[Federal Register Volume 65, Number 129 (Wednesday, July 5, 2000)]
[Notices]
[Pages 41437-41439]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-16952]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-580-841]


Notice of Final Determination of Sales at Less Than Fair Value: 
Structural Steel Beams From South Korea

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

SUMMARY: The Department of Commerce (``the Department'') determines 
that structural steel beams from South Korea are being, or are likely 
to be, sold in the United States at less than fair value.
    Based on our analysis of the comments received, we have made 
changes to our analysis. Therefore, this final determination differs 
from the preliminary determination. The final weighted-average dumping 
margins are listed below in the section entitled ``Continuation of 
Suspension of Liquidation.''

EFFECTIVE DATE: July 5, 2000.

FOR FURTHER INFORMATION CONTACT: Laurel LaCivita (Kangwon), Brandon 
Farlander (Inchon) or Rick Johnson, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 
Washington, DC 20230; telephone: (202) 482-4243, (202) 482-0182, or 
482-3818, respectively.

SUPPLEMENTARY INFORMATION:

The Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the statute are 
references to provisions of the Tariff Act of 1930 (``the Act'') as 
amended by the Uruguay Round Agreements Act (``URAA''). In addition, 
unless otherwise indicated, all citations to the Department's 
regulations refer to the regulations codified at 19 CFR Part 351 (April 
1999).

Background

    On February 11, 2000, the Department published in the Federal 
Register (65 FR 6984) the Notice of Preliminary Determination of Sales 
at Less Than Fair Value and Postponement of Final Determination: 
Structural Steel Beams from South Korea (``Preliminary 
Determination''). We invited parties to comment on our preliminary 
determination. We verified Inchon's sales and cost questionnaire 
responses from March 6-18, 2000. We verified Kangwon's sales and cost 
questionnaire responses from March 6-10, 2000, and March 13-17, 2000, 
respectively. We verified Hyundai U.S.A., the U.S. affiliate of Inchon, 
on April 12-13, 2000. On May 4, 2000, we solicited further information 
from Inchon regarding the merger between Inchon and Kangwon. On May 17, 
2000, we received case briefs from interested parties, and on May 22, 
2000, we received rebuttal briefs. On June 1 and 2, 2000, we verified 
Inchon's information concerning the merger. On June 6, we issued our 
successorship verification report. On June 9, 2000, we received case 
briefs on successorship from Inchon and petitioners and, on June 14, 
2000, we received rebuttal briefs on successorship from Inchon and 
petitioners. At the request of petitioners, we held a public hearing on 
June 16, 2000.

Scope of Investigation

    The products covered by this investigation are doubly-symmetric 
shapes, whether hot- or cold-rolled, drawn, extruded, formed or 
finished, having at least one dimension of at least 80 mm (3.2 inches 
or more), whether of carbon or alloy (other than stainless) steel, and 
whether or not drilled, punched, notched, painted, coated or clad. 
These products include, but are not limited to, wide-flange beams 
(``W'' shapes), bearing piles (``HP'' shapes), standard beams (``S'' or 
``I'' shapes), and M-shapes.
    All products that meet the physical and metallurgical descriptions 
provided above are within the scope of this investigation unless 
otherwise excluded. The following products, are outside and/or 
specifically excluded from the scope of this investigation: structural 
steel beams greater than 400 pounds per linear foot or with a web or 
section height (also known as depth) over 40 inches.
    The merchandise subject to this investigation is classified in the 
Harmonized Tariff Schedule of the United States (``HTSUS'') at 
subheadings: 7216.32.0000, 7216.33.0030, 7216.33.0060, 7216.33.0090, 
7216.50.0000, 7216.61,0000, 7216.69.0000, 7216.91.0000, 7216.99.0000, 
7228.70.3040, 7228.70.6000. Although the HTSUS subheadings are provided 
for convenience and Customs purposes, the written description of the 
merchandise under investigation is dispositive.

Use of Facts Available

    For a discussion of our application of facts available, see the 
``Facts Available'' section of the Issues and Decision Memorandum for 
the Investigation of Structural Steel Beams from South Korea from 
Joseph A. Spetrini, Deputy Assistant Secretary, Import Administration, 
to Troy H. Cribb, Acting Assistant Secretary for Import Administration 
(``Decision Memo''), dated June 26, 2000, which is on file in the 
Central Records Unit, room B-099 of the main Department building, and 
on the Web at: http://ia.ita.doc.gov/frn.

Fair Value Comparisons

    To determine whether sales of beams from South Korea to the United 
States were made at less than fair value, we compared the export price 
(``EP'') and constructed export price (``CEP'') to comparison market 
prices or CV, as described in the ``Export Price,'' ``Constructed 
Export Price,'' and ``Normal Value'' sections below. Our calculations 
followed the methodologies described in the Preliminary Determination, 
except as noted below and in the company-specific calculation memoranda 
dated June 26, 2000, which have been placed in the file in Room B-099. 
For detailed discussions relating to the issues described below, see 
Decision Memo.

Export Price

    For Kangwon's sales to all U.S. customers, and Inchon's direct 
sales and sales through Hyundai Corporation (Channels 2 and 3) to U.S. 
customers, we used EP as defined in section 772 of the Act. We 
calculated EP based on the same methodology described in the 
Preliminary Determination, with the following exceptions:

Inchon

    a. Based on verification findings, we deducted bank charges and 
negotiation fees as a direct selling expense for all U.S. sales. See 
Decision Memo, Comment 31.
    b. We disregarded all of Inchon's U.S. Channel 3 sales to a 
particular customer. See Decision Memo, Comment 11.
    c. We applied additional expenses for all Inchon's U.S. sales to 
account for various additional movement fees, excluding U.S. marine 
insurance, incurred on certain U.S. sales. See Decision Memo, Comment 
13.
    d. We adjusted Hyundai Corporation's indirect selling expenses for 
U.S. sales. See Decision Memo, Comment 14.
    e. We adjusted Inchon's reported packing expenses for all U.S. 
sales. See Decision Memo, Comment 19.

[[Page 41438]]

    f. Based on verification findings with regard to U.S. marine 
insurance, because record evidence indicates that Inchon's expenses 
reported from affiliates were slightly lower, in terms of the dollar 
amount per metric ton, than from non-affiliates, we have applied, as 
facts available, the percentage difference between these two to 
reported U.S. marine insurance expenses for all U.S. sales. See Final 
Analysis Memo: Inchon.

Kangwon

    a. Based on verification findings, we deducted bank charges/fees as 
a direct selling expense for all U.S. sales. See Decision Memo, Comment 
31.

Constructed Export Price

    As discussed in Comment 28 of the Decision Memo, we now determine 
that Inchon's sales through Hyundai U.S.A. are CEP sales. For Inchon's 
sales to U.S. customers via Hyundai U.S.A. (Channel 1), we used CEP as 
defined section 772 of the Act. We calculated CEP, in accordance with 
subsections 772(b), (c), and (d) of the Act, for those sales to the 
first unaffiliated purchaser that took place after importation into the 
United States. We based CEP on the packed, delivered, duty paid or 
delivered prices to unaffiliated purchasers in the United States. We 
made deductions for movement expenses in accordance with section 
772(c)(2)(A) of the Act; these included, where appropriate, foreign 
inland freight from the plant to the port of export, foreign wharfage, 
international freight, marine insurance, U.S. warehousing expenses, 
U.S. loading expenses, U.S. custom duty, U.S. wharfage expenses and 
U.S. brokerage expenses. In accordance with section 772(d)(1) of the 
Act, we deducted those selling expenses associated with economic 
activities occurring in the United States, including direct selling 
expenses (imputed credit expenses) and indirect selling expenses. For 
CEP sales, we also made an adjustment for profit in accordance with 
section 772(d)(3) of the Act. Additionally, we added to the U.S. price 
an amount for duty drawback pursuant to section 772(c)(1)(B) of the 
Act. For a further discussion of this issue, see Final Analysis Memo: 
Inchon. Additionally, we made the following adjustments:
    a. We applied additional expenses for all of Inchon's U.S. sales to 
account for various additional movement fees, excluding U.S. marine 
insurance, incurred on certain U.S. sales. See Decision Memo, Comment 
13.
    b. Based on verification findings, we deducted bank charges and 
negotiation fees as a direct selling expense for all U.S. sales. See 
Decision Memo, Comment 31.
    c. We adjusted Hyundai Corporation's indirect selling expenses for 
U.S. sales. See Decision Memo, Comment 14.
    d. We adjusted Inchon's reported packing expenses for all U.S. 
sales. See Decision Memo, Comment 19.
    e. Based on our verification findings from the Hyundai U.S.A. 
verification, we are deducting U.S. brokerage expenses on a per invoice 
basis. See Final Analysis Memo: Inchon.
    f. We deducted other discounts (which Inchon reported in its 
December 10, 1999, supplemental questionnaire response), where 
applicable, from the U.S. prices. See Final Analysis Memo: Inchon.
    g. Based on verification findings with regard to U.S. marine 
insurance, because record evidence indicates that Inchon's expenses 
reported from affiliates were slightly lower, in terms of the dollar 
amount per metric ton, than from non-affiliates, we have applied, as 
facts available, the percentage difference between these two to 
reported U.S. marine insurance expenses for all U.S. sales. See Final 
Analysis Memo: Inchon.

Normal Value

    We used the same methodology to calculate NV as that described in 
the Preliminary Determination, with the following exceptions:

1. Cost of Production Analysis

Inchon
    a. We increased Inchon's direct materials costs to account for 
materials supplied by affiliated parties. See Decision Memo, Comment 1.
    b. We revised Inchon's reported depreciation expenses to account 
for machinery and equipment supplied by affiliated parties. See 
Decision Memo, Comment 3.
    c. We revised Inchon's reported repairs and maintenance expenses to 
account for services supplied by affiliated parties. See Decision Memo, 
Comment 4.
    d. We revised Inchon's reported R&D expenses. See Decision Memo, 
Comment 6.
    e. We revised Inchon's reported interest expenses. See Decision 
Memo, Comment 9.
Kangwon
    a. We adjusted Kangwon's interest expense to account for the 
disallowance of the gain on debt restructure. See Decision Memo, 
Comment 26.
    b. We recalculated the foreign exchange gains and losses included 
in the interest expense calculation by using Kangwon's historical 
method of amortizing these amounts over the life of the related debt.
    c. We adjusted Kangwon's G&A expense rate computation for various 
miscellaneous income and expense items. See Decision Memo, Comment 27.

2. Calculation of NV Based on Comparison Market Prices

    We performed price-to-price comparisons where there were sales of 
comparable merchandise in the comparison market that did not fail the 
cost test using the same methodology described in the Preliminary 
Determination, with the following exception: For Inchon, we revised the 
customer relationship for one customer to indicate its affiliation with 
Inchon. See Decision Memo, Comment 15.

3. Calculation of NV Based on Constructed Value

    We calculated CV in the same way as in the Preliminary 
Determination with the same exceptions noted above for COP.

Level of Trade

    We have made the same level of trade determinations described in 
the Preliminary Determination.

Currency Conversions

    We made currency conversions in accordance with section 773A of the 
Act in the same manner as in the Preliminary Determination.

Verification

    As provided in section 782(i)(1) of the act, we verified the 
information submitted by the respondents for use in our final 
determination. We used standard verification procedures, including 
examination of relevant accounting and production records, as well as 
original source documents provided by the respondents.

Analysis of Comments Received

    All issues raised in the case and rebuttal briefs by parties to 
this investigation are addressed in the Decision Memo dated June 26, 
2000, which is hereby adopted. A list of the issues which parties have 
raised and to which we have responded, all of which are in the Decision 
Memo, is attached to this notice as an appendix. 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 Room B-099. In addition, a complete version of the Decision 
Memo can be accessed directly on the Web at

[[Page 41439]]

www.ita.doc.gov/import-admin/records/frn/. The paper copy and 
electronic version of the Decision Memo are identical in content.

Continuation of Suspension of Liquidation

    In accordance with section 735(c)(1)(A) of the Act, we are 
directing the U.S. Customs Service (``Customs'') to suspend liquidation 
of all imports of the subject merchandise from South Korea that are 
entered, or withdrawn from warehouse, for consumption on or after the 
date of publication of this notice in the Federal Register. Customs 
shall require a cash deposit or the posting of a bond equal to the 
weighted-average amount by which the NV exceeds the EP and CEP as 
indicated in the chart below. These suspension of liquidation 
instructions will remain in effect until further notice.
    Article VI.5 of the General Agreement on Tariffs and Trade (GATT 
1994) provides that ``[n]o product *  *  * shall be subject to both 
antidumping and countervailing duties to compensate for the same 
situation of dumping or export subsidization.'' This provision is 
implemented in section 772(c)(1)(C) of the Tariff Act. Since 
antidumping duties cannot be assessed on the portion of the margin 
attributed to export subsidies there is no reason to require a cash 
deposit or bond for that amount. The Department has determined in its 
concurrent countervailing duty investigation for structural steel beams 
from Korea that the product under investigation benefitted from export 
subsidies. Normally, where the product under investigation is also 
subject to a concurrent countervailing duty investigation, we instruct 
the Customs Service to require a cash deposit or posting of a bond 
equal to the weighted-average amount by which the NV exceeds the EP, as 
indicated below, minus the amount determined to constitute an export 
subsidy. See, e.g. Notice of Antidumping Duty Order: Stainless Steel 
Wire Rod From Italy, 63 FR 49327 (September 15, 1998). Accordingly, for 
cash deposit purposes we are subtracting from Kangwon's cash deposit 
rate that portion of the rate attributable to the export subsidies 
found in the countervailing duty investigation involving Kangwon(i.e., 
0.09 percent). We have made the same adjustment to the ``All Others'' 
cash deposit rate by subtracting the rate attributable to export 
subsidies found in the countervailing duty investigation of Kangwon.
    We will instruct the Customs Service to require a cash deposit or 
the posting of a bond for each entry equal to the weighted-average 
amount by which the NV exceeds the EP or CEP, adjusting for the export 
subsidy rate, as indicated below. These suspension-of-liquidation 
instructions will remain in effect until further notice. The weighted-
average dumping margins are as follows:

                              [In percent]
------------------------------------------------------------------------
                                                               Bonding/
                                                 Weighted-       cash
             Exporter/manufacturer                average      deposit
                                                   margin        rate
------------------------------------------------------------------------
Inchon........................................        25.51        25.51
Kangwon.......................................        49.73        49.64
All others....................................        37.72        37.67
------------------------------------------------------------------------

    The rate for all other producers and exporters applies to all 
entries of the subject merchandise except for entries from exporters 
that are identified individually above.

ITC Notification

    In accordance with section 735(d) of the Act, we have notified the 
International Trade Commission (``ITC'') of our determination. As our 
final determination is affirmative, the ITC will, within 45 days, 
determine whether these imports are materially injuring, or threaten 
material injury to, the U.S. industry. If the ITC determines that 
material injury, or threat of material injury, does not exist, the 
proceeding will be terminated and all securities posted will be 
refunded or canceled. If the ITC determines that such injury does 
exist, the Department will issue an antidumping duty order.
    This determination is issued and published in accordance with 
sections 735(d) and 777(i)(1) of the Act.

    Dated: June 26, 2000.
Troy H. Cribb,
Acting Assistant Secretary for Import Administration.

APPENDIX

List of Comments and Issues in the Decision Memo

I. Issues Specific to Inchon Iron & Steel Co., Ltd.

A. Cost of Production/Constructed Value Issues
    Comment 1: Applicant of Major Input Rule
    Comment 2: Application of Major Input Rule to Other Affiliated-
Party Transactions
    Comment 3: Description
    Comment 4: Overhead
    Comment 5: SG&A Expenses
    Comment 6: R&D Expenses
    Comment 7: Interest Expense (Securities)
    Comment 8: Interest Expense (Sales-Related Activities)
    Comment 9: Loan Guarantees
    Comment 10: Affiliated-Party Services for an Input
B. Sales and General Issues
    Comment 11: Sales Price and Adjustments for U.S. Channel 3
    Comment 12: Billing Adjustments for U.S. Channel 2 sales
    Comment 13: U.S. Movement Expenses
    Comment 14: Recalculation of Home Market and U.S. Indirect Selling 
Expenses
    Comment 15: Home Market Sales to an Affiliated Customer
    Comment 16: Fees to a Home Market Customer
    Comment 17: Home Market Inland Freight
    Comment 18: Application of Total Adverse Facts Available
    Comment 19: Packing Expenses for U.S. Sales
    Comment 20: Clarification of Home Market and U.S. Verification 
Reports

II. Issues Specific to Kangwon Industries Ltd.

A. Sales and General Issues
    Comment 21: Commissions
    Comment 22: Duty Drawback
    Comment 23: Home Market Freight
    Comment 24: Corrections to Kangwon's Response
    Comment 25: Over- and Under-Reporting of Home Market Sales
B. Cost of Production/Constructed Value Issues
    Comment 26: Gain on Exemption of Debt
    Comment 27: G&A Expenses

III. Issues Applicable to Both Respondents

    Comment 28: EP vs. CEP Sales
    Comment 29: Cash Deposit Rate/Successorship
    Comment 30: Home Market Sales of ASTM-Grade Merchandise
    Comment 31: Banking Negotiation Fees

[FR Doc. 00-16952 Filed 7-3-00; 8:45 am]
BILLING CODE 3510-DS-M