[Federal Register Volume 84, Number 39 (Wednesday, February 27, 2019)]
[Notices]
[Pages 6369-6372]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-03318]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-580-898]


Large Diameter Welded Pipe From the Republic of Korea: Final 
Affirmative Countervailing Duty Determination

AGENCY: Enforcement and Compliance, International Trade Administration, 
Department of Commerce.

SUMMARY: The Department of Commerce (Commerce) determines that 
countervailable subsidies are being provided to producers and exporters 
of large diameter welded pipe (welded pipe) from the Republic of Korea 
(Korea). For information on the estimated subsidy rates, see the 
``Final Determination'' section of this notice.

DATES: Applicable February 27, 2019.

FOR FURTHER INFORMATION CONTACT: George Ayache or Robert Palmer, AD/CVD 
Operations, Office VIII, Enforcement and Compliance, International 
Trade Administration, U.S. Department of Commerce, 1401 Constitution 
Avenue NW, Washington, DC 20230; telephone: (202) 482-2623 or (202) 
482-9068, respectively.

SUPPLEMENTARY INFORMATION:

Background

    The petitioners in this investigation are American Cast Iron Pipe 
Company, Berg Steel Pipe Corp./Berg Spiral Pipe Corp, Dura-Bond 
Industries, Skyline Steel, Stupp Corporation, Greens Bayou Pipe Mill, 
LP, JSW Steel (USA) Inc., and Trinity Products LLC (collectively, the 
petitioners). In addition to the Government of Korea (GOK), the 
mandatory respondents in this investigation are Husteel Co., Ltd. 
(Husteel), Hyundai Steel Company (Hyundai Steel), and SeAH Steel 
Corporation (SeAH Steel).
    The events that occurred since Commerce published the Preliminary 
Determination \1\ on June 29, 2018, are

[[Page 6370]]

discussed in the Issues and Decision Memorandum, which is hereby 
adopted by this notice.\2\ The Issues and Decision Memorandum also 
details the changes we made since the Preliminary Determination to the 
subsidy rates calculated for the mandatory respondents and all other 
producers/exporters. The Issues and Decision Memorandum is a public 
document and is on file electronically via Enforcement and Compliance's 
Antidumping and Countervailing Duty Centralized Electronic Service 
System (ACCESS). ACCESS is available to registered users at http://access.trade.gov, and is available to all parties in the Central 
Records Unit, Room B8024 of the main Department of Commerce building. 
In addition, a complete version of the Issues and Decision Memorandum 
can be accessed directly at http://enforcement.trade.gov/frn/index.html. The signed and electronic versions of the Issues and 
Decision Memorandum are identical in content.
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    \1\ See Large Diameter Welded Pipe from India: Preliminary 
Affirmative Countervailing Duty Determination and Alignment of Final 
Determination with Final Antidumping Duty Determination, 83 FR 30690 
(June 29, 2018) (Preliminary Determination), and accompanying 
Preliminary Decision Memorandum.
    \2\ See Memorandum, ``Large Diameter Welded Pipe from Korea: 
Issues and Decision Memorandum for the Final Affirmative 
Determination of the Countervailing Duty Investigation,'' dated 
concurrently with this determination (Issues and Decision 
Memorandum).
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    Commerce exercised its discretion to toll all deadlines affected by 
the partial federal government closure from December 22, 2018, through 
the resumption of operations on January 29, 2019.\3\ If the new 
deadline falls on a non-business day, in accordance with Commerce's 
practice, the deadline will become the next business day. The revised 
deadline for the final determination of this investigation is now 
February 19, 2019.
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    \3\ See Memorandum to the Record from Gary Taverman, Deputy 
Assistant Secretary for Antidumping and Countervailing Duty 
Operations, performing the non-exclusive functions and duties of the 
Assistant Secretary for Enforcement and Compliance, ``Deadlines 
Affected by the Partial Shutdown of the Federal Government,'' dated 
January 28, 2019. All deadlines in this segment of the proceeding 
have been extended by 40 days.
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Period of Investigation

    The period of investigation is January 1, 2017, through December 
31, 2017.

Scope of the Investigation

    The product covered by this investigation is welded pipe from 
Korea. For a full description of the scope of this investigation, see 
the ``Scope of the Investigation'' in Appendix I of this notice.

Scope Comments

    During the course of this investigation and the concurrent less-
than-fair-value investigations of large diameter welded pipe from 
Canada, Greece, Korea, the People's Republic of China (China) and 
Turkey, and the concurrent countervailing duty (CVD) investigations of 
large diameter welded pipe from China, India, Korea and Turkey, 
Commerce received scope comments from interested parties. Commerce 
issued a Preliminary Scope Decision Memorandum \4\ to address these 
comments. In the Preliminary Determination, Commerce set aside a period 
of time for parties to address scope issues in scope case and rebuttal 
briefs.\5\ No interested parties submitted comments regarding the 
Preliminary Scope Decision Memorandum. Therefore, for this final 
determination, the scope of this investigation remains unchanged from 
that published in the Preliminary Determination.
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    \4\ See Memorandum, ``Scope Comments Decision Memorandum for the 
Preliminary Determinations,'' dated June 19, 2018 (Preliminary Scope 
Decision Memorandum).
    \5\ See Large Diameter Welded Pipe from the Republic of Korea: 
Preliminary Determination of Sales at Less than Fair Value and 
Postponement of Final Determination, 83 FR 43651 (August 27, 2018).
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Analysis of Subsidy Programs and Comments Received

    The subsidy programs under investigation and the issues raised in 
the case and rebuttal briefs by parties in this investigation are 
discussed in the Issues and Decision Memorandum. A list of the issues 
that parties raised, and to which we responded in the Issues and 
Decision Memorandum, is attached to this notice at Appendix II.

Methodology

    Commerce conducted this investigation in accordance with section 
701 of the Tariff Act of 1930, as amended (the Act). For each of the 
subsidy programs found countervailable, Commerce determines that there 
is a subsidy, i.e. , a financial contribution by an ``authority'' that 
gives rise to a benefit to the recipient, and that the subsidy is 
specific.\6\ For a full description of the methodology underlying our 
final determination, see the Issues and Decision Memorandum.
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    \6\ See sections 771(5)(B) and (D) of the Act regarding 
financial contribution; section 771(5)(E) of the Act regarding 
benefit; and section 771(5A) of the Act regarding specificity.
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    In making these findings, Commerce relied, in part, on facts 
available. Further, because one or more respondents did not act to the 
best of their ability to respond to Commerce's requests for 
information, an adverse inference was drawn, where appropriate, in 
selecting from among the facts otherwise available.\7\ For further 
information, see ``Use of Facts Otherwise Available and Adverse 
Inferences'' in the Issues and Decision Memorandum.
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    \7\ See sections 776(a),(b), and 782(d) of the Act.
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Verification

    As provided in section 782(i) of the Act, during September 2018, 
Commerce verified the subsidy information reported by the GOK, Husteel, 
Hyundai Steel, and SeAH Steel. We used standard verification 
procedures, including an examination of relevant accounting records and 
original source documents provided by the respondents.\8\
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    \8\ See Memoranda, ``Verification of the Questionnaire Responses 
of the Government of Korea,'' ``Verification of the Questionnaire 
Responses of Husteel Co., Ltd.,'' ``Verification of the 
Questionnaire Responses of Hyundai Corporation,'' ``Verification of 
the Questionnaire Responses of Hyundai Steel Company,'' and 
``Verification of the Questionnaire Responses of SeAH Steel 
Corporation and ESAB SeAH Corporation,'' all dated October 26, 2018.
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Changes Since the Preliminary Determination

    Based on our review and analysis of the comments received from 
parties, verification, and the minor corrections presented at 
verification, we made certain changes to the respondents' subsidy rate 
calculations. As a result of these changes, Commerce has also revised 
the ``all-others'' rate. For a discussion of these changes, see the 
Issues and Decision Memorandum.

Final Determination

    In accordance with section 705(c)(l)(B)(i) of the Act, we 
calculated a rate for Husteel and Hyundai Steel, two producers/
exporters of subject merchandise selected for individual examination in 
this investigation. Commerce assigned a rate based entirely on facts 
otherwise available with adverse inferences pursuant to section 776 of 
the Act to SeAH Steel.
    Section 705(c)(5)(A) of the Act provides that in the final 
determination, Commerce shall determine an estimated all-others rate 
for companies not individually examined. This rate shall be an amount 
equal to the weighted average of the estimated subsidy rates 
established for those companies individually examined, excluding any 
zero and de minimis rates and any rates based entirely under section 
776 of the Act. Where the rates for the individually investigated 
companies are all zero or de minimis , or determined entirely using 
facts otherwise available, section 705(c)(5)(A)(ii) of the Act 
instructs Commerce to establish an all-others rate using ``any 
reasonable method.'' According to section 705(c)(5)(A)(ii) of

[[Page 6371]]

the Act, one such ``reasonable method'' includes ``averaging the 
weighted average countervailable subsidy rates determined for the 
exporters and producers individually investigated.'' Here, the 
countervailable subsidy rates for all of the individually investigated 
respondents are zero or de minimis or are based on adverse facts 
available (AFA). Therefore, consistent with section 705(c)(5)(A)(ii) of 
the Act, we have averaged the rates of the three individually 
investigated respondents to establish the estimated all others rate. 
This approach is also consistent with our practice in other 
investigations.\9\
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    \9\ See, e.g., Countervailing Duty Investigation of Certain 
Corrosion-Resistant Steel Products from Italy: Final Affirmative 
Determination and Final Affirmative Critical Circumstances, in Part, 
81 FR 35326, 35327 (June 2, 2016).
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    Commerce determines the total estimated net countervailable subsidy 
rates to be:

------------------------------------------------------------------------
                                                           Subsidy rate
                         Company                             (percent)
------------------------------------------------------------------------
Husteel Co., Ltd........................................          * 0.01
Hyundai Steel Company...................................          * 0.44
SeAH Steel Corporation..................................           27.42
All-Others Rate.........................................            9.29
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* (de minimis).

Disclosure

    Commerce will disclose the calculations performed within five days 
of the date of publication of this notice to parties in this proceeding 
in accordance with 19 CFR 351.224(b).

Continuation of Suspension of Liquidation

    As a result of our Preliminary Determination and pursuant to 
section 703(d)(1)(B) and (d)(2) of the Act, Commerce instructed U.S. 
Customs and Border Protection (CBP) to suspend liquidation of entries 
of subject merchandise as described in the scope of the investigation 
section entered, or withdrawn from warehouse, for consumption on or 
after the date of publication of the Preliminary Determination in the 
Federal Register , except for Husteel and Hyundai Steel.\10\ In 
accordance with section 703(d) of the Act, we issued instructions to 
CBP to discontinue the suspension of liquidation for CVD purposes for 
subject merchandise entered, or withdrawn from warehouse, on or after 
October 26, 2018, but to continue the suspension of liquidation of all 
entries from June 29, 2018, through October 25, 2018.
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    \10\ See Preliminary Determination, 83 FR at 30694. Because the 
rates for Husteel and Hyundai Steel were zero or de minimis in the 
Preliminary Determination, Commerce did not suspend entries of 
merchandise from these companies.
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    If the U.S. International Trade Commission (ITC) issues a final 
affirmative injury determination, we will issue a CVD order, reinstate 
the suspension of liquidation under section 706(a) of the Act, and 
require a cash deposit of estimated countervailing duties for such 
entries of subject merchandise in the amounts indicated above. If the 
ITC determines that material injury, or threat of material injury, does 
not exist, this proceeding will be terminated and all estimated duties 
deposited or securities posted as a result of the suspension of 
liquidation will be refunded or canceled.

ITC Notification

    In accordance with section 705(d) of the Act, Commerce will notify 
the ITC of its determination. In addition, we are making available to 
the ITC all non-privileged and non-proprietary information related to 
this investigation. We will allow the ITC access to all privileged and 
business proprietary information in our files, provided the ITC 
confirms that it will not disclose such information, either publicly or 
under an administrative protective order (APO), without the written 
consent of the Assistant Secretary for Enforcement and Compliance.
    Because the final determination in this proceeding is affirmative, 
in accordance with section 705(b) of the Act, the ITC will make its 
final determination as to whether the domestic industry in the United 
States is materially injured, or threatened with material injury, by 
reason of imports of welded pipe from Korea no later than 45 days after 
our final determination. If the ITC determines that material injury or 
threat of material injury does not exist, the proceeding will be 
terminated and all cash deposits will be refunded. If the ITC 
determines that such injury does exist, Commerce will issue a CVD order 
directing CBP to assess, upon further instruction by Commerce, 
countervailing duties on all imports of the subject merchandise, other 
than those produced and exported by Husteel and Hyundai Steel because 
their rates are de minimis , that are entered, or withdrawn from 
warehouse, for consumption on or after the effective date of the 
suspension of liquidation, as discussed above in the ``Continuation of 
Suspension of Liquidation'' section.

Notification Regarding Administrative Protective Orders

    In the event that the ITC issues a final negative injury 
determination, this notice will serve as the only reminder to parties 
subject to an APO of their responsibility concerning the destruction of 
proprietary information disclosed under APO in accordance with 19 CFR 
351.305(a)(3). Timely written notification of the return/destruction of 
APO materials or conversion to judicial protective order is hereby 
requested. Failure to comply with the regulations and terms of an APO 
is a violation which is subject to sanction.
    This determination is issued and published pursuant to sections 
705(d) and 777(i) of the Act.

    Dated: February 19, 2019
Gary Taverman,
Deputy Assistant Secretary for Antidumping and Countervailing Duty 
Operations, performing the non-exclusive functions and duties of the 
Assistant Secretary for Enforcement and Compliance.

Appendix I

Scope of the Investigation

    The merchandise covered by this investigation is welded carbon 
and alloy steel pipe (including stainless steel pipe), more than 
406.4 mm (16 inches) in nominal outside diameter (large diameter 
welded pipe), regardless of wall thickness, length, surface finish, 
grade, end finish, or stenciling. Large diameter welded pipe may be 
used to transport oil, gas, slurry, steam, or other fluids, liquids, 
or gases. It may also be used for structural purposes, including, 
but not limited to, piling. Specifically, not included is large 
diameter welded pipe produced only to specifications of the American 
Water Works Association (AWWA) for water and sewage pipe.
    Large diameter welded pipe used to transport oil, gas, or 
natural gas liquids is normally produced to the American Petroleum 
Institute (API) specification 5L. Large diameter welded pipe may 
also be produced to American Society for Testing and Materials 
(ASTM) standards A500, A252, or A53, or other relevant domestic 
specifications, grades and/or standards. Large diameter welded pipe 
can be produced to comparable foreign specifications, grades and/or 
standards or to proprietary specifications, grades and/or standards, 
or can be non-graded material. All pipe meeting the physical 
description set forth above is covered by the scope of this 
investigation, whether or not produced according to a particular 
standard.
    Subject merchandise also includes large diameter welded pipe 
that has been further processed in a third country, including but 
not limited to coating, painting, notching, beveling, cutting, 
punching, welding, or any other processing that would not otherwise 
remove the merchandise from the scope of the investigation if 
performed in the country of manufacture of the in-scope large 
diameter welded pipe.
    The large diameter welded pipe that is subject to this 
investigation is currently classifiable in the Harmonized Tariff 
Schedule of the United States (HTSUS) under

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subheadings 7305.11.1030, 7305.11.1060, 7305.11.5000, 7305.12.1030, 
7305.12.1060, 7305.12.5000, 7305.19.1030, 7305.19.1060, 
7305.19.5000, 7305.31.4000, 7305.31.6010, 7305.31.6090, 7305.39.1000 
and 7305.39.5000. While the HTSUS subheadings are provided for 
convenience and customs purposes, the written description of the 
scope of this investigation is dispositive.

Appendix II

List of Topics Discussed in the Issues and Decision Memorandum

I. Summary
II. Background
III. Use of Facts Otherwise Available and Adverse Inferences
IV. Subsidies Valuation
V. Analysis of Programs
VI. Analysis of Comments
    Comment 1: Application of Adverse Facts Available (AFA) to SeAH 
Steel for Unreported Affiliates
    Comment 2: Application of AFA to SeAH Steel for SPP Pipe
    Comment 3: Whether the Demand Response Resources (DRR) Program 
is Countervailable
    Comment 4: Whether Tax Credits under Restriction of Special 
Taxation Act (RSTA) Articles 25(2), 25(3), and 26 Are 
Countervailable
    Comment 5: Whether a Benefit Exists in the Modal Shift Program
VII. Recommendation

 [FR Doc. 2019-03318 Filed 2-26-19; 8:45 am]
 BILLING CODE 3510-DS-P