[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 However, POSCO was
revoked from the order on March 12, 2012.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been revoked from the antidumping duty order.\3\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