[Federal Register Volume 69, Number 9 (Wednesday, January 14, 2004)]
[Notices]
[Pages 2113-2116]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-832]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-580-835]


Final Results of Countervailing Duty Administrative Review: 
Stainless Steel Sheet and Strip in Coils from the Republic of Korea

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

ACTION: Notice of Final Results of Countervailing Duty Administrative 
Review.

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SUMMARY: On September 9, 2003, the Department of Commerce (the 
Department) published in the Federal Register its preliminary results 
of administrative review of the countervailing duty order on stainless 
steel sheet and strip in coils from the Republic of Korea for the 
period January 1, 2001 through December 31, 2001 (see Notice of 
Preliminary Results of Countervailing Duty Administrative Review: 
Stainless Steel Sheet and Strip in Coils from the Republic of Korea, 68 
FR 53116 (September 9, 2003) (Preliminary Results)). The Department has 
now completed this administrative review in accordance with section 
751(a) of the Tariff Act of 1930, as amended (the Act).
    Based on information received since the Preliminary Results and our 
analysis of the comments received, the Department has revised the net 
subsidy rate for INI Steel Company (INI)\1\ and Sammi Steel Co., Ltd. 
(Sammi).\2\ As discussed in the ``Issues and Decision Memorandum from 
Holly A. Kuga, Acting Deputy Assistant Secretary for AD/CVD Enforcement 
II to James J. Jochum, Assistant Secretary for Import Administration 
concerning the Final Results of Countervailing Duty Administrative 
Review: Stainless Steel Sheet and Strip in Coils from the Republic of 
Korea'' (Decision Memorandum) dated January 7, 2004, we found INI and 
Sammi to be cross-owned and are therefore calculating a single rate for 
both companies. The final net subsidy rate for the reviewed companies 
is listed below in the section entitled ``Final Results of Review.''
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    \1\ Formerly known as Inchon Iron and Steel Co. (Inchon). As of 
April 2001, Inchon changed its name to INI.
    \2\ As of April 2002, Sammi changed its name to BNG Steel Co., 
Ltd. (BNG).

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EFFECTIVE DATE: January 14, 2004.

FOR FURTHER INFORMATION CONTACT: Carrie Farley or Darla Brown, Office 
of AD/CVD Enforcement VI, Group II, Import Administration, U.S. 
Department of Commerce, Room 4012, 14th Street and Constitution Avenue, 
NW., Washington, DC 20230; telephone: (202) 482-2786.

SUPPLEMENTARY INFORMATION:

Background

    On September 9, 2003, the Department published in the Federal 
Register its Preliminary Results. We invited interested parties to 
comment on the results. Since the preliminary results, the following 
events have occurred.
    On September 12, 2003, respondents requested an extension for 
submission of case and rebuttal briefs. On September 17, 2003, 
petitioners\3\ also requested an extension of time for the submission 
of case and rebuttal briefs. On September 24, 2003, the Department 
revised the briefing schedule, granting petitioners and respondents 
until October 17 to file case briefs and October 24 to file rebuttal 
briefs. See September 24, 2003 Memorandum to the File, from the Team, 
re: Amended Briefing Schedule for the Countervailing Duty 
Administrative Review of Stainless Steel Sheet and Strip from Korea. On 
October 17, 2003, we received case briefs from petitioners and 
respondents. On October 24, 2003, we received rebuttal briefs from 
petitioners and respondents.
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    \3\ Allegheny Ludlum, AK Steel Corporation, J&L Speciality 
Steel, Inc., Butler-Armco Independent Union, Zanesville Armco 
Independent Union, and the United Steelworkers of America, AFL-CIO/
CLC (collectively, petitioners).
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    Pursuant to 19 CFR 351.213(b), this review covers only those 
producers or exporters of the subject merchandise for which a review 
was specifically requested. Accordingly, this review covers INI and 
Sammi. This review covers the period January 1, 2001 through December 
31, 2001, and twenty-three programs.

Scope of the Review

    For purposes of this review, the products covered are certain 
stainless steel sheet and strip in coils. Stainless steel is an alloy 
steel containing, by weight, 1.2 percent or less of carbon and 10.5 
percent or more of chromium, with or without other elements. The 
subject sheet and strip is a flat-rolled product in coils that is 
greater than 9.5 mm in

[[Page 2114]]

width and less than 4.75 mm in thickness, and that is annealed or 
otherwise heat treated and pickled or otherwise descaled. The subject 
sheet and strip may also be further processed (e.g., cold-rolled, 
polished, aluminized, coated, etc.) provided that it maintains the 
specific dimensions of sheet and strip following such processing.
    The merchandise subject to this review is classified in the 
Harmonized Tariff Schedule of the United States (HTSUS) at subheadings: 
7219.13.00.31, 7219.13.00.51, 7219.13.00.71, 7219.13.00.81, 
7219.14.00.30, 7219.14.00.65, 7219.14.00.90, 7219.32.00.05, 
7219.32.00.20, 7219.32.00.25, 7219.32.00.35, 7219.32.00.36, 
7219.32.00.38, 7219.32.00.42, 7219.32.00.44, 7219.33.00.05, 
7219.33.00.20, 7219.33.00.25, 7219.33.00.35, 7219.33.00.36, 
7219.33.00.38, 7219.33.00.42, 7219.33.00.44, 7219.34.00.05, 
7219.34.00.20, 7219.34.00.25, 7219.34.00.30, 7219.34.00.35, 
7219.35.00.05, 7219.35.00.15, 7219.35.00.30, 7219.35.00.35, 
7219.90.00.10, 7219.90.00.20, 7219.90.00.25, 7219.90.00.60, 
7219.90.00.80, 7220.12.10.00, 7220.12.50.00, 7220.20.10.10, 
7220.20.10.15, 7220.20.10.60, 7220.20.10.80, 7220.20.60.05, 
7220.20.60.10, 7220.20.60.15, 7220.20.60.60, 7220.20.60.80, 
7220.20.70.05, 7220.20.70.10, 7220.20.70.15, 7220.20.70.60, 
7220.20.70.80, 7220.20.80.00, 7220.20.90.30, 7220.20.90.60, 
7220.90.00.10, 7220.90.00.15, 7220.90.00.60, and 7220.90.00.80. 
Although the HTSUS subheadings are provided for convenience and customs 
purposes, the Department's written description of the merchandise is 
dispositive.
    Excluded from the scope of this order are the following: (1) sheet 
and strip that is not annealed or otherwise heat treated and pickled or 
otherwise descaled, (2) sheet and strip that is cut to length, (3) 
plate (i.e., flat-rolled stainless steel products of a thickness of 
4.75 mm or more), (4) flat wire (i.e., cold-rolled sections, with a 
prepared edge, rectangular in shape, of a width of not more than 9.5 
mm), and (5) razor blade steel. Razor blade steel is a flat rolled 
product of stainless steel, not further worked than cold-rolled (cold-
reduced), in coils, of a width of not more than 23 mm and a thickness 
of 0.266 mm or less, containing, by weight, 12.5 to 14.5 percent 
chromium, and certified at the time of entry to be used in the 
manufacture of razor blades. See Chapter 72 of the HTSUS, ``Additional 
U.S. Note'' 1(d).
    The Department has determined that certain specialty stainless 
steel products are also excluded from the scope of this order. These 
excluded products are described below:
    Flapper valve steel is defined as stainless steel strip in coils 
containing, by weight, between 0.37 and 0.43 percent carbon, between 
1.15 and 1.35 percent molybdenum, and between 0.20 and 0.80 percent 
manganese. This steel also contains, by weight, phosphorus of 0.025 
percent or less, silicon of between 0.20 and 0.50 percent, and sulfur 
of 0.020 percent or less. The product is manufactured by means of 
vacuum arc remelting, with inclusion controls for sulphide of no more 
than 0.04 percent and for oxide of no more than 0.05 percent. Flapper 
valve steel has a tensile strength of between 210 and 300 ksi, yield 
strength of between 170 and 270 ksi, plus or minus 8 ksi, and a 
hardness (Hv) of between 460 and 590. Flapper valve steel is most 
commonly used to produce specialty flapper valves in compressors.
    Also excluded is a product referred to as suspension foil, a 
specialty steel product used in the manufacture of suspension 
assemblies for computer disk drives. Suspension foil is described as 
302/304 grade or 202 grade stainless steel of a thickness between 14 
and 127 microns, with a thickness tolerance of plus-or-minus 2.01 
microns, and surface glossiness of 200 to 700 percent Gs. Suspension 
foil must be supplied in coil widths of not more than 407 mm, and with 
a mass of 225 kg or less. Roll marks may only be visible on one side, 
with no scratches of measurable depth. The material must exhibit 
residual stresses of 2 mm maximum deflection, and flatness of 1.6 mm 
over 685 mm length.
    Certain stainless steel foil for automotive catalytic converters is 
also excluded from the scope of this order. This stainless steel strip 
in coils is a specialty foil with a thickness of between 20 and 110 
microns used to produce a metallic substrate with a honeycomb structure 
for use in automotive catalytic converters. The steel contains, by 
weight, carbon of no more than 0.030 percent, silicon of no more than 
1.0 percent, manganese of no more than 1.0 percent, chromium of between 
19 and 22 percent, aluminum of no less than 5.0 percent, phosphorus of 
no more than 0.045 percent, sulfur of no more than 0.03 percent, 
lanthanum of between 0.002 and 0.05 percent, and total rare earth 
elements of more than 0.06 percent, with the balance iron.
    Permanent magnet iron-chromium-cobalt alloy stainless strip is also 
excluded from the scope of this order. This ductile stainless steel 
strip contains, by weight, 26 to 30 percent chromium, and 7 to 10 
percent cobalt, with the remainder of iron, in widths 228.6 mm or less, 
and a thickness between 0.127 and 1.270 mm. It exhibits magnetic 
remanence between 9,000 and 12,000 gauss, and a coercivity of between 
50 and 300 oersteds. This product is most commonly used in electronic 
sensors and is currently available under proprietary trade names such 
as ``Arnokrome III.''\4\
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    \4\ ``Arnokrome III'' is a trademark of the Arnold Engineering 
Company.
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    Certain electrical resistance alloy steel is also excluded from the 
scope of this order. This product is defined as a non-magnetic 
stainless steel manufactured to American Society of Testing and 
Materials (ASTM) specification B344 and containing, by weight, 36 
percent nickel, 18 percent chromium, and 46 percent iron, and is most 
notable for its resistance to high temperature corrosion. It has a 
melting point of 1390 degrees Celsius and displays a creep rupture 
limit of 4 kilograms per square millimeter at 1000 degrees Celsius. 
This steel is most commonly used in the production of heating ribbons 
for circuit breakers and industrial furnaces, and in rheostats for 
railway locomotives. The product is currently available under 
proprietary trade names such as ``Gilphy 36.''\5\
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    \5\ ``Gilphy 36'' is a trademark of Imphy, S.A.
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    Certain martensitic precipitation-hardenable stainless steel is 
also excluded from the scope of this order. This high-strength, ductile 
stainless steel product is designated under the Unified Numbering 
System (UNS) as S45500-grade steel, and contains, by weight, 11 to 13 
percent chromium, and 7 to 10 percent nickel. Carbon, manganese, 
silicon and molybdenum each comprise, by weight, 0.05 percent or less, 
with phosphorus and sulfur each comprising, by weight, 0.03 percent or 
less. This steel has copper, niobium, and titanium added to achieve 
aging, and will exhibit yield strengths as high as 1700 Mpa and 
ultimate tensile strengths as high as 1750 Mpa after aging, with 
elongation percentages of 3 percent or less in 50 mm. It is generally 
provided in thicknesses between 0.635 and 0.787 mm, and in widths of 
25.4 mm. This product is most commonly used in the manufacture of 
television tubes and is currently available under proprietary trade 
names such as ``Durphynox 17.''\6\
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    \6\ ``Durphynox 17'' is a trademark of Imphy, S.A.
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    Finally, three specialty stainless steels typically used in certain 
industrial blades and surgical and medical instruments are also 
excluded from the

[[Page 2115]]

scope of this order. These include stainless steel strip in coils used 
in the production of textile cutting tools (e.g., carpet knives).\7\ 
This steel is similar to ASTM grade 440F, but containing, by weight, 
0.5 to 0.7 percent of molybdenum. The steel also contains, by weight, 
carbon of between 1.0 and 1.1 percent, sulfur of 0.020 percent or less, 
and includes between 0.20 and 0.30 percent copper and between 0.20 and 
0.50 percent cobalt. This steel is sold under proprietary names such as 
``GIN4 HI-C.'' The second excluded stainless steel strip in coils is 
similar to AISI 420-J2 and contains, by weight, carbon of between 0.62 
and 0.70 percent, silicon of between 0.20 and 0.50 percent, manganese 
of between 0.45 and 0.80 percent, phosphorus of no more than 0.025 
percent and sulfur of no more than 0.020 percent. This steel has a 
carbide density on average of 100 carbide particles per square micron. 
An example of this product is ``GIN5'' steel. The third specialty steel 
has a chemical composition similar to AISI 420 F, with carbon of 
between 0.37 and 0.43 percent, molybdenum of between 1.15 and 1.35 
percent, but lower manganese of between 0.20 and 0.80 percent, 
phosphorus of no more than 0.025 percent, silicon of between 0.20 and 
0.50 percent, and sulfur of no more than 0.020 percent. This product is 
supplied with a hardness of more than Hv 500 guaranteed after customer 
processing, and is supplied as, for example, ``GIN6.''
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    \7\ This list of uses is illustrative and provided for 
descriptive purposes only.
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Analysis of Comments Received

    All issues raised in the case and rebuttal briefs by parties to 
this review are addressed in the Decision Memorandum, which is hereby 
adopted by this notice. A list of these issues contained in the 
Decision Memorandum is attached to this notice as Appendix I. Parties 
can find a complete discussion of all issues raised in this review 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.

Final Results of Review

    In accordance with section 705(c)(1)(B)(i) of the Act, we 
calculated an ad valorem subsidy rate for INI/Sammi. For the period 
January 1, 2001 through December 31, 2001, we determine the net subsidy 
for INI/Sammi to be 0.55 percent ad valorem. This rate will also apply 
to shipments by Inchon entered or withdrawn from warehouse for the 
period January 1, 2001 through December 31, 2001.
    We will instruct the U.S. Customs and Border Protection (CBP) to 
assess countervailing duties as indicated above. The Department will 
instruct the CBP to collect cash deposits of estimated countervailing 
duties in the percentage detailed above of the f.o.b. invoice prices on 
all shipments of the subject merchandise from the producers/exporters 
under review, entered, or withdrawn from warehouse, for consumption on 
or after the date of publication of the final results of this 
administrative review.
    Because the URAA replaced the general rule in favor of a country-
wide rate with a general rule in favor of individual rates for 
investigated and reviewed companies, the procedures for establishing 
countervailing duty rates, including those for non-reviewed companies, 
are now essentially the same as those in antidumping cases, except as 
provided for in section 777A(e)(2) of the Act. The requested review 
will normally cover only those companies specifically named. See 19 CFR 
351.213(b). Pursuant to 19 CFR 351.212(c), for all companies for which 
a review was not requested, duties must be assessed at the cash deposit 
rate, and cash deposits must continue to be collected, at the rate 
previously ordered. As such, the countervailing duty cash deposit rate 
applicable to a company can no longer change, except pursuant to a 
request for a review of that company. See Federal-Mogul Corporation and 
The Torrington Company v. United States, 822 F. Supp. 782 (CIT 1993) 
and Floral Trade Council v. United States, 822 F. Supp. 766 (CIT 1993). 
Therefore, the cash deposit rates for all companies except those 
covered by this review will be unchanged by the results of this review.
    We will instruct the CBP to continue to collect cash deposits for 
non-reviewed companies at the most recent company-specific or country-
wide rate applicable to the company. As of April 1, 2002, Sammi changed 
its name to BNG. See the Comment 2 of the March 19, 2003, Issues and 
Decision Memorandum that accompanied the Final Results and Partial 
Rescission of Countervailing Duty Administrative Review: Stainless 
Steel Sheet and Strip From the Republic of Korea, 68 FR 13267 (March 
19, 2003). Thus, for cash deposit purposes, we will instruct the CBP to 
assign the rate for INI/Sammi's cash deposit rate to BNG. Accordingly, 
the cash deposit rates that will be applied to non-reviewed companies 
covered by this order will be the rate for that company established in 
the most recently completed administrative proceeding conducted under 
the URAA. If such a review has not been conducted, the rate established 
in the most recently completed administrative proceeding pursuant to 
the statutory provisions that were in effect prior to the URAA 
amendments is applicable. See Stainless Steel Sheet and Strip in Coils 
from the Republic of Korea: Amended Final Results of Countervailing 
Duty Administrative Review, 67 FR 8229 (February 22, 2002). This rate 
shall apply to all non-reviewed companies until a review of a company 
assigned this rate is requested. In addition, for the period January 1, 
2001 through December 31, 2001, the assessment rates applicable to all 
non-reviewed companies covered by this order are the cash deposit rates 
in effect at the time of entry.
    This notice also serves as a reminder to parties subject to 
administrative protective order (APO) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 351.305(a)(3). Timely written 
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 administrative review and notice are issued and published in 
accordance with section 751(a)(1) of the Act.

    Dated: January 7, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.

Appendix I - Issues and Decision Memorandum

I. METHODOLOGY AND BACKGROUND INFORMATION
    A. Same Person Test for Sammi
    B. Sammi and Cross-ownership with INI
II. SUBSIDIES VALUATION INFORMATION
    A. Allocation Period
    B. Benchmarks for Loans and Discount Rates
III. ANALYSIS OF PROGRAMS
    A. Programs Determined to Confer Subsidies
     1. The GOK's Direction of Credit
     2. Article 16 of the Tax Exemption and Reduction Control Act 
(TERCL): Reserve for Export Loss
     3. Article 17 of TERCL: Reserve for

[[Page 2116]]

Overseas Market Development
     4. Technical Development Fund under Restriction of Special 
Taxation (RSTA) Article 9, formerly TERCL Article 8
     5. Asset Revaluation TERCL Article 56(2)
     6. Investment Tax Credits
     7. Electricity Discounts under the Requested Loan Adjustment 
Program (RLA)
     8. Purchase of Sammi Specialty Steel Division by POSCO
    B. Programs Determined to Be Not Used
     1. Investment Tax Credits under RSTA Articles 11, 30, and 94 and 
TERCL Articles 24, 27, 71
     2. Loans from the National Agricultural Cooperation Federation
     3. Tax Incentives for Highly-Advanced Technology Businesses under 
the Foreign Investment and Foreign Capital Inducement Act
     4. Reserve for Investment under Article 43-5 of TERCL
     5. Export Insurance Rates Provided by the Korean Export Insurance 
Corporation
     6. Special Depreciation of Assets on Foreign Exchange Earnings
     7. Excessive Duty Drawback
     8. Short-Term Export Financing
     9. Export Industry Facility Loans
     10. Research and Development
     11. Local Tax Exemption on Land Outside of Metropolitan Area
    C. Programs Determined To Be Not Countervailable
     1. POSCO's Provision of Steel Inputs for Less than Adequate 
Remuneration
     2. Electricity Discounts under the Voluntary Electric Power 
Savings Adjustment Program
     3. Kangwon's Debt-to-Equity Swap
     4. Debt Forgiveness Provided to Sammi by KAMCO
IV. TOTAL AD VALOREM RATE
V. ANALYSIS OF COMMENTS
Comment 1: Benchmarks for INI's and Sammi's Long-term Loans
Comment 2: Sale of Sammi's Bar and Pipe Facility at Changwon
Comment 3: Kangwon's Debt-for-Equity Swap
Comment 4: Debt Forgiveness Provided to Sammi by KAMCO
Comment 5: POSCO's Provision of Steel Inputs for Less than Adequate 
Remuneration
[FR Doc. 04-832 Filed 1-13-04; 8:45 am]
BILLING CODE 3510-DS-S