72 FR 60639, October 25, 2007

DEPARTMENT OF COMMERCE

International Trade Administration

(C-580-857)

 
Coated Free Sheet Paper from the Republic of Korea: Notice of 
Final Affirmative Countervailing Duty Determination

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: We determine that countervailable subsidies are being provided 
to producers and exporters of coated free sheet paper from the Republic 
of Korea. For information on the estimated subsidy rates, see the

[[Page 60640]]

``Suspension of Liquidation'' section of this notice.

EFFECTIVE DATE: October 25, 2007.

FOR FURTHER INFORMATION CONTACT: Robert Copyak, AD/CVD Operations, 
Office 3, Import Administration, International Trade Administration, 
U.S. Department of Commerce, Room 4012, 14th Street and Constitution 
Avenue, N.W., Washington, D.C. 20230; Telephone: 202-482-2209.

SUPPLEMENTARY INFORMATION:

Background

    This investigation covers 19 programs and the following 
manufacturer/exporters: EN Paper Mfg. Co., Ltd. (EN Paper) (formerly 
Shinho Paper Co., Ltd. (Shinho Paper)), Kyesung Paper Co., Ltd. and its 
affiliate Namhan Paper Co., Ltd. (collectively, Kyesung), Moorim Paper 
Co. Ltd. (formerly Shinmoorim Paper Mfg. Co., Ltd.) and its affiliate 
Moorim SP (collectively, Moorim), and Hansol Paper Co., Ltd. (Hansol) 
(collectively, respondents).
    On April 9, 2007, the Department of Commerce (the Department) 
published in the Federal Register its preliminary affirmative 
determination in the countervailing duty investigation of coated free 
sheet paper from the Republic of Korea. See Coated Free Paper from the 
Republic of Korea: Preliminary Affirmative Countervailing Duty 
Determination, 72 FR 17507, 17520 (April 9, 2007) (Preliminary 
Determination).
    On May 8, 2007, the Department published in the Federal Register 
the Notice of Amended Preliminary Countervailing Duty Determination: 
Coated Free Sheet Paper from the Republic of Korea, 72 FR 26074 (May 8, 
2007) (Amended Preliminary Determination). From June 11 through June 
29, 2007, we conducted verification of the questionnaire responses 
submitted by the Government of Korea and respondents.
    In the Preliminary Determination, we found that we required 
additional information in order to determine whether respondents' 
short-term financing from GOK-owned banks and commercial banks 
conferred countervailable benefits. Similarly, regarding the Industrial 
Base Fund (IBF), we found that we required additional information in 
order to determine whether the program conferred a countervailable 
subsidy. On September 6, 2007, we issued our preliminary findings 
regarding these programs. See Memorandum to David M. Spooner, Assistant 
Secretary for Import Administration, through Stephen J. Claeys, Deputy 
Assistant Secretary for Import Administration (Preliminary Decision 
Memorandum).
    We invited interested parties to comment on the Preliminary 
Determination and Preliminary Decision Memorandum. We received case and 
rebuttal briefs from petitioner and respondents regarding the 
Preliminary Determination on August 13 and August 22, 2007, 
respectively.\1\ On September 14 and September 19, 2007, we received 
case and rebuttal briefs from petitioner and respondents regarding the 
Preliminary Decision Memorandum.
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    \1\ Petitioner is the New Page Corporation.
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Period of Investigation

    The period of investigation (POI) is January 1, 2005, through 
December 31, 2005.

Scope of Investigation

    The merchandise covered by this investigation includes coated free 
sheet paper and paperboard of a kind used for writing, printing or 
other graphic purposes. Coated free sheet paper is produced from not-
more-than 10 percent by weight mechanical or combined chemical/
mechanical fibers. Coated free sheet paper is coated with kaolin (China 
clay) or other inorganic substances, with or without a binder, and with 
no other coating. Coated free sheet paper may be surface-colored, 
surface-decorated, printed (except as described below), embossed, or 
perforated. The subject merchandise includes single- and double-side-
coated free sheet paper; coated free sheet paper in both sheet or roll 
form; and is inclusive of all weights, brightness levels, and finishes. 
The terms ``wood free'' or ``art'' paper may also be used to describe 
the imported product.
    Excluded from the scope are: (1) coated free sheet paper that is 
imported printed with final content printed text or graphics; (2) base 
paper to be sensitized for use in photography; and (3) paper containing 
by weight 25 percent or more cotton fiber.
    Coated free sheet paper is classifiable under subheadings 
4810.13.1900, 4810.13.2010, 4810.13.2090, 4810.13.5000, 4810.13.7040, 
4810.14.1900, 4810.14.2010, 4810.14.2090, 4810.14.5000, 4810.14.7040, 
4810.19.1900, 4810.19.2010, and 4810.19.2090 of the Harmonized Tariff 
Schedule of the United States (HTSUS). While HTSUS subheadings are 
provided for convenience and customs purposes, our written description 
of the scope of this investigation is dispositive.

Scope Comments

    On August 20, August 28, and September 10, 2007, the petitioner 
requested that the Department clarify the scope of the antidumping and 
countervailing duty investigations of CFS paper from Indonesia, Korea 
and the People's Republic of China. Specifically, the petitioner asked 
the Department to ``clarify that the scope of the investigation 
includes coated free sheet paper containing hardwood BCTMP.''
    Because this was a general issue pertaining to all six 
investigations, the Department set up a general issues file to handle 
this scope request. A hearing on the scope request was held on 
September 26, 2007. The hearing comprised a public session, a closed 
session for the antidumping investigation from Korea, and a closed 
session for the countervailing duty investigation from the PRC. After 
considering the comments submitted by the parties to these 
investigations, we have determined not to adopt the scope clarification 
sought by the petitioner. See Memorandum to Stephen J. Claeys, Deputy 
Assistant Secretary for Import Administration, entitled ``Scope 
Clarification Request: NewPage Corporation'' dated concurrently with 
this notice, which is appended to ``Issues and Decision Memorandum for 
the Final Determination in the Countervailing Duty Investigation of 
Coated Free Sheet Paper from the People's Republic of China.''

Analysis of Comments Received

    All issues raised in the case and rebuttal briefs by parties to 
this investigation are addressed in the ``Issues and Decision 
Memorandum'' (Decision Memorandum) dated October 17, 2007, which is 
hereby adopted by this notice. A list of issues that parties have 
raised and to which we have responded, all of which are in the Decision 
Memorandum, is attached to this notice as Appendix I. Parties can find 
a complete discussion of all issues raised in this investigation and 
the corresponding recommendations in this public memorandum, which is 
on file in the Central Records Unit. In addition, a complete version of 
the Decision Memorandum can be accessed directly on the World Wide Web 
at http://ia.ita.doc.gov/frn. The paper copy and electronic version of 

the Decision Memorandum are identical in content.

Suspension of Liquidation

    In accordance with section 705(c)(1)(B)(i)(I) of the Tariff Act of 
1930 (as amended) (the Act), we have

[[Page 60641]]

calculated individual rates for the companies under investigation. For 
the period January 1, 2005, through December 31, 2005, we determine the 
net subsidy rates for the investigated companies are as follows:

------------------------------------------------------------------------
                  Producer/Exporter                    Net Subsidy Rate
------------------------------------------------------------------------
EN Paper Mfg. Co., Ltd. (EN Paper)..................    0.04 percent (de
                                                                minimis)
Kyesung Paper Co., Ltd. and its affiliate Namhan         1.46 percent ad
 Paper Co., Ltd. (collectively, Kyesung)............             valorem
Moorim Paper Co. Ltd. and its affiliate Moorim SP           0.00 percent
 (collectively, Moorim).............................
Hansol Paper Co., Ltd. (Hansol).....................    0.17 percent (de
                                                                minimis)
All Others Rate.....................................     1.46 percent ad
                                                                 valorem
------------------------------------------------------------------------

    Under section 705(c)(5)(A) of the Act, the ``All Others'' rate is 
equal to the weight-averaged countervailable subsidy rates established 
for exporters and producers individually investigated, excluding any 
zero and de minimis countervailable subsidy rates and any rates 
determined under section 776 of the Act. In this investigation, the 
``All Others'' rate is equal to the countervailable net subsidy rate 
calculated for Kyesung, the only individually investigated respondent 
with an affirmative net subsidy rate.
    In accordance with our Amended Preliminary Determination, we 
instructed U.S. Customs and Border Protection (CBP) to terminate 
suspension of liquidation of all entries of subject merchandise from 
Korea on or after April 9, 2007, the date of the publication of our 
Preliminary Determination in the Federal Register.
    We will reinstate suspension of liquidation under sections 
705(c)(1)(C) and 703(d)(2) of the Act for all entries of subject 
merchandise other than those produced and exported by EN Paper, Hansol, 
and Moorim and will require a cash deposit or posting of a bond equal 
to estimated countervailing duties in the amounts indicated above, 
effective the publication date of our final determination in the 
Federal Register.
    If the International Trade Commission (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. If however, the ITC determines that such injury 
does exist, we will issue a countervailing duty order.

ITC Notification

    In accordance with section 705(d) of the Act, we will notify the 
ITC of our 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 that 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 Import Administration.

Return or Destruction of Proprietary Information

    In the event that the ITC issues a final negative injury 
determination, this notice will serve as the only reminder to parties 
subject to APO of their responsibility concerning the destruction of 
proprietary information disclosed under APO in accordance with 19 CFR 
351.305(a)(3). Failure to comply is a violation of the APO.
    This determination is published pursuant to sections 705(d) and 
777(i) of the Act.

    Dated: October 17, 2007.
David M. Spooner,
Assistant Secretary for Import Administration.

Appendix I

I. SUMMARY
II. SCOPE COMMENTS
III. PERIOD OF INVESTIGATION
IV. SUBSIDIES VALUATION INFORMATION
    A. Benchmark for Short-Term Loans
    B. Benchmark for Long-Term Loans
    C. Benchmark Discount Rates
    D. Allocation Period
V. CROSS-OWNERSHIP
VI. CREDITWORTHINESS
VII. EQUITYWORTHINESS
VIII. PROGRAMS DETERMINED TO BE COUNTERVAILABLE
    A. Poongman Restructuring
    B. Export and Import Credit Financing from KEXIM
    C. Sale of Pulp for Less Than Adequate Remuneration
    D. Sales of Pulp From Raw Material Reserve for Less Than Adequate 
Remuneration
    E. Reduction in Taxes for Operation in Regional and National 
Industrial Complexes
    F. Duty Drawback on Non-Physically Incorporated Items and Excess 
Loss Rate
    G. Loans Under the Industrial Base Fund (IBF)
    H. Export Loans by Commercial Banks Under KEXIM's Trade Bill 
Rediscounting Program
    I. D/A Loans Issued by the KDB and Other Government-Owned Banks
IX. PROGRAMS DETERMINED TO BE NOT COUNTERVAILABLE
    A. Long-Term Lending Provided by the KDB and Other GOK-Owned 
Institutions
    B. Direction of Credit to the Pulp and Paper Sector
    C. Usance Loans Issued by the KDB and Other Government-Owned Banks
    D. Shinho Restructuring
    1. Debt-to-Equity Swaps and Conversion of Convertible Bonds to 
Equity
    2. Extension of Debt Maturities
    3. New Loans
X. OTHER PROGRAMS: LOANS UNDER THE ACCL PROGRAM
    A. Trade Financing Under the ACCL Program
    B. Commercial Paper Loans Under the ACCL Program
    C. Corporate Procurement Loans Under the ACCL Program
    D. Electronically Processed Secured Receivables Loans
    E. Funds for the Production of Basic Materials or Parts
XI. TERMINATED PROGRAMS
    A. Loans Under the KDB's Rediscount Program
XII. ANALYSIS OF COMMENTS
Comment 1: Whether the GOK Directed Credit to the Pulp and Paper 
Industry
Comment 2: Stainless Steel Is Not Applicable to Poongman's 
Restructuring
Comment 3: GOK Assisted and Directed Credit to Poongman During its 
Restructuring
Comment 4: Poongman Was Unequityworthy and Uncreditworthy
Comment 5: Poongman Did Not Benefit from Debt Forgiveness
Comment 6: Evidence of Entrustment or Direction of Shinho's Creditors
Comment 7: GOK Ownership of Shinho's Creditors and the Corporate 
Restructuring Process
Comment 8: Whether Shinho Was Uncreditworthy During its 1998, 2000, and 
2002 Restructurings and 2004 Syndicated Loan
Comment 9: Whether Shinho Was Unequityworthy During its 1998, 2000, and 
2002 Restructurings
Comment 10: The Validity of the Analyses of Shinho's Financial Status 
Conducted by Third Parties
Comment 11: Donghae Pulp's Sale of Chemical Pulp for Less Than Adequate 
Remuneration
Comment 12: Commerce Correctly Calculated the Benefits from Donghae

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Pulp Based On Monthly Weighted-Average Prices
Comment 13: If the Department Continues to Calculate Monthly Weighted-
Average Prices for Donghae Pulp, Certain Methodological Corrections Are 
Required
Comment 14: Hansol's Arguments that Donghae Pulp is Owned or Controlled 
by the GOK
Comment 15: The Benefit Calculation for Donghae Pulp's Sale of Pulp 
Must Account for Prevailing Market Conditions
Comment 16: Whether Usance and Document Acceptance Loans Provided 
Outside of the ACCL Program Are Countervailable
Comment 17: Whether the Department Should Pro-Rate Benefits on D/A 
Loans Under the Korea Export Import Bank (KEXIM ) Program
Comment 18: Source Data of the Benchmark To Be Applied to D/A Loans 
Under the KEXIM Rediscount Program and Usance Loans Issued by GOK 
Authorities
Comment 19: Calculation of Benchmark To Be Applied to D/A Loans Under 
the KEXIM Rediscount Program
Comment 20: Whether Commercial Paper and Corporate Procurement Loans 
are Countervailable
Comment 21: Use of Company-Specific Benchmark to Measure the Benefit to 
Hansol Under KEXIM's Export and Import Credit Financing Program
Comment 22: Use of Non-Company-Specific Benchmarks for KEXIM's Import 
and Export Credit Financing Program
Comment 23: Whether Hansol Received Countervailable Benefits Through 
the KDB's Placement of its Corporate Bonds
Comment 24: Whether Loans from the Industrial Base Fund (IBF) 
Constitute Countervailable Export Subsidies
Comment 25: Benchmark Rates for Long-Term Korean Won-Denominated Loans
XIII. RECOMMENDATION
[FR Doc. E7-21036 Filed 10-24-07; 8:45 am]

BILLING CODE 3510-DS-S