[Federal Register Volume 71, Number 243 (Tuesday, December 19, 2006)]
[Notices]
[Pages 75937-75940]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-21634]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-580-835]


Stainless Steel Sheet and Strip in Coils from the Republic of 
Korea: Preliminary Results of Countervailing Duty Changed Circumstances 
Review

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

[[Page 75938]]

SUMMARY: In response to a March 22, 2006, request by Hyundai Steel 
Company (Hyundai), claiming to be the successor-in-interest to INI 
Steel Company (INI), the Department of Commerce (the Department) 
initiated a changed circumstances review of the countervailing duty 
(CVD) order on stainless steel sheet and strip in coils (SSSS) from the 
Republic of Korea (Korea). See Stainless Steel Sheet and Strip in Coils 
From the Republic of Korea: Initiation of Countervailing Duty Changed 
Circumstances Review, 71 FR 37541 (June 30, 2006) (Initiation Notice). 
We invited interested parties to comment on our Initiation Notice. We 
received no comments.
    Based on the information submitted by Hyundai, we preliminarily 
determine that: (1) Hyundai is the successor-in-interest to INI, 
formerly Inchon Iron and Steel Co., Ltd. (Inchon); and (2) upon 
publication of the final results of this review, INI's current CVD cash 
deposit rate shall be applied to entries of subject merchandise made by 
Hyundai. Interested parties are invited to comment on these preliminary 
results.

EFFECTIVE DATE: December 19, 2006.

FOR FURTHER INFORMATION CONTACT: Darla Brown or Preeti Tolani, AD/CVD 
Operations, Office 3, Import Administration, International Trade 
Administration, U.S. Department of Commerce, Room 4014, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone (202) 482-2849 
or (202) 482-0395, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On August 6, 1999, the Department published in the Federal Register 
the CVD order on SSSS from Korea. See Amendment to Final Determination: 
Stainless Steel Sheet and Strip in Coils From the Republic of Korea; 
and Notice of Countervailing Duty Orders: Stainless Steel Sheet and 
Strip in Coils From France, Italy, and the Republic of South Korea, 64 
FR 42923 (August 6, 1999). The Department has completed three 
administrative reviews of this CVD order\1\ and is currently conducting 
a fourth review.\2\ In September 2001 and June 2002, respectively, the 
Department initiated and published the preliminary results of a changed 
circumstances review to determine whether INI was entitled to Inchon's 
cash deposit rate.\3\ In the Second Review the Department determined to 
assign Inchon's cash deposit rate to INI, thereby eliminating the need 
to complete the changed circumstances review.\4\ The Department has 
also published notice of continuation of this order upon completion of 
the first five-year (sunset) review.\5\
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    \1\ See Final Results and Partial Rescission of Countervailing 
Duty Administrative Review: Stainless Steel Sheet and Strip in Coils 
from the Republic of Korea, 67 FR 1964 (January 15, 2002), as 
amended, Stainless Steel Sheet and Strip in Coils from Korea: 
Amended Final Results of Countervailing Duty Administrative Review, 
67 FR 8229 (February 22 2002); Final Results and Partial Rescission 
of Countervailing Duty Administrative Review: Stainless Steel Sheet 
and Strip in Coils from the Republic of Korea, 68 FR 13267 (March 
19, 2003), and accompanying Issues and Decision Memorandum (Second 
Review); and Final Results of Countervailing Duty Administrative 
Review: Stainless Steel Sheet and Strip in Coils from the Republic 
of Korea, 69 FR 2113 (January 14, 2004), as amended, Amended Final 
Results of Countervailing Duty Administrative Review: Stainless 
Steel Sheet and Strip in Coils from Korea, 69 FR 7419 (February 17, 
2004).
    \2\ See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews and Request for Revocation in Part, 70 FR 
56631 (September 28, 2005) (initiation of review of Dai Yang Metal 
Co., Ltd.).
    \3\ See Stainless Steel Sheet and Strip in Coils from the 
Republic of Korea; Notice of Initiation of Changed Circumstances 
Countervailing Duty Administrative Review, 66 FR 49639 (September 
28, 2001), and Stainless Steel Sheet and Strip in Coils from the 
Republic of Korea; Notice of Preliminary Results of Changed 
Circumstances Countervailing Duty Administrative Review, 67 FR 38257 
(June 3, 2002).
    \4\ See Second Review Decision Memorandum at section ``C: Name 
Changes.''
    \5\ See Continuation of Antidumping Duty Orders on Stainless 
Steel Sheet and Strip in Coils from Germany, Italy, Japan, the 
Republic of Korea, Mexico, and Taiwan, and Countervailing Duty 
Orders on Stainless Steel Sheet and Strip in Coils from Italy and 
the Republic of Korea, 70 FR 44886 (August 4, 2005).
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    Hyundai asserts that INI changed its corporate name to Hyundai 
effective March 10, 2006. On March 22, 2006, Hyundai requested that the 
Department confirm that Hyundai is entitled to INI's cash deposit rate 
for the CVD order. Simultaneously, Hyundai requested a changed 
circumstances review of the antidumping duty (AD) order on SSSS from 
Korea for the purpose of determining whether Hyundai is the successor-
in-interest to INI and is entitled to INI's exclusion from the AD 
order. On April 11, 20, and 27, 2006, Hyundai submitted additional 
information in response to three requests from the Department for 
additional information. In response to Hyundai's request regarding the 
AD order, on May 12, 2006, the Department initiated a changed 
circumstances review and preliminarily determined that Hyundai is the 
successor-in-interest to INI and merchandise from Hyundai should be 
excluded from the AD order.\6\
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    \6\ See Notice of Initiation and Preliminary Results of Changed 
Circumstances Antidumping Duty Review: Stainless Steel Sheet and 
Strip in Coils from the Republic of Korea, 71 FR 27680 (May 12, 
2006) (AD Changed Circumstances Preliminary Results).
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Scope of the Order

    The products covered by this order 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 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 order is classified in the 
Harmonized Tariff Schedule of the United States (HTSUS) at subheadings: 
7219.13.0031, 7219.13.0051, 7219.13.0071, 7219.1300.81\7\, 
7219.14.0030, 7219.14.0065, 7219.14.0090, 7219.32.0005, 7219.32.0020, 
7219.32.0025, 7219.32.0035, 7219.32.0036, 7219.32.0038, 7219.32.0042, 
7219.32.0044, 7219.33.0005, 7219.33.0020, 7219.33.0025, 7219.33.0035, 
7219.33.0036, 7219.33.0038, 7219.33.0042, 7219.33.0044, 7219.34.0005, 
7219.34.0020, 7219.34.0025, 7219.34.0030, 7219.34.0035, 7219.35.0005, 
7219.35.0015, 7219.35.0030, 7219.35.0035, 7219.90.0010, 7219.90.0020, 
7219.90.0025, 7219.90.0060, 7219.90.0080, 7220.12.1000, 7220.12.5000, 
7220.20.1010, 7220.20.1015, 7220.20.1060, 7220.20.1080, 7220.20.6005, 
7220.20.6010, 7220.20.6015, 7220.20.6060, 7220.20.6080, 7220.20.7005, 
7220.20.7010, 7220.20.7015, 7220.20.7060, 7220.20.7080, 7220.20.8000, 
7220.20.9030, 7220.20.9060, 7220.90.0010, 7220.90.0015, 7220.90.0060, 
and 7220.90.0080. Although the HTSUS subheadings are provided for 
convenience and customs purposes, the Department's written description 
of the merchandise subject to this order is dispositive.
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    \7\ Due to changes to the HTSUS numbers in 2001, 7219.13.0030, 
7219.13.0050, 7219.13.0070, and 7219.13.0080 are now 7219.13.0031, 
7219.13.0051, 7219.13.0071, and 7219.13.0081, respectively.
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    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)

[[Page 75939]]

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 additional specialty 
stainless steel products are also excluded from the scope of this 
order. These excluded products are described below.
    Flapper valve steel is excluded from the scope of this order. 
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 less than 0.002 or greater than 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.''\8\
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    \8\ ``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.''\9\
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    \9\ ``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.''\10\
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    \10\ ``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 scope of this order. These include stainless steel 
strip in coils used in the production of textile cutting tools (e.g., 
carpet knives).\11\ This steel is similar to AISI grade 420 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 Mo.'' 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 100 square microns. 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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    \11\ This list of uses is illustrative and provided for 
descriptive purposes only.
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Preliminary Results of Changed Circumstances Review

    In accordance with section 751(b) of the Tariff Act of 1930, as 
amended (the Act), and 19 CFR 351.216 and 19 CFR

[[Page 75940]]

351.221, the Department initiated this changed circumstances review of 
the CVD order to determine whether Hyundai is the successor-in-interest 
to INI. In the context of changed circumstances reviews of an AD order 
involving, e.g., a change in a company's name, structure or ownership, 
the Department relies on its successor-in-interest analysis to 
determine whether the newly named or structured company remains 
essentially the same as the predecessor company. See, e.g., Notice of 
Final Results of Antidumping Duty Changed Circumstances Review; Certain 
Forged Stainless Steel Flanges From India, 71 FR 31156 (June 1, 2006), 
citing Industrial Phosphoric Acid from Israel; Final Results of 
Antidumping Duty Changed Circumstances Review, 59 FR 6944, 6945 
(February 14, 1994). If the evidence demonstrates that, with respect to 
the production and sale of the subject merchandise, the successor 
company operates as the same business entity as its predecessor, the 
Department will assign the successor the existing cash deposit rate of 
its predecessor.
    For similar changed circumstances in a CVD order, the appropriate 
focus of the analysis for determining the cash deposit rate for a 
successor company is usually whether the successor company operates as 
the same business entity as its predecessor. For such determinations in 
the context of a CVD order, however, such an analysis may not always be 
sufficient, in itself, to determine whether it is appropriate to assign 
the predecessor's CVD cash deposit rate to the successor where the 
circumstances indicate that a change relevant to the subsidy analysis 
may have occurred. We do not find, however, that there are any such 
circumstances in the instant review, such as a privatization or sale of 
a company, that would warrant going beyond the Department's standard 
successor-in-interest analysis. In the instant proceeding, we are only 
examining a change in the name of the company. Further, Hyundai has 
presented evidence establishing that its change in corporate name from 
INI to Hyundai did not affect the company's operations such that they 
are materially different to those of its predecessor. See Hyundai's 
March 22, 2006, submission at Exhibits 2 though 4; see also Hyundai's 
April 11, 2006, submission at page 3 and Exhibit 7. The evidence 
indicates that Hyundai has essentially the same corporate structure and 
operations as INI.
    Therefore, based on the record evidence, and consistent with the 
Department's findings in the AD Changed Circumstances Preliminary 
Results, we preliminarily determine that the current cash deposit rate 
applicable to INI shall be applicable to entries of subject merchandise 
made by Hyundai, entered on or after the publication date of the final 
results of this changed circumstances review. Thus, if these 
preliminary results are adopted in the final results of this changed 
circumstances review, we will instruct U.S. Customs and Border 
Protection to collect a cash deposit at the rate of 0.54 percent ad 
valorem on all entries of SSSS produced and exported by Hyundai on or 
after the publication of the final results of this review. This cash 
deposit rate shall remain in effect until publication of the final 
results of the next administrative review in which Hyundai 
participates.
    In addition, the Department intends to further consider the issue 
of whether alternative or additional successorship criteria would be 
appropriate in the CVD context, and therefore, the Department 
anticipates releasing a separate Federal Register notice shortly 
hereafter inviting parties to submit public comments on the issue.

Public Comment

    Interested parties are invited to comment on these preliminary 
results. Any written comments may be submitted no later than 14 days 
after date of publication of this notice. Rebuttal briefs, limited to 
arguments raised in case briefs, are due five days after the case brief 
deadline. Case briefs and rebuttal briefs must be served on interested 
parties in accordance with 19 CFR 351.309. In accordance with 19 CFR 
351.216(e), the Department will publish the final results of the 
changed circumstances review including the results of its analysis of 
any issues raised in any such comments within 270 days after the date 
on which the changed circumstances review was initiated.
    This notice is in accordance with section 751(b)(1) of the Act and 
19 CFR 351.216 and 351.221.

    Dated: December 12, 2006.
David M. Spooner,
Assistant Secretaryfor Import Administration.
[FR Doc. E6-21634 Filed 12-18-06; 8:45 am]
BILLING CODE 3510-DS-S