DWP 2019 RI: Certain dry wheat pasta
Notice of conclusion of re-investigation
The Canada Border Services Agency (CBSA) has today concluded a re-investigation of the normal values, export prices and amounts of subsidy of certain dry wheat pasta originating in or exported from Turkey, in accordance with the Special Import Measures Act (SIMA).
The re-investigation was initiated on November 27, 2019, as part of the CBSA’s ongoing enforcement of the Canadian International Trade Tribunal’s (CITT) finding of material injury issued on July 26, 2018.
On April 30, 2020, the CBSA postponed the re-investigation in order to alleviate pressures brought on by the COVID-19 pandemic to interested parties.
On September 28, 2020, the CBSA resumed the re-investigation.
The product definition and the applicable tariff classification numbers of the goods subject to the CITT’s finding are contained in Appendix 1 of this notice.
Period of investigation
The Period of Investigation (POI) and the Profitability Analysis Period (PAP) for the dumping re-investigation was from November 1, 2018 to October 31, 2019 and the POI for the subsidy re-investigation was January 1, 2018 to October 31, 2019.
At the initiation of the re-investigation, the CBSA sent Requests 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, as well as any subsidy programs that may be applicable to subject goods. The CBSA also sent an RFI to the Government of Turkey (GOT) to solicit information on any subsidy programs that may be applicable to subject goods. The information was requested for purposes of updating the normal values, export prices and amounts of subsidy for subject goods imported into Canada. Desk audits were conducted for the cooperative exporter from Turkey and the GOT.
As part of the re-investigations, case briefs and reply submissions were provided by counsels representing the complainants and responding exporter. Details of the representations are provided in Appendix 2. Details pertaining to the information submitted by the exporter and the GOT 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 certain dry wheat pasta have been determined for all exporters that submitted a complete response to the Dumping RFI, Subsidy RFI, to the Supplemental RFIs and for whom the desk verification was considered reliable.
Normal values and export prices
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.
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).
Durum Gida Sanayi ve Ticaret A.Ş. is the only exporter/producer that provided a complete response to the CBSA’s dumping RFI. The CBSA determined normal values for future shipments of subject goods for this producer/exporter, effective on March 24, 2021.
For all other exporters of subject goods from Turkey, 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 99.9%, pursuant to section 29 of SIMA.
Normal values previously in place expire on March 24, 2021.
Durum Gida Sanayi ve Ticaret A.Ş. (Durum Gida)
Durum Gida is a producer and exporter of subject goods to Canada. Durum Gida purchases material inputs from a related supplier, Arbel Bakliyat Hububat Sanayi ve Ticaret A.Ş. (Arbel), located in Turkey. A portion of Durum Gida’s exports to Canada were sold to its related importer AGT Clic (AGT).
Durum Gida provided a complete response to the Dumping RFI, six supplemental RFIs and desk verification questionnaires.
Durum Gida provided a database of domestic sales of dry wheat pasta during the PAP. Where there were sufficient profitable sales of like goods, normal values were determined in accordance with section 15 of SIMA, using the exporter’s domestic prices of dry wheat pasta in the Turkish market. Where there were insufficient profitable domestic sales of like goods, or where there were no domestic sales of like goods, normal values were determined in accordance with paragraph 19(b) of SIMA, based on the aggregate of the exporter’s cost of production of the goods, a reasonable amount for administrative, selling and all other costs and a reasonable amount for profits.
The amount for profits was determined in accordance with subparagraph 11(1)(b)(i) of the Special Import Measures Regulations (SIMR), based on Durum Gida’s sales of dry wheat pasta in their domestic market, for each sixty day period during the PAP, within the same general category as the subject goods sold to Canada.
For subject goods exported by Durum Gida to unrelated importers in Canada during the POI, export prices were determined pursuant to section 24 of SIMA, based on the lesser of the exporter’s selling price and the importer’s purchase price, adjusted by deducting therefrom the costs, charges and expenses incurred in preparing the goods for shipment to Canada and resulting from the exportation and shipment of the goods.
Due to the relationship between Durum Gida and AGT, for subject goods exported during the POI by Durum Gida to AGT, a reliability test was performed to determine whether the section 24 export prices were reliable as envisaged by SIMA. This test was conducted by comparing the export prices determined under section 24 of SIMA, based on the lesser of the exporter’s selling prices and the importer’s purchase prices, with the export prices determined under section 25 of SIMA. The amount for profit used for the section 25 calculations was determined in accordance with paragraph 22(a) of the SIMR, based on the profit information relating to vendors who are at the same or substantially the same trade level as AGT and that operated at a profit during the 2018 fiscal year in Canada, on sales to purchasers in Canada who are not associated with those vendors. The test revealed that the export prices determined in accordance with section 24 of SIMA were reliable for all sales and, therefore, export prices for sales to AGT were determined in accordance with section 24 of SIMA.
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:
- practices of the government involve the direct transfer of funds or liabilities or the contingent transfer of funds or liabilities
- 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
- the government provides goods or services, other than general governmental infrastructure, or purchases goods or
- 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:
- there is exclusive use of the subsidy by a limited number of enterprises
- there is predominant use of the subsidy by a particular enterprise
- disproportionately large amounts of the subsidy are granted to a limited number of enterprises and
- 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.
Durum Gida Sanayi ve Ticaret A.Ş. (Durum Gida) is the only exporter/producer that provided a complete response to the CBSA’s subsidy RFI. The GOT also provided a response to the CBSA’s government subsidy RFI. The CBSA determined an amount of subsidy for future shipments of subject goods for Durum Gida, and is equal to 0.022 TL/KG, effective on March 24, 2021.
For all other exporters of subject goods from Turkey, the amount of subsidy will be determined in accordance with a ministerial specification, and is equal to 0.09 TL/KG.
Durum Gida Sanayi ve Ticaret A.Ş. (Durum Gida)
Durum Gida is a producer and exporter of subject goods to Canada.
For purposes of this re-investigation, the CBSA determined that Durum Gida benefitted from the following subsidy programs during the subsidy POI:
- Program 24: Deduction from Taxable Income for Export Revenue
- Program 29: Export Subsidy Program for Agricultural Products
- Program 31: Support to Offset Costs Related to Trade-Remedy Investigations
- Program 33: Provision of Input (e.g. Durum Wheat, Semolina) at Less than Adequate Remuneration
For purposes of the reinvestigation, the above subsidy programs were considered to be specific and therefore actionable. This decision was based on an analysis of the information provided by Durum Gida and the GOT.
The programs used by the responding exporter are listed in Appendix 3.
The amount of subsidy for Durum Gida is 0.022 TL/KG, for all future shipments to Canada.
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.
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 to Importers.
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 with the Director General, Trade and Anti-dumping Programs Directorate, 11th Floor, 100 Metcalfe St., Ottawa, Ontario, K1A 0L8. Such a request must be received within 90 days from the making of the determination in the form and manner outlined in Memorandum D14-1-3, Procedures for Making a Request for a Re-determination or an Appeal of Goods Under the Special Import Measures Act.
Any questions concerning the above should be directed to:
SIMA Registry and Disclosure Unit
Trade and Anti-dumping Programs Directorate
Canada Border Services Agency
11-100 Metcalfe St
Ottawa ON K1A 0L8
- Dana Diab: 613-954-7271
Appendix 1—product definition
“All dry wheat-based pasta, not stuffed or otherwise prepared, and not containing more than two percent eggs, whether or not enriched, fortified, organic, whole wheat or containing milk or other ingredients, originating in or exported from the Republic of Turkey, excluding refrigerated, frozen or canned pasta.”
The subject goods are normally classified under the following tariff classification numbers:
This listing of tariff classification numbers is for convenience of reference only. Refer to the product definition for authoritative details regarding the subject goods.
Case arguments were received on behalf of the Canadian Pasta Manufacturers Association (the Complainant)Footnote 1, and on behalf of Durum Gida Sanayi ve Ticaret A.Ş. (Durum Gida).Footnote 2
The CBSA received reply submissions on behalf of the ComplainantFootnote 3, and on behalf of Durum Gida.Footnote 4
The material issues raised by parties through case briefs are summarized as follows:
Selection of domestic sales—like goods shipped from warehouses
For its domestic sales, Durum Gida sells dry wheat pasta which is shipped from several warehouses located across Turkey, including one in Mersin where all like goods in Turkey are produced. For its export sales to Canada, Durum Gida sells dry wheat pasta which is shipped from its warehouse in Mersin only, also where the subject goods are produced.
Counsel for Durum Gida argued that domestic sales of dry wheat pasta shipped from all warehouses in Turkey should be considered for the purposes of determining normal values as they are all produced and sold from the same factory as sales of dry wheat pasta to Canada.
Counsel for the complainant states subsection 15(e) of the SIMA refers separately to the sale of the good and the place of shipment of the goods and should be considered separately.
Where there were sufficient domestic sales of like goods from the warehouse in Mersin, normal values were determined using section 15 of SIMA, for like goods sold during the POI. Where there were no sufficient sales from the warehouse in Mersin, the CBSA looked at like goods from all warehouses.
The CBSA used section 15(e) of SIMA, where normal values are determined per section 15 of SIMA “at the place from which the goods were shipped directly to Canada or, if the goods have not been shipped to Canada, at the place from which the goods would be shipped directly to Canada under normal conditions of trade”.
Durum Gida submits model criteria used in the initial investigation for which normal values were issued should remain the same and that the additional criteria of packaging type and whether the pasta is a private label or name brand product have no significant impact on the price and cost of the goods. Durum Gida submits that it monitors its domestic and export selling prices and costs on the basis of the four model criteria and not the six model criteria since the final determination was issued. However, recognizes that a reinvestigation is treated as a new and separate proceeding and that the CBSA may not necessarily determine normal values on the same basis as in the original investigation.
Counsel for the complainant stated that counsel for Durum Gida were correct in acknowledging that a reinvestigation is treated as a new and separate investigation and that it is not a legal error for the CBSA, in this reinvestigation, to refine the models for which normal values are issued.
For the purposes of this re-investigation, the CBSA considered information on the record in making a decision on the characteristics of subject goods for the purposes of issuing normal values and identified any differences in the costs in making the decisions, which were considered in the determination future normal values.
Selection of domestic customers
Durum Gida submits that the CBSA should consider some of their major retailer domestic customers in the selection of domestic sales, and that these domestic retail grocery chain customers purchase in the “same or substantially the same” quantities as may be purchased by importers in Canada who are also retail grocery chains.
For the purposes of this re-investigation, the CBSA determined that for export sales to Durum Gida’s largest retail customer in Canada by quantity, the CBSA considered Durum Gida’s domestic customers at the same trade level and the quantity is considered to be at the same or substantially the same quantities. As such, these domestic sales were included for the purposes of determining normal values.
Importer specific normal values
Counsel for Durum Gida submits that there is no legal basis for limiting normal values to a specific importer and neither the SIMA Handbook nor the case law support such an approach. Counsel also stated that normal values issued at the conclusion of this re-investigation should be the basis for assessing future sales to any importer. If the CBSA limits the use of normal values to a specific importer it will be setting a precedent for the proposition that prospective normal values can only be used to sell to importers that an exporter has sold to in the past. Such an approach would be contrary to SIMA and to the WTO Antidumping Agreement.
The CBSA has considered the information provided by all parties in the determination of normal values. The applicability of individual normal values to future importations of subject goods is a matter related to the enforcement of the measure in force, and those decisions will be made on the basis of the information available to the CBSA at the time of importation.
Issues related to amounts of subsidy—investment encouragement program
Counsel for Durum Gida notes that in the final determination, the CBSA found this program to be generally available and therefore not specific.
For the purposes of this re-investigation, no amount of subsidy was calculated for this program.
Issues related to amounts of subsidy—inward processing regime
Counsel for Durum Gida notes that the exporter demonstrated that it has not received any benefit under this program and provided detailed information on how the exporter and the Government of Turkey ensure that there are no excessive tax exemptions or drawback.
The CBSA verified that no exemption was granted in excess of the taxes that would otherwise have been payable for the Inward Processing Regime.
Issues related to amounts of subsidy—provision of wheat at less than adequate remuneration
Durum Gida submits that a portion of wheat purchased from Toprak Mahsulleri Ofisi (“TMO”) during the POI was sold and not used in the production of like or subject goods. Durum Gida requested that the CBSA ensure that any subsidy amounts calculated under this program exclude wheat purchased and resold.
For the purposes of the conclusion of this re-investigation, durum wheat purchased from the TMO that were resold were excluded from the benchmark analysis. The CBSA excluded these sales as Durum Gida did not use these raw materials in the production of dry wheat pasta.
Currency devaluation and inflation in Turkey
The complainant submits that the devalued TRY and the high rate of inflation mean that all normal values issued in this re-investigation will be immediately out-of-date and will not reflect prevailing market conditions in Turkey. The complainant recommends that the CBSA issue normal values in CAD or adjust them for an inflation factor.
Counsel for Durum Gida argued that the currency in which normal values should be stated is governed by the SIMA, notwithstanding any comments set out in D14-1-8. Specifically, section 15 of SIMA provides for normal values based on domestic selling prices of like goods in the foreign domestic market while section 19 provides for normal values based on costs and profits of the exporter. Counsel for Durum Gida stated that SIMA contains no “exception” to this rule and that D14-1-8 was revised in July 2019 to reflect a series of amendments to SIMA but that those amendments did not provide CBSA the authority to express normal values in a different currency in situations of currency fluctuations or inflation. Counsel for Durum Gida submits that the CBSA does not have legislative authority to express normal values in any currency other than TRY.
During the course of the re-investigation, the CBSA has been tracking the fluctuations of world currencies. As the Turkish Lira has been observed to be particularly volatile following the end of the POI and in consideration that the majority of the export sales made by the participating exporter in Turkey are carried out in CAD, the CBSA issued normal values to the exporter in Turkey in CAD.
Retroactive application of anti-dumping duties
The complainant submitted that retroactive duties should apply for importations occurring between November 1, 2018 and the date of the conclusion of this re-investigation due to numerous factors including outdated normal values and changes to cost and prices.
Counsel for Durum Gida stated that the exporter kept the CBSA informed of changes in market conditions and submits that changes in domestic selling prices and costs prior to, during and since the POI are due to exchange rate movements rather than absolute changes. Counsel submits that the exporter has fully cooperated with CBSA in this reinvestigation and the application of retroactive duties on past importations is neither warranted nor justified.
The CBSA has considered the information provided by all parties. The applicability of retroactive application of anti-dumping duties is a matter related to the enforcement of the measure in force, and those decisions will be made on the basis of the information provided and available to the CBSA.
Appendix 3—subsidy programs used by responding exporter
This Appendix consists of descriptions of the subsidy programs which the responding exporter, Durum Gıda Sanayi ve Ticaret A.Ş. (Durum Gida), benefited from during the course of the subsidy POI.
Program 24: Deduction from taxable income for export revenue
This program is made available pursuant to Article 40, Clause 1 of Income Tax Law No. 193 dated January 6, 1961, which was amended by Law No. 4108 dated June 2, 1995. The program is administered by the Ministry of Finance.
The objective of this program is to provide taxpayers with an additional deduction of a lump sum amount from their gross income resulting from exports, construction, maintenance, assembly and transportation activities abroad.
For the purposes of this reinvestigation, this program constitutes a financial contribution pursuant to paragraph 2(1.6)(b) of SIMA, in that amounts that would otherwise be owing and due to the government are reduced and/or exempted, and confers a benefit to the recipient equal to the amount of the reduction/exemption.
The information available also indicates that this program is considered a specific subsidy under paragraph 2(7.2)(b) of SIMA as is contingent upon export performance and, therefore, constitutes a prohibited subsidy as defined in subsection 2(1) of SIMA.
Program 29: Export subsidy program for agricultural products
This program is made available pursuant to Decisions 2016/1 and 2016/16 of the Money-Credit and Coordination Council, applied between 2016-01-01 and 2017-12-31. The Ministry of Economy, General Directorate of Exports is responsible for administering and enforcing the provisions of this program as well as determining the application procedures and principles of the Decisions.
The policy objective of this program is to develop Turkey's export potential in processed agricultural products.
Exporters benefit from this program by having taxes, tax penalties, social security premiums, etc. reduced or exempted as the result of export sales of dry wheat pasta. For the purposes of this reinvestigation this program is a financial contribution pursuant to paragraph 2(1.6)(b) of SIMA, in that amounts that would otherwise be owing and due to the government are reduced and/or exempted, and confers a benefit to the recipient equal to the amount of the reduction/exemption.
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 31: Support to offset costs related to trade-remedy investigations
According to the GOT, it is the Mediterranean Exporter’s Association (MEA), which is a non-profit business and trade association, that provides assistance to its members through its own budgetFootnote 5.
According to MEA, exporters’ associations are non-profit business and trade associations and uses its budget, which basically consists of membership fees to solve the problems of its members face at home and abroad, provides contact between members and foreign importers in order to ease the export processes, to serve up to date domestic and global market news, reports and analysis. Thus, once a trade policy investigation is initiated against Turkish exports, exporters’ associations may contribute to such expenditures. However the MEA claims that this is not a support program since exporters’ associations transfer the money to the exporters that they have already collected as membership fees.Footnote 6
According to MEA, it evaluates each request based on the provisions of “Procedures and Principles Regarding the Supports Provided to Companies for Advocacy and Legal Counselling Services Purchased in Trade Remedy Investigations and Generalized System of Preferences Practices”, which have been in force since 2015 (Procedures and Principles).Footnote 7
According to Article 1 of the Procedures and Principals, the purpose of the directive is to regulate the financial support covered by the budget of the Exporters’ Associations for the attorney/ legal consultancy fees paid by companies as part of investigations abroad of trade policy measures within the context of clause (a) of third paragraph of Article 3 of Law No. 5910 on Foundation and Duties of the Turkish Exporters Assembly and the Exporters’ Associations.
Under the program, 50% of consultancy fees, not exceeding 100,000 USD may be contributed by the Exporters’ Association. According to MEA, the applicant company is required to be a member of the exporters’ association and to realize at least 500,000 USD export within two calendar years prior to the initiation of the investigation.
The CBSA notes that pursuant to paragraph 2(1)(b) of SIMA, the definition of “government” includes “any person, agency or institution acting for, on behalf of, or under the authority of, or under the authority of any law passed by, the government of that country or that provincial, state, municipal or other local or regional government”. As a general rule, an entity will constitute “government” when it possesses, exercises, or is vested with governmental authority.Footnote 8
The CBSA reviewed the MEA’s official websiteFootnote 9 as well as Law 5910Footnote 10, and made the following observations:
- The MEA is a sub-organization of the Turkish Exporters Assembly
- Article 1 - The objective of this Law is to regulate the procedures and principles related with the foundation, operation, duties, bodies, expenses and auditing of the exporters associations and the Turkish Exporters Assembly and the rights and obligations of its members in order to contribute to the economy by increasing export through organizing the exporters and improving cooperation
- Article 3(3) sets the duties of the exporters’ associations
- According to Article 1 of the Procedures and PrinciplesFootnote 11, the Support to Offset Costs Related to Trade-Remedy Investigations is provided within the context of clause (a) of third paragraph of Article 3 of Law No. 5910 on Foundation and Duties of the Turkish Exporters Assembly and the Exporters’ Associations
- Article 4 (1) - Exporters are obliged to be a member of the related association and affect the payments specified in the law
- Article 4 (2) - Members are obliged to comply with the decisions of the association, act in conformity with the objectives of the association, to submit any information and document required by the authorized bodies on time and in full and entitled to resign from membership at will
- Article 11(3) regards the duties of the Turkish Exporters Assembly. Generally speaking, the Turkish Exporters Assembly is under the authority of the Under-secretariat of Foreign Trade. For example, sub-clause (i) the Turkish Exporters Assembly is to perform the other foreign trade related duties to be assigned by the Under-secretariat
- Article 18 sets the mandatory contribution to the exporters’ association and to the Turkish Exporters Assembly
According to the response provided by the cooperative exporter, as a member of the MEA (AKIB), exporters pay nominal fees and services are provided to the exporters. One of them is providing assistance to individual members who are investigated in antidumping and countervailing duty investigations by reimbursing a portion of the legal fees. However, the exporter also states that the exporter’s association is entirely funded by the members and therefore there is no financial contribution by Government or public bodyFootnote 12.
In regards to the above, the CBSA’s position is that the MEA, under the Turkish Exporter’s Assembly, is vested with government authority and carrying out a government function. As such, the MEA is considered as a government body.
Pursuant to paragraph 2(1.6)(a), a financial contribution is provided where practices of the government involve the direct transfer of funds or liabilities or the contingent transfer of funds or liabilities.
The benefit under this program is equal to the amount of legal fees reimbursed or covered by the MEA. Pursuant to paragraph 27(a) of the SIMR, the subsidy is to be distributed over the total quantity of subsidized goods to which the grant is attributable. In the case of this program, the grant would be distributed over the quantity of goods subject to the trade remedy investigation in question.
The exporter states that the criteria in receiving this support is to be a member of the MEA (AKIB) and part of an AD/CVD investigation. Furthermore, the Article 3 Annex outlining the implementation procedures for this support program states that companies should export goods worth at least 500,000 USD or manufacture goods and export through the association. These are criteria for which a company could be eligible for the supportFootnote 13. Companies would then apply for the support and may or may not be granted.
Based on the information on the record, including information provided by the exporter and the eligibility requirements outlined in the Procedures and Principals document, this program appears to be specific. This is because this program is only open to MEA members who export a minimum value of goods and/or produce goods, and only if these goods were exported through the MEA. Therefore, on the basis of the available information on the record, this program does not appear to be generally available to all enterprises in Turkey and therefore appears to be specific pursuant to subsection 2(7.2) of SIMA.
Program 33: Provision of input at less than adequate remuneration
The nature of the subsidy relates to Durum Gida’s purchases of durum wheat, a raw material input used in the production of dry wheat pasta, from the Turkish Grain Board (TMO), an SOE, at prices less than fair market value.
An amount of subsidy for this program for the purposes of the re-investigation was determined by comparing prices paid to TMO for durum wheat purchased during the POI with prices paid to private non-SOEs in Turkey for durum wheat purchased during the same period.
SOEs may be considered to constitute "government" if they possess, exercise or are vested with government authority, which may be indicated by the following factors:
- where a statute or other legal instrument expressly vests government authority in the entity concerned
- evidence that an entity is, in fact, exercising governmental functions or
- evidence that a government exercises meaningful control over an entity
The following factors are present which indicate that the GOT exercises meaningful control over the TMO:
- Government appointment of directors or chief executives, and/or political influence over choice of appointees
- The GOT owns 100% of the capital of TMO
- The government approves the entity’s business plans or otherwise exercises oversight over its functions per decree law number 233
The TMO is an SOE that is granted or vested with authority by statute and is meaningfully controlled by the GOT. Therefore, TMO can be considered government pursuant to subsection 2(1) of SIMA.
For the purposes of this reinvestigation, this program constitutes a financial contribution, pursuant to paragraph 2(1.6)(c) of SIMA, i.e., the government provides goods other than general governmental infrastructure, and confers a benefit to the recipient equal to the difference between the fair market value of the goods in the territory of the government providing the subsidy, and the price at which the goods were provided by that government.
For the purposes of this re-investigation, this program is considered to be a specific subsidy under paragraph 2(7.3)(a) of SIMA as there is exclusive use of the subsidy by a limited number of enterprises.
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