Notice of conclusion of a re-investigation: Corrosion-resistant steel sheet 2 (COR2 2023 RI)

Period of investigation

The period of investigation (POI) and the profitability analysis period (PAP) for the re-investigation was from December 1, 2021 to November 30, 2022.

Re-investigation process

At the initiation of the re-investigation, the CBSA sent a request for information (RFI) to all known importers, exporters, producers and vendors to solicit information on the costs and selling prices of subject goods and like goods. The information was requested for purposes of updating the normal values and export prices for subject goods imported into Canada. On-site verifications were conducted at the premises of two exporters located in Türkiye, and five exporters located in Vietnam.

As part of the re-investigation, case briefs and reply submissions were provided by counsel representing the complainants and responding exporters. Details of the representations are provided in Appendix 1. Details pertaining to the information submitted by the exporters in response to the RFIs as well as the results of the CBSA’s re-investigation are provided below.

Specific normal values, export prices and amounts of subsidy for future shipments of COR have been determined for exporters that submitted a complete response to the Dumping RFI, Supplemental RFIs, and for whom the verification was considered reliable.

Normal values and export prices

Normal value

Normal values are generally determined based on the domestic selling prices of like goods in the country of export, in accordance with section 15 of SIMA, or on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs, plus a reasonable amount for profits, in accordance with paragraph 19(b) of SIMA.

Where, in the opinion of the CBSA, sufficient information has not been furnished or is not available, normal values are determined pursuant to a Ministerial specification in accordance with subsection 29(1) of SIMA.

Export prices

The export price of goods sold to importers in Canada is generally determined in accordance with section 24 of SIMA, based on the lesser of the adjusted exporter’s sale price for the goods or the adjusted importer’s purchase price. These prices are adjusted where necessary by deducting the costs, charges, expenses, duties and taxes resulting from the exportation of the goods as provided for in subparagraphs 24(a)(i) to 24(a)(iii) of SIMA.

Where, in the opinion of the CBSA, sufficient information has not been furnished or is not available, export prices are determined pursuant to a Ministerial specification under subsection 29(1) of SIMA.

Where there are sales between associated persons or a compensatory arrangement exists, the export price may be determined based on the importer’s resale price of the imported goods in Canada to non associated purchasers, less deductions for all costs incurred in preparing, shipping and exporting the goods to Canada that are additional to those incurred on the sales of like goods for use in the country of export, all costs that are incurred in reselling the goods (including duties and taxes) or associated with the assembly of the goods in Canada and an amount representative of the average industry profit in Canada, pursuant to paragraphs 25(1)(c) and 25(1)(d) of SIMA. In any cases not provided for under paragraphs 25(1)(c) and 25(1)(d) of SIMA, the export price is determined in such a manner as the Minister specifies, pursuant to paragraph 25(1)(e).

Türkiye

Tatmetal Çelik Sanayi ve Ticaret A.Ş. (Tatmetal)

TatMetal is a flat steel manufacturer who exported subject goods to Canada during the POI. TatMetal operates a manufacturing plant that hot rolled pickled, cold rolled, galvanized and painted flat steel in Ereğli, Türkiye. The company headquarters is located in Istanbul, Türkiye.

TatMetal provided substantially complete responses to the CBSA’s dumping RFI and supplemental RFI. An on-site verification of TatMetal was conducted from June 5 to June 7, 2023.

The exporter had domestic sales of like goods during the POI/PAP and as a result, normal values were determined pursuant to section 15 of SIMA where possible, based on the company’s weighted average domestic selling prices of COR in Türkiye. Where sufficient domestic sales of like goods did not meet the requirements of section 15 and 16 of SIMA, normal values were determined pursuant to section 19(b) of SIMA, based on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs plus a reasonable amount for profit. The amount for profit was determined pursuant to paragraph 11(1)(b)(ii) of the Special Import Measures Regulations (SIMR).

For the subject goods exported to Canada by TatMetal during the POI, the export prices were determined pursuant to section 24 of SIMA based on the exporter’s selling price less all costs, charges and expenses resulting from the exportation of the goods.

Yıldız Entegre Ağaç Sanayi ve Ticaret A.S. and Yıldız Demir Çelik Sanayi A.S. (Yıldız)

For purposes of this re-investigation, Yıldız Entegre Ağaç Sanayi ve Ticaret A.S. and Yıldız Demir Çelik Sanayi A.S. are related parties who operate as a single entity and thus are collectively referred to as Yıldız. Yıldız is a producer and exporter of COR who did not export subject goods to Canada during the POI, but is interested in doing so in the future. The company currently operates one manufacturing plant producing COR which is located in Izmit, Kocaeli, Türkiye and has headquarters located in Istanbul.

Yıldız provided substantially complete responses to both the CBSA’s Dumping RFI, Subsidy RFI and two supplemental RFIs. An on-site verification of Yıldız was conducted in June 2023.

The exporter had domestic sales of like goods during the POI/PAP and as a result, normal values were determined pursuant to section 15 of SIMA where possible, based on the company’s weighted average domestic selling prices of like goods in Türkiye. Where sufficient domestic sales of like goods did not meet the requirements of section 15 and 16 of SIMA, normal values were determined pursuant to section 19(b) of SIMA, based on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs plus a reasonable amount for profit. The amount for profit was determined pursuant to paragraph 11(1)(b) of SIMR.

All other exporters in Türkiye

For all other exporters of subject goods originating in or exported from the Türkiye, for which the dumping investigation has not been terminated, normal values will be determined by ministerial specification. The normal values for future shipments determined by ministerial specification are calculated by advancing the export price of the goods by 26.1%, pursuant to subsection 29(1) of SIMA.

Normal values previously in place expire on July 17, 2023.

Vietnam

China Steel and Nippon Steel Vietnam Joint Stock Company (China Steel)

China Steel is a manufacturer and exporter of COR who exported subject goods to Canada during the POI. Subject goods shipped to Canada during the POI were produced by China Steel at the plant located in the Ba Ria – Vung Tau Province. The company headquarters is located in Ba Ria – Vung Tau Province, Vietnam.

During the course of the re-investigation, China Steel provided responses to the CBSA’s Dumping RFI as well as two Supplemental RFIs. An on-site verification of China Steel was conducted from May 4th to 9th, 2023. The related parties also responded to CBSA’s Dumping RFI.

The exporter had domestic sales of like goods during the POI/PAP and as a result, normal values were determined pursuant to section 15 of SIMA where possible, based on the company’s weighted average domestic selling prices of COR in Vietnam. Where sufficient domestic sales of like goods did not meet the requirements of section 15 and 16 of SIMA, normal values were determined pursuant to section 19(b) of SIMA, based on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs plus a reasonable amount for profits. The amount for profit was determined pursuant to paragraph 11(1)(b) of SIMR.

As inputs significant in the production of the goods was acquired from one or more associated suppliers, the cost of the inputs were determined pursuant to subparagraph 11.2(1) of SIMR.

For the subject goods exported to Canada by China Steel during the POI, the export prices were determined pursuant to section 24 of SIMA based on the exporter’s selling price less all costs, charges and expenses resulting from the exportation of the goods.

Nam Kim Steel Joint Stock Company (Nam Kim)

Nam Kim is a manufacturer and exporter of COR who exported subject goods to Canada during the POI. Subject goods shipped to Canada during the POI were produced by Nam Kim at the plant located in Binh Duong Province. The company headquarters is located in Binh Duong Province, Vietnam.

During the course of the re-investigation, Nam Kim provided responses to the CBSA’s Dumping RFI as well as Supplemental RFI. An on-site verification of Nam Kim was conducted from May 10th to 12th, 2023.

The exporter had domestic sales of like goods during the POI/PAP and as a result, normal values were determined pursuant to section 15 of SIMA where possible, based on the company’s weighted average domestic selling prices of COR in Vietnam. Where sufficient domestic sales of like goods did not meet the requirements of section 15 and 16 of SIMA, normal values were determined pursuant to section 19(b) of SIMA, based on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs plus a reasonable amount for profits. The amount for profit was determined pursuant to paragraph 11(1)(b) of SIMR.

For the subject goods exported to Canada by Nam Kim during the POI, the export prices were determined pursuant to section 24 of SIMA based on the exporter’s selling price less all costs, charges and expenses resulting from the exportation of the goods.

Hoa Phat Steel Sheet Co., Ltd. (Hoa Phat)

Hoa Phat is a manufacturer and exporter of COR with its headquarters located in Hanoi and its factory located in Hung Yen Province, Vietnam. Hoa Phat purchases inputs from related suppliers who are also located in Vietnam. Hoa Phat did not export subject goods to Canada.

Hoa Phat provided substantially complete responses to the CBSA’s dumping RFI and three supplemental RFIs. An on-site verification of Hoa Phat was conducted from May 19th to 24th, 2023. The related parties also responded to the RFIs and the information was verified during the on-site verification.

The exporter provided a database of domestic sales of like goods during the PAP. As a result, normal values for Hoa Phat were determined in accordance with the methodology of section 15 of SIMA, based on the company’s weighted average domestic selling prices of COR in Vietnam. Where sufficient domestic sales of like goods did not meet the requirements of section 15 and 16 of SIMA, normal values were determined pursuant to section 19(b) of SIMA, based on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs plus a reasonable amount for profits. The amount for profit was determined pursuant to paragraph 11(1)(b) of SIMR.

As inputs significant in the production of the goods was acquired from one or more associated suppliers, the cost of the inputs were determined pursuant to subparagraph 11.2(1) of SIMR.

Hoa Sen Group (Hoa Sen)

Hoa Sen is a manufacturer and exporter of COR who exported subject goods to Canada during the POI. Subject goods shipped to Canada during the POI were produced by Hoa Sen at the Phu My Plant, as well as by other related producers. The company headquarters is located in Ho Chi Minh City, Vietnam.

During the course of the re-investigation, Hoa Sen provided responses to the CBSA’s Dumping RFI as well as three Supplemental RFIs. An on-site verification of Hoa Sen was conducted from May 8th to 12th, 2023. The related parties also responded to any RFIs, as well as Supplemental RFIs issued by the CBSA as part of the re-investigation, and the information was verified during the on-site verification.

The exporter had domestic sales of like goods during the POI/PAP and as a result, normal values were determined pursuant to section 15 of SIMA where possible, based on the company’s weighted average domestic selling prices of COR in Vietnam. Where sufficient domestic sales of like goods did not meet the requirements of section 15 and 16 of SIMA, normal values were determined pursuant to section 19(b) of SIMA, based on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs plus a reasonable amount for profits. The amount for profit was determined pursuant to paragraph 11(1)(b) of SIMR.

As inputs significant in the production of the goods was acquired from one or more associated suppliers, the cost of the inputs were determined pursuant to subparagraph 11.2(1)(a) of SIMR.

For the subject goods exported to Canada by Hoa Sen during the POI, the export prices were determined pursuant to section 24 of SIMA based on the exporter’s selling price less all costs, charges and expenses resulting from the exportation of the goods.

All other exporters in Vietnam

For all other exporters of subject goods originating in or exported from the Vietnam, for which the dumping investigation has not been terminated, normal values will be determined by ministerial specification. The normal values for future shipments determined by ministerial specification are calculated by advancing the export price of the goods by 71.1%, pursuant to subsection 29(1) of SIMA.

Normal values previously in place expire on July 17, 2023.

Amounts of subsidy

In accordance with section 2 of SIMA, a subsidy exists if there is a financial contribution by a government of a country other than Canada that confers a benefit on persons engaged in the production, manufacture, growth, processing, purchase, distribution, transportation, sale, export or import of goods. A subsidy also exists in respect of any form of income or price support within the meaning of Article XVI of the General Agreement on Tariffs and Trade, 1994, being part of Annex 1A to the World Trade Organization (WTO) Agreement that confers a benefit.

Pursuant to subsection 2(1.6) of SIMA, there is a financial contribution by a government of a country other than Canada where:

1. practices of the government involve the direct transfer of funds or liabilities or the contingent transfer of funds or liabilities
2. amounts that would otherwise be owing and due to the government are exempted or deducted or amounts that are owing and due to the government are forgiven or not collected
3. the government provides goods or services, other than general governmental infrastructure, or purchases goods or
4. the government permits or directs a non-governmental body to do anything referred to in any of paragraphs (a) to (c) where the right or obligation to do the thing is normally vested in the government and the manner in which the non-governmental body does the thing does not differ in a meaningful way from the manner in which the government would do it

Where subsidies exist they may be subject to countervailing measures if they are specific in nature. According to subsection 2(7.2) of SIMA a subsidy is considered to be specific when it is limited, in a legislative, regulatory or administrative instrument, or other public document, to a particular enterprise within the jurisdiction of the authority that is granting the subsidy; or is a prohibited subsidy.

A “prohibited subsidy” is either an export subsidy or a subsidy or portion of a subsidy that is contingent, in whole or in part, on the use of goods that are produced or that originate in the country of export. An export subsidy is a subsidy or portion of a subsidy contingent, in whole or in part, on export performance. An “enterprise” is defined as including a group of enterprises, an industry and a group of industries. These terms are all defined in section 2 of SIMA.

Notwithstanding that a subsidy is not specific in law, under subsection 2(7.3) of SIMA a subsidy may also be considered specific having regard as to whether:

1. there is exclusive use of the subsidy by a limited number of enterprises
2. there is predominant use of the subsidy by a particular enterprise
3. disproportionately large amounts of the subsidy are granted to a limited number of enterprises and
4. the manner in which discretion is exercised by the granting authority indicates that the subsidy is not generally available

For purposes of a subsidy re-investigation, the CBSA refers to a subsidy that has been found to be specific as an “actionable subsidy,” meaning that it is subject to countervailing measures if the persons engaged in the production, manufacture, growth, processing, purchase, distribution, transportation, sale, export or import of goods under investigation have benefited from the subsidy.

Financial contributions provided by state-owned enterprises (SOEs) may also be considered to be provided by the government for purposes of this re-investigation. A SOE may be considered to constitute “government” for the purposes of subsection 2(1.6) of SIMA if it possesses, exercises, or is vested with governmental authority. Without limiting the generality of the foregoing, the CBSA may consider the following factors as indicative of whether the SOE meets this standard: 1) the SOE is granted or vested with authority by statute; 2) the SOE is performing a government function; 3) the SOE is meaningfully controlled by the government; or some combination thereof.

Results

Yıldız Entegre Ağaç Sanayi ve Ticaret A.S. and Yıldız Demir Çelik Sanayi A.S. (Yıldız)

Yıldız provided a substantially complete responses to the Subsidy RFI. An on-site verification of Yıldız was conducted in June 2023. The Government of Türkiye (GOT) also provided a response to the CBSA’s Government Subsidy RFI and SRFI.

For purposes of this re-investigation, the CBSA determined that Yıldız benefited from the following subsidy programs during the subsidy POI:

1. Program 24: Deduction from Taxable Income for Export Revenue
2. Program 26: Exemption from Property Tax
3. Program 37: Unemployment Insurance Premium Support under Law 4447
4. Program 38: Special Consumption Tax Reimbursement
5. Program 39: Fee Exemption of Certificate Obtained from Vocational Qualifications Authority

For purposes of the re-investigation, the above subsidy programs were considered to be specific and therefore actionable. This decision was based on an analysis of the information provided by Yıldız and the GOT. Descriptions of the programs used by the responding exporter are listed in Appendix 2.

The amount of subsidy determined for future shipments of subject goods for Yıldız is equal to 7.70 TL/MT, effective on July 17, 2023.

All other exporters in Türkiye

For all other exporters of subject goods from Türkiye, for which the subsidy investigation has not been terminated, the amount of subsidy will be determined in accordance with a ministerial specification, and is equal to 200.46 TL/MT.

Exporter responsibility

Please note that exporters with normal values are required to promptly inform the CBSA in writing of changes to domestic prices, costs, market conditions or terms of sale associated with the production and sales of the goods. All parties are cautioned that where there are increases in domestic prices, and/or costs as noted above, the export price for sales to Canada should be increased accordingly to ensure that any sale made to Canada is not only above the normal value but at or above selling prices and full costs and profit of the goods in the exporter’s domestic market. Where exporters do not properly notify the CBSA of any such changes, do not adjust export prices accordingly, or do not provide the information required to make any necessary adjustments to normal values and export prices, retroactive assessments of anti-dumping or countervailing duties may be warranted.

Importer responsibility

Importers are reminded that it is their responsibility to calculate and declare their anti-dumping and countervailing duty liability. If importers are using the services of a customs broker to clear importations, the brokerage firm should be advised that the goods are subject to anti-dumping and countervailing measures and be provided with sufficient information necessary to clear the shipments. To determine their liability for anti-dumping and countervailing duty, importers should contact the exporters to obtain the applicable normal values and amounts of subsidy. For further information on this matter, refer to Memorandum D14-1-2, Disclosure of normal values, export prices, and amounts of subsidy established under the Special Import Measures Act.

The Customs Act applies, with any modifications that the circumstances require, with respect to the accounting and payment of anti-dumping and countervailing duties. As such, failure to pay the duties within the prescribed time will result in the application of the interest provisions of the Act.

Should the importer disagree with the determination made on any importation of goods, a request for re-determination may be filed. For more information on how to file a request for re-determination, please refer to the Guide for appealing a duty assessment.

Contact us

• Telephone:
• Serena Major: 343-553-2004
• Jordan Harris: 343-573-3003

Email: simaregistry-depotlmsi@cbsa-asfc.gc.ca

Appendix 1: Representations

During the re-investigation, submissions containing representations were received on behalf of the complainants AcelerorMittal Dofasco G.P. and Stelco Inc. (collectively “the complainants”).^{Footnote 1}

Following the closing of the record on June 15, 2023, case arguments were received on behalf of the following parties:

• The complainants^{Footnote 2}
• China Steel and Nippon Steel Vietnam Joint Stock Company (China Steel)^{Footnote 3}
• Nam Kim Steel Joint Stock Company (Nam Kim)^{Footnote 4}
• Hoa Sen Group (Hoa Sen)^{Footnote 5}
• Tatmetal Celik Sanayi ve Ticaret A.Ş. (TatMetal), Yıldız Entegre Ağaç Sanayi ve Ticaret A.S. and Yıldız Demir Çelik Sanayi A.S. (Yıldız)^{Footnote 6}

The CBSA received reply submissions on behalf of:

• The complainants^{Footnote 7}
• Cascadia Metals Ltd. (Cascadia)^{Footnote 8}
• China Steel^{Footnote 9}
• Hoa Sen^{Footnote 10}
• Nam Kim^{Footnote 11}
• Salzgitter Mannesmann International (Canada) Inc. (Salzgitter)^{Footnote 12}
• TatMetal and Yıldız^{Footnote 13}

Certain details provided in case briefs and reply submissions were designated as confidential information by the submitting counsel. This has restricted the ability of the CBSA to discuss all issues raised in these submissions. The material issues raised by the parties through case briefs are summarized as follows:

Particular market situation allegations

Representations made during the re-investigation

On May 26, 2023, counsel for the complainants submitted comments regarding a particular market situation (PMS) in Türkiye, requesting the CBSA initiate an investigation into whether a PMS exists in Türkiye’s corrosion-resistant steel sheet (COR) market, send a PMS request for information (RFI) to Turkish exporters and the Government of Türkiye (GOT), and extend the re-investigation to allow parties sufficient time to respond to the PMS RFI.^{Footnote 14}

Counsel submitted that significant volatility in the economic conditions in Türkiye contribute to the existence of a PMS, namely currency depreciation and hyper-inflation. Counsel further addressed the GOT’s response to the hyper-inflation, which included lowering interest rates and the prohibiting of inflation adjustment accounting, claiming these actions further contributed to a PMS. Furthermore, counsel submitted that the lack of inflation adjustment accounting resulted in distortions to the Turkish exporters’ input costs. Additionally, counsel submitted that the availability and importation of low priced Russian inputs further distorted the pricing of inputs in Türkiye. Counsel also identified various government policies, regulations, and support programs that they claim may contribute to the existence of a PMS.

Counsel referred to the conclusion of CBSA's recent re-investigation of Certain Concrete Reinforcing Bar (rebar), in which the CBSA formed the opinion that a PMS exists in the Turkish rebar market. Counsel highlighted alleged similar circumstances between the rebar and COR markets, and claimed that the factors that resulted in the CBSA finding a PMS in the rebar market also existed in the COR market, and were even more severe during the period of investigation (POI) of the corrosion-resistant steel sheet from Türkiye and Vietnam (COR2) re-investigation.

In an additional letter submitted on June 13, 2023, counsel for the complainants repeated their arguments from their May 26 submission, and repeated their request that the CBSA extend the re-investigation, initiate a PMS investigation, and issue PMS RFIs.^{Footnote 15}

Case briefs

In their case briefs, counsel for the complainants reiterated its allegations that evidence on the record demonstrates that a PMS exists in the Turkish COR sector. Counsel further submitted that the CBSA is not required to formally initiate a PMS investigation in order to make a PMS finding.^{Footnote 16}

In a case brief, counsel for TatMetal and Yıldız addressed the complainants’ PMS allegations, submitting that the allegations should be disregarded and their late submission did not allow the CBSA sufficient time to properly consider the allegations or seek the necessary information. Counsel further stated that the POI largely coincided with an unusually turbulent and volatile period for steel markets around the world, and conditions in the Turkish COR market were not “particular”. In response to the complainants’ arguments concerning distorted input costs, counsel argued that inflationary adjustments are irrelevant due to their impact on costs rather than prices, the CBSA's use of monthly costs as opposed to costs impacted by year-end adjustments, and the use of foreign currency (USD) in the domestic market. Counsel further noted that in 2022, Russian slab was imported into Türkiye under the Inward Processing Regime, and the entire volume of those imports was re-exported as finished goods. In addition, semi-finished steel goods, including slab and billet, were not included in the sanctions imposed by the European Union, negating the argument that Türkiye is a key destination for Russian inputs following the imposition of sanctions.^{Footnote 17}

Counsel also submitted that information on the record concerning Turkish government support programs is limited to the Subsidy RFI responses of Yıldız and the GOT, and there is not sufficient evidence to form an opinion as to whether GOT programs contribute to a PMS. Additionally, counsel argued that evidence on the record demonstrates that Turkish hot-rolled coil and COR prices were generally close to Italian and European prices during the POI, noting Turkish prices were higher in the last 60 days.^{Footnote 18}

Reply submissions

With respect to the timing of the submission of their PMS allegations, counsel for the complainants claimed that there is no time limit for filing evidence and arguments related to PMS. Counsel further submitted that if the evidence on the record supports the finding of a PMS, the CBSA should make such a finding even if no parties specifically argue that a PMS exists. Counsel claimed that if the President of the CBSA determines there is insufficient time to review the PMS allegations and seek additional information to make a PMS determination, then there was also insufficient time to properly consider all exhibits filed after the PMS allegations, identifying exhibits submitted after May 26, 2023 but prior to the close of record. Counsel further stated these exhibits could not be relied upon in the determination of normal values.^{Footnote 19}

In response to the exporters' arguments concerning the re-export of Russian slabs, counsel for the complainants claimed that the low-priced slab imports impact Turkish slab prices as a whole, regardless of whether they are used in goods sold domestically or re-exported. Counsel also argued that Turkish prices tracking closely with Italian and European prices does not prove there is not a PMS, and further notes that it is the difference in prices, not the trends, that is relevant. Counsel referenced hot-rolled coil and COR prices for Türkiye, Italy and Spain, noting price gaps, and stating that Turkish prices were lower, demonstrating a PMS in Türkiye.^{Footnote 20}

Regarding GOT support programs, counsel argued that their PMS submissions provided evidence of government support programs, contrary to the exporters' claims that the only evidence on the record is limited to the Subsidy RFI responses of Yıldız and the GOT.^{Footnote 21}

Counsel for TatMetal and Yıldız addressed the complainants’ suggestions for adjustments to input costs, stating that the proposed adjustment to reflect the price gap between Turkish prices and Italian/Spanish prices is not consistent with WTO Appellate Body guidance as it suggests the substitution of input costs with costs not in the country of export.^{Footnote 22}

CBSA’s response

The CBSA notes that the complainants submitted PMS Allegations only 20 days before the close of the record. Due to the timing of the submission, the CBSA did not have sufficient time to review the allegations, gather additional information, analyze the new information, or verify information submitted.

At the initiation of the re-investigation, parties were advised that the CBSA would not be investigating allegations that a PMS exists in the Turkish COR sector. In order to allow the CBSA proper time to investigate allegations of a PMS, any submissions alleging the existence of a PMS should have been submitted expeditiously following the initiation of the re-investigation. This was conveyed to the counsel of the complainant upon initiation of the re-investigation. In fact, the complainants were aware that the CBSA was planning to initiate a COR re-investigation in advance and could have provided relevant information to the CBSA before the initiation of the proceeding. The complainants’ allegations were submitted more than four months after the initiation of the re-investigation.

The CBSA further notes that the planning and scheduling of verifications for Turkish exporters had been completed before the allegations had been filed and officers had already departed for Türkiye. The on-site verifications started around the time that the allegations were submitted. Officers verifying the responses from the Turkish exporters had limited access to communication during the on-site verifications, and did not have time to review the PMS allegations during verifications. Any information that would have been submitted following the allegations would not have been received until post-verification and would have been unverified. The timing of the allegations essentially prevented the CBSA from being able to properly analyze and verify the information, let alone being able to solicit, analyze, and verify other information that would have been required to properly analyze whether a PMS existed in the Turkish COR market.

Although the CBSA formed the opinion that a PMS exists with respect to the rebar market in Türkiye in the recent re-investigation of rebar, the same opinion would not necessarily be found in regards to the Turkish COR market. In order to form the opinion concerning the Turkish rebar market, the CBSA conducted an in-depth analysis based on information submitted during the re-investigation by the complainant, Turkish exporters, and the GOT, as well as additional research done by the CBSA relating to the Turkish rebar market. The opinion formed by the CBSA is specific to the rebar market in Türkiye, during the POI of the rebar re-investigation.

Additionally, the CBSA further notes that it began its PMS investigation at the initiation of the rebar re-investigation, and in order to have sufficient time to complete the PMS analysis, the CBSA required eight months to conclude the re-investigation. Generally, re-investigations are completed within 180 days of the initiation date, however due to the complexity of the situation, and the amount of analysis required to form an opinion regarding a PMS, additional time was required. The CBSA extended the re-investigation twice to ensure sufficient time was available.

As part of the rebar PMS opinion, the CBSA acknowledged the distortion in the markets for input materials (namely steel billet and scrap steel), caused by large volumes of Russian steel billet available at heavily discounted prices.^{Footnote 23} The CBSA notes that the major input materials for COR (hot-rolled coil and cold-rolled coil), differ from the input materials identified for rebar. In order for the CBSA to form an opinion as to whether there is distortion in the markets for input materials of COR, a full analysis would be required concerning the COR input material markets in Türkiye, the volumes and prices of imports of Russian inputs, and the impacts on the COR market. Due to the timing of the PMS allegations, there was insufficient time for the CBSA to complete such an analysis into the alleged distortion caused by the availability and imports of Russian inputs.

In addition, the CBSA notes that the POIs for the rebar re-investigation and the COR2 re-investigation differ. The POI for the rebar re-investigation was July 1, 2021 to August 31, 2022. The POI for the COR2 re-investigation is December 1, 2021 to November 30, 2022. Although there is some overlap between the two periods, without a complete analysis, the CBSA can not determine whether the distorting effects found during the rebar re-investigation also applied during the COR2 POI. As mentioned above, due to the late submission of the PMS allegations, the CBSA did not have sufficient time to complete such an analysis.

As detailed above, there was insufficient time for the CBSA to properly review the submission, request additional information and verify any relevant information. Therefore, the CBSA did not analyze whether a PMS existed in Turkish COR market.

With respect to the complainants’ request for an extension, the CBSA notes that the closing of the record date had already been extended by one month due to the unforeseen circumstances caused by the devastating earthquakes in Türkiye in February, 2023. The complainant also benefited from this extension, having additional time to review information available on the record, and submit comments/representations. In order to have sufficient time to complete a PMS analysis, and provide sufficient time for all parties to submit information, a significant additional extension of time would be required.

The purpose of the re-investigation is to establish more up-to-date normal values and amounts of subsidy. Normal values issued as a result of this re-investigation are based on information from at least eight months prior to the date of conclusion, as the end of the POI was November 30, 2022. Further extending the re-investigation would create less recent normal values due to a longer delay between the end of the POI and the issuing of normal values.

In addition, several exporters that received normal values or amounts of subsidy as a result of this re-investigation had not participated in the original investigation, and therefore did not previously have any normal values, amounts of subsidy, or exporter specific margins of dumping. Prior to the conclusion of this re-investigation, the ministerial specifications applied to all exports from those exporters. An additional extension would have delayed the issuing of normal values and amounts of subsidy for these exporters, causing the ministerial specifications to continue to be applicable for these exports for a longer time.

In consideration of fairness for all parties involved, the CBSA did not further extend the re-investigation.

Retroactive duty assessments

Case briefs

Counsel for the complainants reiterated that in order to ensure that normal values accurately reflect changing market conditions, exporters with normal values are required to inform the CBSA of changes to domestic prices, costs, market conditions or terms of sale associated with the production and sale of COR. Where an exporter fails to properly notify the CBSA of such changes, fails to properly adjust their export prices, or fails to provide the CBSA with the information needed to make the relevant adjustments to normal values, the CBSA is authorized to impose retroactive anti-dumping duties on the subject goods.^{Footnote 24}

Counsel alleged that there were significant increases in prices of hot-rolled coil and cold-rolled coil, the main inputs in COR, in the subject countries in 2020-2023. Counsel further submitted that the Turkish and Vietnamese exporters have not notified the CBSA of these changes, and therefore, the CBSA should assess retroactive duties to imports of subject COR as of the beginning of the POI (December 1, 2021).^{Footnote 25}

Reply submissions

In their reply submissions, counsel for both Cascadia and Salzgitter responded to the complainants’ allegations, submitting that the CBSA should not recommend retroactive imposition of revised normal values. Counsel noted that due to the COVID-19 pandemic, supply chain reductions, and the impacts of the Russian invasion of Ukraine as well as China’s Zero-Covid policy, the global steel industry has been in chaos. Counsel further submitted that data provided by the complainants demonstrates a declining trend in hot-rolled coil prices in Vietnam in 2021 and 2022, which serves as evidence against the need for retroactivity.^{Footnote 26}

Counsel for China Steel, Hoa Sen and Nam Kim also addressed the complainants’ request for retroactivity, claiming that information on the record concerning prices of inputs, prices and costs of COR, and other market conditions do not demonstrate a requirement for retroactivity.^{Footnote 27} Additionally, counsel for TatMetal and Yıldız also responded the complainants’ arguments, noting that if retroactive duties are imposed, the duties cannot exceed the POI margin of dumping, calculated without zeroing.^{Footnote 28}

CBSA response

Upon completion of the re-investigation, the CBSA will be conducting an analysis of subject imports from exporters of COR during the POI, to determine whether retroactive assessments are warranted. The analysis will rely on information provided via RFI and Supplemental RFI responses received, representations submitted by parties, on-site verifications and any other available relevant information.

Dumping representations: Completeness of information provided and the calculation of normal values and export prices

Representations made during the re-investigation

During the re-investigation, counsel for the complainants discussed various concerns pertaining to the responses to the RFIs and Supplemental RFIs provided by exporters, related parties, and importers. Issues raised included: acquisitions of raw materials, cost of production reporting methodologies, pricing, trade level classifications, discount adjustments, currency exchange gains/losses, and other various alleged inconsistencies and deficiencies within the responses.^{Footnote 29}

There were a number of exporter specific issues that were raised by counsel for the complainants as well. In order to respect the confidentiality designations made by interested parties, the CBSA is limited in the information that can be divulged in response to arguments made concerning certain topics.

Case briefs

Counsel for the complainants repeated many of their concerns and alleged additional deficiencies and inconsistencies. Additionally, counsel made arguments concerning the selection of 60-day periods for the determination of section 15 normal values, submitting that a 60-day period covering April and May of 2022 is the most appropriate. Counsel further submitted that complete responses to the Importer RFI were not received from all importers, and stated that the CBSA should not determine normal values in instances where not all of an exporter’s Canadian importers have responded. They also argue that the CBSA should consider issuing normal values in USD, where appropriate.^{Footnote 30}

In their case briefs, counsels for several exporters generally submit that they have been fully cooperative in the re-investigation, have provided the CBSA with complete responses, addressed issues where required, and have completed full on-site verifications.^{Footnote 31}

Reply submissions

In their reply submission, counsel for the complainants responded to some of the exporters’ claims, repeating some of their concerns, and submitting that all the Vietnamese and Turkish exporters’ responses are incomplete, deficient and/or unreliable for purposes of calculating normal values. Additional concerns identified included profitability and the models and characteristics used to determine normal values.^{Footnote 32}

Counsel for several exporters responded to the complainants' arguments, repeating that their respective responses are complete and verified, generally disagreeing with the complainants’ alleged deficiencies, and responding to specific arguments.^{Footnote 33}

In response to the complainants’ comments concerning importers that did not participate, counsel for several exporters stated that there is no requirement in SIMA or SIMR for importers to complete the importer RFI, and consequences are only applicable if an importer related to the exporter does not respond.^{Footnote 34}

With respect to the selection of 60-day periods, counsel for exporters submitted that the complainants’ objective with choosing that particular 60-day period was based on determining the highest normal values, which is not a factor identified in the guidelines for selecting a 60-day period, and is not consistent with the objective and purpose of the World Trade Organization Anti-dumping Agreement or SIMA.^{Footnote 35}

CBSA response

The CBSA determined that the information provided by China Steel, Hoa Phat, Hoa Sen, Nam Kim, TatMetal and Yıldız in their RFI and SFRI responses, and on-site verification responses was sufficient for purposes of determining normal values and export prices in this re-investigation. Further, normal values and export prices calculated by the CBSA in this review were determined in accordance with both SIMA and the SIMR.

Due consideration has been given to submissions on the topics raised in case briefs on a case by case basis and appropriate adjustments were made, as applicable, in accordance with SIMA and SIMR. Additional information on the calculation of normal values is provided to exporters in the confidential exporter conclusion letters.

Subsidy representations: Completeness of information provided and the calculation of an amount for subsidy

Representations made during the re-investigations

During the re-investigation, counsel for the complainants discussed various concerns pertaining to the responses to the RFIs and Supplemental RFIs provided by exporters, as well as the GOT. The complainant alleged certain deficiencies within responses to the Subsidy RFIs, and further detailed various new programs that may confer countervailable subsidies to Turkish COR exporters.^{Footnote 36}

Case briefs

In their case brief submission, counsel for the complainants reiterated arguments from their previous submission.^{Footnote 37}

Counsel for Yıldız submitted in their case brief that they have provided complete responses to all RFIs, and the information has been verified. Counsel argued that several programs reported by Yıldız are not countervailable, and further discussed the method of allocation and the calculation of subsidies. They also submit that in instances where a program has been terminated, it is not appropriate for the CBSA to include any benefits received during the POI in a prospective amount for subsidy calculation.^{Footnote 38}

Reply submissions

Counsel for the complainants responded to Yıldız’s claims presented in their case brief, submitting that the identified programs are countervailable. They also refer to CBSA’s policy of calculating amounts of subsidy based strictly on benefits received during the POI. ^{Footnote 39}

In their reply submission, counsel for Yıldız maintained their position that the programs referenced by the complainants are not countervailable.^{Footnote 40}

CBSA response

Based on the information on the record and in accordance with SIMA and SIMR, the CBSA has taken the representations on these issues into account when determining the amount of subsidy for Yıldız. Further details can be found in the Amounts of subsidy section as well as Appendix 2.

Appendix 2: Subsidy programs used by responding exporter

This Appendix consists of descriptions of the subsidy programs that the responding exporter benefited from during the POI.

Due to the fact that Yıldız is the only participating exporter in relation to the subsidy re-investigation, the CBSA is limited in some regards in terms of the level of detail that can be shared since some information was designated as confidential by the exporter.

To summarize, the CBSA included a list of 36 potential subsidy programs at the initiation of the re-investigation. The responding exporter, Yıldız, was found to have been receiving benefits from a total of five programs. Of these programs, two were considered to be from the initial list of 36, while the remaining three were considered as programs not previously identified.

Program 24: Deduction from Taxable Income for Export Revenue

According to Article 40, Clause 1 of Income Tax Law No. 193 dated January 6, 1961, which was amended by the Law No. 4108 dated June 2, 1995, all taxpayers may have an additional deduction of a lump sum amount from their gross income resulting from exports, construction, maintenance, assembly and transportation activities abroad. This amount may not exceed 0.5% of the proceeds they earned in foreign exchange from such activities. The program is administered by Ministry of Treasury and Finance.

The only criterion is receipt of foreign currency revenue. The deduction is claimed as part of the exporter’s tax filings and is shown in their annual tax return. No application or approval process required.

Pursuant to paragraph 2(1.6)(b), a financial contribution is provided where amounts that would otherwise be owing and due to the government are exempted or deducted or amounts that are owing and due are forgiven or not collected.

The information available also indicates that this program is considered a specific subsidy under paragraph 2(7.2)(b) of SIMA as it is contingent upon export performance and, therefore, constitutes a prohibited subsidy as defined in subsection 2(1) of SIMA.

Program 26: Exemption from Property Tax

The GOT refers to this program as “Property tax exemption under the Law No. 1319”. The program provides property tax exemption for the buildings which are in the organized industrial zones, free zones, industrial zones, technology development zones and industrial sites.

The relevant legal basis for the tax exemption is paragraph (m) of Article 4 of Property Tax Law No. 1319. The subparagraph (m) of Article 4 (permanent exemptions) of Law No. 1319 has been amended by the Article 10 of Law No. 7033 from the date of 1 July 2017 and it is still in force. Municipalities and the Ministry of Finance are responsible for administering the program.

Local municipalities administer this program. Companies wishing to benefit from this program must notify the related municipality when they first build or acquire a building in an OIZ. The municipality then refrains from assessing the relevant building for property tax.

The property tax rate is 0.2% for these buildings. Owners of buildings located in the types of areas covered by this law (e.g. OIZs) are eligible for the exemption under this program. Owners, not renters, who are responsible for paying property taxes can benefit from the building tax exemption under this program.

Pursuant to paragraph 2(1.6)(b), a financial contribution is provided where amounts that would otherwise be owing and due to the government are exempted or deducted or amounts that are owing and due are forgiven or not collected.

The information available also indicates that this program is considered specific pursuant to paragraph 2(7.3) of SIMA in that the manner in which discretion is exercised by the granting authority indicates that the subsidy may not be generally available.

Program 37: Unemployment insurance premium support under Law 4447

This program aims to reduce occupational accidents in workplaces with more than ten employees that fit into the highly hazardous class covered by the Occupational Health and Safety Law by lowering the employer’s share of employee unemployment insurance to 1% for three years.

The program was established pursuant to the provision of Additional Article 4 of the Law No.4447, which was appended by the Law No. 6645, dated April 4, 2015 and entered in force in April 23, 2015. The Social Security Institution is responsible for administering the program.

Pursuant to paragraph 2(1.6)(b), a financial contribution is provided where amounts that would otherwise be owing and due to the government are exempted or deducted or amounts that are owing and due are forgiven or not collected.

The information available also indicates that this program is considered specific pursuant to paragraph 2(7.3) of SIMA in that the manner in which discretion is exercised by the granting authority indicates that the subsidy may not be generally available.

Program 38: Special Consumption Tax Refund

According to Article 1 of the “Decree on the Excise Tax Levied on the Goods Included in the Schedule (B) of List No (I) Annexed to Excise Tax Law No. 4760” numbered 2012/3792 and dated October 9, 2012; if the goods delivered which are levied with the tax amounts specified in the Schedule (B) of the List No I Annexed to Excise Tax Law No. 4760, are used by the producers in the production of the goods not included in the List No (I), then tax amounts calculated by the multiplication of the rate indicated in the above-mentioned Decree based on HS Codes and the previously levied tax amount is applied to such goods which are used as an input.

The Ministry of Treasury and Finance is responsible for administering the program.

Pursuant to paragraph 2(1.6)(b), a financial contribution is provided where amounts that would otherwise be owing and due to the government are exempted or deducted or amounts that are owing and due are forgiven or not collected.

The information available also indicates that this program is considered specific pursuant to paragraph 2(7.3) of SIMA in that the manner in which discretion is exercised by the granting authority indicates that the subsidy may not be generally available.

Program 39: Fee Exemption of Certificate Obtained From Vocational Qualifications Authority

Obtaining a Vocational Qualification Certificate (VQC) is mandatory for 204 occupation on dangerous and very dangerous works under the Additional Article 1 of the Law No. 5544. The entrance exam fee and the certificate fee itself are reimbursed if employees pass the related exams to obtain a VQC.

This program is implemented under the Additional Article 3 of Law No. 4447. Although the program was terminated on December 31, 2021, benefits received by exporters during the POI are included in any applicable amount for subsidy calculations made by the CBSA.

Pursuant to paragraph 2(1.6)(b), a financial contribution is provided where amounts that would otherwise be owing and due to the government are exempted or deducted or amounts that are owing and due are forgiven or not collected.

The information available also indicates that this program is considered specific pursuant to paragraph 2(7.3) of SIMA in that the manner in which discretion is exercised by the granting authority indicates that the subsidy may not be generally available.