Turkish Exporter Challenges US Date of Sale, DIFMER Adjustment in AD Case

Turkish exporter Kaptan Demir Celik Endustrisi ve Ticaret filed a complaint at the Court of International Trade challenging the Commerce Department's decision on the date of sale of Kaptan's goods in the 2021-22 review of the antidumping duty order on steel concrete reinforcing bar from Turkey (Kaptan Demir Celik Endustrisi ve Ticaret v. United States, CIT # 24-00018).

In the review, Kaptan reported its date of sale as the contract date and gave evidence showing the material terms of sale "did not and could not change after that date." Despite this, Commerce used the invoice data as the date of sale for the exporter's U.S. sales. Commerce also calculated differences in merchandise (DIFMER) adjustment based on the "weight averaging and indexing of reported monthly costs" instead of per unit costs reports by Kaptan, inflating the dumping margin.

Administratively, Kaptan said it submitted "ample record evidence and precedent" showing differences from prior review that "justified use of contract date as the appropriate U.S. date of sale." The "material terms of Kaptan's U.S. sales were set in the contract and did not change." Amendments made after the contract was signed or other material term changes "were prohibited by a board resolution in effect during the [period of review (POR)]," the complaint said.

Still, Commerce stuck with its date of sale taken from the invoice, which led in part to the 29.30% AD rate for Kaptan. At the trade court, Kaptan said the agency's regulations say that "normally" Commerce "will use the date of invoice" as the date of sale unless a different date shows a better date on which the exporter "establishes the material terms of sale." There's evidence showing this better date, but Commerce used the invoice date since the terms of Kaptan's sales contracts "can hypothetically change."

This overlooks evidence showing the terms in Kaptan's contracts "did not actually change, and that such changes were in fact prohibited," the complaint said. "Moreover, a board resolution in effect during the POR explicitly provides that such changes cannot occur," Kaptan argued.

The exporter added that Commerce's long-standing practice is that "per unit cost differences for the reported cost of production for different" control numbers "should only reflect differences between product characteristics." Here, however, the agency "inflation-adjusted its" DIFMER adjustment calculation for each month of the review period using "averaging and indexing," leading to time difference distortions, "which have nothing to do with differences in physical characteristics."