Preliminary Results of Countervailing Duty Administrative Review: Certain Welded Carbon Steel Standard Pipe From Turkey, 68550-68554 [E6-20008]
Download as PDF
<![CDATA[
68550
Federal Register / Vol. 71, No. 227 / Monday, November 27, 2006 / Notices
sroberts on PROD1PC70 with NOTICES
published in the Federal Register the
preliminary results for this review (see
CORE Preliminary Results).
In accordance with 19 CFR
351.213(b), this review covers Duferco
Sorral, the only producer/exporter of the
subject merchandise for which a review
was specifically requested. In the CORE
Preliminary Results, we invited
interested parties to submit case briefs
commenting on the preliminary results
or request a hearing. We did not
conduct a hearing in this review, as one
was not requested, and did not receive
case briefs.
Scope of the Order
This order covers cold-rolled (‘‘coldreduced’’) carbon steel flat-rolled carbon
steel products, of rectangular shape,
either clad, plated, or coated with
corrosion-resistant metals such as zinc,
aluminum, or zinc-, aluminum-, nickelor iron-based alloys, whether or not
corrugated or painted, varnished or
coated with plastics or other
nonmetallic substances in addition to
the metallic coating, in coils (whether or
not in successively superimposed
layers) and of a width of 0.5 inch or
greater, or in straight lengths which, if
of a thickness less than 4.75 millimeters,
are of a width of 0.5 inch or greater and
which measures at least 10 times the
thickness or if of a thickness of 4.75
millimeters or more are of a width
which exceeds 150 millimeters and
measures at least twice the thickness, as
currently classifiable in the Harmonized
Tariff Schedule of the United States
(‘‘HTSUS’’) under item numbers
7210.30.0030, 7210.30.0060,
7210.41.0000, 7210.49.0030,
7210.49.0090, 7210.61.0000,
7210.69.0000, 7210.70.6030,
7210.70.6060, 7210.70.6090,
7210.90.1000, 7210.90.6000,
7210.90.9000, 7212.20.0000,
7212.30.1030, 7212.30.1090,
7212.30.3000, 7212.30.5000,
7212.40.1000, 7212.40.5000,
7212.50.0000, 7212.60.0000,
7215.90.1000, 7215.90.3000,
7215.90.5000, 7217.20.1500,
7217.30.1530, 7217.30.1560,
7217.90.1000, 7217.90.5030,
7217.90.5060, 7217.90.5090.
Included in this order are corrosionresistant flat-rolled products of nonrectangular cross-section where such
cross-section is achieved subsequent to
the rolling process (i.e., products which
have been ‘‘worked after rolling’’)—for
example, products which have been
beveled or rounded at the edges.
Excluded from this order are flat-rolled
steel products either plated or coated
with tin, lead, chromium, chromium
oxides, both tin and lead (‘‘terne plate’’),
VerDate Aug<31>2005
16:58 Nov 24, 2006
Jkt 211001
or both chromium and chromium oxides
(‘‘tin-free steel’’), whether or not
painted, varnished or coated with
plastics or other nonmetallic substances
in addition to the metallic coating. Also
excluded from this order are clad
products in straight lengths of 0.1875
inch or more in composite thickness
and of a width which exceeds 150
millimeters and measures at least twice
the thickness. Also excluded from this
order are certain clad stainless flatrolled products, which are three-layered
corrosion-resistant carbon steel flatrolled products less than 4.75
millimeters in composite thickness that
consist of a carbon steel flat-rolled
product clad on both sides with
stainless steel in a 20%–60%–20%
ratio.
These HTSUS item numbers are
provided for convenience and customs
purposes. The written descriptions
remain dispositive.
Final Results of Review
As noted above, the Department
received no comments concerning the
preliminary results. Therefore,
consistent with the CORE Preliminary
Results, we continue to find that
Duferco Sorral did not receive
countervailable subsidies during the
POR. In accordance with section
705(c)(1)(B)(i) of the Tariff Act of 1930,
as amended, we calculated a total net
subsidy rate of 0.00 percent ad valorem
for Duferco Sorral.
As there have been no changes to or
comments on the preliminary results,
we are not attaching a decision
memorandum to this Federal Register
notice. For further details of the
programs included in this proceeding,
see the CORE Preliminary Results.
Assessment Rates/Cash Deposits
The Department intends to issue
assessment instructions to U.S. Customs
and Border Protection (‘‘CBP’’) 15 days
after the date of publication of these
final results of this review, to liquidate
shipments of subject merchandise by
Duferco Sorral entered, or withdrawn
from warehouse, for consumption on or
after January 1, 2004, through December
31, 2004, without regard to
countervailing duties. We will also
instruct CBP not to collect cash deposits
of estimated countervailing duties on
shipments of the subject merchandise
by Duferco Sorral entered, or withdrawn
from warehouse, for consumption on or
after the date of publication of the final
results of this review.
For all non-reviewed companies, we
will instruct CBP to continue to collect
cash deposits at the most recent
company-specific or country-wide rate
PO 00000
Frm 00022
Fmt 4703
Sfmt 4703
applicable to the company. Accordingly,
the cash deposit rates that will be
applied to non-reviewed companies
covered by this order are those
established in the most recently
completed administrative proceeding.
See Certain Steel Products from France:
Notice of Final Court Decision and
Amended Final Determination of
Countervailing Duty Investigation, 64 FR
67561 (December 2, 1999). These rates
shall apply to all non-reviewed
companies until a review of a company
assigned these rates is requested.
Return of Destruction of Proprietary
Information
This notice also serves as a reminder
to parties subject to administrative
protective order (‘‘APO’’) of their
responsibility concerning the
disposition of proprietary information
disclosed under APO in accordance
with 19 CFR 351.305(a)(3). Timely
written notification of the return/
destruction of APO materials or
conversion to judicial protective order is
hereby requested. Failure to comply
with the regulations and the terms of an
APO is a sanctionable violation.
We are issuing and publishing these
results in accordance with sections
751(a)(1) and 777(i)(1) of the Act.
Dated: November 17, 2006.
Stephen J. Claeys,
Acting Assistant Secretary for Import
Administration.
[FR Doc. 06–9409 Filed 11–24–06; 8:45 am]
BILLING CODE 3510–DS–P
DEPARTMENT OF COMMERCE
International Trade Administration
[C–489–502]
Preliminary Results of Countervailing
Duty Administrative Review: Certain
Welded Carbon Steel Standard Pipe
From Turkey
Import Administration,
International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce
(‘‘the Department’’) is conducting an
administrative review of the
countervailing duty (‘‘CVD’’) order on
certain welded carbon steel standard
pipe from Turkey for the period January
1, 2005, through December 31, 2005. We
preliminarily find that the net subsidy
rate for the company under review is de
minimis. See the ‘‘Preliminary Results
of Review’’ section of this notice, infra.
Interested parties are invited to
comment on these preliminary results.
(See the ‘‘Public Comment’’ section,
infra.)
AGENCY:
E:\FR\FM\27NON1.SGM
27NON1
Federal Register / Vol. 71, No. 227 / Monday, November 27, 2006 / Notices
EFFECTIVE DATE:
November 27, 2006.
FOR FURTHER INFORMATION CONTACT:
Kristen Johnson, AD/CVD Operations,
Office 3, Import Administration,
International Trade Administration,
U.S. Department of Commerce, 14th
Street and Constitution Avenue, NW.,
Washington, DC 20230; telephone: (202)
482–4793.
SUPPLEMENTARY INFORMATION:
sroberts on PROD1PC70 with NOTICES
Background
On March 7, 1986, the Department
published in the Federal Register the
CVD order on certain welded carbon
steel pipe and tube products from
Turkey. See Countervailing Duty Order:
Certain Welded Carbon Steel Pipe and
Tube Products from Turkey, 51 FR 7984
(March 7, 1986). On March 2, 2006, the
Department published a notice of
opportunity to request an administrative
review of this CVD order. See
Antidumping or Countervailing Duty
Order, Finding, or Suspended
Investigation; Opportunity to Request
Administrative Review, 71 FR 10642
(March 2, 2006). On March 23, 2006, we
received a timely request for review
from the Borusan Group (‘‘Borusan’’), a
Turkish producer and exporter of the
subject merchandise. On April 28, 2006,
the Department initiated an
administrative review of the CVD order
on certain welded carbon steel standard
pipe from Turkey, covering the period
January 1, 2005, through December 31,
2005. See Initiation of Antidumping and
Countervailing Duty Administrative
Reviews, 71 FR 25145 (April 28, 2006).
On May 2, 2006, the Department
issued a questionnaire to Borusan and
the Government of the Republic of
Turkey (‘‘the GOT’’); we received the
GOT’s questionnaire response on July
14, 2006, and Borusan’s response on
July 17, 2006. On September 20, 2006,
we issued supplemental questionnaires
to Borusan and the GOT. We received
the supplemental questionnaire
response from Borusan and the GOT on
October 4, 2006. On October 25, 2006,
we issued a second supplemental
questionnaire to Borusan and received
the company’s response on October 31,
2006.
In accordance with 19 CFR
351.213(b), this review covers only
those producers or exporters of the
subject merchandise for which a review
was specifically requested. The only
company subject to this review is
Borusan. During the period of review
(‘‘the POR’’), Borusan was comprised of
Borusan Mannesmann Boru Sanayi ve
Ticaret A.S. (‘‘BMB’’) and Borusan
Istikbal Ticaret T.A.S. (‘‘Istikbal’’). This
review covers 11 programs.
VerDate Aug<31>2005
16:58 Nov 24, 2006
Jkt 211001
Scope of the Order
The products covered by this order
are certain welded carbon steel pipe and
tube with an outside diameter of 0.375
inch or more, but not over 16 inches, of
any wall thickness (pipe and tube) from
Turkey. These products are currently
provided for under the Harmonized
Tariff Schedule of the United States
(‘‘HTSUS’’) as item numbers 7306.30.10,
7306.30.50, and 7306.90.10. Although
the HTSUS subheadings are provided
for convenience and customs purposes,
the written description of the
merchandise is dispositive.
Period of Review
The period for which we are
measuring subsidies is January 1, 2005,
through December 31, 2005.
Company History
As noted above, Borusan is composed
of BMB and Istikbal. BMB was
previously known as Borusan Birlesik
Boru Fabrikalari A.S. (‘‘BBBF’’). On
December 13, 2004, BBBF changed its
name to BMB subsequent to its merger
with Mannesmann Boru Endustrisi
T.A.S. (‘‘MB’’) on November 30,
2004.1 See Final Results of
Countervailing Duty Administrative
Review Certain Welded Carbon Steel
Standard Pipe from Turkey, 71 FR
43111 (July 31, 2006) (‘‘2004 Pipe
Final’’), and accompanying Issues and
Decision Memorandum, at ‘‘Calculation
of Ad Valorem Rate’’ under ‘‘Subsidies
Valuation Information’’ (‘‘2004 Pipe
Memorandum’’).
During the POR, BMB produced the
subject merchandise, which was first
sold to Istikbal, an affiliated export sales
company, and then resold to
unaffiliated customers in the United
States. BMB’s shares are held by
Borusan Mannesmann Boru Yatirim
Holding A.S., a holding company
owned by Borusan Holding A.S.2 and
Mannesmannrohren-Werke, A.G., a
publicly traded company in Germany.
Istikbal is majority-owned by Borusan
Holding A.S.
Subsidies Valuation Information
Benchmark Interest Rates
To determine whether governmentprovided loans under review conferred
1 As of November 30, 2004, MB ceased to exist as
a separate company. However, during the POR, MB
filed its 2004 income tax return for the period
January 1, 2004, through November 30, 2004. With
regard to its 2004 income taxes, MB utilized the
‘‘Deduction from Taxable Income for Export
Revenue’’ program. For more information, see
‘‘Deduction from Taxable Income for Export
Revenue’’ under ‘‘Programs Preliminarily
Determined To Be Countervailable,’’ infra.
2 Borusan Holding A.S. is owned by the family of
Asim Kocabiyik, the company’s founder.
PO 00000
Frm 00023
Fmt 4703
Sfmt 4703
68551
a benefit, the Department uses, where
possible, company-specific interest rates
for comparable commercial loans. See
19 CFR 351.505(a). Borusan provided
the interest rates it paid on short-term
U.S. dollar (‘‘US$’’)-denominated
commercial loans. We preliminarily
find that the company-specific US$denominated short-term loans are
comparable to the export credit US$denominated loans, provided by the
Export Credit Bank of Turkey (‘‘Export
Bank’’), against which Borusan paid
interest during the POR. During the
POR, Borusan, however, did not pay
interest against short-term Turkish Lira
(‘‘YTL’’)-denominated commercial
loans, which are comparable to the
maturity of the export financing loans
provided by the Export Bank.
Where no company-specific
benchmark interest rates are available,
the Department’s regulations direct us to
use a national average interest rate as
the benchmark. See 19 CFR
351.505(a)(3)(ii). According to the GOT,
however, there is no official national
average short-term interest rate
available.3 Therefore, we have
calculated the benchmark interest rate
for short-term YTL-denominated loans
based on short-term interest rate data for
2005, as reported by The Economist.4
To calculate the benchmark, we
sourced short-term interest rates to
represent quarterly rates for Turkey in
2005. Specifically, we sourced the
interest rate reported in the last weekly
publication of The Economist for each
quarter of 2005, i.e., the March 26, 2005,
June 25, 2005, September 24, 2005, and
December 24, 2005 editions. We then
simple averaged those rates to calculate
an annual short-term interest rate for
Turkey.5 We then compared the
nominal average interest rate with the
interest rates that the company paid
against the YTL-denominated Foreign
Trade Companies Short-Term Export
Credits and Pre-Export Credits. See
Memorandum to the File concerning the
Calculations for the Preliminary Results
of the 2005 Review of the
Countervailing Duty Order on Certain
Welded Carbon Steel Standard Pipe
from Turkey, at 2 (November 17, 2006).
3 See GOT’s Questionnaire Response, at 20 (July
14, 2006).
4 In each issue, The Economist reports short-term
interest data on a percentage per annum basis for
select countries.
5 The short-term TL interest rates sourced from
The Economist do not include commissions or fees
paid to commercial banks, i.e., they are nominal
rates. See Carbon and Certain Alloy Steel Wire Rod
from Turkey; Final Negative Countervailing Duty
Determination, 67 FR 55815 (August 30, 2002)
(‘‘Wire Rod’’), and accompanying Issues and
Decision Memorandum, at ‘‘Benchmark Interest
Rates’’ (‘‘Wire Rod Memorandum’’).
E:\FR\FM\27NON1.SGM
27NON1
68552
Federal Register / Vol. 71, No. 227 / Monday, November 27, 2006 / Notices
This methodology is consistent with the
Department’s practice. See 2004 Pipe
Memorandum, at ‘‘Benchmark Interest
Rates’’ under ‘‘Subsidies Valuation
Information’’ and ‘‘Comment 1:
Benchmark Interest Rate for Turkish
Lira Loans.’’
sroberts on PROD1PC70 with NOTICES
Analysis of Programs
tax savings realized by BMB, MB, and
Istikbal in 2005, as a result of the
deduction for export earnings. We then
divided that benefit by Borusan’s total
export sales for 2005. On this basis, we
preliminarily determine the net
countervailable subsidy for this program
to be 0.21 percent ad valorem.
I. Programs Preliminarily Determined To B. Foreign Trade Companies Short-Term
Export Credits
Be Countervailable
The Foreign Trade Company (‘‘FTC’’)
A. Deduction From Taxable Income for
loan program was implemented to assist
Export Revenue
large export trading companies with
Addendum 4108 of Article 40 of the
their export financing needs. This
Income Tax Law allows companies that
program is specifically designed to
operate internationally to claim, directly benefit Foreign Trade Corporate
on their corporate income tax returns, a
Companies (‘‘FTCC’’) and Sectoral
tax deduction equal to 0.5 percent of the Foreign Trade Companies (‘‘SFTC’’).8
foreign exchange revenue earned from
An FTCC is a company whose export
exports and other international
performance was at least US$75 million
activities.6 The income tax deduction
in the previous year. For eligible
for export earnings may either be taken
companies, the Export Bank will
as a lump sum or be used to cover
provide short-term export credits based
certain undocumented expenses, which on their past export performance. Under
were incurred through international
this credit program, the Export Bank
activities, that would otherwise be non- extends short-term export credits
deductible for tax purposes (e.g.,
directly to exporters in Turkish Lira and
expenses paid in cash, such as for
foreign currency (‘‘FX’’), up to 100
lodging, gasoline, and food).
percent of the FOB export commitment.
Consistent with the 2004 Pipe Final,
The program’s interest rates are set by
we preliminarily find that this tax
the Export Bank and the maturity of the
deduction is a countervailable subsidy.
loans is usually 180 days for YTLSee 2004 Pipe Memorandum, at
denominated loans and 360 days for FX‘‘Deduction from Taxable Income for
denominated loans. To qualify for a FTC
Export Revenue’’ under ‘‘Programs
loan, in addition to submitting the
Determined To Be Countervailable.’’
necessary application documents, a
The deduction provides a financial
company must provide a bank letter of
contribution within the meaning of
guarantee, equivalent to the loan’s
section 771(5)(D)(ii) of the Tariff Act of
principal and interest amount.
1930, as amended (‘‘the Act’’), because
Istikbal, whose FTCC status was
it represents revenue forgone by the
renewed in March 2005, was the only
GOT. The deduction provides a benefit
Borusan company to receive FTC credits
in the amount of the tax savings to the
during the POR. Istikbal paid interest
company pursuant to section 771(5)(E)
against FTC loans denominated in
of the Act. It is specific under section
Turkish Lira.
771(5A)(B) of the Act because its receipt
Consistent with previous
is contingent upon export performance.
determinations, we preliminarily find
In this review, no new information or
that these loans confer a countervailable
evidence of changed circumstances has
subsidy within the meaning of section
been submitted to warrant
771(5) of the Act. See, e.g., 2004 Pipe
reconsideration of the Department’s
Memorandum at ‘‘Foreign Trade
prior findings.
Companies Short-Term Export Credits’’
During the review period, BMB, MB,7
under ‘‘Programs Determined To Be
and Istikbal filed separate corporate
Countervailable.’’ The loans constitute a
income tax returns for tax year 2004.
financial contribution in the form of a
Each company utilized the deduction
direct transfer of funds from the GOT,
for export earnings with respect to its
under section 771(5)(D)(i) of the Act. A
2004 income taxes.
benefit exists under section 771(5)(E)(ii)
The Department typically treats a tax
of the Act in the amount of the
deduction as a recurring benefit in
difference between the payments of
accordance with 19 CFR 351.524(c)(1).
To calculate the countervailable subsidy interest that Istikbal made on its loans
during the POR and the payments the
rate for this program, we calculated the
company would have made on
comparable commercial loans. The
6 These actions include construction, repair,
installation, and transportation activities that occur
abroad.
7 See ‘‘Company History’’ section, supra, for MB’s
company information.
VerDate Aug<31>2005
16:58 Nov 24, 2006
Jkt 211001
8 An SFTC is a grouping of small- and mediumsized companies that operate together in a similar
sector.
PO 00000
Frm 00024
Fmt 4703
Sfmt 4703
program is also specific in accordance
with section 771(5A)(B) of the Act
because receipt of the loans is
contingent upon export performance.
Further, the FTC loans are not tied to a
particular export destination. Therefore,
we have treated this program as an
untied export loan program which
renders it countervailable regardless of
whether the loans were used for exports
to the United States. See id.
Pursuant to 19 CFR 351.505(a)(1), we
have calculated the benefit as the
difference between the payments of
interest that Istikbal made on its FTC
loans during the POR and the payments
the company would have made on
comparable commercial loans.9 In
accordance with section 771(6)(A) of the
Act, we subtracted from the benefit
amount the fees which Istikbal paid to
commercial banks for the required
letters of guarantee. We then divided the
resulting benefit by Borusan’s total
export value for 2005. On this basis, we
preliminarily find that the net
countervailable subsidy for this program
is 0.01 percent ad valorem.
C. Pre-Export Credits
This program is similar to the FTC
credit program described above;
however, companies classified as either
FTC or SFTC are not eligible for preexport loans. Under the pre-export
credit program, a company’s past export
performance is considered in evaluating
a company’s eligibility and establishing
the company’s credit limit. Like FTC
loans, the Export Bank directly extends
to companies pre-export loans, which
are denominated in either Turkish Lira
or foreign currency and have a
maximum maturity of 360 and 540 days,
respectively.10 To quality for a preexport loan, in addition to submitting
the necessary application documents, a
company must provide a bank letter of
guarantee, equivalent to the loan’s
principal and interest amount. During
the POR, BMB paid interest against preexport loans that were denominated in
both Turkish Lira and U.S. dollars.
Consistent with previous
determinations, we preliminarily find
that these loans confer a countervailable
subsidy within the meaning of section
771(5) of the Act. See, e.g., 2004 Pipe
Memorandum at ‘‘Pre-Export Credits’’
under ‘‘Programs Determined To Be
Countervailable.’’ The loans constitute a
financial contribution in the form of a
direct transfer of funds from the GOT,
under section 771(5)(D)(i) of the Act. A
9 See ‘‘Benchmark Interest Rates,’’ supra,
(discussing the benchmark rates used in these
preliminary results).
10 The Export Bank also sets the interest rates for
this export loan program.
E:\FR\FM\27NON1.SGM
27NON1
Federal Register / Vol. 71, No. 227 / Monday, November 27, 2006 / Notices
benefit exists under section 771(5)(E)(ii)
of the Act in the amount of the
difference between the payments of
interest that BMB made on its loans
during the POR and the payments the
company would have made on
comparable commercial loans. The
program is also specific in accordance
with section 771(5A)(B) of the Act
because receipt of the loans is
contingent upon export performance.
Further, like the FTC loans, these
loans are not tied to a particular export
destination. Therefore, we have treated
this program as an untied export loan
program rendering it countervailable
regardless of whether the loans were
used for exports to the United States.
Pursuant to 19 CFR 351.505(a)(1), we
have calculated the benefit as the
difference between the payments of
interest that BMB made on its preexport loans during the POR and the
payments the company would have
made on comparable commercial
loans.11 In accordance with section
771(6)(A) of the Act, we subtracted from
the benefit amount the fees which BMB
paid to commercial banks for the
required letters of guarantee. We then
divided the resulting benefit by
Borusan’s total export value for 2005.
On this basis, we preliminarily find that
the net countervailable subsidy for this
program is 0.01 percent ad valorem.
II. Program Preliminary Determined To
Not Confer Countervailable Benefits
sroberts on PROD1PC70 with NOTICES
A. Inward Processing Certificate
Exemption Under the Inward Processing
Certificate (‘‘IPC’’) 12 program,
companies are exempt from paying
customs duties and value added taxes
(‘‘VAT’’) on raw material imports to be
used in the production of exported
goods. Companies may choose whether
to be exempted from the applicable
duties and taxes or have them refunded
upon export. Under the exemption
system, companies provide a letter of
guarantee that is returned to the
companies upon fulfillment of the
committed export.
To participate in this program, a
company must hold an IPC, which lists
the amount of raw materials to be
imported and the amount of product to
be exported. There are two types of
IPCs: A D–1 certificate and D–3
certificate. During the POR, Borusan
utilized D–1 certificates associated with
11 See ‘‘Benchmark Interest Rates,’’ supra
(discussing the benchmark rates used in these
preliminary results).
12 The IPC program is governed by the following
Turkish provisions: Customs Code No. 4458
(Articles 80, 108, 111, 115, and 121), IPC Council
of Ministers’ Decree No. 2005/8391, and
Communique of IPR No. Export 2005/1.
VerDate Aug<31>2005
16:58 Nov 24, 2006
Jkt 211001
imports of raw materials for use in the
production of carbon steel pipe and
tube. Borusan did not utilize any D–3
certificates during the POR.13
An IPC specifies the maximum
quantity of inputs that can be imported
under the program. Under the IPC
program, the value of imported inputs
may not exceed the value of the
exported products. Input/output usage
rates listed on an IPC are set by the GOT
working in conjunction with Turkey’s
Exporter Associations, which are quasigovernmental organizations, whose
leadership are subject to GOT approval.
The input/output usage rates vary by
product and industry and are
determined using data from capacity
reports submitted by companies that
apply for IPCs. The input/output usage
rates are subject to periodic review and
verification by the GOT. The GOT uses
the input/output usage rates to ensure
that a company’s expected export
quantities are sufficient to cover the
quantity of inputs imported duty-free
under the program.14
Pursuant to 19 CFR 351.519(a)(1)(ii), a
benefit exists to the extent that the
exemption extends to inputs that are not
consumed in the production of the
exported product, making normal
allowances for waste, or if the
exemption covers charges other than
imported charges that are imposed on
the input. In regard to the VAT
exemption granted under this program,
pursuant to 19 CFR 351.517(a), in the
case of the exemption upon export of
indirect taxes, a benefit exists to the
extent that the Department determines
that the amount exempted exceeds the
amount levied with respect to the
production and distribution of like
products when sold for domestic
consumption.
In the 2004 Pipe Final, the
Department found that, in accordance
with 19 CFR 351.519(a)(4)(i), the GOT
has a system in place to confirm which
inputs are consumed in the production
of the exported product and in what
amounts, and that the system is
reasonable for the purposes intended.
See 2004 Pipe Memorandum, at
‘‘Inward Processing Certificate
Exemption’’ under ‘‘Programs
Determined To Not Confer
13 For more information on D–3 certificates, see
2004 Pipe Memorandum, at ‘‘Inward Processing
Certificate Exemption’’ under ‘‘Programs
Determined To Not Confer Countervailable
Benefits,’’ and GOT’s Questionnaire Response, at
45–48 (July 14, 2006).
14 For more information on how waste/usage rates
are set by the GOT, see 2004 Pipe Memorandum,
at ‘‘Inward Processing Certificate Exemption’’ under
‘‘Programs Determined To Not Confer
Countervailable Benefits’’ and GOT’s Questionnaire
Response, at Exhibit 5, pages 10–11 (July 14, 2006).
PO 00000
Frm 00025
Fmt 4703
Sfmt 4703
68553
Countervailable Benefits.’’ During the
POR, under D–1 certificates, Borusan
received duty and VAT exemptions on
certain imported inputs used in the
production of steel pipes and tubes and
not duty or VAT refunds. There is no
evidence on the record of this review
that indicates the amount of exempted
inputs imported under the program
were excessive or that Borusan used the
imported inputs for any other product
besides those exported.
Therefore, consistent with the 2004
Pipe Final, we preliminarily determine
that the tax and duty exemptions, which
Borusan received on imported inputs
under D–1 certificates of the IPC
program, did not confer countervailable
benefits as Borusan consumed the
imported inputs in the production of the
exported product, making normal
allowance for waste. We further
preliminarily find that the VAT
exemption did not confer
countervailable benefits on Borusan
because the exemption does not exceed
the amount levied with respect to the
production and distribution of like
products when sold for domestic
consumption. Further, because Borusan
did not import any goods under a D–3
certificate during the POR, we
preliminarily determine that this aspect
of the IPC program was not used.
III. Programs Preliminarily Determined
To Not Be Used
We examined the following programs
and preliminarily determine that
Borusan did not apply for or receive
benefits under these programs during
the POR:
A. VAT Support Program (Incentive
Premium on Domestically Obtained
Goods) 15.
B. Pre-Shipment Export Credits.
C. Post-Shipment Export Loans.
D. Pre-Shipment Rediscount Loans.
E. Subsidized Turkish Lira Credit
Facilities.
F. Subsidized Credit for Proportion of
Fixed Expenditures.
G. Regional Subsidies.
Preliminary Results of Review
In accordance with 19 CFR
351.221(b)(4)(i), we have calculated a
subsidy rate for Borusan for the period
January 1, 2005, through December 31,
2005. We preliminarily determine that
the total net countervailable subsidy
rate is 0.23 percent ad valorem, which
15 Although we found this program to be
terminated in Wire Rod, residual payments for
purchases made prior to the program’s termination
were permitted. See Wire Rod Memorandum, at
‘‘VAT Support Program’’ under ‘‘Programs
Determined To Be Countervailable.’’
E:\FR\FM\27NON1.SGM
27NON1
68554
Federal Register / Vol. 71, No. 227 / Monday, November 27, 2006 / Notices
sroberts on PROD1PC70 with NOTICES
is de minimis, pursuant to 19 CFR
351.106(c).
The Department intends to issue
assessment instructions to U.S. Customs
and Border Protection (‘‘CBP’’) 15 days
after the date of publication of the final
results of this review. If the final results
remain the same as these preliminary
results, the Department will instruct
CBP to liquidate without regard to
countervailing duties all shipments of
subject merchandise produced by
Borusan entered, or withdrawn from
warehouse, for consumption from
January 1, 2005, through December 31,
2005. The Department will also instruct
CBP not to collect cash deposits of
estimated countervailing duties on all
shipments of the subject merchandise
produced by Borusan, entered, or
withdrawn from warehouse, for
consumption on or after the date of
publication of the final results of this
review.
We will also instruct CBP to continue
to collect cash deposits for nonreviewed companies at the most recent
company-specific or country-wide rate
applicable to the company. Accordingly,
the cash deposit rates that will be
applied to companies covered by this
order, but not examined in this review,
are those established in the most
recently completed administrative
proceeding for each company. These
rates shall apply to all non-reviewed
companies until a review of a company
assigned these rates is requested.
CFR 351.303(f). Also, pursuant to 19
CFR 351.310, within 30 days of the date
of publication of this notice, interested
parties may request a public hearing on
arguments to be raised in the case and
rebuttal briefs. Unless the Secretary
specifies otherwise, the hearing, if
requested, will be held two days after
the date for submission of rebuttal
briefs, that is, 37 days after the date of
publication of these preliminary results.
Representatives of parties to the
proceeding may request disclosure of
proprietary information under
administrative protective order no later
than 10 days after the representative’s
client or employer becomes a party to
the proceeding, but in no event later
than the date the case briefs, under 19
CFR 351.309(c)(ii), are due. See 19 CFR
351.305(b)(3). The Department will
publish the final results of this
administrative review, including the
results of its analysis of arguments made
in any case or rebuttal briefs.
This administrative review is issued
and published in accordance with
section 751(a)(1), 777(i)(1) of the Act.
Public Comment
Pursuant to 19 CFR 351.224(b), the
Department will disclose to parties to
the proceeding any calculations
performed in connection with these
preliminary results within five days
after the date of the public
announcement of this notice. Pursuant
to 19 CFR 351.309, interested parties
may submit written comments in
response to these preliminary results.
Unless otherwise indicated by the
Department, case briefs must be
submitted within 30 days after the date
of publication of this notice. Rebuttal
briefs, limited to arguments raised in
case briefs, must be submitted no later
than five days after the time limit for
filing case briefs, unless otherwise
specified by the Department. Parties
who submit argument in this proceeding
are requested to submit with the
argument: (1) A statement of the issues,
and (2) a brief summary of the
argument. Parties submitting case and/
or rebuttal briefs are requested to
provide the Department copies of the
public version on disk. Case and
rebuttal briefs must be served on
interested parties in accordance with 19
National Institute of Standards and
Technology
VerDate Aug<31>2005
16:58 Nov 24, 2006
Jkt 211001
Dated: November 17, 2006.
Stephen J. Claeys,
Acting Assistant Secretary for Import
Administration.
[FR Doc. E6–20008 Filed 11–24–06; 8:45 am]
BILLING CODE 3510–DS–P
DEPARTMENT OF COMMERCE
National Construction Safety Team
Advisory Committee Meeting
National Institute of Standards
and Technology, United States
Department of Commerce.
ACTION: Notice of open meeting.
AGENCY:
SUMMARY: The National Construction
Safety Team (NCST) Advisory
Committee (Committee), National
Institute of Standards and Technology
(NIST), will meet via teleconference
Thursday, December 14, 2006, from 9
a.m. to 11 a.m. The meeting will be
audio Webcast so that the public may
listen to the meeting as it takes place.
The primary purpose of this meeting is
for the NCST Advisory Committee to
discuss its annual report to the Congress
and to discuss the status of the
investigation of World Trade Center 7.
The agenda may change to
accommodate Committee business. The
final agenda will be posted on the NIST
Web site at www.nist.gov/ncst.
DATES: The meeting will convene on
December 14, at 9 a.m. and will adjourn
PO 00000
Frm 00026
Fmt 4703
Sfmt 4703
at 11 a.m. The meeting will be
conducted via teleconference. The live
audio Webcast will be available to the
public via a link on the NIST WTC Web
site, https://wtc.nist.gov.
ADDRESS: The meeting will be held via
teleconference. A live audio Webcast of
the meeting will be available via a link
on the NIST WTC Web site, https://
wtc.nist.gov. Please refer to the
SUPPLEMENTARY INFORMATION section of
this notice for additional information.
FOR FURTHER INFORMATION CONTACT:
Stephen Cauffman, National
Construction Safety Team Advisory
Committee, National Institute of
Standards and Technology, 100 Bureau
Drive, MS 8611, Gaithersburg, MD
20899–8611. Mr. Cauffman’s e-mail
address is stephen.cauffman@nist.gov
and his phone number is (301) 975–
6051.
The
Committee was established pursuant to
Section 11 of the National Construction
Safety Team Act (15 U.S.C. 7310 et
seq.). The Committee is composed of
seven members appointed by the
Director of NIST who were selected for
their technical expertise and experience,
established records of distinguished
professional service, and their
knowledge of issues affecting teams
established under the NCST Act. The
Committee will advise the Director of
NIST on carrying out investigations of
building failures conducted under the
authorities of the NCST Act that became
law in October 2002 and will review the
procedures developed to implement the
NCST Act and reports issued under
section 8 of the NCST Act. Background
information on the NCST Act and
information on the NCST Advisory
Committee is available at www.nist.gov/
ncst.
Pursuant to the Federal Advisory
Committee Act, 5 U.S.C. app. 2, notice
is hereby given that the National
Construction Safety Team (NCST)
Advisory Committee (Committee),
National Institute of Standards and
Technology (NIST), will meet Thursday,
December 14, at 9 a.m. and will adjourn
at 11 a.m. The meeting will be
conducted by teleconference with a live
audio Webcast available to the public.
The primary purpose of this meeting
is for the NCST Advisory Committee to
discuss its annual report to the Congress
and to discuss the status of the
investigation of World Trade Center 7.
The meeting will be conducted via
teleconference with a live audio
Webcast. The final agenda will be
posted on the NIST Web site at
www.nist.gov/ncst.
SUPPLEMENTARY INFORMATION:
E:\FR\FM\27NON1.SGM
27NON1
]]>Agencies
[Federal Register Volume 71, Number 227 (Monday, November 27, 2006)]
[Notices]
[Pages 68550-68554]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-20008]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[C-489-502]
Preliminary Results of Countervailing Duty Administrative Review:
Certain Welded Carbon Steel Standard Pipe From Turkey
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce (``the Department'') is conducting
an administrative review of the countervailing duty (``CVD'') order on
certain welded carbon steel standard pipe from Turkey for the period
January 1, 2005, through December 31, 2005. We preliminarily find that
the net subsidy rate for the company under review is de minimis. See
the ``Preliminary Results of Review'' section of this notice, infra.
Interested parties are invited to comment on these preliminary results.
(See the ``Public Comment'' section, infra.)
[[Page 68551]]
EFFECTIVE DATE: November 27, 2006.
FOR FURTHER INFORMATION CONTACT: Kristen Johnson, AD/CVD Operations,
Office 3, Import Administration, International Trade Administration,
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW.,
Washington, DC 20230; telephone: (202) 482-4793.
SUPPLEMENTARY INFORMATION:
Background
On March 7, 1986, the Department published in the Federal Register
the CVD order on certain welded carbon steel pipe and tube products
from Turkey. See Countervailing Duty Order: Certain Welded Carbon Steel
Pipe and Tube Products from Turkey, 51 FR 7984 (March 7, 1986). On
March 2, 2006, the Department published a notice of opportunity to
request an administrative review of this CVD order. See Antidumping or
Countervailing Duty Order, Finding, or Suspended Investigation;
Opportunity to Request Administrative Review, 71 FR 10642 (March 2,
2006). On March 23, 2006, we received a timely request for review from
the Borusan Group (``Borusan''), a Turkish producer and exporter of the
subject merchandise. On April 28, 2006, the Department initiated an
administrative review of the CVD order on certain welded carbon steel
standard pipe from Turkey, covering the period January 1, 2005, through
December 31, 2005. See Initiation of Antidumping and Countervailing
Duty Administrative Reviews, 71 FR 25145 (April 28, 2006).
On May 2, 2006, the Department issued a questionnaire to Borusan
and the Government of the Republic of Turkey (``the GOT''); we received
the GOT's questionnaire response on July 14, 2006, and Borusan's
response on July 17, 2006. On September 20, 2006, we issued
supplemental questionnaires to Borusan and the GOT. We received the
supplemental questionnaire response from Borusan and the GOT on October
4, 2006. On October 25, 2006, we issued a second supplemental
questionnaire to Borusan and received the company's response on October
31, 2006.
In accordance with 19 CFR 351.213(b), this review covers only those
producers or exporters of the subject merchandise for which a review
was specifically requested. The only company subject to this review is
Borusan. During the period of review (``the POR''), Borusan was
comprised of Borusan Mannesmann Boru Sanayi ve Ticaret A.S. (``BMB'')
and Borusan Istikbal Ticaret T.A.S. (``Istikbal''). This review covers
11 programs.
Scope of the Order
The products covered by this order are certain welded carbon steel
pipe and tube with an outside diameter of 0.375 inch or more, but not
over 16 inches, of any wall thickness (pipe and tube) from Turkey.
These products are currently provided for under the Harmonized Tariff
Schedule of the United States (``HTSUS'') as item numbers 7306.30.10,
7306.30.50, and 7306.90.10. Although the HTSUS subheadings are provided
for convenience and customs purposes, the written description of the
merchandise is dispositive.
Period of Review
The period for which we are measuring subsidies is January 1, 2005,
through December 31, 2005.
Company History
As noted above, Borusan is composed of BMB and Istikbal. BMB was
previously known as Borusan Birlesik Boru Fabrikalari A.S. (``BBBF'').
On December 13, 2004, BBBF changed its name to BMB subsequent to its
merger with Mannesmann Boru Endustrisi T.A.S. (``MB'') on November 30,
2004.\1\ See Final Results of Countervailing Duty Administrative Review
Certain Welded Carbon Steel Standard Pipe from Turkey, 71 FR 43111
(July 31, 2006) (``2004 Pipe Final''), and accompanying Issues and
Decision Memorandum, at ``Calculation of Ad Valorem Rate'' under
``Subsidies Valuation Information'' (``2004 Pipe Memorandum'').
---------------------------------------------------------------------------
\1\ As of November 30, 2004, MB ceased to exist as a separate
company. However, during the POR, MB filed its 2004 income tax
return for the period January 1, 2004, through November 30, 2004.
With regard to its 2004 income taxes, MB utilized the ``Deduction
from Taxable Income for Export Revenue'' program. For more
information, see ``Deduction from Taxable Income for Export
Revenue'' under ``Programs Preliminarily Determined To Be
Countervailable,'' infra.
---------------------------------------------------------------------------
During the POR, BMB produced the subject merchandise, which was
first sold to Istikbal, an affiliated export sales company, and then
resold to unaffiliated customers in the United States. BMB's shares are
held by Borusan Mannesmann Boru Yatirim Holding A.S., a holding company
owned by Borusan Holding A.S.\2\ and Mannesmannrohren-Werke, A.G., a
publicly traded company in Germany. Istikbal is majority-owned by
Borusan Holding A.S.
---------------------------------------------------------------------------
\2\ Borusan Holding A.S. is owned by the family of Asim
Kocabiyik, the company's founder.
---------------------------------------------------------------------------
Subsidies Valuation Information
Benchmark Interest Rates
To determine whether government-provided loans under review
conferred a benefit, the Department uses, where possible, company-
specific interest rates for comparable commercial loans. See 19 CFR
351.505(a). Borusan provided the interest rates it paid on short-term
U.S. dollar (``US$'')-denominated commercial loans. We preliminarily
find that the company-specific US$-denominated short-term loans are
comparable to the export credit US$-denominated loans, provided by the
Export Credit Bank of Turkey (``Export Bank''), against which Borusan
paid interest during the POR. During the POR, Borusan, however, did not
pay interest against short-term Turkish Lira (``YTL'')-denominated
commercial loans, which are comparable to the maturity of the export
financing loans provided by the Export Bank.
Where no company-specific benchmark interest rates are available,
the Department's regulations direct us to use a national average
interest rate as the benchmark. See 19 CFR 351.505(a)(3)(ii). According
to the GOT, however, there is no official national average short-term
interest rate available.\3\ Therefore, we have calculated the benchmark
interest rate for short-term YTL-denominated loans based on short-term
interest rate data for 2005, as reported by The Economist.\4\
---------------------------------------------------------------------------
\3\ See GOT's Questionnaire Response, at 20 (July 14, 2006).
\4\ In each issue, The Economist reports short-term interest
data on a percentage per annum basis for select countries.
---------------------------------------------------------------------------
To calculate the benchmark, we sourced short-term interest rates to
represent quarterly rates for Turkey in 2005. Specifically, we sourced
the interest rate reported in the last weekly publication of The
Economist for each quarter of 2005, i.e., the March 26, 2005, June 25,
2005, September 24, 2005, and December 24, 2005 editions. We then
simple averaged those rates to calculate an annual short-term interest
rate for Turkey.\5\ We then compared the nominal average interest rate
with the interest rates that the company paid against the YTL-
denominated Foreign Trade Companies Short-Term Export Credits and Pre-
Export Credits. See Memorandum to the File concerning the Calculations
for the Preliminary Results of the 2005 Review of the Countervailing
Duty Order on Certain Welded Carbon Steel Standard Pipe from Turkey, at
2 (November 17, 2006).
[[Page 68552]]
This methodology is consistent with the Department's practice. See 2004
Pipe Memorandum, at ``Benchmark Interest Rates'' under ``Subsidies
Valuation Information'' and ``Comment 1: Benchmark Interest Rate for
Turkish Lira Loans.''
---------------------------------------------------------------------------
\5\ The short-term TL interest rates sourced from The Economist
do not include commissions or fees paid to commercial banks, i.e.,
they are nominal rates. See Carbon and Certain Alloy Steel Wire Rod
from Turkey; Final Negative Countervailing Duty Determination, 67 FR
55815 (August 30, 2002) (``Wire Rod''), and accompanying Issues and
Decision Memorandum, at ``Benchmark Interest Rates'' (``Wire Rod
Memorandum'').
---------------------------------------------------------------------------
Analysis of Programs
I. Programs Preliminarily Determined To Be Countervailable
A. Deduction From Taxable Income for Export Revenue
Addendum 4108 of Article 40 of the Income Tax Law allows companies
that operate internationally to claim, directly on their corporate
income tax returns, a tax deduction equal to 0.5 percent of the foreign
exchange revenue earned from exports and other international
activities.\6\ The income tax deduction for export earnings may either
be taken as a lump sum or be used to cover certain undocumented
expenses, which were incurred through international activities, that
would otherwise be non-deductible for tax purposes (e.g., expenses paid
in cash, such as for lodging, gasoline, and food).
---------------------------------------------------------------------------
\6\ These actions include construction, repair, installation,
and transportation activities that occur abroad.
---------------------------------------------------------------------------
Consistent with the 2004 Pipe Final, we preliminarily find that
this tax deduction is a countervailable subsidy. See 2004 Pipe
Memorandum, at ``Deduction from Taxable Income for Export Revenue''
under ``Programs Determined To Be Countervailable.'' The deduction
provides a financial contribution within the meaning of section
771(5)(D)(ii) of the Tariff Act of 1930, as amended (``the Act''),
because it represents revenue forgone by the GOT. The deduction
provides a benefit in the amount of the tax savings to the company
pursuant to section 771(5)(E) of the Act. It is specific under section
771(5A)(B) of the Act because its receipt is contingent upon export
performance. In this review, no new information or evidence of changed
circumstances has been submitted to warrant reconsideration of the
Department's prior findings.
During the review period, BMB, MB,\7\ and Istikbal filed separate
corporate income tax returns for tax year 2004. Each company utilized
the deduction for export earnings with respect to its 2004 income
taxes.
---------------------------------------------------------------------------
\7\ See ``Company History'' section, supra, for MB's company
information.
---------------------------------------------------------------------------
The Department typically treats a tax deduction as a recurring
benefit in accordance with 19 CFR 351.524(c)(1). To calculate the
countervailable subsidy rate for this program, we calculated the tax
savings realized by BMB, MB, and Istikbal in 2005, as a result of the
deduction for export earnings. We then divided that benefit by
Borusan's total export sales for 2005. On this basis, we preliminarily
determine the net countervailable subsidy for this program to be 0.21
percent ad valorem.
B. Foreign Trade Companies Short-Term Export Credits
The Foreign Trade Company (``FTC'') loan program was implemented to
assist large export trading companies with their export financing
needs. This program is specifically designed to benefit Foreign Trade
Corporate Companies (``FTCC'') and Sectoral Foreign Trade Companies
(``SFTC'').\8\ An FTCC is a company whose export performance was at
least US$75 million in the previous year. For eligible companies, the
Export Bank will provide short-term export credits based on their past
export performance. Under this credit program, the Export Bank extends
short-term export credits directly to exporters in Turkish Lira and
foreign currency (``FX''), up to 100 percent of the FOB export
commitment. The program's interest rates are set by the Export Bank and
the maturity of the loans is usually 180 days for YTL-denominated loans
and 360 days for FX-denominated loans. To qualify for a FTC loan, in
addition to submitting the necessary application documents, a company
must provide a bank letter of guarantee, equivalent to the loan's
principal and interest amount.
---------------------------------------------------------------------------
\8\ An SFTC is a grouping of small- and medium-sized companies
that operate together in a similar sector.
---------------------------------------------------------------------------
Istikbal, whose FTCC status was renewed in March 2005, was the only
Borusan company to receive FTC credits during the POR. Istikbal paid
interest against FTC loans denominated in Turkish Lira.
Consistent with previous determinations, we preliminarily find that
these loans confer a countervailable subsidy within the meaning of
section 771(5) of the Act. See, e.g., 2004 Pipe Memorandum at ``Foreign
Trade Companies Short-Term Export Credits'' under ``Programs Determined
To Be Countervailable.'' The loans constitute a financial contribution
in the form of a direct transfer of funds from the GOT, under section
771(5)(D)(i) of the Act. A benefit exists under section 771(5)(E)(ii)
of the Act in the amount of the difference between the payments of
interest that Istikbal made on its loans during the POR and the
payments the company would have made on comparable commercial loans.
The program is also specific in accordance with section 771(5A)(B) of
the Act because receipt of the loans is contingent upon export
performance. Further, the FTC loans are not tied to a particular export
destination. Therefore, we have treated this program as an untied
export loan program which renders it countervailable regardless of
whether the loans were used for exports to the United States. See id.
Pursuant to 19 CFR 351.505(a)(1), we have calculated the benefit as
the difference between the payments of interest that Istikbal made on
its FTC loans during the POR and the payments the company would have
made on comparable commercial loans.\9\ In accordance with section
771(6)(A) of the Act, we subtracted from the benefit amount the fees
which Istikbal paid to commercial banks for the required letters of
guarantee. We then divided the resulting benefit by Borusan's total
export value for 2005. On this basis, we preliminarily find that the
net countervailable subsidy for this program is 0.01 percent ad
valorem.
---------------------------------------------------------------------------
\9\ See ``Benchmark Interest Rates,'' supra, (discussing the
benchmark rates used in these preliminary results).
---------------------------------------------------------------------------
C. Pre-Export Credits
This program is similar to the FTC credit program described above;
however, companies classified as either FTC or SFTC are not eligible
for pre-export loans. Under the pre-export credit program, a company's
past export performance is considered in evaluating a company's
eligibility and establishing the company's credit limit. Like FTC
loans, the Export Bank directly extends to companies pre-export loans,
which are denominated in either Turkish Lira or foreign currency and
have a maximum maturity of 360 and 540 days, respectively.\10\ To
quality for a pre-export loan, in addition to submitting the necessary
application documents, a company must provide a bank letter of
guarantee, equivalent to the loan's principal and interest amount.
During the POR, BMB paid interest against pre-export loans that were
denominated in both Turkish Lira and U.S. dollars.
---------------------------------------------------------------------------
\10\ The Export Bank also sets the interest rates for this
export loan program.
---------------------------------------------------------------------------
Consistent with previous determinations, we preliminarily find that
these loans confer a countervailable subsidy within the meaning of
section 771(5) of the Act. See, e.g., 2004 Pipe Memorandum at ``Pre-
Export Credits'' under ``Programs Determined To Be Countervailable.''
The loans constitute a financial contribution in the form of a direct
transfer of funds from the GOT, under section 771(5)(D)(i) of the Act.
A
[[Page 68553]]
benefit exists under section 771(5)(E)(ii) of the Act in the amount of
the difference between the payments of interest that BMB made on its
loans during the POR and the payments the company would have made on
comparable commercial loans. The program is also specific in accordance
with section 771(5A)(B) of the Act because receipt of the loans is
contingent upon export performance.
Further, like the FTC loans, these loans are not tied to a
particular export destination. Therefore, we have treated this program
as an untied export loan program rendering it countervailable
regardless of whether the loans were used for exports to the United
States.
Pursuant to 19 CFR 351.505(a)(1), we have calculated the benefit as
the difference between the payments of interest that BMB made on its
pre-export loans during the POR and the payments the company would have
made on comparable commercial loans.\11\ In accordance with section
771(6)(A) of the Act, we subtracted from the benefit amount the fees
which BMB paid to commercial banks for the required letters of
guarantee. We then divided the resulting benefit by Borusan's total
export value for 2005. On this basis, we preliminarily find that the
net countervailable subsidy for this program is 0.01 percent ad
valorem.
---------------------------------------------------------------------------
\11\ See ``Benchmark Interest Rates,'' supra (discussing the
benchmark rates used in these preliminary results).
---------------------------------------------------------------------------
II. Program Preliminary Determined To Not Confer Countervailable
Benefits
A. Inward Processing Certificate Exemption Under the Inward Processing
Certificate (``IPC'') \12\ program, companies are exempt from paying
customs duties and value added taxes (``VAT'') on raw material imports
to be used in the production of exported goods. Companies may choose
whether to be exempted from the applicable duties and taxes or have
them refunded upon export. Under the exemption system, companies
provide a letter of guarantee that is returned to the companies upon
fulfillment of the committed export.
---------------------------------------------------------------------------
\12\ The IPC program is governed by the following Turkish
provisions: Customs Code No. 4458 (Articles 80, 108, 111, 115, and
121), IPC Council of Ministers' Decree No. 2005/8391, and Communique
of IPR No. Export 2005/1.
---------------------------------------------------------------------------
To participate in this program, a company must hold an IPC, which
lists the amount of raw materials to be imported and the amount of
product to be exported. There are two types of IPCs: A D-1 certificate
and D-3 certificate. During the POR, Borusan utilized D-1 certificates
associated with imports of raw materials for use in the production of
carbon steel pipe and tube. Borusan did not utilize any D-3
certificates during the POR.\13\
---------------------------------------------------------------------------
\13\ For more information on D-3 certificates, see 2004 Pipe
Memorandum, at ``Inward Processing Certificate Exemption'' under
``Programs Determined To Not Confer Countervailable Benefits,'' and
GOT's Questionnaire Response, at 45-48 (July 14, 2006).
---------------------------------------------------------------------------
An IPC specifies the maximum quantity of inputs that can be
imported under the program. Under the IPC program, the value of
imported inputs may not exceed the value of the exported products.
Input/output usage rates listed on an IPC are set by the GOT working in
conjunction with Turkey's Exporter Associations, which are quasi-
governmental organizations, whose leadership are subject to GOT
approval. The input/output usage rates vary by product and industry and
are determined using data from capacity reports submitted by companies
that apply for IPCs. The input/output usage rates are subject to
periodic review and verification by the GOT. The GOT uses the input/
output usage rates to ensure that a company's expected export
quantities are sufficient to cover the quantity of inputs imported
duty-free under the program.\14\
---------------------------------------------------------------------------
\14\ For more information on how waste/usage rates are set by
the GOT, see 2004 Pipe Memorandum, at ``Inward Processing
Certificate Exemption'' under ``Programs Determined To Not Confer
Countervailable Benefits'' and GOT's Questionnaire Response, at
Exhibit 5, pages 10-11 (July 14, 2006).
---------------------------------------------------------------------------
Pursuant to 19 CFR 351.519(a)(1)(ii), a benefit exists to the
extent that the exemption extends to inputs that are not consumed in
the production of the exported product, making normal allowances for
waste, or if the exemption covers charges other than imported charges
that are imposed on the input. In regard to the VAT exemption granted
under this program, pursuant to 19 CFR 351.517(a), in the case of the
exemption upon export of indirect taxes, a benefit exists to the extent
that the Department determines that the amount exempted exceeds the
amount levied with respect to the production and distribution of like
products when sold for domestic consumption.
In the 2004 Pipe Final, the Department found that, in accordance
with 19 CFR 351.519(a)(4)(i), the GOT has a system in place to confirm
which inputs are consumed in the production of the exported product and
in what amounts, and that the system is reasonable for the purposes
intended. See 2004 Pipe Memorandum, at ``Inward Processing Certificate
Exemption'' under ``Programs Determined To Not Confer Countervailable
Benefits.'' During the POR, under D-1 certificates, Borusan received
duty and VAT exemptions on certain imported inputs used in the
production of steel pipes and tubes and not duty or VAT refunds. There
is no evidence on the record of this review that indicates the amount
of exempted inputs imported under the program were excessive or that
Borusan used the imported inputs for any other product besides those
exported.
Therefore, consistent with the 2004 Pipe Final, we preliminarily
determine that the tax and duty exemptions, which Borusan received on
imported inputs under D-1 certificates of the IPC program, did not
confer countervailable benefits as Borusan consumed the imported inputs
in the production of the exported product, making normal allowance for
waste. We further preliminarily find that the VAT exemption did not
confer countervailable benefits on Borusan because the exemption does
not exceed the amount levied with respect to the production and
distribution of like products when sold for domestic consumption.
Further, because Borusan did not import any goods under a D-3
certificate during the POR, we preliminarily determine that this aspect
of the IPC program was not used.
III. Programs Preliminarily Determined To Not Be Used
We examined the following programs and preliminarily determine that
Borusan did not apply for or receive benefits under these programs
during the POR:
A. VAT Support Program (Incentive Premium on Domestically Obtained
Goods) \15\.
---------------------------------------------------------------------------
\15\ Although we found this program to be terminated in Wire
Rod, residual payments for purchases made prior to the program's
termination were permitted. See Wire Rod Memorandum, at ``VAT
Support Program'' under ``Programs Determined To Be
Countervailable.''
---------------------------------------------------------------------------
B. Pre-Shipment Export Credits.
C. Post-Shipment Export Loans.
D. Pre-Shipment Rediscount Loans.
E. Subsidized Turkish Lira Credit Facilities.
F. Subsidized Credit for Proportion of Fixed Expenditures.
G. Regional Subsidies.
Preliminary Results of Review
In accordance with 19 CFR 351.221(b)(4)(i), we have calculated a
subsidy rate for Borusan for the period January 1, 2005, through
December 31, 2005. We preliminarily determine that the total net
countervailable subsidy rate is 0.23 percent ad valorem, which
[[Page 68554]]
is de minimis, pursuant to 19 CFR 351.106(c).
The Department intends to issue assessment instructions to U.S.
Customs and Border Protection (``CBP'') 15 days after the date of
publication of the final results of this review. If the final results
remain the same as these preliminary results, the Department will
instruct CBP to liquidate without regard to countervailing duties all
shipments of subject merchandise produced by Borusan entered, or
withdrawn from warehouse, for consumption from January 1, 2005, through
December 31, 2005. The Department will also instruct CBP not to collect
cash deposits of estimated countervailing duties on all shipments of
the subject merchandise produced by Borusan, entered, or withdrawn from
warehouse, for consumption on or after the date of publication of the
final results of this review.
We will also instruct CBP to continue to collect cash deposits for
non-reviewed companies at the most recent company-specific or country-
wide rate applicable to the company. Accordingly, the cash deposit
rates that will be applied to companies covered by this order, but not
examined in this review, are those established in the most recently
completed administrative proceeding for each company. These rates shall
apply to all non-reviewed companies until a review of a company
assigned these rates is requested.
Public Comment
Pursuant to 19 CFR 351.224(b), the Department will disclose to
parties to the proceeding any calculations performed in connection with
these preliminary results within five days after the date of the public
announcement of this notice. Pursuant to 19 CFR 351.309, interested
parties may submit written comments in response to these preliminary
results. Unless otherwise indicated by the Department, case briefs must
be submitted within 30 days after the date of publication of this
notice. Rebuttal briefs, limited to arguments raised in case briefs,
must be submitted no later than five days after the time limit for
filing case briefs, unless otherwise specified by the Department.
Parties who submit argument in this proceeding are requested to submit
with the argument: (1) A statement of the issues, and (2) a brief
summary of the argument. Parties submitting case and/or rebuttal briefs
are requested to provide the Department copies of the public version on
disk. Case and rebuttal briefs must be served on interested parties in
accordance with 19 CFR 351.303(f). Also, pursuant to 19 CFR 351.310,
within 30 days of the date of publication of this notice, interested
parties may request a public hearing on arguments to be raised in the
case and rebuttal briefs. Unless the Secretary specifies otherwise, the
hearing, if requested, will be held two days after the date for
submission of rebuttal briefs, that is, 37 days after the date of
publication of these preliminary results.
Representatives of parties to the proceeding may request disclosure
of proprietary information under administrative protective order no
later than 10 days after the representative's client or employer
becomes a party to the proceeding, but in no event later than the date
the case briefs, under 19 CFR 351.309(c)(ii), are due. See 19 CFR
351.305(b)(3). The Department will publish the final results of this
administrative review, including the results of its analysis of
arguments made in any case or rebuttal briefs.
This administrative review is issued and published in accordance
with section 751(a)(1), 777(i)(1) of the Act.
Dated: November 17, 2006.
Stephen J. Claeys,
Acting Assistant Secretary for Import Administration.
[FR Doc. E6-20008 Filed 11-24-06; 8:45 am]
BILLING CODE 3510-DS-P
