Certain Welded Carbon Steel Pipe and Tube from Turkey: Notice of Preliminary Results of Antidumping Duty Administrative Review, 33262-33268 [2010-14106]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 75, Number 112 (Friday, June 11, 2010)]
[Notices]
[Pages 33262-33268]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-14106]


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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, 74 FR 30052 (June 24, 2009) (``Review 
Initiation''). This review covers the Borusan Group\1\ (collectively 
``Borusan''), Tubeco Pipe and Steel Corporation, Toscelik,\2\ Erbosan, 
Erciyas Boru Sanayi ve Ticaret A.S. (``Erbosan''),

[[Page 33263]]

and the Yucel Group companies.\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 Yucel Group companies reported that they had no shipments 
to the United States during the POR. The preliminary results are listed 
below in the section titled ``Preliminary Results of Review.''

EFFECTIVE DATE:  June 11, 2010.
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    \1\ 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.
    \2\ Toscelik Profil ve Sac Endustrisi A.S., Toscelik Metal 
Ticaret A.S., Tosyali Dis Ticaret A.S. (collectively ``Toscelik'').
    \3\ Cayirova Boru Sanayi ve Ticaret A.S., Yucel Boru ve Profil 
Endustrisi A.S., and Yucelboru Ihracat Ithalat ve Pazarlama A.S. 
(collectively ``Yucel Group Companies'').

FOR FURTHER INFORMATION CONTACT: Joy Zhang or Christopher Hargett, at 
(202) 482-1168 or (202) 482-4161, respectively; AD/CVD Operations, 
Office 3, Import Administration, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, 
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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 1, 2009, 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, 74 FR 
20278 (May 1, 2009). On June 1, 2009, in accordance with 19 CFR 
351.213(b), domestic interested parties, Wheatland Tube Company and 
Allied Tube and Conduit Corporation, requested reviews of Borusan, 
Toscelik, Erbosan, and the Yucel Group companies. On June 1, 2009, 
Borusan also requested a review.
    On June 24, 2009, the Department published a notice of initiation 
of administrative review of the antidumping duty order on welded pipe 
and tube from Turkey, covering the period May 1, 2008, through April 
30, 2009. See Review Initiation.
    On July 28, 2009, due to the significant number of requests 
received and the Department's resource constraints at the time of 
initiation of the instant review, the Department informed known 
interested parties of its intent to limit the number of companies 
examined in the current review. See Memo to Melissa Skinner, through 
James Terpstra, from Dennis McClure, ``Antidumping Duty Administrative 
Review of Certain Welded Carbon Steel Pipe and Tube from Turkey: 
Selection of Respondents for Individual Review,'' dated July 28, 2009. 
In accordance with section 777A(c)(2)(B), we selected Borusan and 
Toscelik.
    On July 29, 2009, 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, 2009. We issued supplemental section A, B, C, and D 
questionnaires, to which Borusan and Toscelik responded during November 
and December, 2009, and January 2010.
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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 25, 2010, the Department extended the time period for 
issuing the preliminary results of the administrative review from 
January 31, 2010, to May 31, 2010. See Certain Welded Carbon Steel Pipe 
and Tube from Turkey: Notice of Extension of Time Limits for 
Preliminary Results of Antidumping Duty Administrative Review, 75 FR 
3896 (January 25, 2010). Further, as explained in the memorandum from 
the Deputy Assistant Secretary for Import Administration, the 
Department has exercised its discretion to toll deadlines for the 
duration of the closure of the Federal Government from February 5, 
through February 12, 2010. Thus, all deadlines in this segment of the 
proceeding have been extended by seven days. See Memorandum to the 
Record regarding ``Tolling of Administrative Deadlines As a Result of 
the Government Closure During the Recent Snowstorm,'' dated February 
12, 2010. Because of this extension, the preliminary results for this 
segment of the proceeding are now due June 7, 2010.

Period of Review

    The POR covered by this review is May 1, 2008, through April 30, 
2009.

Scope of the Order

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

The Yucel Group Companies

    On June 25, 2009, the Yucel Group companies submitted timely-filed 
certifications indicating that they had no shipments of subject 
merchandise to the United States during the POR. We have not received 
any comments on the Yucel Group companies' submission. We confirmed 
that Yucel Group companies' claim of no shipments by issuing a ``No 
Shipment Inquiry'' to CBP and by reviewing electronic CBP data. See 
Memo to Melissa Skinner, through James Terpstra, from Joy Zhang and 
Christopher Hargett, ``Welded Carbon Steel Pipe and Tube from Turkey 
Period of Review: May 1, 2008, through April 30, 2009: No Shipment 
Analysis for Yucel Group Companies,'' dated April 30, 2010.
    With regard to the Yucel Group companies' claim of no shipments, 
our practice since implementation of the 1997 regulations concerning 
no-shipment respondents has been to rescind the administrative review 
if the respondent certifies that it had no shipments and we have 
confirmed

[[Page 33264]]

through our examination of CBP data that there were no shipments of 
subject merchandise during the POR. See Antidumping Duties; 
Countervailing Duties, 62 FR 27296, 27393 (May 19, 1997), and Oil 
Country Tubular Goods from Japan: Preliminary Results of Antidumping 
Duty Administrative Review and Partial Rescission of Review, 70 FR 
53161, 53162 (September 7, 2005), unchanged in Oil Country Tubular 
Goods from Japan: Final Results and Partial Rescission of Antidumping 
Duty Administrative Review, 71 FR 95 (January 3, 2006). As a result, in 
such circumstances, we normally instruct CBP to liquidate any entries 
from the no-shipment company at the deposit rate in effect on the date 
of entry.
    In our May 6, 2003, ``automatic assessment'' clarification, we 
explained that, where respondents in an administrative review 
demonstrate that they had no knowledge of sales through resellers to 
the United States, we would instruct CBP to liquidate such entries at 
the all-others rate applicable to the proceeding. See Antidumping and 
Countervailing Duty Proceedings: Assessment of Antidumping Duties, 68 
FR 23954 (May 6, 2003).
    Based on the Yucel Group companies' assertion of no shipments and 
confirmation of that claim by CBP data, we preliminarily determine that 
the Yucel Group companies had no sales to the United States during the 
POR.
    Because ``as entered'' liquidation instructions do not alleviate 
the concerns which the May 2003 clarification was intended to address, 
we find it appropriate in this case to instruct CBP to liquidate any 
existing entries of merchandise produced by the Yucel Group companies 
and exported by other parties at the all-others rate should we continue 
to find at the time of our final results that the Yucel Group companies 
had no shipments of subject merchandise from the Russian Federation. 
See, e.g., Certain Frozen Warmwater Shrimp from India: Partial 
Rescission of Antidumping Duty Administrative Review, 73 FR 77610, 
77612 (December 19, 2008). In addition, the Department finds that it is 
more consistent with the May 2003 clarification not to rescind the 
review in part in these circumstances but, rather, to complete the 
review with respect to the Yucel Group companies and issue appropriate 
instructions to CBP based on the final results of the review. See the 
Assessment Rates section of this notice below.

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 starting price, the packed, delivered 
price to unaffiliated purchasers in the United States. In accordance 
with section 772(c)(2)(A) of the Act, we made the following deductions 
from the starting price (gross unit price), where appropriate: foreign 
inland freight from the mill to port, foreign brokerage and handling, 
international freight, marine insurance, U.S. brokerage, U.S. duty, and 
other related movement charges.
    In addition, Borusan reported an amount for duty drawback which 
represents the amount of duties on imported raw materials associated 
with a particular shipment of subject merchandise to the United States 
that is exempted upon export. Borusan requested that we add the amount 
to the starting price. See page C-34 of Borusan's August 29, 2009, 
original response. To determine if a duty drawback adjustment is 
warranted, the Department has employed a two-prong test which 
determines whether: (1) the rebate and import duties are dependent upon 
one another, or in the context of an exemption from import duties, if 
the exemption is linked to the exportation of the subject merchandise; 
and (2) the respondent has demonstrated that there are sufficient 
imports of the raw material to account for the duty drawback on the 
exports of the subject merchandise. See Allied Tube & 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. Additionally, Borusan has 
provided evidence that the imports of hot- rolled coil are sufficient 
to account for the duty drawback claimed on the export of subject 
merchandise. At Borusan's sales verification, we reviewed and obtained 
copies of documents that demonstrated that Borusan has passed the 
Department's two-prong test: 1) The Internal Processing Permit 
Certificate which shows all imports covered by the program (which are 
sufficient to cover the volume of exports), 2) The Letter of Export 
Commitment which shows the actual exports covered by the program, and 
3) The Duty Drawback Certificate, which demonstrates that the imports, 
exports, and drawback are all linked under the program. See Exhibit C-8 
of Borusan's August 29, 2009, response, and Sales Verification 
Report\5\ at page 15. 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 Notice 
of Preliminary Results of Antidumping Duty Administrative Review: 
Certain Welded Carbon Steel Pipe and Tube From Turkey, 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'').
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    \5\ Memorandum to File:``Verification of the Sales Response of 
the Borusan Group in the Antidumping Review of Certain Welded Carbon 
Steel Standard Pipe from Turkey'' from Christopher Hargett and Joy 
Zhang, analysts, through James Terpstra, Program Manager, and 
Melissa Skinner, Office Director, dated April 19, 2010 (``Sales 
Verification Report'').

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[[Page 33265]]

Normal Value

A. Selection of Comparison Market

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

B. Cost Reporting Period

    The Department's normal practice is to calculate an annual 
weighted-average cost for the entire period of investigation or period 
of review. See, e.g., Notice of Final Results of Antidumping Duty 
Administrative Review: Certain Pasta from Italy, 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). This methodology is 
predictable and generally applicable in all proceedings. However, the 
Department recognizes that possible distortions may result if our 
normal annual weighted-average cost method is used during a period of 
significant cost changes.
    In determining whether to deviate from our normal methodology of 
calculating an annual weighted average cost, the Department evaluates 
the case-specific record evidence using two primary factors: (1) the 
change in the cost of manufacturing (``COM'') recognized by the 
respondent during the POI must be significant; and (2) the record 
evidence must indicate that sales during the shorter averaging periods 
reasonably link to the cost of production (``COP'') or constructed 
value (``CV'') during the same shorter averaging periods. See, e.g., 
Stainless Steel Plate in Coils From Belgium: Final Results of 
Administrative Review, 73 FR 75398, 75399 (December 11, 2008) and 
Stainless Steel Sheet and Strip in Coils from Mexico: Final Results of 
Administrative Review, 75 FR 6627 (February 10, 2010).
a. Significance of Cost Changes
    Record evidence shows that both Borusan and Toscelik experienced 
significant changes in the total COM during the POR and that the 
changes in COM are primarily attributable to the price volatility for 
hot-rolled coils, the main input consumed in the production of the 
merchandise under consideration. See Memorandum to Neal M. Halper, 
``Cost of Production and Constructed Value Calculation Adjustments for 
the Preliminary Results Borusan,'' dated June 7, 2010 (``Borusan 
Preliminary Cost Memorandum''), and Memorandum to Neal M. Halper, 
``Cost of Production and Constructed Value Calculation Adjustments for 
the Preliminary Determination Toscelik'' dated June 7, 2010 (``Toscelik 
Preliminary Cost Memorandum'').
    The record indicates that hot-rolled prices changed dramatically 
throughout the POR. Id. Specifically, the record data shows that the 
percentage difference between the high and low quarterly costs for 
welded carbon pipe and tube products exceeded 25 percent during the 
POR. Id. As a result, we have determined that for the preliminary 
results the changes in COM for Borusan and Toscelik are significant.
b. Linkage between Cost and Sales Information
    The Department evaluates whether there is evidence of linkage 
between the cost changes and the sales prices for the given POI/POR. 
Our definition of linkage does not require direct traceability between 
specific sales and their specific production cost, but rather relies on 
whether there are correlative elements which would indicate a 
reasonable correlation between the underlying costs and the final sales 
prices levied by the company. These correlative elements may be 
measured and defined in a number of ways depending on the associated 
industry, and the overall production and sales processes. See, e.g., 
Stainless Steel Bar from India: Preliminary Results of Antidumping Duty 
Administrative Review 75 FR 12204 (March 15, 2010).
    Based on record evidence we find that the cost changes and sales 
prices for Borusan and Toscelik appear to be reasonably correlated. 
Because the data on which we base our analysis contains business 
proprietary information, a detailed analysis is included in Borusan 
Preliminary Cost Memorandum and Toscelik Preliminary Cost Memorandum.
    In light of the two factors discussed above, we preliminarily 
determined that it is appropriate to rely on a shorter cost periods 
with respect to Borusan and Toscelik. Thus, we used quarterly indexed 
annual average raw material costs and annual weighted-average 
fabrication costs in the COP and CV calculations. See Borusan 
Preliminary Cost Memorandum and Toscelik Preliminary Cost Memorandum.

C. Cost of Production Analysis

    Because the Department disregarded sales below the COP in the last 
completed review of Borusan and Toscelik, we have reasonable grounds to 
believe or suspect that sales of the foreign like product under 
consideration for the determination of NV in this review may have been 
made at prices below the COP as provided by section 773(b)(2)(A)(ii) of 
the Act. Therefore, pursuant to section 773(b)(1) of the Act, we 
initiated a COP investigation of sales by Borusan and Toscelik in the 
home market. See 2007-08 Administrative Review.
1. Calculation of Cost of Production
    Before making any comparisons to NV, we conducted a quarterly COP 
analysis of Borusan and Toscelik's sales pursuant to section 773(b)(3) 
of the Act to determine whether Borusan and Toscelik's comparison 
market sales were made at prices below the COP. We calculated the COP 
based on the sum of the cost of materials and fabrication for the 
foreign like product, plus amounts for SG&A expenses and packing, in 
accordance with section 773(b)(3) of the Act.
    The Department relied on the COP data submitted by Borusan and 
Toscelik and their supplemental section D questionnaire responses for 
the COP calculation, except for the following instances:
    Borusan:
    a) We excluded packing costs from Borusan's the cost of goods sold 
(``COGS'') in the financial expense rate ratio calculation.
    b) We adjusted Borusan's general administrative expense (``G&A'') 
calculation by excluding an amount for doubtful accounts and included 
this amount in the calculations of indirect selling expenses.
    For additional details, see Borusan Preliminary Cost Memorandum. No 
adjustments were made to Toscelik's reported cost data.

[[Page 33266]]

2. Test of Comparison Market Sales Prices
    As required under section 773(b)(2) of the Act, we compared the 
quarterly weighted average COP to the per-unit price of the comparison 
market sales of the foreign like product to determine whether these 
sales had been made at prices below the COP within an extended period 
of time in substantial quantities, and whether such prices were 
sufficient to permit the recovery of all costs within a reasonable 
period of time. We determined the net comparison market prices for the 
below cost test by subtracting from the gross unit price any applicable 
movement charges, discounts, rebates, direct and indirect selling 
expenses (also subtracted from the COP), and packing expenses.
3. Results of the COP Test
    Pursuant to section 773(b)(2)(C)(i) of the Act, where less than 20 
percent of sales of a given product were at prices less than the COP, 
we did not disregard any below-cost sales of that product because we 
determined that the below-cost sales were not made in ``substantial 
quantities.'' Where 20 percent or more of the respondent's home market 
sales of a given model 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 prices to the indexed POR weighted-average COPs, 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.
    Therefore, for Borusan and Toscelik, we disregarded below-cost 
sales of a given product of 20 percent or more and used the remaining 
sales as the basis for determining NV, in accordance with section 
773(b)(1) of the Act. See Borusan and Toscelik's calculation memos.

D. 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 ordinary course of trade, 
of either an identical or a similar foreign like product, based on 
matching characteristics. We calculated NV based on free on board 
(``FOB'') mill or delivered prices to unaffiliated customers, or prices 
to affiliated customers which were determined to be at arm's length 
(see discussion below regarding these sales). We made deductions, where 
appropriate, from the starting price for billing adjustments, 
discounts, rebates, and inland freight. Additionally, we added interest 
revenue. In accordance with section 773(a)(6) of the Act, we deducted 
home market packing costs and added U.S. packing costs.
    In accordance with section 773(a)(6)(C)(iii) of the Act, we 
adjusted for differences in the circumstances of sale. These 
circumstances included differences in imputed credit expenses and other 
direct selling expenses, such as the expense related to bank charges 
and factoring. We also made adjustments, where appropriate, for 
physical differences in the merchandise in accordance with section 
773(a)(6)(C)(ii) of the Act.

E. Calculation of Normal Value Based on Constructed Value (``CV'')

    When we could not determine the NV based on comparison market sales 
because there were no contemporaneous sales of a comparable product, we 
compared the EP to CV. In accordance with section 773(e) of the Act, we 
calculated CV based on the sum of the COM of the product sold in the 
United States, plus amounts for SG&A expenses, profit, and U.S. packing 
costs. In accordance with section 773(e)(2)(A) of the Act, we based 
SG&A expenses and profit on the amounts incurred by Borusan in 
connection with the production and sale of the foreign like product in 
the comparison market.
    For price to CV comparisons, we made adjustments to CV for 
circumstances of sale (``COS'') differences, in accordance with section 
773(a)(8) of the Act and 19 CFR 351.410. We made COS adjustments by 
deducting direct selling expenses incurred on comparison market sales 
and adding U.S. direct selling expenses.

F. Calculation of Arm's-Length Sales

    We included in our analysis Borusan 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 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 price to that affiliated party was, 
on average, within a range of 98 to 102 percent of the price of the 
same or comparable merchandise sold to the unaffiliated parties, we 
determined that the sales made to the affiliated party were at arm's-
length. See 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). 
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 Antidumping 
Proceedings: Affiliated Party Sales in the Ordinary Course of Trade, 67 
FR 69186, 69187 (November 15, 2002).

Level of Trade

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

[[Page 33267]]

    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. In our analysis, we 
grouped the reported selling functions into the following sales 
function category: 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-18 and A-21 
of Borusan's September 25, 2009, response.
    We found that Borusan's U.S. sales were also made at only one LOT. 
Borusan reports one channel of distribution, and sales are negotiated 
on an order-by-order basis with an unaffiliated trading company. See 
page A-17 of Borusan's September 25, 2009, response.
    We then compared Borusan's home market LOT and with the U.S. LOT. 
We note the selling functions do not differ for the activities falling 
under inventory maintenance (i.e., forward inventory maintenance and 
sales from warehouse), quality assurance/warranty service (i.e., 
provide warranty service), and freight and delivery (i.e., act as agent 
or coordinate production/delivery for customer with mill and coordinate 
freight and delivery arrangement). Furthermore, we note that the 
selling functions grouped under sales process and marketing, such as 
customer advice/product information, discounts, advertising, and 
rebates only differ somewhat between the home market LOT and U.S. LOT. 
See page A-9 of Borusan's September 25, 2009, response. Therefore, we 
compared all U.S. sales to an identical home market LOT and did not 
find it necessary to make an LOT adjustment.
    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 4, 2009, at page 14. 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, (4) Sales/Marketing Support, and (5) Warranty Service. Id. 
We found that Toscelik's sales to the United States were made to one 
level of trade. 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 
were comparable, and that a LOT adjustment is not appropriate for 
Toscelik in this case.

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 a fluctuation 
existed during the POR in this case.

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-Average
                Manufacturer/Exporter                  Margin (percent)
------------------------------------------------------------------------
Borusan.............................................                5.44
Toscelik............................................                0.00
Yucel Group\6\......................................                3.28
All Others..........................................               14.74
------------------------------------------------------------------------
\6\ No shipments or sales subject to this review. The firm has an
  individual rate from the last segment of the proceeding (the 2004-2005
  review) in which the firm had shipments or sales.

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

Assessment

    The Department will determine, and CBP shall assess, antidumping 
duties on all appropriate entries, pursuant to section 751(a)(1)(B) of 
the Act and 19 CFR 351.212(b). The Department calculated importer-
specific duty assessment rates on the basis of the ratio of the total 
antidumping duties calculated for the examined sales to the total 
entered value of the examined sales for that importer. Where the 
assessment rate is above de minimis, we will instruct CBP to assess 
duties on all entries of subject merchandise by that importer. The 
Department intends to issue assessment instructions to CBP 15 days 
after the date of publication of the final results of review.
    The Department clarified its ``automatic assessment'' regulation on 
May 6, 2003. See Antidumping and Countervailing Duty Proceedings: 
Assessment of Antidumping Duties, 68

[[Page 33268]]

FR 23954 (May 6, 2003). This clarification will apply to entries of 
subject merchandise during the period of review produced by companies 
included in these preliminary results of review for which the reviewed 
companies did not know their merchandise was destined for the United 
States. In such instances, we will instruct CBP to liquidate unreviewed 
entries at the all-others rate if there is no rate for the intermediate 
company(ies) involved in the transaction. For a full discussion of this 
clarification, see Antidumping and Countervailing Duty Proceedings: 
Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003).

Cash Deposit Requirements

    The following cash deposit rates will be effective upon publication 
of the final results of this administrative review for all shipments of 
welded pipe and tube from Turkey entered, or withdrawn from warehouse, 
for consumption on or after the publication date, as provided by 
section 751(a)(1) of the Act: (1) the cash deposit rate for the company 
listed above will be the rate established in the final results of this 
review; (2) for previously reviewed or investigated companies not 
listed above, the cash deposit rate will continue to be the company-
specific rate published for the most recent period; (3) if the exporter 
is not a firm covered in this review, a prior review, or the less-than-
fair-value (``LTFV'') investigation, but the manufacturer is, the cash 
deposit rate will be the rate established for the most recent period 
for the manufacturer of the merchandise; and (4) if neither the 
exporter nor the manufacturer is a firm covered in this or any previous 
review or the LTFV investigation conducted by the Department, the cash 
deposit rate will be 14.74 percent, the ``All Others'' rate established 
in the LTFV investigation. These cash deposit requirements, when 
imposed, shall remain in effect until further notice.
    This notice serves as a preliminary reminder to importers of their 
responsibility under section 351.402(f)(2) of the Department's 
regulations to file a certificate regarding the reimbursement of 
antidumping and/or countervailing duties prior to liquidation of the 
relevant entries during this review period. Failure to comply with this 
requirement could result in the Secretary's presumption that 
reimbursement of antidumping and/or countervailing duties occurred and 
the subsequent assessment of double antidumping duties.
    This determination is issued and published in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: June 4, 2010.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2010-14106 Filed 6-10-10; 8:45 am]
BILLING CODE 3510-DS-S