[Federal Register Volume 73, Number 15 (Wednesday, January 23, 2008)]
[Notices]
[Pages 3925-3928]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-1105]



[[Page 3925]]

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DEPARTMENT OF COMMERCE

International Trade Administration

[A-580-816]


Certain Corrosion-Resistant Carbon Steel Flat Products From the 
Republic of Korea: Notice of Preliminary Results of Antidumping Duty 
New Shipper Review

AGENCY: Import Administration, International Trade Administration, U.S. 
Department of Commerce.
SUMMARY: In response to a request by the respondent, Haewon MSC Co., 
Ltd. (Haewon), the Department of Commerce (the Department) is 
conducting a new shipper review of the antidumping duty order on 
certain corrosion-resistant carbon steel flat products (CORE) from the 
Republic of Korea (Korea). This review covers one producer/exporter of 
the subject merchandise, Haewon. We preliminarily determine that Haewon 
did not make sales below normal value (NV). If these preliminary 
results are adopted in our final results, we will instruct U.S. Customs 
and Border Protection (CBP) to liquidate entries subject to this review 
regard without regard to antidumping duties.

DATES: Effective Date: January 23, 2008.

FOR FURTHER INFORMATION CONTACT: Victoria Cho or George McMahon, AD/CVD 
Operations, Office 3, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone at (202) 482-
5075, or (202) 482-1167, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On August 19, 1993, the Department published the antidumping order 
on CORE from Korea. See Antidumping Duty Orders on Certain Cold-Rolled 
Carbon Steel Flat Products and Certain Corrosion-Resistant Carbon Steel 
Flat Products from Korea, 58 FR 44159 (August 19, 1993) (Order). On 
February 28, 2007, during the semi-annual anniversary month of the 
Order, the Department received a timely request for a new shipper 
review of the Order from Haewon, in accordance with 19 CFR 351.214(c). 
On March 27, 2007, the Department published a notice of initiation of a 
new shipper review of the antidumping duty order on CORE from Korea 
covering the period August 1, 2006, through January 31, 2007. See 
Corrosion-Resistant Carbon Steel Flat Products from Korea: Notice of 
Initiation of Antidumping Duty New Shipper Review for the period August 
1, 2006, through January 31, 2007, 72 FR 14260 (March 27, 2007).
    On August 30, 2007, the Department published a notice extending the 
time period for issuing the preliminary results of the new shipper 
review from September 17, 2007, to January 15, 2008. See Corrosion-
Resistant Carbon Steel Flat Products From Korea: Extension of Time 
Limits for the Preliminary Results of Antidumping Duty New Shipper 
Review, 72 FR 50099 (August 30, 2007).
    On June 21, 2007, United States Steel Corporation \1\ submitted an 
allegation that Haewon's home market sales were made at prices below 
the cost of production (COP). The Department analyzed the information 
referenced in petitioners' letter of June 21, 2007, and determined that 
the COP allegation was company-specific, employed a reasonable 
methodology, provided evidence of below-cost sales, and included models 
which are representative of the broader range of CORE sold by Haewon. 
Therefore, we determined that the petitioners' COP allegation provided 
a reasonable basis to initiate a new shipper COP investigation. See the 
Department's July 6, 2007, COP memorandum (COP memo). As a result, the 
Department issued a Section D questionnaire to Haewon on July 6, 2007. 
The Department subsequently issued three supplemental questionnaires 
regarding Sections A-C of the Department's initial questionnaire to 
Haewon on June 29, 2007, September 14, 2007, and October 17, 2007, 
respectively. The Department also issued two supplemental 
questionnaires regarding Section D of the Department's initial 
questionnaire on September 14, 2007, and October 17, 2007, 
respectively.
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    \1\ Petitioners are the United States Steel Corporation (U.S. 
Steel) and Nucor Corporation (Nucor) (collectively, petitioners). 
Mittal Steel USA ISG, Inc. (Mittal Steel USA) is a domestic 
interested party.
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Period of Review

    The period of review (POR) is August 1, 2006, through April 10, 
2007.\2\
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    \2\ Note that the Department extended the POR until April 10, 
2007 in order to include HMSC's U.S. sale, which entered on this 
particular date. See Department's letter to Haewon, dated May 23, 
2007.
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Date of Sale

    It is the Department's practice normally to use the invoice date as 
the date of sale, although we may use a date other than the invoice 
date if we are satisfied that a different date better reflects the date 
on which the exporter or producer establishes the material terms of 
sale. See 19 CFR 351.401(i). We have preliminarily determined that 
there is no reason to depart from the Department's treatment of invoice 
date as the date of sale for Haewon.

Petitioners' Comments

    On October 15, 2007, November 5, 2007, and December 10, 2007, the 
petitioners submitted a series of comments calling into question the 
bona fide nature of Haewon's U.S. sale and suggesting an affiliation 
between Haewon and the final customer of its U.S. sale. Haewon 
submitted comments rebutting petitioners' allegations. The Department 
issued an importer questionnaire to both Haewon and its U.S. importer 
on November 9, 2007. Based on the Department's analysis of the November 
9, 2007, questionnaire response, and the information on the record, we 
determined that Haewon's U.S. sale is a bona fide transaction. For a 
discussion of these issues, see Memorandum from Victoria Cho, through 
James Terpstra to Melissa G. Skinner, regarding the bona fide nature of 
Haewon's sale to the United States, dated January 15, 2008.

Verification

    The Department conducted a verification of Haewon's sales from 
November 5 through November 8, 2007, and a verification of Haewon's COP 
from November 9 through November 15, 2007. As provided in section 
782(i)(3) of the Tariff Act of 1930, as amended (the Act), we verified 
the information provided by Haewon. We used standard verification 
procedures, including an examination of the relevant sales and 
financial records. Our verification results are detailed in the 
company-specific verification report placed in the case file in the 
Central Records Unit (CRU), Department of Commerce, HCHB Building, at 
Room 1117. See Haewon's Sales Verification Report and Haewon's Cost 
Verification Report, dated January 15, 2008.

Scope of the Order

    This order covers flat-rolled carbon steel products, of rectangular 
shape, either clad, plated, or coated with corrosion-resistant metals 
such as zinc, aluminum, or zinc-, aluminum-, nickel-or iron-based 
alloys, whether or not corrugated or painted, varnished or coated with 
plastics or other nonmetallic substances in addition to the metallic 
coating, in coils (whether or not in successively superimposed layers) 
and of a width of 0.5 inch or greater, or in straight lengths which, if 
of a thickness less than 4.75 millimeters, are of a width of 0.5 inch 
or greater and which measures at least 10 times the

[[Page 3926]]

thickness or if of a thickness of 4.75 millimeters or more are of a 
width which exceeds 150 millimeters and measures at least twice the 
thickness, as currently classifiable in the Harmonized Tariff Schedule 
of the United States (HTSUS) under item numbers 7210.30.0030, 
7210.30.0060, 7210.41.0000, 7210.49.0030, 7210.49.0090, 7210.49.0091, 
7210.49.0095, 7210.61.0000, 7210.69.0000, 7210.70.6030, 7210.70.6060, 
7210.70.6090, 7210.90.1000, 7210.90.6000, 7210.90.9000, 7212.20.0000, 
7212.30.1030, 7212.30.1090, 7212.30.3000, 7212.30.5000, 7212.40.1000, 
7212.40.5000, 7212.50.0000, 7212.60.0000, 7215.90.1000, 7215.90.3000, 
7215.90.5000, 7217.20.1500, 7217.30.1530, 7217.30.1560, 7217.90.1000, 
7217.90.5030, 7217.90.5060, and 7217.90.5090. Included in the order are 
flat-rolled products of non-rectangular cross-section where such cross-
section is achieved subsequent to the rolling process including 
products which have been beveled or rounded at the edges (i.e., 
products which have been ``worked after rolling''). Excluded from this 
order are flat-rolled steel products either plated or coated with tin, 
lead, chromium, chromium oxides, both tin and lead (``terne plate''), 
or both chromium and chromium oxides (``tin-free steel''), whether or 
not painted, varnished or coated with plastics or other nonmetallic 
substances in addition to the metallic coating. Also excluded from this 
order are clad products in straight lengths of 0.1875 inch or more in 
composite thickness and of a width which exceeds 150 millimeters and 
measures at least twice the thickness. Also excluded from this order 
are certain clad stainless flat-rolled products, which are three-
layered corrosion-resistant carbon steel flat-rolled products less than 
4.75 millimeters in composite thickness that consist of a carbon steel 
flat-rolled product clad on both sides with stainless steel in a 20% -
60% -20% ratio.
    These HTSUS item numbers are provided for convenience and customs 
purposes. The written descriptions remain dispositive.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
CORE products produced by Haewon, covered by the scope of the order, 
and sold in the home market during the POR to be foreign like products 
for the purpose of determining appropriate product comparisons to CORE 
sold in the United States.
    Where there were no sales in the ordinary course of trade of 
identical merchandise in the home market to compare to U.S. sales, we 
compared U.S. sales to the next most similar foreign like product on 
the basis of the characteristics listed in Appendix V of the 
Department's antidumping questionnaire. In making the product 
comparisons, we matched foreign like products based on the Appendix V 
physical characteristics reported by Haewon. Haewon reported both its 
home market and U.S. sales on an actual weight basis; therefore, no 
conversions of the weight field were necessary in making our fair-value 
comparisons.

Normal Value Comparisons

    To determine whether sales of CORE by the respondent to the United 
States were made at less than NV, we compared the Export Price (EP) to 
the NV, as described in the ``Export Price'' and ``Normal Value'' 
sections of this notice. In accordance with section 777A(d)(2) of the 
Act, we calculated monthly weighted-average prices for NV and compared 
these to individual U.S. transactions.

Export Price

    Haewon sold subject merchandise directly to the first unaffiliated 
purchaser in the United States prior to importation, and constructed 
export price methodology was not otherwise warranted based on the 
record facts of this review. Therefore, in accordance with section 
772(a) of the Act, we applied the Department's EP methodology to 
Haewon's sales.
    We calculated EP using, as the starting price, the packed, 
delivered price to the unaffiliated purchaser in the United States. In 
accordance with section 772(c)(2)(A) of the Act, we made the following 
deductions from the starting price (gross unit price), where 
appropriate: foreign inland freight from the mill to warehouse to port, 
foreign brokerage and handling, international freight, marine 
insurance, and other related charges.

Normal Value

A. Selection of Comparison Market

    In order to determine whether there was a sufficient volume of 
sales in the home market to serve as a viable basis for calculating NV, 
we compared Haewon's volume of home-market sales of the foreign like 
product to its respective volume of the U.S. sale of the subject 
merchandise, in accordance with section 773(a)(1) of the Act. Haewon's 
aggregate volume of home-market sales of the foreign like product was 
greater than five percent of its respective aggregate volume of U.S. 
sales of the subject merchandise. Therefore, we determined that 
Haewon's home market was viable. We calculated NV as noted in the 
``Calculation of NV Based on Comparison Market Prices'' and 
``Calculation of NV Based on Constructed Value'' sections of this 
notice.

B. COP Analysis

    As referenced in the background section, the Department conducted 
an analysis of U.S. Steel's allegation that Haewon's home market sales 
were made below the COP. We found that there were reasonable grounds to 
believe or suspect that Haewon's sales of the foreign like product in 
the home market were made at prices below their respective COP. 
Accordingly, pursuant to section 773(b)(1) of the Act, we initiated a 
new shipper COP investigation to determine whether Haewon's sales were 
made at prices below their COP. See COP Memo.
1. Calculation of COP
    In accordance with section 773(b)(3) of the Act, we calculated the 
COP based on the sum of Haewon's costs of materials and fabrication 
employed in producing the foreign like product, plus selling, general, 
and administrative expenses (SG&A) and the cost of all expenses 
incidental to packing and preparing the foreign like product for 
shipment. We relied on the COP data submitted by Haewon.
2. Test of Comparison Market Sales Prices
    We compared the weighted-average COP figures to home-market sales 
of the foreign like product as required by section 773(b) of the Act, 
in order to determine whether these sales had been made at prices below 
the COP. On a product-specific basis, we compared the COP to the home-
market prices, less any applicable movement charges, rebates, 
discounts, packing, and direct selling expenses.
3. Results of the COP Test
    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of a respondent's sales of a given product were at prices less 
than the COP, we did not disregard any below-cost sales of that product 
because we determined that the below-cost sales were not made in 
``substantial quantities.'' Where 20 percent or more of a respondent's 
sales of a given product during the POR were

[[Page 3927]]

at prices less than the COP, we determined that sales of that model 
were made in ``substantial quantities'' for an extended period of time, 
in accordance with sections 773(b)(2)(B) and (C) of the Act, and were 
not at prices which would permit recovery of all costs within a 
reasonable period of time, in accordance with section 773(b)(2)(D) of 
the Act. In such cases, we disregarded the below-cost sales in 
accordance with section 773(b)(1) of the Act.
    For purposes of these preliminary results, we disregarded below-
cost sales of a given product and used the remaining sales as the basis 
for determining NV, in accordance with section 773(b)(1) of the Act.

C. Calculation of NV Based on Comparison Market Prices

    For Haewon, for those comparison products for which there were 
sales at prices above the COP, we based NV on home-market prices. We 
were able to match the U.S. sale to contemporaneous sales, made in the 
ordinary course of trade, of a similar foreign like product, based on 
the product matching characteristics. For Haewon, we calculated NV 
based on sales from its warehouse to unaffiliated customers or Haewon 
Steel Tech (Haewon ST),\3\ which were determined to be at arm's length 
(see discussion below regarding these sales). We made deductions, where 
appropriate, from the starting price for discounts, rebates, inland 
freight, and pre-sale warehouse expense. In accordance with section 
773(a)(6) of the Act, we deducted home-market packing costs and added 
U.S. packing costs.
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    \3\ Haewon sold a small amount of CORE to its affiliate, Haewon 
ST, a steel service center, in Korea. Haewon ST resold the CORE to 
end users in Korea.
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    In addition to the aforementioned home market sales, Haewon acted 
as a toll producer of subject merchandise for another company in Korea. 
Haewon stated that under generally accepted accounting principles 
(GAAP) in Korea, these transactions are classified as sales of 
galvanizing services (i.e., tolling transactions), and not as sales of 
merchandise. See Haewon's Section A Questionnaire Response dated May 
17, 2007, at page 20, footnote 8. That is, the unaffiliated company 
supplied material inputs that Haewon processed into subject merchandise 
and shipped back to the company. However, Haewon reported that it 
included the quantity and value of these sales of galvanized coil in 
its reported home market sales figures. Because these are not sales of 
subject merchandise produced by Haewon and sold to an unaffiliated 
party, but rather are sales for which Haewon acted as a toll producer, 
we did not include these transactions in our margin calculations. The 
basis for the price of the resales is considered business proprietary 
information. See Haewon's Preliminary Results Calculation Memorandum, 
dated January 15, 2008.

Arm's-Length Sales

    We included in our analysis Haewon's home-market sales to 
affiliated customers only where we determined that such sales were made 
at arm's-length prices, i.e., at prices comparable to prices at which 
Haewon sold identical merchandise to its unaffiliated customers. 
Haewon's sales to affiliates constituted less than five percent of 
overall home-market sales. To test whether the sales to affiliates were 
made at arm's-length prices, we compared the starting prices of sales 
to affiliated and unaffiliated customers net of all movement charges, 
direct selling expenses, discounts, and packing. Where the price to 
that affiliated party was, on average, within a range of 98 to 102 
percent of the price of the same or comparable merchandise sold to the 
unaffiliated parties, we determined that the sales made to the 
affiliated party were at arm's length. See Antidumping Proceedings: 
Affiliated Party Sales in the Ordinary Course of Trade, 67 FR 69186 
(November 15, 2002).

Level of Trade

    As set forth in section 773(a)(1)(B)(i) of the Act, to the extent 
practicable, the Department calculates NV based on sales at the same 
level of trade (LOT) as U.S. sales, either EP or CEP. When the 
Department is unable to find sale(s) in the comparison market at the 
same LOT as the U.S. sale(s), the Department may compare sales in the 
U.S. and foreign markets at different LOTs. The NV LOT is that of the 
starting-price of sales in the home market. To determine whether home-
market sales are at a different LOT than U.S. sales, we examine stages 
in the marketing process and selling functions along the chain of 
distribution between the producer and the unaffiliated customer. If the 
comparison-market sales are at a different LOT and the differences 
affect price comparability, as manifested in a pattern of consistent 
price differences between the sales on which NV is based and 
comparison-market sales at the LOT of the export transaction, we make 
an LOT adjustment pursuant to section 773(a)(7)(A) of the Act.
    We compared Haewon's selling functions in the home market to the 
selling functions for its U.S. sale. Haewon provided a selling 
functions chart for both markets in Exhibit A-5 of its May 17, 2007, 
section A response (section A response). Haewon reported its U.S. sale 
as an EP sale and it reported one LOT based on one channel of 
distribution. Similarly, we confirmed during verification that Haewon 
has one channel of distribution in the home market. As described in 
Haewon's section A response and at verification, the selling functions 
performed by Haewon in connection with its home market sales do not 
vary by customer category or distribution channel. Haewon did not claim 
an LOT adjustment because Haewon's home market sales were made at one 
LOT. Haewon's home market and U.S. sales were made through direct 
shipments from Haewon's production facility to the destination 
designated by the customer. Therefore, we find Haewon's home market LOT 
comparable to its LOT in the U.S. market.

Currency Conversion

    For purposes of these preliminary results, we made currency 
conversions in accordance with section 773A(a) of the Act, based on the 
official exchange rates published by the Federal Reserve Bank.

Preliminary Results of Review

    As a result of this review, we preliminarily determine that the 
following margin exists for the period August 1, 2006 through April 10, 
2007:

Haewon.........................................................     0.00
 

    We will disclose the calculations used in our analysis to parties 
to this proceeding within five days of the publication date of this 
notice. See CFR 351.224(b). Interested parties are invited to comment 
on the preliminary results. Interested parties may submit case briefs 
within 30 days of the date of publication of this notice. Rebuttal 
briefs, limited to issues raised in the case briefs, may be filed no 
later than 37 days after the date of publication of this notice. 
Parties who submit arguments are requested to submit with each 
argument: (1) A statement of the issue, (2) a brief summary of the 
argument, and (3) a table of authorities. Further, parties submitting 
written comments should provide the Department with an additional copy 
of the public version of any such comments on a diskette. Any 
interested party may request a hearing within 30 days of publication of 
this notice. See 19 CFR 351.310(c). If requested, a hearing will be 
held 44

[[Page 3928]]

days after the publication of this notice, or the first workday 
thereafter. The Department will publish a notice of the final results 
of this administrative review, which will include the results of its 
analysis of issues raised in any written comments or hearing, within 
120 days from publication of this notice.

Assessment Rates

    Upon completion of the new shipper review, the Department shall 
determine, and CBP shall assess, antidumping duties on all appropriate 
entries in accordance with 19 CFR 351.212. The Department intends to 
issue liquidation instructions directly to CBP 15 days after the date 
of publication of the final results of this new shipper review. The 
Department clarified its ``automatic assessment'' regulation on May 6, 
2003. See Antidumping and Countervailing Duty Proceedings: Assessment 
of Antidumping Duties, 68 FR 23954 (May 6, 2003). This clarification 
will apply to entries of subject merchandise during the POR produced by 
the respondent for which it did not know its merchandise was destined 
for the United States. In such instances, we will instruct CBP to 
liquidate unreviewed entries at the all-others rate if there is no rate 
for the intermediate company(ies) involved in the transaction. For a 
full discussion of this clarification, see Antidumping and 
Countervailing Duty Proceedings: Assessment of Antidumping Duties, 68 
FR 23954 (May 6, 2003).

Cash Deposit Requirements

    The following cash deposit requirements will be effective upon 
publication of the final results of this new shipper review for all 
shipments of CORE from Korea entered, or withdrawn from warehouse, for 
consumption on or after the publication date, as provided for by 
section 751(a)(1) of the Act: (1) The cash deposit rate for subject 
merchandise manufactured and exported by Haewon will be the rate 
established in the final results of this new shipper review; except no 
cash deposit will be required if its weighted-average margin is de 
minimis (i.e., less than 0.5 percent); (2) if the exporter is not a 
firm covered in this review, but was covered in a previous review or 
the original less-than-fair-value (LTFV) investigation, the cash 
deposit rate will continue to be the company-specific rate published 
for the most recent period; (3) if the exporter is not a firm covered 
in this review, a previous review, or the original LTFV investigation, 
but the manufacturer is, the cash deposit rate will be the rate 
established for the most recent period for the manufacturer of the 
merchandise; and (4) the cash deposit rate for all other manufacturers 
and/or exporters of this merchandise, shall be 17.70 percent, the all 
others rate established in the LTFV investigation. These requirements, 
when imposed, shall remain in effect until further notice.

Notification to Interested Parties

    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties. We are issuing and publishing 
this notice in accordance with sections 751(a)(1) and 777(i)(1) of the 
Act.

    Dated: January 15, 2008.
David M. Spooner,
Assistant Secretary for Import Administration.
 [FR Doc. E8-1105 Filed 1-22-08; 8:45 am]
BILLING CODE 3510-DS-P