 
Borusan.
    For Toscelik, however, our analysis revealed that the quarterly 
average sales prices and costs did not show reasonable correlation. See 
Toscelik's Cost Calculation Memo. Although we have found significant 
cost changes in COM, we have not found reasonable linkage between costs 
and sales prices. Therefore, for Toscelik, we have used our normal 
annual average cost methodology for the preliminary results.

E. Cost of Production Analysis

    The Department disregarded sales below the COP in the last 
completed

[[Page 33208]]

review in which Borusan and Toscelik participated. See 2007-08 
Administrative Review and Notice of Preliminary Results of Antidumping 
Duty New Shipper Review: Certain Welded Carbon Steel Pipe and Tube from 
Turkey, 71 FR 26043 (May 3, 2006), unchanged in Notice of Final Results 
of Antidumping Duty New Shipper Review: Certain Welded Carbon Steel 
Pipe and Tube From Turkey, 71 FR 43444, (August 1, 2006). Thus, in 
accordance with section 773(b)(2)(A)(ii) of the Act, there are 
reasonable grounds to believe or suspect that Borusan and Toscelik made 
sales of the subject merchandise in their comparison market at prices 
below the COP in the current review period. Thus, pursuant to section 
773(b)(1) of the Act, we initiated a COP investigation of sales by 
Borusan and Toscelik.
1. Calculation of Cost of Production
    Before making any comparisons to NV, we conducted a sales below 
cost analysis of Borusan and Toscelik pursuant to section 773(b) of the 
Act, to determine whether Borusan's and Toscelik's comparison market 
sales were made at prices below the COP. We compared sales of the 
foreign like product in the home market with model-specific COP 
figures. In accordance with section 773(b)(3) of the Act, we calculated 
COP based on the sum of the cost of materials and fabrication employed 
in producing the foreign like product, plus amounts for SG&A expenses, 
financial expenses and all costs incidental to placing the foreign like 
product in packed condition and ready for shipment.
    In our sales-below-cost analysis, we relied on the COP information 
provided by Borusan and Toscelik in their questionnaire responses 
except in the case of Toscelik, where we have calculated an annual 
weighted average material cost for each control number and we 
calculated the net financial expense ratio based on the December 31, 
2009, consolidated financial statements of Tosyali Holdings A.S. See 
Toscelik's Cost Calculation Memo.
2. Test of Comparison Market Prices
    In determining whether to disregard Borusan's and Toscelik's home 
market sales made at prices below the COP, we examined, in accordance 
with sections 773(b)(1)(A) and (B) of the Act, whether, within an 
extended period of time, such sales were made in substantial 
quantities, and whether such sales were made at prices which permitted 
the recovery of all costs within a reasonable period of time in the 
normal course of trade. As noted in section 773(b)(2)(D) of the Act, 
prices are considered to provide for recovery of costs if such prices 
are above the weighted average per-unit COP for the period of 
investigation or review. We determined the net comparison market prices 
for the below-cost test by subtracting from the gross unit price any 
applicable movement charges, discounts, direct and indirect selling 
expenses, and packing expenses. See Toscelik Sales Calculation Memo and 
Borusan Sales Calculation Memo.
    As discussed above, we have determined it appropriate to rely on 
our alternative quarterly cost calculation approach for Borusan in this 
review. In light of the Court's decisions in SeAH Steel Corp. v. United 
States, 704 F. Supp. 2d 1353 (Ct. Int'l Trade 2010), and SeAH Steel 
Corporation v. United States, 2011 Ct. Int'l. Trade LEXIS 32, Slip. Op. 
2011-33 (Ct. Int'l. Trade March 29, 2011) (``SeAH Second Remand''), we 
have used a new approach to testing for cost recovery when using our 
alternative quarterly cost methodology. Under this new approach, we 
calculated a CONNUM-specific weighted-average annual price using only 
those sales that failed the cost test, and compared the resulting 
weighted average price to the weighted-average annual cost per CONNUM. 
If the weighted-average annual price per CONNUM is above the weighted-
average annual cost per CONNUM then we have restored all of the below-
cost sales of that CONNUM to the normal value pool of sales available 
for comparison with U.S. sales. The Department believes this 
alternative complies with the statutory mandate at section 773(b)(2)(D) 
of the Act to use a weighted-average cost for the period. It also 
conforms with the Statement of Administrative Action H.R. Doc. No. 103-
316, vol. 1, p. 832 (1994) which clarifies that ``the determination of 
cost recovery is based on an analysis of actual weighted-average prices 
and cost during the period of investigation or review * * *'' We invite 
interested parties to comment on this methodology in their case and 
rebuttal briefs.
    In prior cases, we used an indexation methodology when calculating 
quarterly costs for both the sales-below-cost test and the cost 
recovery test. See SSSS from Mexico and SSPC from Belgium. 
Specifically, we indexed the quarterly average material costs reported 
for each CONNUM to the end of the POR, calculated a weighted-average 
cost for each CONNUM, and then indexed the weighted-average cost back 
to each quarter of the POR. In light of the SeAH Second Remand, which 
precluded the use of indexing in the cost recovery test, we have not 
used an indexing methodology when calculating quarterly costs for 
purposes of the cost recovery test in this review.
    For the sales-below-cost test we have used the quarterly costs as 
recorded in Borusan's normal books and records and reported to the 
Department. We have not applied an indexation adjustment to Borusan's 
reported quarterly average cost because there is no indication that 
such costs, which are based on their normal books and records, 
unreasonably reflect the cost to produce such merchandise.
3. Results of 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 a respondent's sales of a 
given product were at prices less than the COP we disregarded the 
below-cost sales because: (1) They were made within an extended period 
of time in ``substantial quantities,'' in accordance with sections 
773(b)(2)(B) and (C) of the Act; and (2) based on our comparison of POR 
prices to the weighted-average COPs for the POR, they were at prices 
which would not permit the recovery of all costs within a reasonable 
period of time, in accordance with section 773(b)(2)(D) of the Act.
    Our cost test for Toscelik revealed that, for home market sales of 
certain models, less than 20 percent of the sales of those models were 
made at prices below the COP. Therefore, we retained all such sales in 
our analysis and included them in determining NV. Our cost test for 
Toscelik also indicated that for home market sales of other models, 
more than 20 percent were sold at prices below the COP within an 
extended period of time and were at prices which would not permit the 
recovery of all costs within a reasonable period of time. Thus, in 
accordance with section 773(b)(1) of the Act, we excluded these below 
cost sales from our analysis and used the remaining above-cost sales to 
determine NV. See Toscelik Sales Calculation Memo.

F. Calculation of NV Based on Comparison Market Prices

    For Borusan and Toscelik, 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

[[Page 33209]]

ordinary course of trade, with sales of either an identical or a 
similar foreign like product, based on matching characteristics. We 
calculated NV based on ex works or delivered prices to unaffiliated 
customers, or prices to affiliated customers which were determined to 
be at arm's length (see discussion above regarding these sales). We 
made adjustments, 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.
    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 \5\ and 
other direct selling expenses, such as the expense related to bank 
charges and factoring. We also made adjustments, where appropriate, for 
physical differences in the merchandise in accordance with section 
773(a)(6)(C)(ii) of the Act.
---------------------------------------------------------------------------

    \5\ We recalculated credit expense for all sales where payment 
date occurred before the shipment date and zero was reported as the 
imputed credit expense. In addition, we recalculated credit for 
sales with a missing payment date using May 31, 2011, the date of 
the preliminary results. See Toscelik Sales Calculation Memo.
---------------------------------------------------------------------------

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) of the Act 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. We did not find that a 
fluctuation existed during the POR in this case and therefore, used the 
daily exchange rate.

Preliminary Results of Review

    As a result of this review, we preliminarily determine that the 
following margin exists for the period May 1, 2008, through April 30, 
2009:

------------------------------------------------------------------------
                                                             Weighted-
                  Manufacturer/exporter                   average margin
                                                             (percent)
------------------------------------------------------------------------
Borusan.................................................            5.26
Toscelik................................................            4.74
------------------------------------------------------------------------

    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 19 CFR 351.224(b). 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 19 CFR 351.310(c). 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 
companies listed above will be the rates 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 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 increase in antidumping duties by the amount of 
antidumping and/or countervailing duties reimbursed.

[[Page 33210]]

    This determination is issued and published in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: May 31, 2011.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2011-14032 Filed 6-7-11; 8:45 am]
BILLING CODE 3510-DS-P