72 FR 86 pgs. 25253-25261 - 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

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Type: NOTICEVolume: 72Number: 86Pages: 25253 - 25261

Docket number: (A-489-807)

FR document: [FR Doc. E7-8583 Filed 5-3-07; 8:45 am]

Agency: Commerce Department

Sub Agency: International Trade Administration

Official PDF Version: PDF Version

DEPARTMENT OF COMMERCE

International Trade Administration

(A-489-807)

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

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

The Department of Commerce (the Department) is conducting an administrative review and a new shipper review of the antidumping duty order on certain steel concrete reinforcing bars (rebar) from Turkey for the period April 1, 2005, through March 31, 2006. We have preliminarily determined that certain of the producers/exporters have made sales below normal value (NV). If these preliminary results are adopted in the final results of these reviews, we will instruct U.S. Customs and Border Protection (CBP) to assess antidumping duties on all appropriate entries.

We also have preliminarily determined to revoke the antidumping duty order with respect to Colakoglu Metalurji A.S. and Colakoglu Dis Ticaret A.S. (collectively "Colakoglu") and Diler Demir Celik Endustrisi ve Ticaret A.S., Yazici Demir Celik Sanayi ve Turizm Ticaret A.S., and Diler Dis Ticaret A.S. (collectively, "Diler").

Interested parties are invited to comment on these preliminary results. We will issue the final results no later than 120 days from the date of publication of this notice.

EFFECTIVE DATE:

May 4, 2007.

FOR FURTHER INFORMATION CONTACT:

Irina Itkin or Alice Gibbons, AD/CVD Operations, Office 2, Import Administration-Room B099, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-0656 or (202) 482-0498, respectively.

SUPPLEMENTARY INFORMATION:

Background

On April 3, 2006, the Department published in the Federal Register a notice of "Opportunity To Request Administrative Review" of the antidumping duty order on rebar from Turkey. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity To Request Administrative Review , 71 FR 16549 (Apr. 3, 2006).

In accordance with 19 CFR 351.213(b)(2), on April 28, 2006, the Department received requests to conduct an administrative review of the antidumping duty order on rebar from Turkey from the following producers/exporters of rebar: Colakoglu; Diler; Ekinciler Demir ve Celik Sanayi A.S. and Ekinciler Dis Ticaret A.S. (collectively "Ekinciler"); Habas Sinai ve Tibbi Gazlar Istihsal Endustrisi A.S. (Habas); and Kaptan Demir Celik Endustrisi ve Ticaret A.S. and Kaptan Metal Dis Ticaret ve Nakliyat A.S. (collectively "Kaptan"). As part of their requests, Colakoglu and Diler also requested that the Department revoke the antidumping order with regard to them, in accordance with 19 CFR 351.222(b). Also, on April 28, 2006, the domestic interested parties, Nucor Corporation, Gerdau AmeriSteel Corporation and Commercial Metals Company, requested an administrative review for Colakoglu, Diler, Ekinciler, and Habas pursuant to section 751(a) of the Tariff Act of 1930, as amended (the Act), and in accordance with 19 CFR 351.213(b)(1). Further, in accordance with 19 CFR 351.214(b), on April 28, 2006, the Department received a request to conduct a new shipper review of the antidumping duty order on rebar from Turkey from Kroman Celik Sanayii A.S. and Yucelboru Ihracat Ithalat ve Pazarlama A.S. (collectively "Kroman").

In May 2006, the Department initiated an administrative review for Colakoglu, Diler, Ekinciler, Habas, and Kaptan and a new shipper review for Kroman, and we issued antidumping duty questionnaires to these companies. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part , 71 FR 30864 (May 31, 2006), and Notice of Initiation of New Shipper Antidumping Duty Review: Certain Steel Concrete Reinforcing Bars from Turkey , 71 FR 30383 (May 26, 2006). On May 22, 2006, Kroman agreed in writing to waive the time limits in order for the Department, pursuant to 19 CFR 351.214(j)(3), to conduct the new shipper review concurrently with the administrative review.

In July 2006, we received responses to sections A through D of the questionnaire from Colakoglu, Diler, Ekinciler, and Habas, and to sections A through C of the questionnaire from Kaptan and Kroman.

Also in July 2006, the domestic interested parties requested that the Department initiate sales-below-cost investigations of Kaptan and Kroman. We initiated sales-below-cost investigations for these companies in August 2006. See the Memoranda to James Maeder, Director, Office 2, AD/CVD Operations, from The Team, entitled, "Petitioners' Allegation of Sales Below the Cost of Production for Kaptan Demir Celik Endustrisi Ve Ticaret A.S. and Kaptan Metal Dis Ticaret Ve Nakliyat A.S." ("Kaptan Cost Allegation Memo") and "Petitioners' Allegation of Sales Below the Cost of Production for Kroman Celik Sanayii A.S. and Yucelboru Ihracat Ithalat ve Pazarlama A.S." ("Kroman Cost Allegation Memo"), dated August 11, 2006.

In August 2006, we issued supplemental sales questionnaires to each of the six respondent companies. We received responses to these questionnaires in August and September 2006.

In September 2006, we conducted an on-site verification of Kroman's sales response in Turkey. Also during this month, we received Kaptan's and Kroman's responses to section D of the questionnaire, and we issued supplemental cost questionnaires to Colakoglu, Diler, Ekinciler, and Habas. We received responses to the supplemental cost questionnaires from Colakoglu, Diler, Ekinciler, and Habas in September and October 2006.

In October 2006, we issued supplemental cost questionnaires to Kaptan and Kroman. Also during this month, the Department postponed the preliminary results of this review until no later than April 30, 2007. See Certain Steel Concrete Reinforcing Bars from Turkey; Notice of Extension of Time Limits for Preliminary Results of Antidumping Duty Administrative Review and New Shipper Review , 71 FR 62418 (Oct. 25, 2006).

We received a supplemental cost questionnaire response from Kaptan and Kroman in November 2006.

From November 2006 through January 2007, we issued additional supplemental questionnaires to each of the respondents. We received responses to these questionnaires from November 2006 through February 2007.

In February 2007, the domestic interested parties alleged that each of the rebar producers involved in both the administrative and new shipper reviews was engaged in anti-competitive practices in the home and U.S. markets during the period of review (POR), as evidenced by a 2005 finding by the Turkish Government Competition Board (Competition Board). As a result, the domestic industry requested that the Department inter alia : 1) reject the responses by the producers in the administrative review and base the preliminary dumping margins on adverse facts available (AFA), and 2) determine that Kroman is affiliated with all Turkish rebar producers named in the Competition Board report and rescind the initiation of the new shipper review for this company. In February and March 2007, we received comments from the respondents on these allegations, as well as reply comments from the domestic industry. For further discussion, see the "Turkish Government Competition Board Finding" section below.

In March 2007, we issued additional supplemental cost questionnaires to Colakoglu and Ekinciler, as well as questionnaires to all interested parties regarding the allegations noted above. We received responses to these questionnaires in April 2007.

Also in April 2007, the domestic interested parties submitted a second report by the Competition Board, which they allege: 1) demonstrates that several of the respondents were engaged in close supplier relationships; and, 2) should be relied upon by the Department to make a finding that the respondents in this proceeding are affiliated.

Scope of the Order

The product covered by this order is all stock deformed steel concrete reinforcing bars sold in straight lengths and coils. This includes all hot-rolled deformed rebar rolled from billet steel, rail steel, axle steel, or low-alloy steel. It excludes (i) plain round rebar, (ii) rebar that a processor has further worked or fabricated, and (iii) all coated rebar. Deformed rebar is currently classifiable under subheadings 7213.10.000 and 7214.20.000 of the Harmonized Tariff Schedule of the United States (HTSUS). The HTSUS subheadings are provided for convenience and customs purposes. The written description of the scope of these proceedings is dispositive.

Period of Review

The POR is April 1, 2005, through March 31, 2006.

Notice of Intent To Revoke, in Part

As noted above, on April 28, 2006, Colakoglu and Diler requested revocation of the antidumping duty order with respect to their sales of subject merchandise, pursuant to 19 CFR 351.222(b). These requests were accompanied by certifications that Colakolgu and Diler have sold the subject merchandise at not less than NV during the current POR and will not sell the merchandise at less than NV in the future. Colakoglu and Diler further certified that they sold subject merchandise to the United States in commercial quantities for a period of at least three consecutive years. Colakoglu and Diler also agreed to immediate reinstatement of the antidumping duty order, as long as any exporter or producer is subject to the order, if the Department concludes that, subsequent to the revocation, they sold the subject merchandise at less than NV.

Pursuant to section 751(d) of the Act, the Department "may revoke, in whole or in part" an antidumping duty order upon completion of a review under section 751(a) of the Act. While Congress has not specified the procedures the Department must follow in revoking an order, the Department has developed a procedure for revocation that is described in 19 CFR 351.222. Sections 351.222(b)(1)(A) and 351.222(b)(2) of the Department's regulations explain that the Secretary may revoke an antidumping duty order in part if the Secretary concludes, inter alia , that one or more exporters or producers covered by the order have sold the subject merchandise in commercial quantities at not less than NV for a period of at least three consecutive years. See Notice of Final Results of the Antidumping Duty Administrative Review and Determination Not to Revoke the Antidumping Duty Order: Brass Sheet and Strip from the Netherlands , 65 FR 742, 743 (Jan. 6, 2000).

We preliminarily determine that the requests from Colakoglu and Diler meet all of the criteria under 19 CFR 351.222(b). With regard to the criteria of subsection 19 CFR 351.222(b)(2), our preliminary margin calculations show that Colakoglu and Diler sold rebar at not less than NV during the current review period. See the "Preliminary Results of the Review" section below. In addition, Colakoglu and Diler sold rebar at not less than NV in the two previous administrative reviews in which they were involved ( i.e. , their dumping margins were zero or de minimis ). See Certain Steel Concrete Reinforcing Bars From Turkey; Final Results and Rescission of Antidumping Duty Administrative Review in Part , 71 FR 65082 (Nov. 7, 2006), unchanged in Notice of Amended Final Results and Rescission of Antidumping Duty Administrative Review in Part: Certain Steel Concrete Reinforcing Bars From Turkey , 71 FR 75711 (Dec. 18, 2006); Certain Steel Concrete Reinforcing Bars From Turkey; Final Results, Rescission of Antidumping Duty Administrative Review in Part, and Determination To Revoke in Part , 70 FR 67665 (Nov. 8, 2005).

Based on our examination of the sales data submitted by Colakoglu and Diler, we preliminarily determine that they sold the subject merchandise in the United States in commercial quantities in each of the consecutive years cited by Colakoglu and Diler to support their requests for revocation. See the Memoranda to the file from Brianne Riker entitled "Analysis of Colakoglu Metalurji A.S. and Colakoglu Dis Ticaret A.S.'s Commercial Quantities for Request for Revocation" and "Analysis of Diler Demir Celik Endustrisi ve Ticaret A.S., Yazici Demir Celik Sanayi ve Turizm Ticaret A.S., and Diler Dis Ticaret A.S.'s Commercial Quantities for Request for Revocation," dated April 30, 2007. Thus, we preliminarily find that Colakoglu and Diler had zero or de minimis dumping margins for their last three administrative reviews and sold subject merchandise in commercial quantities in each of these years. Also, we preliminarily determine that the application of the antidumping duty order with respect to Colakoglu and Diler is no longer warranted for the following reasons: 1) the companies had zero or de minimis margins for a period of at least three consecutive years; 2) the companies have agreed to immediate reinstatement of the order if the Department finds that they have resumed making sales at less than NV; and, 3) the continued application of the order is not otherwise necessary to offset dumping. Therefore, we preliminarily determine that Colakoglu and Diler qualify for revocation of the order on rebar pursuant to 19 CFR 351.222(b)(2), and that the order with respect to merchandise produced and exported by Colakolgu and Diler should be revoked. If these preliminary findings are affirmed in our final results, we will revoke this order in part for Colakoglu and Diler and, in accordance with 19 CFR 351.222(f)(3), terminate the suspension of liquidation for any of the merchandise in question that is entered, or withdrawn from warehouse, for consumption on or after April 1, 2006, and instruct CBP to refund any cash deposits for such entries.

We note that the domestic interested parties have alleged that the Competition Board finding should render Colakoglu and Diler ineligible for revocation. The Department is currently considering this argument and will make a decision on it no later than the final results. For further discussion, see the "Turkish Government Competition Board Finding" section below.

Bona Fide Sale Analysis - Kroman

For the reasons stated below, we preliminarily find that Kroman's reported U.S. sale during the POR is a bona fide sale, as required by 19 CFR 351.214(b)(2)(iv)(c), based on the totality of the facts on the record. Specifically, we find that the price reported for Kroman's rebar sale was similar to the average unit value of U.S. imports of comparable rebar from Turkey during the POR. We also find that the quantity of the sale was within the range of shipment sizes of comparable goods exported from Turkey during the POR. See the Memorandum from Brianne Riker to the File, entitled "Placing Information from the 2005-2006 Administrative Review on Rebar from Turkey on the Record of the New Shipper Review on Rebar from Turkey for Kroman Celik Sanayii A.S.," dated April 30, 2007. Finally, we considered whether the importer involved in this transaction is an actual commercial entity, and we found no reason to doubt the legitimacy of the importing party involved in this new shipper review. See the Memorandum to James Maeder from Irina Itkin entitled, "Analysis of Kroman Celik Sanayii A.S.'s Bona Fides As A New Shipper in the New Shipper Review of Certain Steel Concrete Reinforcing Bars from Turkey," dated April 30, 2007, for further discussion of our price and quantity analysis.

Therefore, for the reasons mentioned above, the Department preliminarily finds that Kroman's sole U.S. sale during the POR was a bona fide commercial transaction. We note that the domestic interested parties have alleged that: 1) Kroman's U.S. sale is not a bona fide transaction because the price for this sale was not competitively set; and/or, 2) Kroman is not entitled to a new shipper review because it is affiliated with other respondents in this case. The Department is currently considering these arguments and, when we make a determination with regard to the Competition Board's reports, we will incorporate our analysis on this point into that determination. For further discussion, see the "Turkish Government Competition Board Finding" section below.

Turkish Government Competition Board Finding

On February 21 and 23, 2007, the domestic interested parties submitted a report by the Turkish Government Competition Board regarding the Turkish steel industry in the administrative review and new shipper review, respectively. The domestic interested parties argue that this report demonstrates that the respondents engaged in anti-competitive behavior prior to and during the POR by colluding with each other to manipulate home market and export prices and to suppress costs. The domestic interested parties assert that the Department should: (1) find that a particular market situation, a fictitious market, or sales outside the course of ordinary trade exist and not use home market sales as a basis for NV; (2) not revoke Colakoglu and Diler from the order due to collusive behavior; (3) find that all U.S. sales are not bona fide ; and (4) collapse all Turkish rebar producers into a single entity and find that Kroman does not qualify as a new shipper because of affiliation with other respondents. The domestic parties further contend that the Department should, as a result, rescind the initiation of the new shipper review for Kroman and assign preliminary dumping margins to each of the remaining producers using AFA.

In addition, on April 9, 2007, the domestic interested parties submitted a second report by the Competition Board, which they allege: 1) demonstrates that several of the respondents were engaged in close supplier relationships; and 2) should be relied upon by the Department to make a finding that the respondents in this proceeding are affiliated.

The respondents in this case have objected to the Department's acceptance of these submissions because, they argue: (1) it is inappropriate to consider antitrust findings in the context of a dumping proceeding; (2) the Competition Board's ruling is not final, as it is under appeal in the Turkish judicial system; (3) the Competition Board's decision and evidence should not be considered in the current POR because it relates to a prior period of time; and/or (4) the small fines that the Competition Board levied indicate that it did not believe that the anti-competitive behavior was significant. The respondents did not submit arguments regarding the domestic interested parties' April 9, 2007, submission.

As a threshold matter, we have concluded that it is appropriate to accept the Competition Board's reports on the administrative record of these proceedings. Pursuant to 19 CFR 351.104(a), the Competition Board's reports are new factual information which are, at minimum, of concern to these proceedings in that they address alleged collusive and anti-competitive behavior among members of the Turkish steel industry, of which rebar producers are a significant part, that may have influenced the costs and market prices of the respondents in these reviews. Accordingly, the Department acted consistently with its authority in accepting this information and considering it for purposes of the ongoing administrative and new shipper reviews. See 19 CFR 351.104(a) and 351.301(c)(2) (authorizing the Department to consider information provided during the proceeding and allowing it to extend the time within which information may be provided during a review if it considers such an extension of time is warranted).

The Department has been unable to fully address this issue in these preliminary results because the Competition Board's reports were placed on the record late in the proceedings, and there has been a large amount of argument submitted by both sides on the matter. Furthermore, the domestic interested parties submitted new arguments on this point not long before issuance of these preliminary results. Accordingly, the Department has not yet had the opportunity to fully review and address all issues with regard to this matter. Subsequent to publication of the preliminary results, the Department will provide to the interested parties its preliminary conclusions on these issues and give them an opportunity to comment on those conclusions before reaching final conclusions and publishing the final results of these administrative and new shipper reviews.

Comparisons to Normal Value

To determine whether sales of rebar from Turkey were made in the United States at less than NV, we compared the export price (EP) to the NV, as described in the "Normal Value" section of this notice. When making comparisons in accordance with section 771(16) of the Act, we considered all products sold in the home market as described in the "Scope of the Order" section of this notice, above, that were in the ordinary course of trade for purposes of determining appropriate product comparisons to U.S. sales. Where there were no sales of identical merchandise in the home market made in the ordinary course of trade, we compared U.S. sales to sales of the most similar foreign like product made in the ordinary course of trade based on the characteristics listed in sections B and C of our antidumping questionnaire.

Product Comparisons

In accordance with section 771(16) of the Act, we first attempted to compare products produced by the same company and sold in the U.S. and home markets that were identical with respect to the following characteristics: form, grade, size, and industry standard specification. Where there were no home market sales of foreign like product that were identical in these respects to the merchandise sold in the United States, we compared U.S. products with the most similar merchandise sold in the home market based on the characteristics listed above, in that order of priority.

Export Price

We used EP methodology for all U.S. sales, in accordance with section 772(a) of the Act, because the subject merchandise was sold directly to the first unaffiliated purchaser in the United States prior to importation, and constructed export price methodology was not otherwise warranted based on the facts of record.

Regarding U.S. date of sale, four of the respondents ( i.e. , Colakoglu, Ekinciler, Habas, and Kaptan) argued that we should use contract date as the date of sale for their U.S. sales in this review, while Diler and Kroman argued that we should base their dates of sale on invoice date. After analyzing the record, we determine that the appropriate U.S. date of sale for Colakoglu, Diler, and Habas is the earlier of invoice or shipment date because: (1) we previously found that the terms of sale ( i.e. , price and quantity) were changeable after the contract date for these respondents ( see Certain Steel Concrete Reinforcing Bars from Turkey; Preliminary Results and Partial Rescission of Antidumping Duty Administrative Review , 71 FR 26455, 26458 (May 5, 2006) ( 04-05 Preliminary Results ), unchanged in the final results); and, (2) we find that there were no changes in the sales process, customers, types of contracts, etc., between the previous administrative review and the current POR for these respondents. Further, regarding Ekinciler, we determined that the appropriate U.S. date of sale is contract date because, as in the previous administrative review, we find that the material terms of sale were set at the contract date, given that the terms did not change prior to invoicing. See id.

Finally, regarding Kaptan and Kroman, because these companies were not respondents in the previous administrative review, we examined the contracts and invoices related to their U.S. sales. For Katpan, we found that the terms of sale were not set at the contract date and, therefore, we used the earlier of invoice or shipment date as the U.S. date of sale. For Kroman, we determined that there were no changes to the material terms of sale between the contract and invoice date and, therefore, we used contract date as the U.S. date of sale.

A. Colakoglu

We based EP on packed prices to the first unaffiliated purchaser in the United States. We made deductions from the starting price for loading expenses, inspection fees, demurrage expenses (offset by freight commission revenue, dispatch revenue, and other freight-related revenue), ocean freight expenses, U.S. customs duties, and U.S. brokerage and handling expenses, where appropriate, in accordance with section 772(c)(2)(A) of the Act.

B. Diler

C. Ekinciler

We based EP on packed prices to the first unaffiliated purchaser in the United States. We made deductions from the starting price for foreign inland freight, customs overtime fees, crane charges, terminal charges, inspection fees, demurrage expenses (offset by despatch revenue), ocean freight expenses (offset by freight revenue), U.S. customs duties, and U.S. brokerage and handling expenses, in accordance with section 772(c)(2)(A) of the Act.

D. Habas

We based EP on packed prices to the first unaffiliated purchaser in the United States. We made deductions from the starting price for foreign inland freight expenses, customs overtime fees, loading charges (offset by despatch revenue), forklift charges, surveying expenses, and ocean freight expenses, where appropriate, in accordance with section 772(c)(2)(A) of the Act. Additionally, we added to the starting price an amount for duty drawback pursuant to section 772(c)(1)(B) of the Act.

E. Kaptan

We based EP on packed prices to the first unaffiliated purchaser in the United States. We made deductions from the starting price for foreign inland freight expenses, foreign brokerage and handling charges, loading expenses, inspection fees, freight commission expenses, demurrage commission expenses, weighing charges, and ocean freight expenses (offset by freight-related revenues), where appropriate, in accordance with section 772(c)(2)(A) of the Act. Additionally, we added to the starting price an amount for duty drawback pursuant to section 772(c)(1)(B) of the Act.

F. Kroman

We based EP on packed prices to the first unaffiliated purchaser in the United States. We made deductions from the starting price for foreign inland freight expenses, foreign brokerage and handling expenses, inspection fees, ocean freight expenses, U.S. customs duties, and U.S. brokerage and handling expenses where appropriate, in accordance with section 772(c)(2)(A) of the Act. Additionally, we added to the starting price an amount for duty drawback pursuant to section 772(c)(1)(B) of the Act.

Normal Value

A. Home Market Viability and Selection of Comparison Markets

In order to determine whether there is a sufficient volume of sales in the home market to serve as a viable basis for calculating NV ( i.e. , the aggregate volume of home market sales of the foreign like product is five percent or more of the aggregate volume of U.S. sales), we compared the volume of each respondent's home market sales of the foreign like product to the volume of U.S. sales of subject merchandise, in accordance with section 773(a)(1)(C) of the Act. Based on this comparison, we determined that each respondent had a viable home market during the POR. Consequently, we based NV on home market sales.

For each respondent, in accordance with our practice, we excluded home market sales of non-prime merchandise made during the POR from our preliminary analysis based on the limited quantity of such sales in the home market and the fact that no such sales were made to the United States during the POR. See , e.g. , 04-05 Preliminary Results , 71 FR at 26459, unchanged in the final results; Certain Steel Concrete Reinforcing Bars from Turkey; Preliminary Results and Partial Rescission of Antidumping Duty Administrative Review and Notice of Intent To Revoke in Part , 70 FR 23990, 23993 (May 6, 2005), unchanged in the final results; Certain Steel Concrete Reinforcing Bars From Turkey; Preliminary Results and Partial Rescission of Antidumping Duty Administrative Review and Notice of Intent Not To Revoke in Part , 69 FR 25066, 25066 (May 5, 2004), unchanged in the final results; Certain Steel Concrete Reinforcing Bars from Turkey; Preliminary Results of Antidumping Duty Administrative Review and Notice of Intent Not to Revoke in Part , 68 FR 23972 (May 6, 2003), unchanged in the final results.

B. Affiliated-Party Transactions and Arm's-Length Test

Diler, Ekinciler, Habas, and Kroman made sales of rebar to affiliated parties in the home market during the POR. Consequently, we tested these sales to ensure that they were made at arm's-length prices, in accordance with 19 CFR 351.403(c). To test whether the sales to affiliates were made at arm's-length prices, we compared the unit prices of sales to affiliated and unaffiliated customers net of all movement charges, direct selling expenses, and packing expenses. Pursuant to 19 CFR 351.403(c) and in accordance with the Department's practice, 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 at the same level of trade (LOT), we determined that the sales made to the affiliated party were at arm's length. See Antidumping Proceedings: Affiliated Party Sales in the Ordinary Course of Trade , 67 FR 69186 (Nov. 15, 2002) (establishing that the overall ratio calculated for an affiliate must be between 98 and 102 percent in order for sales to be considered in the ordinary course of trade and used in the NV calculation). Sales to affiliated customers in the home market that were not made at arm's-length prices were excluded from our analysis because we considered these sales to be outside the ordinary course of trade. See 19 CFR 351.102(b).

C. Cost of Production Analysis

Pursuant to section 773(b)(2)(A)(ii) of the Act, for Colakoglu, Diler, Ekinciler, and Habas, there were reasonable grounds to believe or suspect that these respondents made home market sales at prices below their costs of production (COPs) in this review because the Department had disregarded sales that failed the cost test for these companies in the most recently completed segment of this proceeding in which these companies participated ( i.e. , the 2003-2004 administrative review for Colakoglu, Diler, and Habas and the 2000-2001 administrative review for Ekinciler). As a result, the Department initiated an investigation to determine whether these companies made home market sales during the POR at prices below their COPs.

Pursuant to section 773(b)(2)(A)(i) of the Act, for Kaptan and Kroman, there were reasonable grounds to believe or suspect that these respondents made home market sales at prices below their COP in this review because of information contained in the cost allegations properly filed by the domestic interested parties. As a result, the Department initiated an investigation to determine whether Kaptan and Kroman made home market sales during the POR at prices below their COPs. See the "Kaptan Cost Allegation Memo" and the "Kroman Cost Allegation Memo."

1. Calculation of COP

In accordance with section 773(b)(3) of the Act, we calculated COP based on the sum of the respondents' cost of materials and fabrication for the foreign like product, plus amounts for general and administrative (G&A) expenses and interest expenses. See the "Test of Home Market Sales Prices" section below for treatment of home market selling expenses.

We relied on the COP information provided by each respondent in its questionnaire responses, except for the following instances where the information was not appropriately quantified or valued:

A. Colakoglu

Because Colakoglu's financial revenue exceeded its expense, we did not include an amount for financial expense in the calculation of COP or constructed value (CV). This is in accordance with the Department's practice of determining that, when a company earns enough financial income that it recovers all of its financial expense, that company did not have a resulting cost for financing during that period. See Certain Steel Concrete Reinforcing Bars from Turkey; Preliminary Results and Partial Rescission of Antidumping Duty Administrative Review , 71 FR 26455, 26460 (May 5, 2006) ( 04-05 Preliminary Results ), unchanged in the final results; Notice of Final Results of Antidumping Duty Administrative Review: Certain Softwood Lumber Products From Canada , 70 FR 73437 (Dec. 12, 2005) ( Lumber from Canada ), and accompanying Issues and Decision Memorandum at Comments 9 and 25. For further discussion of this adjustment, see the Memorandum from LaVonne Clark to Neal Halper entitled, "Cost of Production and Constructed Value Calculation Adjustments for the Preliminary Results - Colakoglu Metalurji A.S. and Colakoglu Dis Ticaret A.S.," dated April 30, 2007.

B. Diler

1. We applied the transactions disregarded rule under section 773(f)(2) of the Act to the billets purchased through an affiliated reseller. As a result, we adjusted Yazici Demir Celik Sanayi ve Turizm Ticaret A.S.'s (Yazici Demir's) fixed and variable costs of steelmaking.

2. We adjusted the reported G&A expenses for Yazici Demir to exclude an offset for an income item related to an affiliated party because the income was associated with Yazici Demir's investment activities.

3. We adjusted the reported G&A expenses for Diler Demir Celik Endustrisi ve Ticaret A.S. (Diler Demir) to include the cost of POR donations.

4. We adjusted the respective cost of sales figure used as the denominator for G&A and financial expense rate calculations by excluding the costs of byproduct merchandise sold during the 2005 fiscal year for Yazici Demir and Diler Demir.

5. Because Diler's financial revenue exceeded its expense, we did not include an amount for financial expense in the calculation of COP or CV. See 04-05 Preliminary Results , 71 FR at 26460; Lumber from Canada at Comments 9 and 25.

For further discussion of these adjustments, see the Memorandum from Angela Strom to Neal Halper entitled, "Cost of Production and Constructed Value Adjustments for the Preliminary Results - Diler Demir Celik Endustrisi ve Ticaret A.S., Yazici Demir Celik Sanayi ve Tursizm Ticaret A.S., and Diler Dis Ticaret A.S.," dated April 30, 2007.

C. Ekinciler

1. We adjusted Ekinciler's G&A expense ratio to include the actual expenses charged by its parent company ( i.e. , Ekinciler Holding) for direct services and allocated Ekinciler Holding's residual G&A expenses ( i.e. , those G&A expenses not charged to a subsidiary) to each subsidiary, including Ekinciler, based on the proportion of each subsidiary's cost of sales (COS).

2. We recalculated Ekinciler's fiscal year-end 2005 depreciation expenses for assets with remaining useful lives to be based on the stated depreciation rates reported in Ekinciler's general assets ledger.

3. We have excluded the COS for scrap and defective billets from the COS denominator in calculating the G&A and financial expense ratios.

4. We adjusted Ekinciler's fixed overhead expense to include the amortization of certain proprietary assets.

For further discussion of these adjustments, see the Memorandum from Laurens van Houten to Neal Halper entitled, "Cost of Production and Constructed Value Calculation Adjustments for the Preliminary Results - Ekinciler Demir ve Celik Sanayi A.S.," dated April 30, 2007.

D. Habas

1. We adjusted the reported cost of raw materials to include import duties that were not collected by the Turkish government due to the subsequent re-exportation of the material and the claimed duty drawback adjustment.

2. Because Habas' financial revenue exceeded its expense, we did not include an amount for financial expense in the calculation of COP or CV. See 04-05 Preliminary Results , 71 FR at 26460; Lumber from Canada at Comments 9 and 25.

For further discussion of these adjustments, see the Memorandum from Gina Lee to Neal Halper entitled, "Cost of Production and Constructed Value Calculation Adjustments for the Preliminary Results - Habas Sinai ve Tibbi Gazlar Istihsal Endustrisi A.S.," dated April 30, 2007.

E. Kaptan

We adjusted the reported cost of raw materials to include import duties that were not collected by the Turkish government due to the subsequent re-exportation of the material and the claimed duty drawback adjustment. For further discussion of these adjustments, see the Memorandum from Trinette Boyd to Neal Halper entitled, "Cost of Production and Constructed Value Calculation Adjustments for the Preliminary Results - Kaptan Demir Celik Endustrisi ve Ticaret A.S. and Kaptan Metal Dis Ticaret ve Nakliyat A.S.," dated April 30, 2007.

F. Kroman

2. We adjusted the net financial expense rate to: (1) exclude offsets for investment-related gains and losses by adding them to the reported net interest expense; and, (2) correct mathematical errors contained in Kroman's calculation.

For further discussion of these adjustments, see the Memorandum from Frederick Mines to Neal Halper entitled, "Cost of Production and Constructed Value Calculation Adjustments for the Preliminary Results - Kroman Celik Sanayii A.S.and Yucelboru Ihracat Ithalat ve Pazarlama A.S.," dated April 30, 2007.

2. Test of Home Market Sales Prices

We compared the weighted-average COP figures to home market prices of the foreign like product, as required under section 773(b) of the Act, to determine whether these sales had been made at prices below the COP. On a product-specific basis, we compared the COP to home market prices, less any applicable movement charges, selling expenses, and packing expenses.

In determining whether to disregard home market sales made at prices below the COP, we examined whether such sales were made: 1) in substantial quantities within an extended period of time; and 2) at prices which permitted the recovery of all costs within a reasonable period of time. See sections 773(b)(1)(A) and (B) of the Act.

3. Results of the COP Test

Pursuant to section 773(b)(2)(C)(i) of the Act, where less than 20 percent of a respondent's sales of a given product were at prices less than the COP, we did not disregard any below-cost sales of that product because we determined that the below-cost sales were not made in "substantial quantities." Where 20 percent or more of a respondent's sales of a given product were at prices below the COP, we determined that sales of that model were made in "substantial quantities" within an extended period of time (as defined in section 773(b)(2)(B) of the Act), in accordance with section 773(b)(2)(C)(i) of the Act. In such cases, we also determined that such sales were not made at prices which would permit recovery of all costs within a reasonable period of time, in accordance with section 773(b)(2)(D) of the Act. Therefore, for purposes of this administrative review, we disregarded these below-cost sales for Diler, Ekinciler, Habas, Kaptan, and Kroman, and used the remaining sales as the basis for determining NV, in accordance with section 773(a)(1) of the Act.

D. Level of Trade

In accordance with section 773(a)(1)(B) of the Act, to the extent practicable, we determine NV based on sales in the comparison market at the same LOT as EP. The NV LOT is that of the starting-price sales in the comparison market or, when NV is based on CV, that of the sales from which we derive selling, G&A expenses, and profit. For EP, the U.S. LOT is also the level of the starting-price sale, which is usually from the exporter to the unaffiliated U.S. customer.

To determine whether NV sales are at a different LOT than EP sales, we examine stages in the marketing process and selling functions along the chain of distribution between the producer and the unaffiliated customer. If the comparison-market sales are at a different LOT and the difference affects 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.

All the respondents in this review claimed that they sold rebar at a single LOT in their home and U.S. markets. Five of the respondents (Diler, Ekinciler, Habas, Kaptan, and Kroman) reported that they sold rebar directly to various categories of customers in the home market, while the remaining company (Colakoglu) reported that it made both direct sales and sales through affiliated resellers to various categories of customers in the home market. Regarding U.S. sales, all respondents reported only EP sales to the United States to a single customer category ( i.e. , unaffiliated traders). Similar to their home market channels of distribution, five of these respondents reported direct sales to U.S. customers, while one respondent (Colakoglu) reported that it made all of its U.S. sales through an affiliated party in the United States. Regarding these latter sales, we have classified them as EP transactions, in accordance with our practice, because evidence on the record demonstrates that: (1) all significant selling activities related to these sales ( e.g. , price negotiations, invoicing) were conducted by Colakoglu personnel in Turkey; (2) the only selling functions provided by Colakoglu employees on behalf of the affiliated party include certain import-related expenses; and (3) this affiliated party has no physical location or employees in the United States. See 04-05 Preliminary Results , 71 FR at 26461, unchanged in the final results.

To determine whether sales to any of these customer categories were made at different LOTs, we examined the stages in the marketing process and selling functions along the chain of distribution for each of these respondents. Regarding home market sales, each of the respondents reported that it performed identical selling functions across customer categories in the home market. After analyzing the data on the record with respect to these functions, we find that the respondents performed the same selling functions for their home market customers, regardless of customer category or channel of distribution. Regarding Colakoglu, although it made direct sales and sales through its affiliated resellers in the home market, we find that there is one home market LOT because: 1) the resellers do not have separate locations apart from Colakoglu's offices; and 2) all selling activities related to home market sales made by the affiliated resellers are performed by Colakoglu personnel. Therefore, we find that Colakoglu does not perform an additional layer of selling functions for the home market sales through its affiliated resellers. Accordingly, we find that all of the respondents made all sales at a single marketing stage ( i.e. , at one LOT) in the home market.

Regarding U.S. sales, each of the respondents reported that it only made sales to one customer category through one channel of distribution in the U.S. market and, thus, identical selling functions were performed for all sales. Therefore, after analyzing the data on the record with respect to these functions, we find that the respondents made all sales at a single marketing stage ( i.e. , one LOT) in the U.S. market.

Although each of the respondents provided certain additional services for U.S. sales and not home market sales, we did not find these differences to be material selling function distinctions significant enough to warrant a separate LOT for any respondent. Therefore, after analyzing the selling functions performed in each market, we find that the distinctions in selling functions are not material and thus, that the home market and U.S. LOTs are the same. Accordingly, we determined that sales in the U.S. and home markets during the POR for each respondent were made at the same LOT, and as a result, no LOT adjustment is warranted for any of the respondents.

E. Calculation of Normal Value

1. Colakoglu

We based NV on the starting prices to home market customers. For those home market sales negotiated in U.S. dollars, we used the U.S.-dollar price, rather than the Turkish lira (YTL) price adjusted for kur farki ( i.e. , an adjustment to the YTL invoice price to account for the difference between the estimated and actual YTL value on the date of payment), because the only price agreed upon was a U.S.-dollar price, which remained unchanged. The buyer merely paid the YTL-equivalent amount at the time of payment. This treatment is consistent with our treatment of these transactions in the most recently completed segment of this proceeding. See 04-05 Preliminary Results , 71 FR at 26461, unchanged in the final results. Where appropriate, we made deductions from the starting price for foreign inland freight expenses, in accordance with section 773(a)(6)(B) of the Act.

Pursuant to section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410(b), we made circumstance-of-sale adjustments for credit expenses (offset by interest revenue), bank charges, exporter association fees, and commissions. Regarding commissions, Colakoglu incurred commissions only in relation to U.S. sales. Therefore, pursuant to 19 CFR 351.410(e), we offset U.S. commissions by the lesser of the commission amount or home market indirect selling expenses. We deducted home market packing costs and added U.S. packing costs, in accordance with section 773(a)(6) of the Act.

Where appropriate, we made an adjustment to NV to account for differences in physical characteristics of the merchandise, in accordance with section 773(a)(6)(C)(ii) of the Act and 19 CFR 351.411(a). We based this adjustment on the difference in the variable costs of manufacturing for the foreign like product and subject merchandise. See 19 CFR 351.411(b).

2. Diler

We based NV on the starting prices to home market customers. For those home market sales negotiated in U.S. dollars, we used the U.S.-dollar price, rather than the YTL price adjusted for kur farki , because the only price agreed upon was a U.S.-dollar price, which remained unchanged. For further discussion, see the "Colakoglu" section above. Where appropriate, we made deductions from the starting price for foreign inland freight expenses, in accordance with section 773(a)(6)(B) of the Act.

Pursuant to section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410(b), we made circumstance-of-sale adjustments for credit expenses (offset by interest revenue), bank fees, and exporter association fees. We deducted home market packing costs and added U.S. packing costs, in accordance with section 773(a)(6)(B)(i) of the Act.

3. Ekinciler

We based NV on the starting prices to home market customers. For those home market sales negotiated in U.S. dollars, we used the U.S.-dollar price, rather than the YTL price adjusted for kur farki , because the only price agreed upon was a U.S.-dollar price, which remained unchanged. For further discussion, see the "Colakoglu" section above. Where appropriate, we made deductions from the starting price for billing adjustments. In addition, where appropriate, we made deductions for foreign inland freight expenses, in accordance with section 773(a)(6)(B) of the Act.

Pursuant to section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410(b), we made circumstance-of-sale adjustments for credit expenses, bank charges, and exporter association fees. We deducted home market packing costs and added U.S. packing costs, in accordance with section 773(a)(6) of the Act.

4. Habas

5. Kaptan

We based NV on the starting prices to home market customers. Where appropriate, we made deductions from the starting price for foreign inland freight expenses, in accordance with section 773(a)(6)(B) of the Act.

Pursuant to section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410(b), we made circumstance-of-sale adjustments for credit expenses, bank fees, exporter association fees, and commissions. Regarding commissions, Kaptan incurred commissions only in relation to U.S. sales. Therefore, pursuant to 19 CFR 351.410(e), we offset U.S. commissions by the lesser of the commission amount or home market indirect selling expenses. We deducted home market packing costs and added U.S. packing costs, in accordance with section 773(a)(6) of the Act.

6. Kroman

We based NV on the starting prices to home market customers. For those home market sales negotiated in U.S. dollars, we used the U.S.-dollar price, rather than the YTL price adjusted for kur farki , because the only price agreed upon was a U.S.-dollar price, which remained unchanged. For further discussion, see the "Colakoglu" section above. Where appropriate, we made deductions from the starting price for billing adjustments. In addition, where appropriate, we made deductions from the starting price for foreign inland freight expenses, in accordance with section 773(a)(6)(B) of the Act.

Pursuant to section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410(b), we made circumstance-of-sale adjustments for credit expenses and exporter association fees. We deducted home market packing costs and added U.S. packing costs, in accordance with section 773(a)(6)(B)(i) of the Act.

Currency Conversion

We made currency conversions into U.S. dollars pursuant to section 773A(a) of the Act and 19 CFR 351.415. Although the Department's preferred source for daily exchange rates is the Federal Reserve Bank, the Federal Reserve Bank does not track or publish exchange rates for Turkish Lira. Therefore, we made currency conversions based on exchange rates from the Dow Jones Reuters Business Interactive LLC (trading as Factiva).

Preliminary Results of the Review

We preliminarily determine that the following margins exist for the respondents during the period April 1, 2005, through March 31, 2006:

Manufacturer/Producer/Exporter	Margin Percentage
Colakoglu Metalurji A.S. and Colakoglu Dis Ticaret A.S.	0.13 ( de minimis )
Diler Demir Celik Endustrisi ve Ticaret A.S./ Yazici Demir Celik Sanayi ve Turizm Ticaret A.S./ Diler Dis Ticaret A.S.	0.16 ( de minimis )
Ekinciler Demir ve Celik Sanayi A.S./ Ekinciler Dis Ticaret A.S.	3.70
Habas Sinai ve Tibbi Gazlar Istithsal Endustrisi A.S.	0.22 ( de minimis )
Kaptan Demir Celik Endustrisi ve Ticaret A.S./ Kaptan Metal Dis Ticaret ve Nakliyat A.S.	0.00
Kroman Celik Sanayii A.S./ Yucelboru Ihracat Ithalat ve Pazarlama A.S.	0.00

Disclosure and Public Hearing

The Department will disclose to parties the calculations performed in connection with these preliminary results within five days of the date of publication of this notice. See 19 CFR 351.224(b). Pursuant to 19 CFR 351.309, interested parties may submit cases briefs not later than 30 days after the date of publication of this notice. Rebuttal briefs, limited to issues raised in the case briefs, may be filed not later than 35 days after the date of publication of this notice. Parties who submit case briefs or rebuttal briefs in this proceeding 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. In addition, we note that we will provide interested parties with an opportunity to submit comments pertaining to our preliminary conclusions on the Competition Board's report once such conclusions are reached.

Interested parties who wish to request a hearing or to participate if one is requested must submit a written request to the Assistant Secretary for Import Administration, Room B-099, within 30 days of the date of publication of this notice. Requests should contain: (1) the party's name, address and telephone number; (2) the number of participants; and, (3) a list of issues to be discussed. See 19 CFR 351.310(c). Issues raised in the hearing will be limited to those raised in the respective case briefs. The Department will issue the final results of the administrative and new shipper reviews, including the results of its analysis of issues raised in any written briefs, not later than 120 days after the date of publication of this notice, pursuant to section 751(a)(3)(A) of the Act.

Assessment

Upon completion of the administrative and new shipper reviews, the Department shall determine, and CBP shall assess, antidumping duties on all appropriate entries, in accordance with 19 CFR 351.212. The Department will issue appropriate appraisement instructions for the companies subject to these reviews directly to CBP 15 days after the date of publication of the final results of this review.

Pursuant to 19 CFR 351.212(b)(1), for all sales made by Colakoglu, Habas, Kaptan, and Kroman, as well as for certain sales made by Ekinciler, because we have the reported entered value of the U.S. sales, we have calculated importer-specific assessment rates based on the ratio of the total amount of antidumping duties calculated for the examined sales to the total entered value of those sales.

Regarding all of Diler's and certain of Ekinciler's sales, we note that these companies did not report the entered value for the U.S. sales in question. Accordingly, we have calculated importer-specific assessment rates for the merchandise in question by aggregating the dumping margins calculated for all U.S. sales to each importer and dividing this amount by the total quantity of those sales. To determine whether the duty assessment rates were de minimis , in accordance with the requirement set forth in 19 CFR 351.106(c)(2), we calculated importer-specific ad valorem ratios based on the estimated entered value.

We will instruct CBP to assess antidumping duties on all appropriate entries covered by these reviews if any importer-specific assessment rate calculated in the final results of these reviews is above de minimis ( i.e. , at or above 0.50 percent). Pursuant to 19 CFR 351.106(c)(2), we will instruct CBP to liquidate without regard to antidumping duties any entries for which the assessment rate is de minimis ( i.e. , less than 0.50 percent). See 19 CFR 351.106(c)(1).

We are preliminarily revoking the order with respect to Colakoglu's and Diler's exports of subject merchandise. If these revocations become final, we will instruct CBP to terminate the suspension of liquidation for exports of such merchandise entered, or withdrawn from warehouse, for consumption on or after April 1, 2006, and to refund all cash deposits collected.

The final results of these reviews shall be the basis for the assessment of antidumping duties on entries of merchandise covered by the final results of these reviews and for future deposits of estimated duties, where applicable.

The Department clarified its "automatic assessment" regulation on May 6, 2003 (68 FR 23954). This clarification will apply to entries of subject merchandise during the POR 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 requirements will be effective for all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of the administrative and new shipper reviews, as provided by section 751(a)(2)(C) of the Act: (1) the cash deposit rate for each specific company listed above will be that established in the final results of these reviews, except if the rate is less than 0.50 percent, and therefore, de minimis within the meaning of 19 CFR 351.106(c)(1), in which case the cash deposit rate will be zero; (2) for previously reviewed or investigated companies not participating in these reviews, 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 these reviews or the original 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) the cash deposit rate for all other manufacturers or exporters will continue to be 16.06 percent, the All-Others rate established in the LTFV investigation. These requirements, when imposed, shall remain in effect until further notice.

Notification to Importers

This notice serves as a preliminary reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping 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 duties occurred and the subsequent assessment of double antidumping duties.

We are issuing and publishing these results of review in accordance with sections 751(a)(1), 751(a)(2)(B)(iv), and 777(i)(1) of the Act, as well as 19 CFR 351.214(i), 351.221(b)(4), and 351.222(f)(2)(iv).

Dated: April 30, 2007.

David M. Spooner,

Assistant Secretaryfor Import Administration.

[FR Doc. E7-8583 Filed 5-3-07; 8:45 am]

BILLING CODE 3510-DS-S