[Federal Register Volume 67, Number 192 (Thursday, October 3, 2002)]
[Notices]
[Pages 62124-62126]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-24795]



[[Page 62124]]

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DEPARTMENT OF COMMERCE

International Trade Administration

[A-580-848]


Notice of Final Determination of Sales at Less Than Fair Value: 
Certain Cold-Rolled Carbon Steel Flat Products From Korea

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

EFFECTIVE DATE: October 3, 2002.

FOR FURTHER INFORMATION CONTACT: Brian Ledgerwood at (202) 482-3836, or 
Mark Young at (202) 482-6397, Office of AD/CVD Enforcement VI, Group 
II, Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230.

The 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 of Commerce (``the 
Department'') regulations are to the regulations at 19 CFR part 351 
(April 2001).

Final Determination

    We determine that certain cold-rolled carbon steel flat products 
(``cold-rolled steel'') from Korea are being, or are likely to be, sold 
in the United States at less than fair value (``LFTV''), as provided in 
section 735 of the Act. The estimated margins of sales at LTFV are 
shown in the Continuation of Suspension of Liquidation section of this 
notice.

Case History

    On May 9, 2002, the Department published its preliminary 
determination in the above-captioned antidumping duty investigation. 
See Notice of Preliminary Determination of Sales at Less Than Fair 
Value: Certain Cold-Rolled Carbon Steel Flat Products from Korea, 67 FR 
31255 (May 9, 2002) (``Preliminary Determination''). On June 28, 2002, 
the Department published its postponement of the final determination in 
the above captioned antidumping duty investigation. See Certain Cold-
Rolled Carbon Steel Flat Products from Korea: Postponement of Final 
Determination of Antidumping Investigation, 67 FR 43582, (``June 28, 
2002''). Since the preliminary determination, the following events have 
occurred. In May 2002, the Department verified the responses submitted 
by the respondents in this investigation, Pohang Iron & Steel Co., Ltd. 
(``POSCO'') and Dongbu Steel Co., Ltd., (``Dongbu'') (collectively, 
``the respondents''). In July 2002, the Department conducted the U.S. 
subsidiary verification of Pohang Steel America Corporation (``POSAM'') 
and Dongbu U.S.A. Incorporated (``Dongbu USA''). On August 26, 2002, we 
received case briefs from the petitioners \1\ and the respondents. On 
September 5, 2002, we received rebuttal briefs from the petitioners and 
the respondents. A public hearing was held on September 9, 2002.
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    \1\ The petitioners in this investigation are Bethlehem Steel 
Corporation, National Steel Corporation, United States Steel 
Corporation, and Nucor Corporation.
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    With respect to scope, in the preliminary LTFV determinations in 
this and the companion cold-rolled steel investigations, 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 \2\ and respondents from various countries subject to these 
investigations of cold-rolled steel. In addition, on June 13, 2002, 
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 scope petitioners 
objected to this request.
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    \2\ The petitioners in the scope rulings are Bethlehem Steel 
Corporation, LTV Steel Company, Inc., Nucor Corporation, Steel 
Dynamics, Inc., United States Steel Corporation, WCI Steel, Inc., 
and Weirton Steel Corporation (collectively, ``the scope 
petitioners'').
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    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 the Scope Appendix 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 (Aug. 14, 
2002). For a complete discussion of the comments received on the 
Preliminary Scope Rulings, see the memorandum titled ``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'') is July 1, 2000, through June 
30, 2001. This period corresponds to the four most recent fiscal 
quarters prior to the month of the filing of the petition (i.e., 
September 2001).

Verification

    As provided in section 782(i) of the Act, we conducted verification 
of the cost and sales information submitted by the respondents. We used 
standard verification procedures including

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examination of relevant accounting and production records, and original 
source documents provided by the respondents.

Analysis of Comments Received

    All issues raised in the case and rebuttal briefs by parties to 
this antidumping proceeding are listed in the appendix to this notice 
and addressed in the Decision Memorandum dated September 23, 2002, and 
are hereby adopted by this notice. The Decision Memorandum is on file 
in room B-099 of the main Department of 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/frn/index.html. The 
paper and electronic versions of the Decision Memorandum are identical 
in content.

Changes Since the Preliminary Determinations

    Based on our findings at verification, and analysis of comments 
received, we have made adjustments to the preliminary determination in 
calculating the final dumping margin in this proceeding. These 
adjustments to the dumping margin are discussed in the Decision 
Memorandum for this investigation.

Critical Circumstances

    On April 10, 2002, the Department preliminarily determined that 
critical circumstances exist with respect to all imports of cold-rolled 
steel from Korea except for those from Dongbu. See Memorandum from 
Bernard Carreau to Faryar Shirzad Re: Preliminary Affirmative 
Determinations of Critical Circumstances; see also Notice of 
Preliminary Determination of Critical Circumstances: Certain Cold-
Rolled Carbon Steel Flat Products from Australia, the Peoples Republic 
of China, India, The Republic of Korea, the Netherlands, and the 
Russian Federation, 67 FR 19157 (April 18, 2002) (``Preliminary 
Critical Circumstances Determination''). In its preliminary finding of 
critical circumstances, the Department determined that there was a 
history of dumping and material injury by reason of dumped imports of 
subject merchandise in the United States by Korean manufacturers; that 
there was a reasonable basis to believe or suspect importers of the 
subject merchandise knew or should have known that the exporter was 
selling the subject merchandise at less than its fair value and that 
there was likely to be material injury by reason of such sales; and 
that there have been massive imports of the subject merchandise over a 
relatively short period of time. For further details, see the 
Preliminary Determination, the Preliminary Critical Circumstances 
Determination, and Memorandum to File, from Mark Manning: Respondents' 
Arguments Concerning the Preliminary Determination of Affirmative 
Critical Circumstances, dated April 26, 2002.
    Whereas no new or persuasive evidence to the contrary has been 
presented to the Department since the Preliminary Critical 
Circumstances Determination, we have determined in this final 
determination that critical circumstances exist for imports of Cold-
Rolled Steel from Korea (with the exception of Dongbu). See Decision 
Memorandum at comment 7 for further discussion.

Continuation of Suspension of Liquidation

    Pursuant to section 735(c)(1)(B) of the Act, we are instructing the 
U.S. Customs Service (``Customs'') to continue to suspend liquidation 
of all imports of cold-rolled steel from Korea (except those produced 
or exported by Dongbu) that are entered, or withdrawn from warehouse, 
for consumption on or after February 8, 2002 (which is 90 days prior to 
the date of publication of the Preliminary Determination in the Federal 
Register). For subject merchandise produced or exported by Dongbu, we 
are instructing Customs to continue to suspend liquidation for imports 
that are entered, or withdrawn from warehouse, for consumption on or 
after May 9, 2002 which is the date of the preliminary determination. 
Customs shall continue to require a cash deposit or the posting of a 
bond equal to the estimated amount by which the normal value exceeds 
the U.S. price as shown below. The suspension of liquidation 
instructions will remain in effect until further notice.
    In the companion countervailing duty investigation we have found 
the existence of export subsidies. Section 772(c)(1)(C) of the Act 
directs the Department to increase EP or CEP by the amount of the 
countervailing duty ``imposed'' on the subject merchandise ``to offset 
an export subsidy'' in an administrative review. The basic economic 
theory underlying this provision is that in parallel antidumping and 
countervailing duty investigations, if the Department finds that a 
respondent received the benefits of an export subsidy program, it is 
presumed the subsidy contributed to lower-priced sales of subject 
merchandise in the United States market by the amount of any such 
export subsidy. Thus, the subsidy and dumping are presumed to be 
related, and the assessment of duties against both would in effect be 
``double-application'' or imposing two duties against the same 
situation. Therefore, Congress, through section 772(c)(1)(C) of the 
Act, indicated that the Department should factor the subsidy into the 
antidumping calculations to prevent this ``double-application'' of 
duties.
    We believe the economic theory implicit in section 772(c)(1)(C) of 
the Act should also generally apply to our cash deposit calculations in 
an investigation. The calculations underlying cash deposit rates 
resulting from an initial investigation are essentially equivalent to 
those determined in administrative reviews leading to the assessment of 
antidumping duties. Congress has indicated, in effect, that no dumping 
exists if the export subsidies calculated in a countervailing duty 
proceeding are equal to or greater than the calculated dumping margin. 
The Department believes that this is true regardless if such a result 
appears in an administrative review or in an investigation. The 
Department has determined in its Final Affirmative Countervailing Duty 
Determination: Notice of Final Affirmative Countervailing Duty 
Determination: Certain Cold-Rolled Carbon Steel Flat Products from the 
Republic of Korea (``Cold-Rolled CVD'') (issued concurrently) that the 
product under investigation benefited from export subsidies. Consistent 
with our longstanding practice, where the product under investigation 
is also subject to a concurrent countervailing duty investigation, we 
instruct the Customs Service to require a cash deposit or posting of a 
bond equal to the weighted-average amount by which the normal value 
exceeds the export price, as indicated below, minus the amount of the 
countervailing duty determined to offset an export subsidy. See, e.g., 
Notice of Antidumping Duty Order: Stainless Steel Wire Rod From Italy, 
63 FR 49327 (September 15, 1998); and Notice of Final Determination of 
Sales at Less Than Fair Value: Polyethylene Terephthalate Film, Sheet, 
and Strip From India, 67 FR 34899, (May 16, 2002). Accordingly, for 
cash deposit purposes we will subtract from the cash deposit rate that 
portion of the rate attributable to the export subsidies found in the 
affirmative countervailing duty determination, in the event that an 
order in the companion countervailing

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duty case is issued.\3\ After the adjustment for the cash deposit rate 
attributed to export subsidies, the resulting cash deposit rate for 
Dongbu will be 11.02 percent. In accordance with section 735(c)(1)(B) 
of the Act, we are directing the Customs Service to continue to suspend 
liquidation of all entries of subject merchandise entered, or withdrawn 
from warehouse, for consumption on or after May 9, 2002, the date of 
publication of the preliminary determination in the Federal Register. 
We will instruct the Customs Service to continue to require a cash 
deposit or the posting of a bond for each entry equal to the weighted-
average amount by which the normal value exceeds the export price, 
adjusted for the export subsidy rate, as indicated below. These 
suspension of liquidation instructions will remain in effect until 
further notice.
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    \3\ Because suspension of liquidation in Cold-Rolled CVD is 
currently discontinued and will not be resumed unless and until the 
Department issues a countervailing duty order, the antidumping cash 
deposit rates are the rates indicated below.
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    We determine that the following percentage margins exist for the 
period July 1, 2000, through June 30, 2001:

------------------------------------------------------------------------
                                                                Margin
                   Manufacturer/exporter                      (percent)
                                                                 \4\
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POSCO......................................................     5.15 \5\
Dongbu.....................................................        11.13
All Others.................................................         8.90
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ITC Notification

    In accordance with section 735(d) of the Act, we have notified the 
ITC of our determination. As our final determination is affirmative, 
the ITC will determine, within 45 days, whether these imports are 
causing material injury, or threat of material injury, to an industry 
in the United States. If the ITC determines that material injury, or 
threat of injury does not exist, the proceeding will be terminated and 
all securities posted will be refunded or cancelled. If the ITC 
determines that such injury does exist, the Department will issue an 
antidumping duty order directing Customs officials to assess 
antidumping duties on all imports of the subject merchandise entered, 
or withdrawn from warehouse, for consumption on or after the effective 
date of the suspension of liquidation.
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    \4\ If an order is issued in the companion countervailing duty 
investigation, suspension of liquidation in Cold-Rolled CVD will 
resume. Additionally, if an order is issued in this antidumping duty 
investigation, the Department will issue antidumping duty cash 
deposit instructions requiring a cash deposit rate for Dongbu equal 
to the dumping margin calculated for Dongbu less the export subsidy 
rate calculated for Dongbu in Cold-Rolled CVD. In Cold-Rolled CVD, 
Dongbu's ad valorem export subsidy rate is 0.11 percent. Therefore, 
we will adjust Dongbu's antidumping duty rate by the export subsidy 
rate, if necessary (i.e., 11.13-0.11 = 11.02 percent). Furthermore, 
the Department will issue antidumping duty cash deposit instructions 
requiring an ``All Others'' cash deposit equal to the ``All Others'' 
antidumping duty rate less the ``All Others'' export subsidy rate 
calculated in Cold-Rolled CVD. In Cold-Rolled CVD, the ``All 
Others'' ad valorem export subsidy rate is 0.11 percent. Therefore, 
we will adjust the antidumping duty ``All Others'' margin by the 
export subsidy rate, if necessary (i.e., 8.90-0.11 = 8.79 percent).
    \5\ In Cold-Rolled CVD, POSCO's ad valorem net subsidy rate is 
de minimis. Therefore, we will not adjust POSCO's antidumping duty 
rate by its export subsidy rate, because POSCO would be excluded 
from any resulting countervailing duty order on certain cold-rolled 
carbon steel flat products from Korea.
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Notification Regarding Administrative Protective Order (APO)

    This notice also serves as a reminder to parties subject to APO of 
their responsibility concerning the disposition of proprietary 
information disclosed under APO in accordance with 19 CFR 351.305. 
Timely notification of return/destruction of APO materials or 
conversion to judicial protective order is hereby requested. Failure to 
comply with the regulations and the terms of an APO is a sanctionable 
violation.
    This determination is issued and published in accordance with 
sections 735(d) and 777(i)(1) of the Act.

    Dated: September 23, 2002.
Faryar Shirzad,
Assistant Secretary for Import Administration.

Appendix I--List of Comments and Issues in the Decision Memorandum

A. Issues

Scope

1. Scope of the Investigation

Pohang Iron & Steel Co., Ltd. (``POSCO'')

Sales Issues:
    Comment 1: U.S. ``Channel 3'' Sales
    Comment 2: Middleman Dumping Allegation
    Comment 3: Certifications of Completeness and Accuracy
    Comment 4: U.S. Indirect Selling Expenses
    Comment 5: Temper, Annealing, and Surface Finish Fields
    Comment 6: Constructed Export Price--CEP--Offset
    Comment 7: Critical Circumstances
Cost Issues:
    Comment 8: General and Administrative Expense Rate Calculation

Dongbu Steel Co., Ltd. (``Dongbu'')

Sales Issues:
    Comment 9: U.S. Indirect Selling Expense Calculation Methodology
    Comment 10: Constructed Export Price--CEP--Offset
    Comment 11: Warranty Expenses
    Comment 12: Submission of New Factual Information
    Comment 13: Ministerial Errors
    A. The Department's Preliminary Determination Failed to 
Distinguish Between Prime and Non-Prime Sales
    B. The Department's Margin Program Incorrectly Converts the 
Variables HMMOVE and HMPACK
    C. The Department's Preliminary Determination Double Counted 
Billing Adjustments
    D. The Department Failed to Assign a Weight to Dongbu's ``Stone 
Finish'' Merchandise
Cost Issues:
    Comment 14: Interest Expense/Financial Expense Ratio
    Comment 15: General and Administrative Expense Rate

[FR Doc. 02-24795 Filed 10-2-02; 8:45 am]
BILLING CODE 3510-DS-P