Turkish Rebar Exporter Challenges Commerce's Affiliation Finding in CVD Review

Turkish steel exporter Kaptan Demir Celik Endustrisi ve Ticaret kicked off litigation at the Court of International Trade in an Oct. 19 complaint over a countervailing duty review on steel concrete reinforcing bar from Turkey covering entries in 2018, arguing against the Commerce Department's finding that ship building company Nur Gemicilik ve Tic is a cross-owned input supplier of Kaptan (Kaptan Demir Celik Endustrisi ve Ticaret A.S. v. United States, CIT #21-00565).

During the review, Kaptan, one of two mandatory respondents in the case, submitted a list of all its affiliates, which included Nur, as the ship builder sold scrap metal to Kaptan. However, Kaptan told Commerce that the amount of scrap was "extremely miniscule" compared to the amount of scrap it bought from other suppliers, so Nur could not qualify as a "cross-owned input supplier."

Nevertheless, Commerce requested from Kaptan a list of the subsidies that Nur received from the Turkish government. Kaptan acquiesced to the request, ultimately leading Commerce to find that Nur was a cross-owned input supplier of Kaptan, and that Nur received a countervailable subsidy from the fact that it operated rent-free. Commerce further held that the rent-free land was regionally specific since it was located in an area that qualifies for the exemption in Turkish Law 5084, meaning that it can be subject to a countervailing duty. The result was a 1.82% CVD rate for Kaptan.

This led Kaptan to file its case at CIT, and bring four claims against Commerce's final determination in its complaint. In all, Kaptan is pushing against the agency's finding that Nur is a cross-owned input supplier of Kaptan, that Nur's rent-free land was regionally specific, that the rent-free land benefit was good for less than adequate remuneration rather than forgone revenue, and that the industrial rent benchmark from Colliers International Real Estate Report for Turkey in 2018 was the right one.