Commerce Refused Filing, Then Used It as Evidence, Rebar Exporter Says

The Commerce Department wrongly countervailed benefits received by a Turkish rebar exporter under a law the department hadn’t known existed until the exporter noted it in a filing -- while rejecting that filing, said exporter claimed in a June 27 complaint (Kaptan Demir Celik Endustrisi ve Ticaret v. U.S., CIT #24-00096).

Exporter Kaptan Demir Celik Endustrisi ve Ticaret filed its complaint to contest the 2021 countervailing duty review of rebar from Turkey, which resulted in a 5.54% duty for Kaptan (see 2405010044).

The exporter is no stranger to the Court of International Trade, having brought a previous case (see 2401300068) challenging Commerce’s 2020 finding of de jure specificity regarding the exporter’s use of Turkey’s Bank and Insurance Transactions Tax exemption program and the department’s choice of benchmark prices to assess the benefit it received from industrial land granted to it by the government.

Kaptan raised these issues again in its newest case, but added two more charges alleging the department wrongly applied adverse facts available in calculating CVD for social security support programs under Law 4447 and 27256. It also pushed back on the department’s decision to use AFA to set its BITT exemption CVD, something that hadn’t been done in prior reviews.

The exporter first mentioned the Law 4447 program in its initial questionnaire response, it said, and Commerce didn’t ask “any follow-up questions” at the time. The department later issued a questionnaire regarding the program to the Turkish government, which responded Oct. 2, 2023.

Kaptan said it then “sought to provide clarifications as to its own receipt of benefits” Oct. 12 after Turkey filed its questionnaire, but Commerce rejected that follow-up for untimeliness. The department also refused to accept any new information during verification, the exporter said.

It then applied adverse facts available due to deficiencies in the Turkish government’s response, Kaptan said.

In that Oct. 12 follow-up, Kaptan also included information regarding its benefits under Law 27256 for the first time, it said. Though Commerce hadn’t accepted the filing, the department still applied AFA to Kaptan’s use of that law in its final determination, it said. To prove that the program existed, Commerce cited “its own memorandum rejecting Kaptan’s October 12, 2023 submission, and the passage in its own verification report declining to accept information on the receipt of benefits under this program.”

“There was no evidence that [Law 27256] even existed” outside of Kaptan’s own filings, the exporter argued. If the department did want to countervail the law, Kaptan’s filing “‘must be restored to the record,” it said.

The exporter also took issue with Commerce’s application of AFA to Kaptan’s use of Turkey’s BITT exemption. The department did so after Kaptan failed to report “so-called ‘arbitrage’ transactions” in which the exporter sold Turkish lira for U.S. dollars.

But arbitrage transactions aren't covered by the exemption, Kaptan claimed. Even if they were, Commerce hadn’t given the exporter the chance to fix its “alleged error”; it had actually refused to accept at verification “a screen shot showing Kaptan’s total arbitrage transactions in the [period of review],” Kaptan said.

It called Commerce’s rejection of its findings, and the department’s determination that the BITT exemption applied to arbitrage transactions, “arbitrary and capricious and an abuse of discretion.”