[Federal Register Volume 77, Number 173 (Thursday, September 6, 2012)]
[Notices]
[Pages 54891-54897]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-21993]


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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: Preliminary Results of the 18th Antidumping Duty 
Administrative Review, and Partial Rescission

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

SUMMARY: In response to timely requests, the Department of Commerce 
(the Department) is conducting the 18th administrative review of the 
antidumping order on corrosion-resistant carbon steel flat products 
(CORE) from the Republic of Korea \1\ (Korea). This review covers seven 
manufacturers and/or exporters (collectively, the respondents) of the 
subject merchandise: Dongbu Steel Co., Ltd., (Dongbu), Dongkuk 
Industries Co., Ltd. (Dongkuk), Haewon MSC Co. Ltd. (Haewon), Hyundai 
HYSCO (HYSCO), LG Chem., Ltd. (LG Chem), LG Hausys, Ltd. (Hausys), and 
Union Steel Manufacturing Co., Ltd. (Union).\2\ The period of review 
(POR) is August 1, 2010, through July 31, 2011. We preliminarily 
determine that Dongbu and HYSCO have not made sales of subject 
merchandise at less than normal value (NV).
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    \1\ See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews and Requests for Revocations in Part, 76 FR 
61076 (October 3, 2011) (Initiation Notice).
    \2\ The Department also initiated a review of Pohang Iron & 
Steel Co., Ltd. (POSCO) and Pohang Coated Steel Co., Ltd. (POCOS) 
(collectively, POSCO), in the Initiation Notice. However, POSCO was 
revoked from the order on March 12, 2012. See Certain Corrosion-
Resistant Carbon Steel Flat Products From the Republic of Korea: 
Notice of Final Results of the 2009-2010 Administrative Review and 
Revocation, in Part, 77 FR 14501 (March 12, 2012) (CORE 17 Final 
Results).
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    If these preliminary results are adopted in the final results of 
this administrative review, we will instruct U.S. Customs and Border 
Protection (CBP) to assess antidumping duties on all appropriate 
entries of subject merchandise during the POR. Additionally, we are 
rescinding this review with respect to POSCO because this company has 
been revoked from the antidumping duty order.\3\
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    \3\ Id.

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DATES: Effective Date: September 6, 2012.

FOR FURTHER INFORMATION CONTACT: Cindy Robinson (Dongbu) or Christopher 
Hargett (HYSCO), AD/CVD Operations, Office 3, Import Administration, 
International Trade

[[Page 54892]]

Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-
3797, and (202) 482-4161, respectively.

SUPPLEMENTARY INFORMATION: 

Background

    On August 19, 1993, the Department published the antidumping duty 
order on CORE from Korea.\4\ On August 2, 2010, we published in the 
Federal Register the Antidumping or Countervailing Duty Order, Finding, 
or Suspended Investigation; Opportunity to Request Administrative 
Review, 76 FR 45773 (August 1, 2011). On August 31, 2010, respondents 
and petitioners \5\ requested a review of Dongbu, Dongkuk, Haewon, 
Hausys, HYSCO, LG Chem, POSCO, and Union. The Department initiated a 
review of each of the companies for which a review was requested.\6\
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    \4\ 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) (Orders on 
Certain Steel from Korea).
    \5\ Petitioners are the United States Steel Corporation (U.S. 
Steel), Nucor Corporation (Nucor), and ArcelorMittal USA LLC 
(ArcelorMittal USA).
    \6\ See Initiation Notice.
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Selection of Respondents for Individual Examination

    On October 6, 2011, the Department placed on the record and 
distributed to all interested parties under administrative protective 
order a memorandum stating that we intend to limit the number of 
companies individually examined during this review and attaching 
proprietary data to be used for selection of companies for individual 
examination in this administrative review.\7\ Due to the large number 
of companies in this administrative review and the resulting 
administrative burden of examining each company for which a request was 
made, the Department determined that it would not be practicable to 
examine individually all eight producers/exporters of subject 
merchandise for which a review had been initiated.\8\ After careful 
consideration of our resources, we determined to review a reasonable 
number of respondents which account for the largest volume of subject 
merchandise exported from Korea in accordance with section 777A(c)(2) 
of the Act.\9\ On October 26, 2011, the Department selected Dongbu and 
HYSCO as mandatory respondents in this review.\10\
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    \7\ See Memorandum to the File, ``Customs and Border Patrol Data 
for Selection of Respondents for Individual Review'' (October 6, 
2011).
    \8\ Id.
    \9\ See Memorandum to Melissa Skinner, Director, Office 3, AD/
CVD Operations, through James Terpstra, Program Manager, Office 3, 
AD/CVD Operations, FROM: Christopher Hargett, Senior International 
Trade Compliance Analyst, Office 3, AD/CVD Operations, titled 
``Selection of Respondents for Individual Review'' (October 26, 
2011) (Respondent Selection Memo).
    \10\ See Memorandum from Christopher Hargett, Sr. International 
Trade Compliance Analyst, through James Terpstra, Program Manager, 
to Melissa Skinner, Director, Office 3, entitled ``18th Antidumping 
Duty Administrative Review of Corrosion-Resistant Carbon Steel Flat 
Products from the Republic of Korea: Selection of Respondents for 
Individual Review,'' dated October 26, 2010 (Respondent Selection 
Memo).
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    During the most recently completed segments of the proceeding in 
which HYSCO and Dongbu participated,\11\ the Department disregarded 
sales below the cost of production (COP) for each of these companies. 
Therefore, pursuant to section 773(b)(2)(A)(ii) of the Tariff Act of 
1930, as amended (the Act), we had reasonable grounds to believe or 
suspect that sales by these companies of the foreign like product under 
consideration for the determination of NV in this review were made at 
prices below the COP. We instructed HYSCO and Dongbu to respond to 
sections A through D of the initial questionnaire,\12\ which we issued 
on October 26, 2011.
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    \11\ See Certain Corrosion-Resistant Carbon Steel Flat Products 
From the Republic of Korea: Notice of Final Results of the Sixteenth 
Administrative Review, 76 FR 17381 (March 29, 2011).
    \12\ Section A: Organization, Accounting Practices, Markets and 
Merchandise; Section B: Comparison Market Sales; Section C: Sales to 
the United States; Section D: Cost of Production and Constructed 
Value; Section E: Further Manufacturing.
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    From December 2011 through August 2012, Dongbu and HYSCO submitted 
timely responses to the Department's questionnaires.\13\
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    \13\ On August 13, 2012, Dongbu submitted a response to the 
Department's second section D supplemental questionnaire issued on 
August 3, 2012, but Dongbu inadvertently omitted narrative pages in 
this submission. Following the Department's instructions, Dongbu 
resubmitted a complete response on August 14, 2012.
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Union

    On October 28 and November 22, 2011, Union submitted requests to be 
considered a mandatory respondent by the Department.\14\ On January 3, 
2012, Union submitted its section A response to the Department's 
initial questionnaire. On January 20, 2012, Union submitted its 
sections B through D response to the Department's initial 
questionnaire. On April 10, 2012, Union met with the Department to 
reiterate its request that it be selected as a respondent in the 
instant case.\15\ Pursuant to the reasons stated in the Respondent 
Selection Memo, the Department maintains its decision to select and 
individually review only two mandatory respondents in the instant 
review, Dongbu and HYSCO.
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    \14\ See Letter from Union to the Department requesting to be a 
third mandatory respondent, dated October 28, 2011; see also Letter 
from Union to the Department requesting to be a third mandatory 
respondent, dated November 22, 2011.
    \15\ See Memo to the File, ``Ex Parte Meeting with Counsel for 
Union Steel,'' dated April 23, 2012.
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    Although Union was not selected as a mandatory respondent, it 
submitted a voluntary response and has requested to be treated as a 
voluntary respondent.\16\ As provided in section 782(a) of the Act, and 
consistent with our findings in Frozen Shrimp,\17\ we separately 
addressed the issue of whether we can examine voluntary respondents, 
considering the available resources in light of the current workload, 
including the work involved in examining the two mandatory respondents, 
to determine whether examining voluntary respondents would be unduly 
burdensome or inhibit timely completion of the review.\18\ For the 
reasons discussed in the Union Voluntary Respondent Memo, we determined 
that given the existing resources and the complexity of this case, 
examining Union as a voluntary respondent would be unduly burdensome 
and inhibit the timely completion of this administrative review.\19\ 
Thus we are not examining Union as a voluntary respondent.
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    \16\ See Letter from Union to the Department requesting to be a 
voluntary respondent, dated October 28, 2011; see also Letters from 
Union requesting to be a third mandatory respondent, dated October 
28, 2011 and November 22, 2011 (both requesting in the alternative 
to be considered a voluntary respondent).
    \17\ See Certain Frozen Warmwater Shrimp From Thailand: 
Preliminary Results of Antidumping Duty Administrative Review and 
Preliminary No Shipment Determination, 77 FR 13082, 13085 (March 5, 
2012) (Frozen Shrimp).
    \18\ See Memorandum to Gary Taverman, Senior Advisor for 
Antidumping and Countervailing Duty Operations, from Melissa 
Skinner, Office Director AD/CVD Operations, Office 3, entitled ``The 
18th Antidumping Duty Administrative Review of Certain Corrosion-
Resistant Carbon Steel Flat Products (CORE) from the Republic of 
Korea: Union Steel's Request to be Examined as a Voluntary 
Respondent,'' dated August 30, 2012 (Union's Voluntary Respondent 
Memorandum).
    \19\ Id.
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    On October 28, 2011, POSCO submitted its request to be considered a 
voluntary respondent by the Department, but it withdrew its request to 
participate as a voluntary respondent for this administrative review on 
November 10, 2011. As mentioned, supra, POSCO was revoked from the CORE 
Order in the CORE 17 Final Results, thus, we are rescinding this review 
with respect to POSCO.

[[Page 54893]]

Period of Review

    The POR covered by this review is August 1, 2010, through July 31, 
2011.

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 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.

Rates for Respondents Not Selected for Individual Examination

    Generally, we have looked to section 735(c)(5) of the Act, which 
provides instructions for calculating the all-others rate in an 
investigation, for guidance when calculating the rate for respondents 
not selected for individual examination. Section 735(c)(5)(A) of the 
Act instructs that we do not calculate an all-others rate using any 
zero or de minimis weighted-average dumping margins or any weighted-
average dumping margins based on total facts available. Accordingly, 
the Department's usual practice has been to average the rates for the 
selected companies excluding rates that are zero, de minimis, or based 
entirely on facts available.\20\ Section 735(c)(5)(B) of the Act also 
provides that, where all rates are zero, de minimis, or based on total 
facts available, we may use ``any reasonable method'' for assigning the 
rate to non-selected respondents. One method that section 735(c)(5)(B) 
of the Act contemplates as a possible method is ``averaging the 
estimated weighted average dumping margins determined for the exporters 
and producers individually investigated.''
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    \20\ See Ball Bearings and Parts Thereof From France, Germany, 
Italy, Japan, and the United Kingdom: Final Results of Antidumping 
Duty Administrative Reviews and Rescission of Reviews in Part, 73 FR 
52823, 52824 (September 11, 2008) (AFBs 2008), and accompanying 
Issues and Decision Memorandum at Comment 16.
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    In this review, we have calculated weighted-average dumping margins 
of zero or de minimis for both companies selected as mandatory 
respondents. In previous cases, the Department has determined that a 
``reasonable method'' to use when, as here, the rates of the 
respondents selected for individual examination are zero or de minimis 
is to apply to those companies not selected for individual examination 
the average of the most recently determined rates that are not zero, de 
minimis, or based entirely on facts available (which may be from a 
prior review or new shipper review).\21\ If any such non-selected 
company had its own calculated rate that is contemporaneous with or 
more recent than such prior determined rates, however, the Department 
has applied such individual rate to the non-selected company in the 
review in question, including when that rate is zero or de minimis.\22\ 
However, all prior rates for this proceeding were calculated using the 
Department's zeroing methodology. The Department has stated that it 
will not use its zeroing methodology in administrative reviews with 
preliminary determinations issued after April 16, 2012.\23\ Therefore, 
we will not apply any rates calculated in prior reviews to the non-
selected companies in these reviews. Based on this, and in accordance 
with the statute and the Department's recent practice in AFBs 2012,\24\ 
we determine that a reasonable method for determining the weighted-
average dumping margins for the non-selected respondents in this review 
is to average the weighted-average dumping margins calculated for the 
mandatory respondents.
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    \21\ See AFBs 2008, and accompanying Issues and Decision 
Memorandum at Comment 16.
    \22\ Id.
    \23\ See Antidumping Proceedings: Calculation of the Weighted 
Average Dumping Margin and Assessment Rate in Certain Antidumping 
Proceedings: Final Modification, 77 FR 8101 (February 14, 2012) 
(Final Modification for Reviews).
    \24\ See Ball Bearings and Parts Thereof From France, Germany, 
and Italy: Preliminary Results of Antidumping Duty Administrative 
Reviews and Rescission of Antidumping Duty Administrative Reviews in 
Part, 77 FR 33159 (June 5, 2012) (AFBs 2012).
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Targeted Dumping Allegations

    On May 8 and 24, 2012, petitioners submitted targeted dumping 
allegations with regard to HYSCO and Dongbu, respectively.
    The petitioners note that they conducted their own targeted dumping 
analyses of Dongbu's and HYSCO's U.S. sales using the Department's 
targeted dumping methodology as applied in Steel Nails and modified in 
Wood Flooring.\25\ Based on the petitioners' own analysis, the 
petitioners argue that the Department should conduct a targeted dumping 
analysis and employ average-to-transaction comparisons

[[Page 54894]]

without offsets, should the Department find that the record supports 
its allegation of targeted dumping.
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    \25\ See The petitioners' Allegation of Targeted Dumping with 
respect to Dongbu, dated May 24, 2012, at 3, 5-7, and (citing 
Certain Steel Nails from the People's Republic of China: Final 
Determination of Sales at Less Than Fair Value and Partial 
Affirmative Determination of Critical Circumstances, 73 FR 33,977 
(June 16, 2008) (Steel Nails), and accompany Issues and Decision 
Memorandum at Comment 8; Multilayered Wood Flooring from the 
People's Republic of China: Final Determination of Sales at Less 
Than Fair Value, 76 FR 64318 (Oct. 18, 2011) (Wood Flooring), and 
accompanying Issues and Decision Memorandum at Comment 4); The 
petitioners' Allegation of Targeted Dumping with respect to HYSCO, 
dated May 8, 2012, at 3, 5-6 (same).
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    On August 7, 2012, Dongbu submitted its response to petitioners' 
May 24, 2012, targeted dumping allegation submitted with regard to 
Dongbu. Dongbu argued that there is no statutory authority for applying 
the targeted dumping exception provided in section 777A(d)(1)(B) of the 
Act to this administrative review. Moreover, Dongbu claimed that a 
decision to apply the average-to-transaction methodology with zeroing 
in this review would completely undermine the recent change to the 
Department's zeroing practice in reviews that was announced in the 
Final Modification for Reviews. Accordingly, Dongbu requested that the 
Department reject petitioners' targeted dumping allegation and instead 
apply its new monthly average-to-average comparison methodology without 
zeroing the negative comparison results in these preliminary results.
    HYSCO did not comment on the targeted dumping allegation submitted 
by the petitioners.
    For purposes of these preliminary results, the Department did not 
conduct a targeted dumping analysis. In calculating the preliminary 
weighted-average dumping margin, the Department applied the calculation 
methodology adopted in the Final Modification for Reviews.\26\ In 
particular, the Department compared monthly, weighted-average U.S. 
prices with monthly, weighted-average normal values, and granted 
offsets for negative comparison results in the calculation of the 
weighted-average dumping margins.\27\ Application of this methodology 
in these preliminary results affords parties an opportunity to 
meaningfully comment on the Department's implementation of this 
recently adopted methodology in the context of this administrative 
review. The Department intends to continue to consider, pursuant to 19 
CFR 351.414(c), whether another method is appropriate in this 
administrative review in light of the parties' pre-preliminary comments 
and any comments on the issue that parties may include in their case 
and rebuttal briefs.
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    \26\ See Final Modification for Reviews.
    \27\ See id. at 8102.
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Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
CORE products produced by the respondents, meeting the description of 
the scope of the order, and sold in the home market during the POR to 
be foreign like products. As the basis for NV, we first identified home 
market sales in the ordinary course of trade of foreign like product 
which was identical to the subject merchandise 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 
identified home market sales of the most similar foreign like product 
on the basis of the characteristics listed in Appendix V of the 
Department's antidumping questionnaire.

Fair Value Comparisons

    To determine whether sales of CORE by the respondents to the United 
States were made at prices less than NV, we compared U.S. prices, based 
either on the export price (EP) or the constructed export price (CEP), 
to the NV, as described in the ``Export Price/Constructed Export 
Price'' and ``Normal Value'' sections of this notice. In particular, 
the Department compared monthly, weighted-average EPs or CEPs with 
monthly, weighted-average normal values, and granted offsets for 
negative comparison results in the calculation of the weighted-average 
dumping margin for each respondent.\28\
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    \28\ See Final Modification for Reviews.
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Export Price/Constructed Export Price

    For the price to the United States, we used, as appropriate, EP or 
CEP, in accordance with sections 772(a) and (b) of the Act. We 
calculated EP when the merchandise was sold by the producer or exporter 
outside of the United States directly to the first unaffiliated 
purchaser in the United States prior to importation and when CEP was 
not otherwise warranted based on the facts on the record. We calculated 
CEP for those sales where a person in the United States, affiliated 
with the foreign exporter or acting for the account of the exporter, 
made the sale to the first unaffiliated purchaser in the United States 
of the subject merchandise. We based EP and CEP on the packed prices 
and the applicable delivery terms to the first unaffiliated customer 
in, or for exportation to, the United States.
    For U.S. prices based on EP, we made deductions for movement 
expenses in accordance with section 772(c)(2)(A) of the Act, which 
included, where appropriate, foreign inland freight to the port, 
foreign brokerage, international freight, marine insurance, U.S. inland 
freight from the port to warehouse, U.S. warehouse expenses, U.S. 
inland freight from the warehouse to the unaffiliated customer, U.S. 
brokerage and handling expenses, and U.S. customs duty.
    In accordance with section 772(b) of the Act, we calculated CEP 
where the record established that sales made by HYSCO and Dongbu were 
made in the United States after importation. HYSCO's and Dongbu's 
respective affiliates in the United States (1) took title to the 
subject merchandise and (2) invoiced and received payment from the 
unaffiliated U.S. customers for their sales of the subject merchandise 
to those U.S. customers.\29\ Thus, where appropriate, the Department 
determined that U.S. prices for these sales should be based on the CEP 
under section 772(b) of the Act. Where appropriate, we made deductions 
from the starting price for foreign inland freight to the port, foreign 
brokerage, international freight, marine insurance, U.S. inland freight 
from the port to warehouse, U.S. warehouse expenses, U.S. inland 
freight from the warehouse to the unaffiliated customer, U.S. brokerage 
and handling expenses, U.S. customs duty, credit expenses, warranty 
expenses, commissions, inventory carrying costs incurred in the United 
States, and other indirect selling expenses in the United States 
associated with economic activity in the United States.\30\ Pursuant to 
section 772(d)(3) of the Act, we made an adjustment for CEP profit. 
Where appropriate, we added interest revenue to the gross unit price.
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    \29\ See Letter from HYSCO to the Department entitled 
``Eighteenth Administrative Review of Corrosion-Resistant Carbon 
Steel Flat Products from Korea: Section A Questionnaire Response,'' 
dated December 20, 2011, at pages A1-A3, (HYSCO QRA) at A-23; see 
also Letter from Dongbu to the Department entitled ``Corrosion-
Resistant Carbon Steel Flat Products from Korea: Administrative 
Review (8/1/10-7/31/11),'' dated December 30, 2011, at pages A10 and 
A-23 (Dongbu QRA).
    \30\ See sections 772(c)(2)(A) and 772(d)(1) of the Act.
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HYSCO's Entries of Subject Merchandise that were Further Manufactured 
and Sold as Non-Subject Merchandise in the United States

    In its section A questionnaire response, HYSCO requested that the 
Department excuse it from reporting information for certain POR sales 
of subject merchandise imported by its wholly owned U.S. subsidiary, 
HYSCO America Company (HAC), that were further manufactured after 
importation and sold as non-subject merchandise in the United States, 
claiming that determining CEP for sales through HAC would be 
unreasonably burdensome.\31\
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    \31\ See HYSCO QRA at pages A1-A3.
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    Section 772(e) of the Act provides that when the value added in the 
United States by an affiliated party is likely to exceed substantially 
the value of the subject merchandise, the Department shall use one of 
the following prices to

[[Page 54895]]

determine CEP if there is a sufficient quantity of sales to provide a 
reasonable basis of comparison and the use of such sales is 
appropriate: (1) The price of identical subject merchandise sold by the 
exporter or producer to an unaffiliated person; or (2) the price of 
other subject merchandise sold by the exporter or producer to an 
unaffiliated person.
    The record evidence shows that the value added by the affiliated 
party to the subject merchandise after importation in the United States 
was significantly greater than the 65 percent threshold we use in 
determining whether the value added in the United States by an 
affiliated party substantially exceeds the value of the subject 
merchandise.\32\ We then considered whether there were sales of 
identical subject merchandise or other subject merchandise sold in 
sufficient quantities by the exporter or producer to an unaffiliated 
person that could provide a reasonable basis of comparison. In addition 
to the sales to HAC that were further manufactured, HYSCO also had CEP 
sales of similar, but not identical, subject merchandise to 
unaffiliated customers in the United States in back-to-back 
transactions through another HYSCO affiliate in the United States, 
Hyundai HYSCO USA (HHU).\33\
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    \32\ See 19 CFR 351.402(c)(2); HYSCO QRA at A9.
    \33\ See HYSCO QRA at A9; Letter from HYSCO to the Department 
entitled ``Eighteenth Administrative Review of Corrosion-Resistant 
Carbon Steel Flat Products from Korea: Supplemental Sections A-C 
Questionnaire Response,'' dated August 7, 2012 (HYSCO 2SQR), at page 
1 and exhibit 1.
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    The appropriate methodology for determining the CEP for sales whose 
value has been substantially increased through U.S. further 
manufacturing generally must be made on a case-by-case basis.\34\ In 
this instance, we find that there is a reasonable quantity of sales of 
subject merchandise to unaffiliated parties for comparison 
purposes.\35\ Furthermore, there is no other reasonable methodology for 
determining CEP for HAC's further-manufacturered sales. Therefore, we 
relied on HYSCO's other sales of similar merchandise to unaffiliated 
parties in the United States as the basis for calculating CEP for 
HYSCO's sales through HAC, which is consistent with the previous 
administrative reviews of CORE from Korea.\36\
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    \34\ See the Department's Antidumping Questionnaires, Appendices 
I-V at page I9 and I10, available at http://ia.ita.doc.gov/questionnaires/questionnaires-ad.html.
    \35\ See Memorandum to the File, from Christopher Hargett, Sr. 
International Trade Compliance Analyst, through James Terpstra, 
Program Manager, AD/CVD Operation Office 3, entitled ``Preliminary 
Results in the 18th Administrative Review on Corrosion-Resistant 
Carbon Steel Flat Products from Korea: Calculation Memorandum for 
Hyundai HYSCO,'' dated concurrently with this notice (HYSCO Calc 
Memo).
    \36\ See, e.g., CORE 17 Final Results; see also Certain 
Corrosion-Resistant Carbon Steel Flat Products From the Republic of 
Korea: Notice of Preliminary Results of the Sixteenth Antidumping 
Duty Administrative Review, 75 FR 55769 (September 14, 2010) 
(unchanged in the final results); Certain Corrosion-Resistant Carbon 
Steel Flat Products from the Republic of Korea: Notice of 
Preliminary Results of the Antidumping Duty Administrative Review, 
74 FR 46110, 46112 (September 8, 2009) (unchanged in the final 
results); Certain Corrosion-Resistant Carbon Steel Flat Products 
From the Republic of Korea: Notice of Preliminary Results of the 
Antidumping Duty Administrative Review, 73 FR 52267, 52270 
(September 9, 2008) (unchanged in the final results).
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Normal Value

    Based on a comparison of the aggregate quantity of home market and 
U.S. sales, we determined that the quantity of the foreign like product 
sold in the exporting country was sufficient to permit a proper 
comparison with the sales of the subject merchandise to the United 
States, pursuant to section 773(a)(1) of the Act. Therefore, in 
accordance with section 773(a)(1)(B)(i) of the Act, we based NV on the 
price at which the foreign like product was first sold for consumption 
in the home market, in usual commercial quantities and in the ordinary 
course of trade. We increased NV by U.S. packing costs in accordance 
with section 773(a)(6)(A) of the Act.
    Where appropriate, we deducted inland freight from the plant to 
distribution warehouse, warehouse expense, inland freight from the 
plant/warehouse to customer, and packing, pursuant to section 
773(a)(6)(B) of the Act. Additionally, we made adjustments to NV, where 
appropriate, for credit and warranty expenses, in accordance with 
section 773(a)(6)(C)(iii) of the Act. Where appropriate, we added 
interest revenue, and applied billing adjustments to the gross unit 
price.
    For purposes of calculating NV, section 771(16) of the Act defines 
``foreign like product'' as merchandise which is either (1) identical 
or (2) similar to the merchandise sold in the United States. When no 
identical products are sold in the home market, the products which are 
most similar to the product sold in the United States are identified. 
When the NV is based on the prices of sales for the most similar 
products, an adjustment is made to the NV for differences in cost 
attributable to differences in the actual physical characteristics 
between the products sold in the United States and in the home 
market.\37\
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    \37\ See 19 CFR 351.411 and section 773(a)(6)(C)(ii) of the Act.
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Cost of Production

    As stated above, in the most recently completed segments of this 
proceeding in which HYSCO and Dongbu participated, the Department found 
and disregarded sales that failed the cost test for each of these 
companies. Therefore, for this review, the Department has reasonable 
grounds to believe or suspect that sales of the foreign like products 
under consideration for the determination of NV may have been made at 
prices below the COP as provided by section 773(b)(2)(A)(ii) of the 
Act. Pursuant to section 773(b)(1) of the Act, the Department conducted 
a COP investigation of sales in the home market by HYSCO and Dongbu.

A. Calculation of Cost of Production

    We calculated the COP based on the sum of the cost of materials and 
fabrication for the foreign like product, plus amounts for SG&A 
expenses and packing, in accordance with section 773(b)(3) of the Act. 
Except as noted below, the Department relied on the COP data submitted 
by HYSCO and Dongbu in their supplemental section D questionnaire 
responses.
    HYSCO provided information showing that it purchased substrate 
(i.e., hot-rolled coil) from affiliated parties. The substrate is a 
major input into production of the merchandise-under-consideration, 
and, therefore, we have applied the major input rule to value such 
purchases. As a result, we adjusted HYSCO's substrate costs pursuant to 
section 773(f)(3) of the Act. In addition, for the preliminary results 
we used the cost of manufacturing adjusted to reflect the differences 
in temper rolling costs.\38\
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    \38\ See Memorandum from Ernest Z. Gziryan, Senior Accountant, 
through Theresa C. Deeley, Lead Accountant, to Neal M. Halper, 
Director, Office of Accounting, entitled ``Antidumping Duty 
Administrative Review of Corrosion-Resistant Carbon Steel Flat 
Products from Korea: Cost of Production and Constructed Value 
Calculation Adjustments for the Preliminary Results--Hyundai 
HYSCO,'' dated concurrently with this notice (HYSCO Cost Calculation 
Memo).
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    Based on our review of the record evidence, neither Dongbu nor 
HYSCO appeared to experience significant changes in the cost of 
manufacturing during the POR.\39\ Therefore, we followed our normal 
methodology of calculating POR weighted-average COP.
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    \39\ See Letter from HYSCO to the Department entitled 
``Eighteenth Administrative Review of Corrosion-Resistant Carbon 
Steel Flat Products from Korea: Response of Hyundai HYSCO to Section 
D of the Department's October 26, 2012, Questionnaire,'' dated 
January 13, 2012, at exhibit D-3.

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[[Page 54896]]

B. Test of Comparison Market Sales Prices

    As required under section 773(b)(2) of the Act, we compared the POR 
weighted-average COP to the per-unit price of the home market sales of 
the foreign like product to determine whether these sales had been made 
at prices below the COP within an extended period of time in 
substantial quantities, and whether such prices were sufficient to 
permit the recovery of all costs within a reasonable period of time. We 
determined the net home market prices for the below cost test by 
subtracting from the gross unit price any applicable movement charges, 
discounts, rebates, direct and indirect selling expenses, and packing 
expenses.

C. Results of the COP Test

    Pursuant to section 773(b)(2)(C)(i) of the Act, where less than 20 
percent of sales of a given product were at prices less than the COP, 
we disregarded no 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 the respondent's home market 
sales of a given model were at prices less than the COP, we disregarded 
the below-cost sales because: (1) they were made within an extended 
period of time in ``substantial quantities,'' in accordance with 
sections 773(b)(2)(B) and (C) of the Act; and (2) based on our 
comparison of prices to the weighted-average COPs, they were at prices 
which would not permit the recovery of all costs within a reasonable 
period of time, in accordance with section 773(b)(2)(D) of the Act.
    As a result of our analysis for these preliminary results, for 
HYSCO and Dongbu, we have disregarded certain home markets sales priced 
below COP in accordance with section 773(b)(1) of the Act.\40\
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    \40\ See HYSCO and Dongbu Cost Calculation Memos.
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Calculation of NV Based on Home Market Prices

    For those home market products for which there were sales at prices 
above the COP for HYSCO and Dongbu, we based NV on home market prices. 
In these preliminary results, we were able to match all U.S. sales to 
contemporaneous sales, made in the ordinary course of trade, of either 
an identical or a similar foreign like product, based on the matching 
characteristics identified in Appendix V of the original questionnaire. 
We calculated NV based on free on board (FOB) mill or delivered prices 
to unaffiliated customers, or prices to affiliated customers which were 
determined to be at arm's length (see discussion below regarding these 
arm's-length sales). We made deductions, where appropriate, from the 
starting price for billing adjustments, discounts, rebates, and inland 
freight. Additionally, we added interest revenue, where appropriate. In 
accordance with section 773(a)(6) of the Act, we deducted home market 
packing costs and added U.S. packing costs.
    In accordance with section 773(a)(6)(C)(iii) of the Act, we 
adjusted for differences in the circumstances of sale. These 
circumstances included differences in imputed credit expenses and other 
direct selling expenses, such as the expense related to bank charges 
and factoring. Id. We also made adjustments, where appropriate, for 
physical differences in the merchandise in accordance with section 
773(a)(6)(C)(ii) of the Act.

Arm's-Length Sales

    Dongbu and HYSCO reported that they made sales in the home market 
to affiliated parties. The Department calculates NV based on a sale to 
an affiliated party only if it is satisfied that the price to the 
affiliated party is comparable to the price at which sales are made to 
parties not affiliated with the producer or exporter, i.e., sales at 
arm's-length.\41\
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    \41\ See 19 CFR 351.403(c).
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    To test whether these sales were made at arm's length, we compared 
the reported home market prices of sales to affiliated and unaffiliated 
customers with applied billing adjustments, including interest revenue, 
net of all movement charges, direct selling expenses, discounts, 
rebates, and packing. In accordance with the Department's current 
practice, if the prices charged to an affiliated party were, on 
average, between 98 and 102 percent of the prices charged to 
unaffiliated parties at the same level-of-trade for merchandise 
identical or most similar to the merchandise sold to the affiliated 
party, we considered the sales to be at arm's-length prices.\42\ 
Conversely, where we found that the sales to an affiliated party did 
not pass the arm's-length test, then all sales to that affiliated party 
have been excluded from the NV calculation.\43\
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    \42\ See Notice of Preliminary Results and Partial Rescission of 
Antidumping Duty Administrative: Ninth Administrative Review of the 
Antidumping Duty Order on Certain Pasta from Italy, 71 FR 45017, 
45020 (August 8, 2006) (unchanged in Notice of Final Results of the 
Ninth Administrative Review of the Antidumping Duty Order on Certain 
Pasta from Italy, 72 FR 7011 (February 14, 2007)); 19 CFR 
351.403(c).
    \43\ See Antidumping Proceedings: Affiliated Party Sales in the 
Ordinary Course of Trade, 67 FR 69186, 69187 (November 15, 2002); 
also see Dongbu and HYSCO's preliminary results calculation 
memorandums, dated concurrently with this notice.
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Level of Trade

    In accordance with section 773(a)(1)(B) of the Act, we determined 
NV based on sales in the home market at the same level of trade (LOT) 
as the EP or CEP sales, to the extent possible. When there were no 
sales at the same LOT, we compared U.S. sales to comparison market 
sales at the most similar LOT.
    Pursuant to 19 CFR 351.412, to determine whether EP or CEP sales 
and NV sales were at different LOTs, we examined stages in the 
marketing process and selling functions along the chain of distribution 
between the producer and the unaffiliated (or arm's-length) customers. 
If the home market sales are at a different LOT and the differences 
affect price comparability, as manifested in a pattern of consistent 
price differences between sales at different LOTs in the country in 
which NV is determined, we will make an LOT adjustment under section 
773(a)(7)(A) of the Act. For CEP sales, if the NV LOT is at a more 
advanced stage of distribution than the CEP LOT, and the data available 
do not provide an appropriate basis to determine an LOT adjustment, we 
will grant a CEP offset, as provided in section 773(a)(7)(B) of the 
Act.\44\
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    \44\ See Notice of Final Determination of Sales at Less Than 
Fair Value: Certain Cut-to-Length Carbon Steel Plate from South 
Africa, 62 FR 61731, 61732-33 (November 19, 1997).
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    We did not make an LOT adjustment under 19 CFR 351.412(e) because 
there was only one home market LOT for each respondent and we were 
unable to identify a pattern of consistent price differences 
attributable to differences in LOTs.\45\ NV sales for each company are 
at a more advanced LOT than the LOT for their respective U.S. CEP 
sales.\46\ Thus, pursuant to section 773(a)(7)(B) of the Act and 19 CFR 
351.412(f), we are preliminarily granting a CEP offset for Dongbu and 
HYSCO.
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    \45\ See 19 CFR 351.412(d).
    \46\ See HYSCO Calc Memo at page 3, and Dongbu's Calc Memo at 
page 3.
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    For a detailed description of our LOT methodology and a summary of 
company-specific LOT findings for these preliminary results, see Dongbu 
and HYSCO's preliminary results calculation memorandum.

[[Page 54897]]

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 the Review

    As a result of this review, we preliminarily find that the 
following weighted-average dumping margins exist:

------------------------------------------------------------------------
                                                              Weighted-
                                                               average
                   Manufacturer/Exporter                       dumping
                                                               margins
                                                              (percent)
------------------------------------------------------------------------
Dongbu.....................................................            0
HYSCO......................................................            0
Review-Specific Average Rate Applicable to: Dongkuk,                   0
 Haewon, Hausys, LG Chem, and Union........................
------------------------------------------------------------------------

Comment

    The Department intends to disclose calculations performed within 
five days of the date of publication of this notice to the parties to 
this proceeding in accordance with 19 CFR 351.224(b). Interested 
parties may submit case briefs no later than 30 days after the date of 
publication of these preliminary results of review.\47\ Rebuttal briefs 
are limited to issues raised in the case briefs and may be filed no 
later than five days after the time limit for filing the case 
briefs.\48\ Parties submitting arguments in this proceeding are 
requested to submit with the argument: (1) A statement of the issue, 
(2) a brief summary of the argument, and (3) a table of authorities, in 
accordance with 19 CFR 351.309(d)(2). Case and rebuttal briefs must be 
served on interested parties in accordance with 19 CFR 351.303(f).
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    \47\ See 19 CFR 351.309(c)(ii).
    \48\ See 19 CFR 351.309(d).
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    An interested party may request a hearing within 30 days of 
publication of these preliminary results.\49\ Any hearing, if 
requested, ordinarily will be held two days after the due date of the 
rebuttal briefs in accordance with 19 CFR 351.310(d)(1). The Department 
will issue the final results of this administrative review, which will 
include the results of its analysis of issues raised in any such 
comments, or at a hearing, if requested, within 120 days of publication 
of these preliminary results, unless extended.\50\
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    \49\ See 19 CFR 351.310(c).
    \50\ See section 751(a)(3)(A) of the Act and 19 CFR 351.213(h).
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Assessment Rates

    The Department shall determine, and CBP shall assess, antidumping 
duties on all appropriate entries. If the weighted-average dumping 
margin for particular respondents is above de minimis in the final 
results of these reviews, we will calculate importer-specific ad 
valorem duty assessment rates based on the ratio of the total amount of 
dumping calculated for the importer's examined sales to the total 
entered value for those sales in accordance with 19 CFR 
351.212(b)(1).\51\
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    \51\ In these preliminary results, the Department applied the 
assessment rate calculation method adopted in Final Modification for 
Reviews, i.e., on the basis of monthly average-to-average 
comparisons using only the transactions associated with that 
importer with offsets being provided for non-dumped comparisons.
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    The Department clarified its ``automatic assessment'' regulation on 
May 6, 2003.\52\ This clarification will apply to entries of subject 
merchandise during the period of review produced by companies selected 
for individual examination in these preliminary results of review for 
which the reviewed companies did not know their merchandise was 
destined for the United States. In such instances, we will instruct CBP 
to liquidate unreviewed entries at the country-specific all-others rate 
if there is no rate for the intermediate company(ies) involved in the 
transaction.\53\
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    \52\ See Antidumping and Countervailing Duty Proceedings: 
Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003).
    \53\ See id.
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    For the companies which were not selected for individual review, we 
will calculate an assessment rate based on the weighted average of the 
cash deposit rates calculated for the companies selected for individual 
review.
    We intend to issue liquidation instructions to CBP 15 days after 
publication of the final results of this review.

Cash Deposit Requirements

    The following deposit rates will be effective upon publication of 
the final results of this administrative review for all shipments of 
CORE from Korea entered, or withdrawn from warehouse, for consumption 
on or after the publication date, as provided by section 751(a)(2)(C) 
of the Act: (1) The cash deposit rates for the companies listed above 
will be the rates established in the final results of this review, 
except if the rate is less than 0.5 percent and, therefore, de minimis, 
the cash deposit will be zero; (2) for previously reviewed or 
investigated companies not listed above, the cash deposit rate will 
continue to be the company-specific rate published for the most recent 
final results in which that manufacturer or exporter participated; (3) 
if the exporter is not a firm covered in this review, a prior review, 
or the original less-than-fair-value (LTFV) investigation, but the 
manufacturer is, the cash deposit rate will be the rate established for 
the most recent final results for the manufacturer of the merchandise; 
and (4) if neither the exporter nor the manufacturer is a firm covered 
in this or any previous review conducted by the Department, the cash 
deposit rate will be 17.70 percent, the all-others rate established in 
the LTFV.\54\ These cash deposit requirements, when imposed, shall 
remain in effect until further notice.
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    \54\ See Orders on Certain Steel from Korea.
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Notification to Importers

    This notice serves as a preliminary reminder to importers of their 
responsibility under 19 CFR 351.402(f)(2) 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.
    These preliminary results of review are issued and published in 
accordance with sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: August 30, 2012.
Paul Piquado,
Assistant Secretary for Import Administration.
[FR Doc. 2012-21993 Filed 9-5-12; 8:45 am]
BILLING CODE 3510-DS-P