                        Slip Op. 00-50

          UNITED STATES COURT OF INTERNATIONAL TRADE

              BEFORE: RICHARD W. GOLDBERG, JUDGE


MANNESMANN-SUMERBANK BORU
ENDUSTRISI T.A.S., BORUSAN
BIRLESIK BORU FABRIKALARI
A.S., AND BORUSAN ITHALAT
IHRACAT VE DAGITIM A.S.,


Plaintiffs,

               v.
                                           Court No. 98-05-02185
UNITED STATES OF AMERICA,


Defendant,


and

ALLIED TUBE & CONDUIT CORP.
AND WHEATLAND TUBE COMPANY,

          Defendant-
Intervenors.


[Court remands.]

                                         Dated: May 3, 2000

     Dickstein Shapiro Morin & Oshinsky LLP, (Arthur J. Lafave
III and Douglas N. Jacobson) for plaintiffs.

     David W. Ogden, Acting Assistant Attorney General; David
M. Cohen, Director, Commercial Litigation Branch, Civil
Division, United States Department of Justice; Lucius B. Lau,
Attorney, Commercial Litigation Branch, Civil Division, United
States Department of Justice; Office of the Chief Counsel for
Import Administration, United States Department of Commerce
(Linda A. Andros), of counsel, for defendant.
Court No. 98-05-02185                            Page 2




                        OPINION and ORDER

GOLDBERG, Judge: In its opinion, Mannesmann-Sumerbank Boru

Endustrisi T.A.S. v. United States, 23 CIT __, 86 F. Supp. 2d

1266 (1999), the Court reviewed the Department of Commerce’s

(“Commerce”) Certain Welded Carbon Steel Pipe and Tube and Welded

Carbon Steel Line Pipe from Turkey; Final Results and Partial

Recission of Countervailing Duty Administrative Reviews, 63 Fed. Reg.

18,885 (April 16, 1998) ("Final Results").   The Court remanded a

portion of the Final Results to Commerce with instructions to

“include plaintiffs’ foreign exchange gains in the denominator of the

subsidy margin or provide an adequate explanation of how this case

differs from prior determinations.”   Mannesmann-Sumerbank, 23 CIT

at __, 86 F. Supp. 2d at 1277.   The Court further instructed Commerce

that “[i]f [it] takes the latter course of action, it must also

explain why Turkish GAAP and plaintiffs’ accounting methods are

unreliable or distortive.” Id.

    In order to “weigh the policy implications of this issue

against its overall countervailing duty practice,” Commerce

requested, and was granted, an extension of time in which to file
Court No. 98-05-02185                              Page 3


its remand determination.     Motion for Extension of Time of 2/16/00.

On March 17, 2000, Commerce submitted its Final Results of

Redetermination on Remand (“Remand Results”) to the Court.

    In the Remand Results, Commerce chose not to recalculate the

subsidy margin.   Instead, it asserts that its long-standing policy

has been to exclude foreign exchange gains from the denominator.

Further, Commerce asserts that this policy is reasonable.       Because

Commerce fails to adequately substantiate its practice or its

reasonableness, however, the Court once again remands the Final

Results.

    In the Remand Results, Commerce states that its long-standing

policy has been to exclude foreign exchange gains and losses from the

denominator of the subsidy equation. See Remand Results, at 3.       Yet,

it does not point to a single previously published source to

illustrate its avowed practice.     In fact, Commerce asserts

that “this aspect of our calculations is not directly

addressed in the public notices describing our investigative

or review results.”     Remand Results, at 3.

    Nonetheless, Commerce counsels the Court to ignore both

Final Affirmative Countervailing Duty Determination: Certain Pasta

(“Pasta”) from Turkey (“Pasta From Turkey”), 61 Fed. Reg.
Court No. 98-05-02185                              Page 4


30,366, (June 14, 1996) and Final Affirmative Countervailing Duty

Determination; Brass Sheet and Strip From Brazil (“Brass Sheet”), 51

Fed. Reg. 40,837 (Nov. 10, 1986) because they are “not reflective of

general Department practice.”     Remand Results, at 3.     In discussing

Brass Sheet, Commerce rationalizes that the determination is 14

years old, and thus “it is difficult to determine why exchange rate

gains were included in the sales denominator.”     Id. at 6.     And with

respect to Pasta from Turkey, Commerce acknowledges that “the

Department departed from its practice without a substantive

explanation.”   Remand Results, at 8.    While these two determinations

do not definitively establish Commerce’s prior practice, they are the

only published sources available to the Court to assess that

practice.   And, notably, they both contradict Commerce’s avowed

policy.

    Moreover, when discussing the reasonableness of its

avowed policy, Commerce claims that “companies do not

routinely adjust the booked value of their sales for exchange

rates and losses,” and that companies that do otherwise are

“exceptions.”   Remand Results, at 4.    Yet Commerce provides no

support for this assertion.     Nor does Commerce supply the

basis for its rationale that “the U.S. Customs Service uses

the F.O.B. value of imports
Court No. 98-05-02185                             Page 5


to establish the CVD duties an importer must pay at the time

the goods enter the country.”    Remand Results, at 5.

    Finally, although this case involves the 1996

administrative review, Commerce notes in the Remand Results

that it indexed the numerator and denominator of the subsidy

calculation in the 1997 administrative review.    See Remand

Results, at 7 n.3.   In the Preliminary Results of that review,

Commerce explains that “[i]ndexing the benefit and the sales

figure will neutralize any potential distortion in our subsidy

calculations caused by high inflation and the timing of the

receipt of the subsidy.”    Certain Welded Carbon Steel Pipes

and Tubes and Welded Carbon Steel Line Pipe from Turkey;

Preliminary Results of Countervailing Duty Administrative

Reviews, 64 Fed. Reg. 16,924, 16,926 (Apr. 7, 1999).

    In light of Commerce’s position in the Remand Results

that its policy of excluding foreign exchange gains and losses

from the denominator of the subsidy equation is reasonable,

Commerce’s reference to its 1997 determination raises a

question for this review.    That is, given the “potential [for]

distortion” described above, whether Commerce’s decision to

exclude foreign exchange gains and losses in this case is

still reasonable
Court No. 98-05-02185                              Page 6


considering (1) there was high inflation and (2) Commerce did

not index the numerator and denominator of the subsidy

calculation (as it did in the later review).

    Because Commerce has failed to substantiate its practice

or its reasonableness, this Court remands.     It is hereby

     ORDERED that Commerce’s determination, in the Final
Results, to exclude plaintiffs’ “kur farki” accounts from the
denominator of the subsidy equation is remanded in conformance
with the original remand instructions;

     ORDERED that Commerce shall, within thirty (30) days of
the date of this Order, issue a remand determination;

     ORDERED that the parties may, within ten (10) days of the
date on which Commerce issues its remand determination, submit
memoranda addressing Commerce’s remand determination, not to
exceed five (5) pages in length; and it is further

     ORDERED that the parties may, within ten (10) days of the
date on which memoranda addressing Commerce’s remand
determinations are filed, submit response briefs, not to
exceed five (5) pages in length.


                                 ______________________

                                   Richard W. Goldberg
                                          JUDGE


Dated:   May 3, 2000
         New York, New York.
