Notice of Final Affirmative Countervailing Duty Determination: Certain Cold-Rolled Carbon Steel Flat Products From the Republic of Korea

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of final affirmative countervailing duty determination.

EFFECTIVE DATE:

October 3, 2002.

FOR FURTHER INFORMATION CONTACT:

Tipten Troidl at (202) 482-1767 or Darla Brown at (202) 482-2849, Office of AD/CVD Enforcement VI, Import Administration, U.S. Department of Commerce, Room 4012, 14th Street and Constitution Avenue, NW., Washington, DC 20230.

SUMMARY:

On March 4, 2002, the Department of Commerce (the Department) published in the Federal Register its preliminary affirmative determination in the countervailing duty investigation of certain cold-rolled carbon steel flat products (subject merchandise) from the Republic of Korea for the period of investigation (POI) calendar year 2000 (67 FR 9685).

The net subsidy rate in the final determination differs from that of the preliminary determination. The revised final net subsidy rate is listed below in the “Suspension of Liquidation” section of this notice.

SUPPLEMENTARY INFORMATION:

Applicable Statute and Regulations

Unless otherwise indicated, all citations to the statute are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Tariff Act of 1930 (the Act) by the Uruguay Round Agreements Act (URAA). In addition, unless otherwise indicated, all citations to the Department's regulations are to the regulations codified at 19 CFR part 351 (2001).

Background

On March 4, 2002, the Department of Commerce (the Department) published in the Federal Register its preliminary affirmative determination in the countervailing duty investigation of certain cold-rolled carbon steel flat products from the Republic of Korea. See Notice of Preliminary Affirmative Countervailing Duty Determination and Alignment of Final Countervailing Duty Determination with Final Antidumping Duty Determination: Certain Cold-Rolled Carbon Steel Flat Products from the Republic of Korea, 67 FR 9685 (March 4, 2002) (Preliminary Determination). This investigation covers the POI calendar year 2000.

We invited interested parties to comment on the Preliminary Determination. We received both case briefs and rebuttal briefs from interested parties. A public hearing was held on August 27, 2002. All issues raised in the case and rebuttal briefs by parties to this investigation are addressed in the “Issues and Decision Memorandum” (Decision Memorandum) dated September 23, 2002, which is hereby adopted by this notice.

With respect to scope, in the Preliminary Determinations in these cases, the Department preliminarily excluded certain porcelain enameling steel from the scope of these investigations. See Scope Appendix to the Notice of Preliminary Determination of Sales at Less Than Fair Value: Certain Cold-Rolled Carbon Steel Flat Products from Argentina, 67 FR 31181 (May 9, 2002) (Scope Appendix—Argentina Preliminary LTFV Determination). On June 13, 2002, we issued a preliminary decision on the remaining 75 scope exclusion requests filed in a number of the on-going cold-rolled steel investigations (see the June 13, 2002, memorandum regarding “Preliminary Scope Rulings in the Antidumping Investigations on Certain Cold-Rolled Carbon Steel Flat Products from Argentina, Australia, Belgium, Brazil, France, Germany, India, Japan, Korea, the Netherlands, New Zealand, the People's Republic of China, the Russian Federation, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey, and Venezuela, and in the Countervailing Duty Investigations of Certain Cold-Rolled Carbon Steel Flat Products from Argentina, Brazil, France, and Korea” (Preliminary Scope Rulings), which is on file in the Department's Central Records Unit (CRU), room B-099 of the main Department building. We gave parties until June 20, 2002, to comment on the preliminary scope rulings, and until June 27, 2002, to submit rebuttal comments. We received comments and/or rebuttal comments from petitioners and respondents from various countries subject to these investigations of cold-rolled steel. In addition, on June 13, 2002, the North American Metals Company (an interested party in the Japanese proceeding) filed a request that the Department issue a “correction” for an already excluded product. On July 8, 2002, the petitioners objected to this request.

At the request of multiple respondents, the Department held a public hearing with respect to the Preliminary Scope Rulings on July 1, 2002. The Department's final decisions on the scope exclusion requests are addressed in the “Scope of Investigation” section below.

Scope of Investigation

For purposes of this investigation, the products covered are certain cold-rolled (cold-reduced) flat-rolled carbon-quality steel products. A full description of the scope of this investigation is contained in “Appendix I” attached to the Notice of Correction to Final Determination of Sales at Less Than Fair Value: Certain Cold-Rolled Carbon Steel Flat Products from Australia, 67 FR 52934 (August 14, 2002). For a complete discussion of the comments received on the Preliminary Scope Rulings, see the memorandum regarding “Issues and Decision Memorandum for the Final Scope Rulings in the Antidumping Duty Investigations on Certain Cold-Rolled Carbon Steel Flat Products from Argentina, Australia, Belgium, Brazil, France, Germany, India, Japan, Korea, the Netherlands, New Zealand, the People's Republic of China, the Russian Federation, South Africa, Spain, Sweden, Taiwan, Thailand, Turkey, and Venezuela, and in the Countervailing Duty Investigations of Certain Cold-Rolled Carbon Steel Flat Products from Argentina, Brazil, France, and Korea,” dated July 10, 2002, which is on file in the CRU.

Period of Investigation

The period of investigation (POI) for which we are measuring subsidies is calendar year 2000.

Verification

As provided in section 782(i) of the Act, we conducted verification of the government responses from April 15 through 18, 2002. We also conducted verification of the responses of companies from April 17 through 25, 2002. We used standard verification procedures, including meeting with government and company officials and examining relevant accounting records and original source documents provided by the respondents. Our verification results are outlined in detail in the public versions of the verification reports, which are on file in the Central Records Unit of the Department of Commerce (Room B-099).

Analysis of Comments Received

A list of issues which parties have raised and to which we have responded, all of which are in the Decision Memorandum, is attached to this notice as Appendix I. Parties can find a complete discussion of all issues raised in this investigation and the corresponding recommendations in this public memorandum which is on file in room B-099 of the Main Commerce Building. In addition, a complete version of the Decision Memorandum can be accessed directly on the World Wide Web at http://ia.ita.doc.gov,, under the heading “Federal Register Notices.” The paper copy and electronic version of the Decision Memorandum are identical in content.

Suspension of Liquidation

In accordance with section 705(c)(1)(B)(i)(I) of the Act, we have calculated individual rates for the companies under investigation. For the period calendar year 2000, we determine the net subsidy rates for the investigated companies to be as follows:

In accordance with our preliminary affirmative determination, we instructed the U.S. Customs Service to suspend liquidation of all entries of certain cold-rolled carbon steel flat products from Korea, which were entered or withdrawn from warehouse, for consumption on or after March 4, 2002, the date of the publication of our preliminary determination in the Federal Register. In accordance with section 703(d) of the Act, we instructed the U.S. Customs Service to discontinue the suspension of liquidation for merchandise entered on or after July 2, 2002, but to continue the suspension of liquidation of entries made between March 4, 2002 and July 1, 2002.

We will reinstate suspension of liquidation under section 706(a) of the Act for all entries if the ITC issues a final affirmative injury determination and will require a cash deposit of estimated countervailing duties for such entries of merchandise in the amounts indicated above. If the ITC determines that material injury, or threat of material injury, does not exist, this proceeding will be terminated and all estimated duties deposited or securities posted as a result of the suspension of liquidation will be refunded or canceled.

ITC Notification

In accordance with section 705(d) of the Act, we will notify the ITC of our determination. In addition, we are making available to the ITC all non-privileged and non-proprietary information related to this investigation. We will allow the ITC access to all privileged and business proprietary information in our files, provided that the ITC confirms that it will not disclose such information, either publically or under an administrative protective order (APO), without the written consent of the Assistant Secretary for Import Administration.

If the ITC determines that material injury, or threat of material injury, does not exist, these proceedings will be terminated. If however, the ITC determines that such injury does exist, we will issue a countervailing duty order.

Return or Destruction of Proprietary Information

In the event that the ITC issues a final negative injury determination, this notice will serve as the only reminder to parties subject to APO of their responsibility concerning the destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Failure to comply is a violation of the APO.

This determination is published pursuant to sections 705(d) and 777(i) of the Act.

Appendix I—Issues and Decision Memorandum

Methodology and Background Information

I. The Net Subsidy Rate Attributable to Union Steel Manufacturing Co., Ltd. (Union)

II. Subsidies Valuation Information

A. Allocation Period

B. Benchmarks for Loans and Discount Rate

C. Treatment of Subsidies Received by Trading Companies

Analysis of Programs

I. Programs Conferring Subsidies

A. Pre-Shipment and Post-Shipment Export Financing

B. GOK Infrastructure Investment at Kwangyang Bay Through 1991

C. Research and Development (R&D)

D. Provision of Land at Asan Bay

E. POSCO's Exemption of Bond Requirement for Port Use at Asan Bay

F. Investment Tax Credits

G. Reserve for Export Loss—Article 16 of the TERCL

H. Reserve for Overseas Market Development under TERCL Article 17

I. Asset Revaluation Under Article 56(2) of the TERCL

J. Tax Reserve for Balanced Development under TERCL Article 41/ RSTA Article 58

K. Short-term Export Financing

L. Local Tax Exemption on Land outside of Metropolitan Area

M. Electricity Discounts under the Requested Load Adjustment Program

N. POSCO's Provision of Steel Inputs at Less than Adequate Remuneration

O. Dongbu's Excessive Exemptions under the Harbor Act

P. Exemption of VAT on Imports of Anthracite Coal

II. Programs Determined To Be Not Countervailable

A. GOK Infrastructure Investments at Kwangyang Bay

B. R&D Aid for Anthracite Coal Technology

C. Asan Bay Infrastructure Subsidies

D. Reserve for Energy-Saving Equipment (RSTA Article 30)

III. Programs Determined To Be Not Used

A. Anthracite Coal for Less than Adequate Remuneration

B. Grants to Dongbu

C. Technical Development Fund (RSTA Article 9, formerly TERCL Article 8)

D. Export Insurance

IV. Total Ad Valorem Rate

V. Analysis of Comments

Comment 1: GOK Control of POSCO

Comment 2: POSCO's Provision of Hot-rolled Coil at Less than Adequate Remuneration

Comment 3: Exemption of VAT

Comment 4: Direction of Credit

Comment 5: Tax Programs

Comment 6: Research and Development Subsidies

Comment 7: The GOK's Provision of Infrastructure at Kwangyang Bay

Comment 8: The GOK's Provision of Infrastructure at Asan Bay

Comment 9: Provision of Land at Asan Bay: Land Price and Benchmark

Comment 10: Provision of Land at Asan Bay: Fees Waived

Comment 11: Exemption of Port Fees under the Harbor Act

Comment 12: POSCO's donation to POSTECH