Turkish Bank Tax Exemption Not Countervailable, Rebar Exporter Argues at Trade Court

The Commerce Department incorrectly concluded that exemptions from Turkey's Bank and Insurance Transactions Tax (BITT) were countervailable subsidies, in the final results of the 2020 administrative review of the countervailing duty order on steel concrete reinforcing bar from Turkey, exporter Kaptan Demir Celik Endustrisi ve Ticaret said in a June 21 complaint. Kaptan also took issue with Commerce's valuation benchmark for industrial land in Turkey (Kaptan Demir Çelik Endüstrisi ve Ticaret A.Ş. v. U.S., CIT # 23-00131).

Turkish law requires that nearly every company in nearly every sector of the Turkish economy obtain an industrial registration certificate before starting production activities, Kaptan said, and BITT exemptions are available to all establishments with those certificates Therefore, "nearly every company in Turkey is eligible for BITT exemptions," making them non-specific and not countervailable, Kaptan said.

Commerce also calculated countervailing duties for Kaptan's right to occupy and use unimproved industrial land located outside a remote village rent-free. That land is in the Trabzon province 1,000 km from Istanbul. However, Commerce selected the petitioner’s preferred benchmark from improved industrial leases in Cerkezkoy, "one of the largest and most established industrial zones in Turkey."

Commerce unreasonably rejected Kaptan's benchmark, the company said. "Commerce for years has used benchmarks based upon non-public information in some of the most high-profile cases before the agency." The agency also misread a CAFC precedent case when it did not evaluate any credibility factors related to the report Kaptan's benchmark was based on. Instead, Kaptan said, the department found the report not credible "simply because it was prepared for the purposes of the review."