```

[Federal Register Volume 73, Number 175 (Tuesday, September 9, 2008)]
[Notices]
[Pages 52315-52326]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-20918]

-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration

[C-580-818]

Corrosion-Resistant Carbon Steel Flat Products From the Republic 
of Korea: Preliminary Results of Countervailing Duty Administrative 
Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (the Department) is conducting an 
administrative review of the countervailing duty (CVD) order on 
corrosion-resistant carbon steel flat products from the Republic of 
Korea (Korea) for the period of review (POR) January 1, 2006, through 
December 31, 2006. For information on the net subsidy for each of the 
reviewed companies, see the ``Preliminary Results of Review'' section 
of this notice. Interested parties are invited to comment on these 
preliminary results. See the ``Public Comment'' section of this notice.

DATES: Effective Date: September 9, 2008.

FOR FURTHER INFORMATION CONTACT: Robert Copyak or Gayle Longest, AD/CVD 
Operations, Office 3, Import Administration, International Trade 
Administration, U.S. Department of Commerce, Room 4014, 14th Street and 
Constitution Ave., NW., Washington, D.C. 20230; telephone: (202) 482-
2209 and (202) 482-3338, respectively.

SUPPLEMENTARY INFORMATION: 

Background

    On August 17, 1993, the Department published in the Federal 
Register the CVD order on corrosion-resistant carbon steel flat 
products (CORE) from Korea. See Countervailing Duty Orders and 
Amendments of Final Affirmative Countervailing Duty Determinations: 
Certain Steel Products from Korea, 58 FR 43752 (August 17, 1993). On 
August 2, 2007, the Department published a notice of opportunity to 
request an administrative review of this CVD order. See Antidumping or 
Countervailing Duty Order, Finding, or Suspended Investigation; 
Opportunity to Request Administrative Review, 72 FR 42383 (August 2, 
2007). On August 31, 2007, we received a timely request for review from 
Pohang Iron and Steel Co. Ltd. (POSCO) and Dongbu Steel Co., Ltd. 
(Dongbu). On September 25, 2007, the Department published a notice of 
initiation of the administrative review of the CVD order on corrosion-
resistant carbon steel flat products from Korea covering the POR 
January 1, 2006, through December 31, 2006. See Initiation of 
Antidumping and Countervailing Duty Administrative Reviews and Requests 
for Revocation in Part, 72 FR 54428 (September 25, 2007). On November 
2, 2007, the Department sent its initial questionnaire to POSCO, 
Dongbu, and the Government of Korea (GOK). On December 20, 2007, the 
Department received questionnaire responses from POSCO, Pohang Steel 
Co., Ltd. (POCOS, a production affiliate of POSCO), POSCO Steel Service 
& Sales Co., Ltd. (POSTEEL, a trading company for POSCO),\1\ and 
Dongbu. On January 7, 2008, the Department received questionnaire 
responses from the GOK. On March 4, 2008 and April 7, 2008, we issued 
supplemental questionnaires to POSCO and the GOK. On March 24, 2008 and 
April 14, 2008, we received responses to these supplemental 
questionnaires.
---------------------------------------------------------------------------

    \1\ In these preliminary results, unless otherwise stated, we 
use POSCO to collectively refer to POSCO, POCOS, and POSTEEL.
---------------------------------------------------------------------------

    On April 28, 2008, the Department published in the Federal Register 
a notice of extension of the time period for issuing the preliminary 
results. See Corrosion-Resistant Carbon Steel Flat Products from the 
Republic of Korea: Extension of Time Limit for Preliminary Results of 
Countervailing Duty Administrative Review, 73 FR 22920 (April 28, 
2008).
    In accordance with 19 CFR 351.213(b), this review covers only those 
producers or exporters for which a review was specifically requested. 
The companies subject to this review are POSCO (and its affiliates 
POCOS and POSTEEL) and Dongbu.

Affiliated Companies

    In the present administrative review, record evidence indicates 
that POCOS is a majority-owned production affiliate of POSCO. Under 19 
CFR 351.525(b)(6)(iii), if the firm that received a subsidy is a 
holding company, including a parent company with its own operations, 
the Department

[[Page 52316]]

will attribute the subsidy to the consolidated sales of the holding 
company and its subsidiaries. Thus, we attributed any subsidies 
received by POCOS to POSCO and its subsidiaries, net of intra-company 
sales. Dongbu reported that it is the only member of the Dongbu group 
in Korea that was involved with the sale of subject merchandise to the 
United States.

Scope of Order

    Products covered by this order are certain corrosion-resistant 
carbon steel flat products from Korea. These products include 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. The merchandise subject to 
this order is currently classifiable in the Harmonized Tariff Schedule 
of the United States (HTSUS) at subheadings: 7210.30.0000, 
7210.31.0000, 7210.39.0000, 7210.41.0000, 7210.49.0030, 7210.49.0090, 
7210.60.0000, 7210.61.0000, 7210.70.6030, 7210.70.6060, 7210.70.6090, 
7210.90.1000, 7210.90.6000, 7210.90.9000, 7212.20.0000, 7212.21.0000, 
7212.29.0000, 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, 
7215.9030, 7215.90.5000, 7217.12.1000, 7217.13.1000, 7217.19.1000, 
7217.19.5000, 7217.20.1500, 7217.22.5000, 7217.23.5000, 7217.29.1000, 
7217.29.5000, 7217.30.15.0000, 7217.32.5000, 7217.33.5000, 
7217.39.1000, 7217.39.5000, 7217.90.1000 and 7217.90.5000. Although the 
HTSUS subheadings are provided for convenience and customs purposes, 
the Department's written description of the merchandise is dispositive.

Average Useful Life

    Under 19 CFR 351.524(d)(2), we will presume the allocation period 
for non-recurring subsidies to be the average useful life (AUL) of 
renewable physical assets for the industry concerned as listed in the 
Internal Revenue Service's (IRS) 1997 Class Life Asset Depreciation 
Range System, as updated by the Department of the Treasury. The 
presumption will apply unless a party claims and establishes that the 
IRS tables do not reasonably reflect the company-specific AUL or the 
country-wide AUL for the industry under examination and that the 
difference between the company-specific and/or country-wide AUL and the 
AUL from the IRS tables is significant. According to the IRS tables, 
the AUL of the steel industry is 15 years. No interested party 
challenged the 15-year AUL derived from the IRS tables. Thus, in this 
review, we have allocated, where applicable, all of the non-recurring 
subsidies provided to the producers/exporters of subject merchandise 
over a 15-year AUL.

Subsidies Valuation Information

A. Benchmarks for Short-Term Financing

    For those programs requiring the application of a won-denominated, 
short-term interest rate benchmark, in accordance with 19 CFR 
351.505(a)(2)(iv), we used as our benchmark an annual average company-
specific weighted-average interest rate for commercial won-denominated 
loans outstanding during the POR. Where no such benchmark instruments 
are available, we used national average lending rates for the POR, as 
reported in the International Monetary Fund's (IMF) International 
Financial Statistics Yearbook. This approach is in accordance with 19 
CFR 351.505(a)(3)(ii) and the Department's practice. See, e.g. , Final 
Affirmative Countervailing Duty Determination: Structural Steel Beams 
From the Republic of Korea, 65 FR 41051 (July 3, 2000) (H Beams 
Investigation), and the accompanying Issues and Decision Memorandum (H 
Beams Decision Memorandum) at ``Benchmarks for Short-Term Financing.''
    For Dongbu's document acceptance (D/A) loans rediscounted under the 
Korean Export Import Bank's (KEXIM's) rediscount program, we used, for 
benchmark purposes, Dongbu's usance loans issued by commercial banks. 
See Coated Free Sheet Paper from the Republic of Korea: Notice of Final 
Affirmative Countervailing Duty Determination, 72 FR 60639 (October 25, 
2007) (CFS Paper Investigation) and accompanying Issues and Decision 
Memorandum at Comment 18 (CFS Paper Decision Memorandum).

B. Benchmark for Long-Term Loans

    During the POR, POSCO and Dongbu had outstanding long-term won-
denominated and foreign-currency denominated loans from government-
owned banks and Korean commercial banks. Based on our findings on this 
issue in prior investigations and administrative reviews, we are using 
the following benchmarks to calculate the subsidies attributable to 
respondents' countervailable long-term loans obtained through 2006:
    (1) For countervailable, foreign-currency denominated loans, 
pursuant to 19 CFR 351.505(a)(2), and consistent with our past 
practice, our preference is to use the company-specific, weighted-
average foreign currency-denominated interest rates on the company's 
loans from foreign bank branches in Korea, foreign securities, and 
direct foreign loans outstanding during the POR. See, e.g., Final 
Affirmative Countervailing Duty Determination: Stainless Steel Sheet 
and Strip in Coils from the Republic of Korea, 64 FR 30636, 30640 (June 
8, 1999) (SSSS Investigation). Where no such benchmark instruments are 
available, and consistent with 19 CFR 351.505(a)(3)(ii), as well as our 
practice, we relied on the national average lending rates as reported 
by the IMF's International Financial Statistics Yearbook. See, e.g., 
Final Results and Partial Rescission of Countervailing Duty 
Administrative Review: Stainless Steel Sheet and Strip in Coils from 
the Republic of Korea, 69 FR 2113 (January 14, 2004), and the 
accompanying Issues and Decision Memorandum at ``Benchmarks for Long-
Term Loans and Discount Rates.''
    (2) For countervailable, won-denominated, long-term loans, our 
practice is to use the company-specific corporate bond rate on the 
company's public and private bonds, as we determined that the GOK did 
not control the Korean domestic bond market after 1991 and that 
domestic bonds may serve as an appropriate benchmark interest rate. 
See, e.g., Final Negative Countervailing Duty Determination: Stainless 
Steel Plate in Coils from the Republic of Korea, 64 FR 15530, 15531 
(March 31, 1999) (Plate in Coils Investigation); see also 19 CFR 
351.505(a)(2)(ii). Where no such benchmark instruments are available, 
we used the national average of the yields on three-year corporate 
bonds, as reported by the Bank of Korea (BOK), consistent with 19 CFR 
351.505(a)(3)(ii). We note that the use of the three-year corporate 
bond rate from the BOK follows the approach taken in Plate in Coils 
Investigation, in which we

[[Page 52317]]

determined that, absent company-specific interest information, the 
corporate bond rate is the best indicator of a market rate for won-
denominated long-term loans in Korea. See Plate in Coils Investigation, 
64 FR at 15531; see also 19 CFR 351.505(a)(3)(ii).
    In accordance with 19 CFR 351.505(a)(2)(i), our benchmarks take 
into consideration the structure of the government-provided loans. For 
countervailable fixed-rate loans, pursuant to 19 CFR 
351.505(a)(2)(iii), we used benchmark rates issued in the same year 
that the government loans were issued. For countervailable variable-
rate loans outstanding during the POR, pursuant to 19 CFR 
351.505(a)(5)(i), our preference is to use the interest rates of 
variable-rate lending instruments issued during the year in which the 
government loans were issued. Where such benchmark instruments are 
unavailable, we used interest rates from debt instruments issued during 
the POR as our benchmarks, as such rates better reflect a variable 
interest rate that would be in effect during the POR. This approach is 
in accordance with the Department's practice. See, e.g., Final Results 
and Partial Rescission of Countervailing Duty Administrative Review: 
Stainless Steel Sheet and Strip From the Republic of Korea, 68 FR 13267 
(March 19, 2003), and accompanying Issues and Decision Memorandum at 
Comment 8; see also 19 CFR 351.505 (a)(5)(ii).

I. Program Preliminarily Determined To Confer Subsidies

A. The GOK's Direction of Credit

    In the Plate in Coils Investigation, 64 FR 15530, 15532-33 (March 
31, 1999) and in the SSSS Investigation, 64 FR 30636, 30641-42 (June 8, 
1999), the Department determined that the GOK controlled directly and 
indirectly the lending practices of most sources of credit in Korea 
through 1997. Furthermore, the Department determined that the GOK's 
regulated credit from domestic commercial banks and government-
controlled banks such as the Korea Development bank (KDB) was specific 
to the steel industry. In the Final Affirmative Countervailing Duty 
Determination: Certain Cut-to-Length Carbon-Quality Steel Plate from 
the Republic of Korea, 64 FR 73176, 73179 (December 29, 1999) (CTL 
Plate Investigation) and in the H Beams Investigation and H Beams 
Decision Memorandum at ``GOKs Credit Policies from 1992 through 1998,'' 
the Department determined that the GOK's directed lending practices 
continued to be specific with respect to the steel industry through 
1998.
    In every subsequent CVD investigation or administrative review of a 
Korean steel product covering a period of investigation (POI) or POR 
from 2000 to 2005, we provided the GOK an opportunity to present new 
factual information concerning the government's credit policies, which 
we would consider along with our findings in prior investigations. For 
every POI or POR covering the years 2000 to 2005, respondents decided 
not to provide new information on the GOK's lending policies for 
domestic banks. Therefore, with respect to each of the years from 2000 
to 2005, consistent with section 776 of the Act, we found that the 
GOK's direction of credit policies to the steel industry continued 
through the period 2000 to 2005. See, e.g., Notice of Final Affirmative 
Countervailing Duty Determination: Certain Cold-Rolled Carbon Steel 
Flat Products From the Republic of Korea, 67 FR 62102, (October 3, 
2002) (Cold-Rolled Investigation), and accompanying Issues and Decision 
Memorandum at ``GOK Directed Credit'' (Cold-Rolled Decision 
Memorandum); Final Results of Countervailing Duty Administrative 
Review: Stainless Steel Sheet and Strip in Coils from the Republic of 
Korea, 69 FR 2113 (January 14, 2004) (SSSS 2004 Review), and 
accompanying Issues and Decision Memorandum at ``The GOK's Direction of 
Credit'' (SSSS 2004 Review Decision Memorandum); and Notice of Final 
Results of Countervailing Duty Administrative Review: Certain Cut-to-
Length Carbon-Quality Steel Plate from the Republic of Korea, 72 FR 
38565 (July 13, 2007) (CTL Plate 2007 Review), and accompanying Issues 
and Decision Memorandum at ``The GOK's Direction of Credit'' (CTL Plate 
2007 Review Decision Memorandum).
    The Department's last determination of the GOK's directed credit 
policies not based on adverse facts available (AFA) was in the H Beams 
Investigation, which covered calendar year 1998. See H Beams Decision 
Memorandum at ``GOK's Credit Policies from 1992 through 1998.'' In its 
June 7, 2000, memorandum regarding direction of credit in the H Beams 
Investigation, the Department noted that: (1) The history of GOK 
intervention in the credit market from the 1960s into the 1990s 
including the Heavy and Chemical Industry (HCI) promotion program that 
was introduced in the 1980s; (2) an IMF Working Paper that concluded 
that the GOK continued to favor priority sectors with credit and that 
financial institutions believed that the government would protect them 
on risky lending on unprofitable projects; \2\ (3) a 1999 OECD report 
that stated that the GOK exerted immense pressure and directed much of 
the country's lending activities, often on the basis of political whim 
rather than a proper evaluation of risk; \3\ (4) a World Bank study 
illustrating Korea's selective allocation of credit which also 
concluded that the promotion of the steel industry was one of the top 
priorities of the GOK; \4\ (5) an Agreement with the IMF in which the 
GOK explicitly stated it would stop directing credit; \5\ (6) a Korean 
Presidential Commission report on the government's pervasive influence 
and intervention in the country's financial sector; \6\ (7) the fact 
that the Korean steel industry was one of the top recipients of KDB 
lending during the time in which the KDB was the largest source of 
long-time financing in Korea; and (8) industry-specific costs of 
borrowing as reported in the Bank of Korea's Financial Statement 
Analysis and the steel industry's access to the foreign loan market 
that was controlled by the GOK. In the H Beams Investigation, the GOK 
argued that measures were taken in 1998 to liberalize the Korean 
financial sector. See H Beams Decision Memorandum at ``GOKs Credit 
Policies from 1992 through 1998.'' However, in our analysis of the 
financial reforms for our final determination, the Department stated 
that while the GOK started to plan and implement reforms in the

[[Page 52318]]

financial sector during 1998, the record evidence indicated that the 
GOK's previous attempts at removing or reducing its controls and 
influence over lending in the country were not successful. We noted 
that, in the ten years prior to 1998, the GOK twice attempted to reform 
its financial system. In 1988, the GOK attempted to deregulate interest 
rates. However, the GOK deemed the 1988 liberalization a failure 
because when interest rates began to rise, the GOK cancelled the 
reforms by indirectly pressuring the banks to keep interest rates low. 
In the early 1990s, the GOK attempted reforms again with a four-stage 
interest rate deregulation plan. Again, the GOK deemed this attempt to 
reform the financial system a failure. We also noted in the H Beams 
Investigation that, during 1998 and 1999, despite its apparent 
liberalization attempts, the GOK threatened to cut off credit to Korean 
companies unless the companies followed GOK policies. Id. In addition, 
during this period the GOK took control of five large commercial banks 
due to the financial crisis.
---------------------------------------------------------------------------

    \2\ Borsesztein, Eduardo and Jong-Wha Lee, Credit Allocation and 
Financial Crisis in Korea (an International Monetary Fund Working 
Paper), February 1999. See Memorandum to the File from Eric B. 
Greynolds, Program Manager, ``Information Regarding Reforms to the 
Korean Financial System,'' at Attachment 1 (August 11, 2008) 
(Direction of Credit Memorandum), a public document on file in the 
Central Records Unit, room 1117 of the Main Commerce Building.
    \3\ OECD, Asia and the Global Crisis--The Industrial 
Dimension,1999. See Memorandum from Melissa G. Skinner, Director, 
Office of CVD/AD Enforcement VI to Holly A. Kuga, Acting Deputy 
Director for Import Administration, ``Direction of Credit in Korea: 
Structural Steel Beams from the Republic of Korea'' (June 7, 2000), 
which is on the record of this administrative review at GOK's 
January 7, 2008 Questionnaire Response at Exhibit A-2 (Direction of 
Credit Memorandum for H Beams).
    \4\ World Bank, Credit Policies and the Industrialization of 
Korea, 1995 World Bank Study. See Direction of Credit Memorandum for 
H Beams, which is on the record of this administrative review at 
GOK's January 7, 2008 Questionnaire Response at Exhibit A-2.
    \5\ See, e.g., December 3, 1997, Letter of Intent of the 
Government of Korea to IMF, and December 5, 1997, Republic of Korea 
IMF Stand-By Arrangement, which are included as Attachment 2 of the 
Direction of Credit Memorandum.
    \6\ The Presidential Commission for Financial Reform, Financial 
Reform in Korea: The Third Report, 1997. See Direction of Credit 
Memorandum for H Beams, which is on the record of this 
administrative review at GOK's January 7, 2008 Questionnaire 
Response, at Exhibit A-2.
---------------------------------------------------------------------------

    Thus, while the Department acknowledged in the H Beams 
Investigation that the GOK was attempting to make reforms in the 
financial sector in 1998 and 1999, we concluded that the then status of 
these reforms was not enough to change our affirmative direction of 
credit determination because: (1) The GOK had tried twice before within 
a ten-year period to implement financial reforms and failed at each 
attempt; and (2) the GOK was undermining its reform attempts by 
threatening to cut off lending to Korean firms and by taking control of 
large commercial banks. Id. Subsequent to our determination in the H 
Beams Investigation, the GOK did not provide any new information on 
financial reforms implemented after 1997 in any administrative review 
of any outstanding CVD order covering the Korean steel industry; 
therefore, the Department has not revisited our direction of credit 
determination with respect to the steel industry.
    During the POR, POSCO and Dongbu had outstanding loans that were 
received prior to and/or during the 2006 POR. As in the prior 
proceedings, we requested that the GOK provide information pertaining 
to the GOK's direction-of-credit policies through 2006.
    In its January 7, 2008, questionnaire response in the instant 
review, the GOK provided new information on the issue of directed 
credit and the status of reforms within the financial sector for the 
period 2002 through 2006.\7\ Based on this new information and the 
reforms implemented in the Korean financial sector after the 1997 
Financial Crisis, the GOK concludes that the Department should now find 
that the GOK does not direct credit to the steel industry.
---------------------------------------------------------------------------

    \7\ The GOK stated that it chose not to respond to direction of 
credit questions in previous administrative reviews of steel 
products covering periods after 2000 because of the considerable 
burden of responding to the Department's questions and the very 
small impact of the Department's finding of directed credit on 
respondents (especially given that the aggregate company-specific 
subsidy rates were de minimis).
---------------------------------------------------------------------------

    In this administrative review, the GOK states that, based on the 
significant and sweeping reforms of the Korean financial sector after 
the 1997 Financial Crisis, the Department held in Dynamic Random Access 
Memory Semiconductors from the Republic of Korea: Final Affirmative 
Countervailing Duty Determination (DRAMS Investigation) that the Korean 
financial sector did not direct credit to the semiconductor industry 
after 1998. See DRAMS Investigation, 68 FR 37122 (June 23, 2003), and 
accompanying Issues and Decision Memorandum at ``Direction of Credit 
and Other Financial Assistance'' (DRAMS Decision Memorandum). The GOK 
states that reforms have continued at a fast pace since 1998, more 
banks have been privatized, and numerous reforms have been implemented 
in order to enhance the financial strength and independence of the 
banking sector. The GOK notes that the Corporate Restructuring 
Promotion Act requires banks to undertake ongoing evaluations of their 
customers and their financial health to avoid insolvency and to take 
steps to restructure the debtors that become credit risks.
    The GOK states that when the Department made its initial finding of 
directed credit to the steel industry, the Department noted that the 
availability of long-term lending in Korea was predominantly controlled 
by the state-owned KDB. The GOK notes that there are now numerous 
sources of long-term funds available in the Korean market including 
loans from commercial banks. A comparison of outstanding loans from the 
KDB and loans sourced from commercial banks shows that commercial banks 
provide the majority of long-term lending in Korea. See Government of 
Korea's January 7, 2008 Questionnaire Response at Exhibit A-5 (GOK's 
January QR). Furthermore, there are now other means for companies to 
finance long-term debt such as issuing bonds and notes in Korea and 
internationally. See GOK's January QR at 8.
    According to the questionnaire response submitted by the GOK in 
this administrative review, in the wake of the 1997 Financial Crisis, 
the GOK launched a financial sector restructuring program aimed at 
maintaining a functioning financial system and, at the same time, 
making it more market-oriented. Nearly a quarter of Korea's financial 
institutions, including nine of 26 commercial banks at the time, were 
ultimately closed. To improve the supervisory framework, the Financial 
Supervisory Commission (FSC), a unified body covering banking, 
insurance, non-banks and the capital market, was established. The FSC 
was established under the Act on Establishment of Financial Supervisory 
Organizations enacted in December 1997 and last amended in 2003, with a 
view to contributing to the development of the national economy by 
establishing an orderly and sound credit system. The FSC supervises 
financial institutions, including commercial banks, and takes 
regulatory actions in accordance with the applicable statutes. Other 
than general regulatory functions, the FSC does not intervene in the 
daily operations, including credit evaluation or extensions decisions, 
of financial institutions. The FSC's supervisory functions in relation 
to bank's credit services are confined to ensuring compliance with 
credit limits, the provision of adequate reserves, and other ordinary 
affairs as necessary to determine the soundness of operation of the 
financial institution. Since the creation of the FSC in 1998, the 
Ministry of Finance and Economy's authority over the establishment of 
banks and the supervision of banks has shifted to the FSC.
    The GOK also states that it does not intervene in the decision-
making process for the direction or regulation of credit, or for 
deposit and lending rates, which are entirely reserved for the 
discretion of individual financial institutions. As a measure in the 
course of prudential regulation, the Financial Supervisory Service 
(FSS) issued a Sample Guideline for Credit Risk Assessment and a 
Notification to Financial Institutions Regarding Risk Evaluation System 
for Corporations, for the purpose of enhancing the risk evaluation 
system by individual financial institutions.\8\ These documents

[[Page 52319]]

provide simple basic guidelines but do not offer specific details for 
the banks to follow in managing their credit extensions. The GOK states 
that all bank-specific policies on lending and credit evaluation are 
established by individual banks.
---------------------------------------------------------------------------

    \8\ The FSS was established on January 2, 1999, under the Act on 
the Establishment of Financial Supervisory Organizations by bringing 
together four supervisory bodies--Banking Supervisory Authority, 
Securities Supervisory Board, Insurance Supervisory Board, and Non-
Bank Supervisory Authority--into a single supervisory organization. 
The primary function of the FSS is examination and supervision of 
financial institutions but can extend to other oversight and 
enforcement functions as charged by the Financial Services 
Commission (the former Financial Supervisory Commission) and the 
Securities and Futures Commission.
---------------------------------------------------------------------------

    The GOK states that it does not provide any guidance with regard to 
the commercial interest rates to be charged for loans by Korean 
commercial banks. Specific interest rates to be charged by financial 
institutions are only determined by the respective financial 
institution itself. As such, interest rates differ from bank to bank 
depending upon the policies taken by individual banks, the nature of 
the loans, the current conditions of the financial market, and the 
creditworthiness of the borrower.
    The Prime Minister's Decree 408, enacted in November 2000, sets 
forth that the government should not intervene in the general 
management of the banks. Furthermore, the Depositors Protection Act, 
revised in January 2000, in turn sets forth that the officers and 
employees who are responsible for the financial troubles of the 
financial institutions should compensate for the damages personally and 
individually. Therefore, the GOK states, not only are GOK officials 
prohibited from intervening in the daily business operation of the 
banks, but also any GOK official making such an attempt would assume 
civil and criminal liability in a personal capacity.
    According to the GOK's questionnaire response, during 2004 through 
2006, no Korean commercial bank was taken over or administered by the 
GOK due to bank restructurings in Korea. Furthermore, the GOK has 
privatized most of the commercial banks that it took over as a result 
of the 1997 Financial Crisis. Many of these commercials banks, such as 
SC First and the Korean Exchange Bank (KEB), have majority ownership by 
foreign interests. For other commercial banks such as Kookmin, foreign 
shareholders are the major shareholders of the bank. Currently only one 
commercial bank, Woori, has majority ownership by the GOK. According to 
the GOK, the Korea Deposit Insurance Corporation owns approximately 80 
percent of Woori.
    With respect to other lending sources found countervailable in 
prior directed credit determinations, the National Investment Fund 
(NIF) was liquidated on January 2, 2003. The NIF supported heavy and 
chemical industries during the period from 1974 to 1991 by extending 
loans raised through the issuance of national investment bonds to 
financial institutions. The GOK also noted that the Department 
determined that access to foreign securities and direct foreign loans 
after April 1999 is no longer countervailable.
    Finally, the GOK argues that, in Coated Free Sheet Paper from the 
Republic of Korea: Notice of Preliminary Affirmative Countervailing 
Duty Determination, 72 FR 17507 (April 9, 2007) (CFS Paper Preliminary 
Determination), the Department reaffirmed its finding in the DRAMS 
Investigation that: (1) Distinguished between banks that are government 
authorities and banks with some government ownership (as a result of 
the 1997 Financial Crisis) that acted as commercial banks and (2) 
measured the specificity of long-term loans to the paper sector only 
with respect to GOK-owned banks that were government authorities. See 
CFS Paper Preliminary Determination at 72 FR 17511-17512, 17517. The 
GOK noted that, in the CFS Paper Investigation, 72 FR 60639 (October 
25, 2007), the specificity test used by the Department demonstrated 
that long-term loans from GOK-owned banks were not specific to the 
paper sector. See CFS Paper Investigation and CFS Paper Decision 
Memorandum at ``Long-Term Lending Provided by the KDB and Other GOK-
Owned Institutions.'' The GOK states that a comparable analysis 
demonstrates that long-term loans from GOK-owned banks are not specific 
to the steel industry during the POR.
    We find that the new information submitted by the GOK is sufficient 
to warrant a re-examination of the Department's direction of credit 
determination made with respect to the Korean steel industry. As noted 
above, the Department last reviewed new information in the H Beams 
Investigation, in which we stated that, although the GOK was starting 
to implement reforms of the financial sector, these reforms were, in 
part, undermined by the GOK's taking control of commercial banks and 
the fact that previous attempts at reforms were not successful. See H 
Beams Decision Memorandum at ``GOK's Credit Policies from 1992 through 
1998.''
    Our determination in the H Beams Investigation reviewed the 
attempts of the GOK to reform the financial sector in 1998 and 1999. 
Id. The GOK has now provided new information on the details of the 
financial sector reforms that were implemented in the wake of the 1997 
Financial Crisis, arguing that these reforms have removed the controls 
that led to the Department's determination of direction of bank credit. 
While the information submitted by the GOK supports its arguments 
regarding reforms of the banking sector, our original directed credit 
determination relied on independent sources detailing GOK control and 
direction of bank credit. Thus, it is appropriate to also review those 
independent sources to determine if these sources substantiate the 
information submitted by the GOK in this administrative review. 
However, before this review of independent research on GOK financial 
reforms, it is important to review the Department's determinations 
regarding directed credit made in both the DRAMS Investigation and the 
CFS Paper Investigation.
    In its questionnaire response, the GOK states that since the 
directed credit determination regarding the Korean steel industry, the 
Department has addressed directed credit in investigations of two non-
steel products, the DRAMS Investigation and the CFS Paper 
Investigation, and reached different conclusions with respect to 
directed credit from Korean banks.
    In the DRAMS Investigation, the Department first examined the GOK's 
credit policies through 1998. See DRAMS Investigation, and DRAMS 
Decision Memorandum at ``The GOK's Credit Policies Through 1998.'' The 
Department stated that it had found that the GOK controlled the lending 
practices of banks in Korea in prior cases involving the Korean steel 
industry and had determined in the H Beams Investigation that the GOK 
directed credit through 1998. Although in the DRAMS Investigation the 
Department provided the GOK with an opportunity to present new factual 
information concerning the GOK's direction of long-term lending through 
1998, no new information was presented. See DRAMS Decision Memorandum 
at 12. Therefore, in the DRAMS Investigation, the Department determined 
that the GOK continued to control, directly and indirectly, the long-
term lending practices of Korean domestic banks through 1998. See DRAMS 
Decision Memorandum at ``The GOK's Credit Policies Through 1998.'' 
However, the respondents in the DRAMS Investigation provided new 
information with respect to whether the GOK directed bank credit for 
the period 1999 through June 30, 2002. See DRAMS Decision Memorandum at 
``The GOK's Involvement in the ROK Lending Sector from 1999 through 
June 30, 2002.'' Therefore, the Department

[[Page 52320]]

analyzed this information to determine whether the GOK continued to 
direct credit from domestic banks after 1999. Based on this analysis, 
the Department determined in the DRAMS Investigation that the GOK only 
directed credit to a group of companies that were part of the Hyundai 
group, including DRAMs manufacturer, Hynix. Id.
    In the CFS Paper Investigation, the Department stated that, 
although the GOK exerted broad control over lending through 1998 that 
resulted in credit being directed specifically to strategic industries 
such as steel and semiconductors, there was not sufficient information 
to conclude that the paper industry was designated as a strategic 
industry by the GOK and, thus, a beneficiary of directed credit. See 
CFS Paper Decision Memorandum at ``Direction of Credit to the Pulp and 
Paper Sector.'' In CFS Paper Investigation, the Department also 
separately examined the provision of long-term lending provided by the 
KDB and other GOK-owned institutions, and found that KDB lending was 
not specific to the paper industry. See CFS Paper Decision Memorandum 
at ``Long-Term Lending Provided by the KDB and Other GOK-Owned 
Institutions.''
    Our review of independent research on the post-financial crisis 
reforms within the Korean financial and banking sector, as discussed 
further below, support the statements made by the GOK in this review. 
Our review also provided no evidence of continued GOK systemic control 
of banking credit within Korea, including banking credit directed 
towards the Korean steel industry.
    In the period after the 1997 Financial Crisis and leading up to 
2002, the GOK implemented a number of reforms in the financial sector. 
As noted by many experts, the Korean financial sector was long 
characterized by government intervention and a discretionary 
implementation of rules where the GOK played a crucial role in credit 
resource allocation.\9\ The Korean banking sector suffered due to 
inefficient internal management and GOK intervention in the financial 
sector prevented the development of market discipline. Furthermore, 
selective credit allocation by the government resulted in an 
inefficient and distorted financial system.\10\
---------------------------------------------------------------------------

    \9\ Kyung Tae Lee and Inkoo Lee, ``Crisis, Reforms, and 
Structural Changes in the Korean Economy,'' October 6, 2007, at 4. 
See Direction of Credit Memorandum, at Attachment 3.
    \10\ Takatoshi Ito and Yuko Hashimoto, ``Banking Restructuring 
in Asia: Crisis Management in the Aftermath of the Asian Financial 
Crisis and Prospects for Crisis Prevention--Korea,'' February 5, 
2007, at 17. See Direction of Credit Memorandum, at Attachment 4.
---------------------------------------------------------------------------

     The GOK controlled the allocated financial resources by managing 
both the commercial banks and the state-owned special banks.\11\
---------------------------------------------------------------------------

    \11\ Jahyeong Koo and Sherry L. Kiser, ``Recovery from a 
Financial Crisis: The Case of South Korea,'' Economic and Financial 
Review, Fourth Quarter 2001, Federal Reserve Bank of Dallas, at 25. 
See Direction of Credit Memorandum, at Attachment 5.
---------------------------------------------------------------------------

    As discussed in the GOK's questionnaire response, after the 1997 
Financial Crisis, the GOK implemented a number of reforms of the 
financial sector, many at the behest of the IMF. The GOK actively 
implemented the IMF's suggested reforms, which included structural 
reforms of the financial system.\12\ For example, the GOK introduced a 
new financial supervisory system to prevent moral hazard. As discussed 
above, the FSS was created in an attempt to overcome inconsistent 
treatment of different institutions and to meet international standards 
of financial supervision.\13\ The GOK increased the independence of the 
Bank of Korea (BOK) from the Ministry of Finance and Economy (MOFE), 
and stripped the regulatory powers out of both the BOK and MOFE and 
located them in an independent regulatory agency.\14\
---------------------------------------------------------------------------

    \12\ Jai S. Mah, ``The Restructuring in the Post-Crisis Korean 
Economy,'' November 2003. See Direction of Credit Memorandum at 
Attachment 6.
    \13\ Kyung Tae Lee and Inkoo Lee, ``Crisis, Reforms, and 
Structural Changes in the Korean Economy,'' October 6, 2007, at 4. 
See Direction of Credit Memorandum, at Attachment 3.
    \14\ Stephan Haggard and Andrew MacIntyre, ``The Politics of 
Moral Hazard: The Origins of Financial Crisis in Indonesia, Korea 
and Thailand,'' August 1999. See Direction of Credit Memorandum, at 
Attachment 7.
---------------------------------------------------------------------------

    Korea's progress in strengthening its supervision of financial 
institutions was especially significant; Korean commercial banks 
adopted Western-style board governance systems, where the majority of 
board members are outside directors.\15\ During the restructuring 
process, the GOK pursued a policy of encouraging the entry of foreign 
banks and all the regulatory obstacles that stood in the way of foreign 
entry were eased.\16\ The IMF has noted that the Korean banking system 
was transformed after the 1997 Financial Crisis and noted that Korean 
banks strengthened their commercial orientation, allowing them to 
refocus their activities on their most profitable lending 
activities.\17\ The long-held belief that ``banks never fail because 
the government will bail them out'' faded away.\18\ The reforms that 
were implemented by the GOK after the 1997 Financial Crisis changed the 
ways banks were operated as well as the patterns of the asset 
allocation behavior of banking institutions.\19\ The IMF concluded that 
since the Financial Crisis, the GOK accelerated its shift towards a 
market-oriented development strategy and that direct credit was 
abolished.\20\
---------------------------------------------------------------------------

    \15\ Dr. Janet Yellen, President and CEO of the Federal Reserve 
Bank of San Francisco, ``The Asian Financial Crisis Ten Years Later: 
Assessing the Past and Looking to the Future (Speech),'' February 6, 
2007. See Direction of Credit Memorandum at Attachment 8.
    \16\ Soo-Myung Kim, Ji-Young Kim and Hoon-Tae Ryoo, 
``Restructuring and Reforms in the Banking Industry,'' BIS Papers 
No. 28 at 267. See Direction of Credit Memorandum, at Attachment 9.
    \17\ International Monetary Fund (IMF), ``IMF Country Report No. 
04/44,'' February 2004, at 6. See Direction of Credit Memorandum at 
Attachment 10.
    \18\ Soo-Myung Kim, Ji-Young Kim and Hoon-Tae Ryoo, 
``Restructuring and Reforms in the Banking Industry,'' BIS Papers 
No. 28 at 259. See Direction of Credit Memorandum, at Attachment 11.
    \19\ Eui-Gak Hwang, ``Banking Sector Restructuring in Korea 
After the 1997-1998 Crisis,'' at 13. See Direction of Credit 
Memorandum, at Attachment 12.
    \20\ International Monetary Fund (IMF), ``IMF Country Report No. 
05/49,'' February 2005, at 5. See Direction of Credit Memorandum, at 
Attachment 13.
---------------------------------------------------------------------------

    Based on the Department's decision on Korean directed credit 
policies in both the DRAMS Investigation and the CFS Paper 
Investigation, the information submitted by the GOK in this review 
regarding directed credit and reforms in the financial sector for the 
period 2002-2006, and our substantiation of this submitted information 
through independent research, we determine that the GOK no longer has a 
systemic practice of directing credit within the Korean financial 
sector and that directed credit within the Korean steel industry ended 
as of 2002.
    With regard to the period prior to 2002, the GOK provided some 
information regarding its lending policies, and Dongbu and POSCO 
reported receiving long-term loans prior to 2002. However, even 
assuming that the GOK's actions during this period constituted 
direction of credit, any potential benefit to Dongbu and POSCO during 
this POR is less than 0.005 percent. As explained in Coated Free Sheet 
Paper from the People's Republic of China: Final Determination of 
Countervailing Duty Investigation, 72 FR 60645 (October 25, 2007) (CFS 
Paper from China Investigation), and accompanying Issues and Decision 
Memorandum at ``Purchases at Prices that Constitute More than Adequate 
Remuneration'' (CFS Paper from China Decision Memorandum), where the 
countervailable subsidy rate for a program is less than 0.005 percent, 
the program is not included in the total CVD rate. Hence, we 
preliminarily find

[[Page 52321]]

that any long-term loans provided prior to 2002 and outstanding during 
the POR did not confer a measurable benefit to Dongbu or POSCO during 
the POR. Accordingly, it is unnecessary to make a finding as to the 
countervailability of the GOK's Direction of Credit program prior to 
2002 for this administrative review.
    Therefore, for purposes of this review, we determine that there is 
no directed credit to the Korean steel industry from 2002. This 
decision is restricted to the post-2001 period that was addressed by 
the GOK in its questionnaire response. Furthermore, our determination 
in this review does not change the decision that was made by the 
Department in DRAMS Investigation that there may still be instances in 
which the GOK may attempt to influence bank decisions on an ad hoc 
basis such as the government-led financial restructuring of Hynix. 
Accordingly, loans that were issued to the respondents from private 
Korean commercial banks and government-owned banks from January 1, 
2002, onward are not countervailable. We note that, as described below, 
we are still examining loans provided by the KDB, as it is a government 
policy bank.
    We have decided to modify our treatment of commercial banks with 
government ownership with respect to the finding of a financial 
contribution under section 771(5)(B)(i) of the Act. In both the DRAMS 
Investigation and the CFS Paper Investigation, we accorded different 
treatment under this section of the Act to government-owned banks that 
were commercial banks and those government-owned banks that acted as 
policy or specialized banks. Upon further review, we have determined 
that, with respect to determining whether a government-owned bank is a 
public entity or authority under the CVD law, it is more appropriate to 
focus solely on the issue of government ownership and control. This 
treatment of government-owned commercial banks is consistent with our 
treatment of all other government-owned entities, such as government-
owned manufacturers, utility companies, and service providers. 
Furthermore, this treatment of government-owned commercial banks is 
also more consistent with 19 CFR 351.505(a)(2)(ii) and 
351.505(a)(6)(ii). Thus, a government-owned or controlled bank, be it a 
commercial bank or a policy bank, is considered a public entity or 
authority under the Act.
    This modification of our treatment of government-owned commercial 
banks has no effective impact on our directed credit determination, but 
it provides uniformity of treatment for all government-owned entities 
and is more consistent with our regulations.
    As discussed above, we are only countervailing directed credit 
provided prior to January 1, 2002. In accordance with 19 CFR 
351.505(c)(2) and (4), we calculated the benefit for each fixed- and 
variable-rate loan received from GOK-owned or -controlled banks to be 
the difference between the actual amount of interest paid on the 
directed loan during the POR and the amount of interest that would have 
been paid during the POR at the benchmark interest rate. We conducted 
our benefit calculations using the benchmark interest rates described 
in the ``Subsidies Valuation Information'' section above. For foreign 
currency-denominated loans, we converted the benefits into Korean won 
using exchange rates obtained from the BOK. We then summed the benefits 
from each company's long-term fixed-rate and variable-rate won-
denominated loans.
    To calculate the net subsidy rate, we divided the companies' total 
benefits by their respective total f.o.b. sales values during the POR, 
as this program is not tied to exports or a particular product. In 
calculating the net subsidy rate for POSCO, we removed from the 
denominator sales made between affiliated parties.\21\ On this basis, 
we preliminarily determine the subsidy rate under the direction of 
credit program to be less than 0.005 percent ad valorem for POSCO and 
less than 0.0005 percent ad valorem for Dongbu.
---------------------------------------------------------------------------

    \21\ For POSCO, we also removed intra-company sales from the 
denominators of the net subsidy rate calculations of the other 
programs found countervailable in these preliminary results. This 
step was not necessary for Dongbu.
---------------------------------------------------------------------------

B. Asset Revaluation Under Article 56(2) of the Tax Reduction and 
Exemption Control Act (TERCL)

    Under Article 56(2) of the TERCL, the GOK permitted companies that 
made an initial public offering between January 1, 1987, and December 
31, 1990, to revalue their assets at a rate higher than the 25 percent 
required of most other companies under the Asset Revaluation Act. The 
Department has previously found this program to be countervailable. For 
example, in the CTL Plate Investigation, the Department determined that 
this program was de facto specific under section 771(5A)(D)(iii) of the 
Act because the actual recipients of the subsidy were limited in number 
and the basic metal industry was a dominant user of this program. See 
CTL Plate Investigation, 64 FR at 73183. We also determined that a 
financial contribution was provided in the form of tax revenue foregone 
pursuant to section 771(5)(D)(ii) of the Act. Id. The Department 
further determined that a benefit was conferred within the meaning of 
section 771(5)(E) of the Act on those companies that were able to 
revalue their assets under TERCL Article 56(2) because the revaluation 
resulted in participants paying fewer taxes than they would otherwise 
pay absent the program. Id. No new information, evidence of changed 
circumstances, or comments from interested parties were presented in 
this review to warrant any reconsideration of the countervailability of 
this program.
    The benefit from this program is the difference that the 
revaluation of depreciable assets has on a company's tax liability each 
year. Evidence on the record indicates that, in 1989, POSCO made an 
asset revaluation that increased its depreciation expense. Dongbu 
reported that it did not use this program during the POR. To calculate 
the benefit to POSCO, we took the additional depreciation listed in the 
tax return filed during the POR, which resulted from the company's 
asset revaluation, and multiplied that amount by the tax rate 
applicable to that tax return. We then divided the resulting benefit by 
POSCO's total f.o.b. sales. On this basis, we preliminarily determine 
the net countervailable subsidy to be 0.02 percent ad valorem for 
POSCO. This program was not used by Dongbu.

C. Research and Development (R&D) Grants Under the Industrial 
Development Act (IDA)

    The GOK, through the Ministry of Commerce, Industry, and Energy 
(MOCIE), provides R&D grants to support numerous projects pursuant to 
the IDA, including technology for core materials, components, 
engineering systems, and resource technology. The IDA is designed to 
foster the development of efficient technology for industrial 
development. To participate in this program a company may: (1) Perform 
its own R&D project, (2) participate through the Korea New Iron and 
Steel Technology Research Association (KNISTRA), which is an 
association of steel companies established for the development of new 
iron and steel technology, and/or (3) participate in another company's 
R&D project and share R&D costs, along with funds received from the 
GOK. To be eligible to participate in this program, the applicant must 
meet the qualifications set forth in the basic plan and must perform 
R&D as set forth under the Notice of Industrial Basic Technology 
Development. If the R&D project is not successful, the company must 
repay the full amount.

[[Page 52322]]

    In the H Beams Investigation, the Department determined that 
through KNISTRA the Korean steel industry receives funding specific to 
the steel industry. Therefore, given the nature of KNISTRA, the 
Department found projects under KNISTRA to be specific. See Preliminary 
Negative Countervailing Duty Determination with Final Antidumping Duty 
Determination: Structural Steel Beams From the Republic of Korea, 64 FR 
69731, 69740 (December 14, 1999) (unchanged in the final determination 
and the H Beams Decision Memorandum, at ``R&D Grants Under the Korea 
New Iron & Steel Technology Research Association (KNISTRA)''). Further, 
we found that the grants constituted a financial contribution under 
section 771(5)(D)(i) of the Act in the form of a grant, and bestowed a 
benefit under section 771(5)(E) of the Act in the amount of the grant. 
Id. No new factual information or evidence of changed circumstances has 
been provided to the Department with respect to this program. 
Therefore, we preliminarily continue to find that this program is de 
jure specific within the meaning of section 771(5A)(D)(i) of the Act 
and constitutes a financial contribution and confers a benefit under 
sections 771(5)(D)(i) and 771(5)(E) of the Act, respectively.
    Dongbu reported that it did not use the program during the POR. 
POSCO reported receiving grants through KNISTRA during the POR; 
however, it claims that the research grants it received under the 
program are tied to non-subject merchandise. Upon review of the 
information submitted by the GOK and POSCO, we preliminarily determine 
that certain grants are tied to non-subject merchandise, and thus, we 
did not include these grants in our benefit calculations. See the GOK's 
January 4, 2008, Questionnaire Response, at Exhibit G-6; POSCO's April 
18, 2008, Supplemental Questionnaire Response; and POSCO's May 8, 2008, 
Supplemental Questionnaire Response.
    However, POSCO also reported receiving certain other grants related 
to new technologies that can be applicable for both inputs of subject 
merchandise as well as subject merchandise. See POSCO's December 20, 
2007, Questionnaire Response, at Exhibit 6; and ``Memorandum to the 
File through Eric Greynolds, ``Factual Information Regarding the Steel 
Production Process'' (September 2, 2008). Some of these R&D grants were 
examined in previous reviews of this case and found to provide 
countervailable benefits to POSCO. See Corrosion-Resistant Carbon Steel 
Flat Products from the Republic of Korea: Final Results of 
Countervailing Duty Administrative Review, 73 FR 2444 (January 15, 
2008) (2005 CORE from Korea), and the accompanying Issues and Decision 
Memorandum at Comment 2 (2005 CORE from Korea Decision Memorandum). In 
this administrative review, as in the previous administrative review of 
this case, there is nothing on the record that demonstrates that the 
R&D projects in question could not be used in the production of subject 
merchandise or that this new technology is limited to the development 
of non-subject merchandise. Therefore, we find in these preliminary 
results, as in prior reviews, that the R&D grants in question provide a 
countervailable benefit to POSCO during the 2006 POR.
    In addition, in the instant review POSCO provided information on 
several R&D projects for which 2006 is the first year that a grant was 
received. The GOK's and POSCO's information with respect to the R&D 
projects initially funded in 2006 indicates that some of these grants 
are tied specifically to non-subject merchandise. See GOK's January 4, 
2008, Questionnaire Response, at Exhibit G-6; POSCO's April 18, 2008, 
Supplemental Questionnaire Response at page 1 and Exhibit G-10; and 
POSCO's May 8, 2008, Supplemental Questionnaire Response, at page 2. 
Therefore, we did not include the grants that are tied to non-subject 
merchandise in our calculations in these preliminary results. With 
respect to the other R&D grants related to projects initially funded in 
2006, there is no information provided in POSCO's questionnaire 
responses that demonstrates that the new technologies developed in this 
R&D project are limited to non-subject merchandise and could not be 
used to develop a hot-rolled technology for the subject merchandise. 
See POSCO's April 18, 2008, Supplemental Questionnaire Response at 
pages 1 and 2 and Exhibit G-10, and POSCO's May 8, 2008, Supplemental 
Questionnaire at pages 1 and 2. Moreover, with respect to another 
project initially funded in 2006, we find that this project involves 
developing methods that could be applicable to inputs to both subject 
merchandise and non-subject merchandise. Under 19 CFR 351.525(b)(5), if 
a subsidy is tied to the production or sale of a particular product, 
the Department will attribute the subsidy only to that product. But, 
under sub-paragraph (ii), if a subsidy is tied to the production of an 
input product, then the Department will attribute the subsidy to both 
the input and downstream products produced by a corporation, where the 
input is primarily dedicated to downstream products. Accordingly, we 
have attributed the grant related to a production process that can be 
used as an input into the production of subject merchandise to POSCO's 
total sales.
    To determine the benefit from the grants that POSCO received 
through KNISTRA, we calculated the GOK's contribution for each R&D 
project. Next, in accordance with 19 CFR 351.524(b)(2), we determined 
whether to allocate the non-recurring benefit from the grants over 
POSCO's AUL by dividing the approved amount by POSCO's total sales in 
the year of approval. Because the approved amounts were less than 0.5 
percent of POSCO's total sales in the year of receipt, we expensed the 
grants to the year of receipt. Next, to calculate the net subsidy rate, 
we divided the portion of the benefit allocated to the POR by POSCO's 
total f.o.b. sales during the POR. On this basis, we preliminarily 
determine POSCO's net subsidy rate under this program to be 0.01 
percent ad valorem.

D. Exemption of VAT on Imports of Anthracite Coal

    Under Article 106 of Restriction of Special Taxation Act (RSTA), 
imports of anthracite coal are exempt from the value added tax (VAT). 
In the Cold-Rolled Investigation, we determined that the program is de 
jure specific under section 771(5A)(D)(i) of the Act. Because the GOK 
allows for only a few items to be exempt from VAT, the items allowed to 
be imported without paying VAT are limited. See Cold-Rolled Decision 
Memorandum at ``Exemption of VAT on Imports of Anthracite Coal.'' We 
also determined that the VAT exemptions under the program constitute a 
financial contribution under section 771(5)(D)(ii) of the Act, as the 
GOK is not collecting revenue otherwise due, and that the exemptions 
confer a benefit under section 771(5)(E) of the Act equal to the amount 
of the VAT that would have otherwise been paid if not for the 
exemption. No new information, evidence of changed circumstances, or 
comments from interested parties were presented in this review to 
warrant any reconsideration of the countervailability of this program. 
Therefore, we preliminarily continue to find that this program is de 
jure specific within the meaning of section 771(5A)(D)(i) of the Act 
because it is limited, constitutes a financial contribution in the form 
of forgone revenue under section 771(5)(D)(ii) of the Act, and confers 
a benefit in the amount of the revenue

[[Page 52323]]

foregone within the meaning of 771(5)(E) of the Act.
    Dongbu reported that it did not use the program during the POR. 
POSCO imported anthracite coal during the POR and, therefore, received 
a benefit in the amount of the VAT that it should have otherwise paid 
if not for the exemption. To determine POSCO's benefit from the VAT 
exemption on these imports, we calculated the amount of VAT that would 
have been due absent the program on the total value of anthracite coal 
POSCO imported during the POR. We then divided the amount of this tax 
benefit by POSCO's total f.o.b. sales. Based on this methodology, we 
preliminarily determine the POSCO received a countervailable subsidy of 
0.06 percent ad valorem.

E. Other Subsidies Related to Operations at Asan Bay: Provision of Land 
and Exemption of Port Fees Under Harbor Act

1. Provision of Land
    As explained in the Cold-Rolled Investigation, the GOK's overall 
development plan is published every 10 years and describes the 
nationwide land development goals and plans for the balanced 
development of the country. Under these plans, the Ministry of 
Construction and Transportation (MOCAT) prepares and updates its Asan 
Bay Area Broad Development Plan. See Cold-Rolled Decision Memorandum at 
``Provision of Land at Asan Bay.'' The Korea Land Development 
Corporation (Koland) is a government investment corporation that is 
responsible for purchasing, developing, and selling land in the 
industrial sites. Id.
    In the Cold-Rolled Investigation, we verified that the GOK, in 
setting the price per square meter for land at the Kodai Industrial 
Estate, removed the 10 percent profit component from the price charged 
to Dongbu. Id. In the Cold-Rolled Investigation, we further explained 
that companies purchasing land at Asan Bay must make payments on the 
purchase and development of the land before the final settlement. 
However, in the case of Dongbu, we found that the GOK provided an 
adjustment to Dongbu's final payment to account for ``interest earned'' 
by the company for the pre-payments. Id. POSCO reported that it did not 
use this program.
    In the Cold-Rolled Investigation, we determined that the price 
discount and the adjustment of Dongbu's final payment to account for 
``interest earned'' by the company on its pre-payments were 
countervailable subsidies. Specifically, the Department determined that 
they were specific under section 771(5A)(D)(iii)(I) of the Act, as they 
were limited to Dongbu. Id. Further, the Department found the price 
discount and the price adjustment for ``interest earned'' constituted 
financial contributions in the form of grants under section 
771(5)(D)(i) of the Act and conferred benefits in the amount of grants 
within the meaning of section 771(5)(E) of the Act. Id. No new 
information, evidence of changed circumstances, or comments from 
interested parties were presented in this review to warrant any 
reconsideration of the countervailability of this program. Therefore, 
we preliminarily continue to find that this program is de facto 
specific within the meaning of section 771(5A)(D)(iii)(I) of the Act 
because it is limited to Dongbu, constitutes a financial contribution 
in the form of grants under sections 771(5)(D)(i), and confers a 
benefit in the amount of the price discount and the price adjustment 
within the meaning of 771(5)(E) of the Act.
    Consistent with the Cold-Rolled Investigation, we have treated the 
land price discount and the interest earned refund as non-recurring 
subsidies. Id. In accordance with 19 CFR 351.524(b)(2), because the 
grant amounts were more than 0.5 percent of the company's total sales 
in the year of receipt, we applied the Department's standard grant 
methodology, as described under 19 CFR 351.524(d)(1), and allocated the 
subsidies over a 15-year allocation period. See the ``Average Useful 
Life'' section above. To calculate the benefit from these grants, we 
used as our discount rate the rates described above in the ``Subsidies 
Valuation Information'' section. We then summed the benefits received 
by Dongbu during the POR. We calculated the net subsidy rate by 
dividing the total benefit attributable to the POR by Dongbu's total 
f.o.b. sales for the POR. On this basis, we determine a net 
countervailable subsidy rate for Dongbu of 0.20 percent ad valorem for 
the POR.
2. Exemption of Port Fees Under the Harbor Act
    Under the Harbor Act, companies are allowed to construct 
infrastructure facilities at Korean ports; however, these facilities 
must be deeded back to the government. Because the ownership of these 
facilities reverts to the government, the government compensates 
private parties for the construction of these infrastructure 
facilities. Because a company must transfer to the government its 
infrastructure investment, under the Harbor Act, the GOK grants the 
company free usage of the facility and the right to collect fees from 
other users of the facility for a limited period of time. Once a 
company has recovered its cost of constructing the infrastructure, the 
company must pay the same usage fees as other users of the 
infrastructure.
    In the Cold-Rolled Investigation, the Department found that Dongbu 
received free use of harbor facilities at Asan Bay based upon both its 
construction of a port facility as well as a road that the company 
built from its plant to its port. See Cold-Rolled Decision Memorandum 
at ``Dongbu's Excessive Exemptions under the Harbor Act.'' The 
Department also determined that Dongbu received an exemption of harbor 
fees for a period of almost 70 years under this program. See id.
    In the Cold-Rolled Investigation, the Department found the 
exemption from the fees to be a countervailable subsidy. No new 
information, evidence of changed circumstances, or comments from 
interested parties were presented in this review to warrant any 
reconsideration of the countervailability of this program. Thus, we 
preliminarily continue to find that the program is countervailable and 
is specific under section 771(5A)(D)(iii)(I) of the Act because the 
excessive exemption period of 70 years is limited to Dongbu. Moreover, 
we preliminarily determine that the GOK is foregoing revenue that it 
would otherwise collect by allowing Dongbu to be exempt from port 
charges for up to 70 years and, thus, the program constitutes a 
financial contribution within the meaning of section 771(5)(D)(ii) of 
the Act. Further, we preliminarily determine that the exemptions confer 
a benefit under section 771(5)(E) of the Act in the amount of the port 
charges that were not collected.
    In the Cold-Rolled Investigation, the Department treated the 
program as a recurring subsidy and determined that the benefit is equal 
to the average yearly amount of harbor fee exemptions provided to 
Dongbu. Id. For purposes of these preliminary results, we have employed 
the same benefit calculation. To calculate the net subsidy rate, we 
divided the average yearly amount of exemptions by Dongbu's total 
f.o.b. sales for the POR. On this basis, we preliminarily determine 
that Dongbu's net subsidy rate under this program is 0.02 percent ad 
valorem.

E. Short-Term Export Financing

    KEXIM supplies two types of short-term loans for exporting 
companies, short-term trade financing and comprehensive export 
financing. KEXIM provides short-term loans to

[[Page 52324]]

Korean exporters who manufacture export goods under export contracts. 
The loans are provided up to the amount of the bill of exchange or 
contracted amount less any amount already received. For comprehensive 
export financing loans, KEXIM supplies short-term loans to any small or 
medium-sized company, or any large company that is not included in the 
five largest conglomerates based on their comprehensive export 
performance. To obtain the loans, companies must report their export 
performance periodically to KEXIM for review. Comprehensive export 
financing loans cover from 50 to 90 percent of the company's export 
performance; however, the maximum loan amount is restricted to 30 
billion won. In Steel Products from Korea, the Department determined 
that the GOK's short-term export financing program was countervailable. 
See Final Affirmative Countervailing Duty Determinations and Final 
Negative Critical Circumstances Determinations: Certain Steel Products 
From Korea, 58 FR 37338, 37350 (July 9, 1993) (Steel Products from 
Korea); see also, Cold-Rolled Decision Memorandum at ``Short-Term 
Export Financing.'' No new information, evidence of changed 
circumstances, or comments from interested parties were presented in 
this review to warrant any reconsideration of the countervailability of 
this program. Therefore, we continue to find this program 
countervailable. Specifically, we preliminarily determine that the 
program is specific, pursuant to section 771(5A)(B) of the Act, because 
receipt of the financing is contingent upon exporting. In addition, we 
preliminarily determine that the export financing constitutes a 
financial contribution in the form of a loan within the meaning of 
section 771(D)(i) of the Act and confers a benefit within the meaning 
of section 771(E)(ii) of the Act. POCOS, POSCO's affiliate, and Dongbu 
reported using short-term export financing during the POR.
    Pursuant to 19 CFR 351.505(a)(1), to calculate the benefit under 
this program, we compared the amount of interest paid under the program 
to the amount of interest that would have been paid on a comparable 
commercial loan. As our benchmark, we used the short-term interest 
rates discussed above in the ``Subsidies Valuation Information'' 
section. To calculate the net subsidy rate, we divided the benefit by 
the f.o.b. value of the respective company's total exports. On this 
basis, we determine the net subsidy rate to be less than 0.005 percent 
ad valorem for POSCO and less than 0.005 percent ad valorem for Dongbu.

II. Program Preliminarily Determined Not To Confer a Benefit During the 
POR

A. Reserve for Research and Manpower Development Fund Under RSTA 
Article 9 (Formerly Article 8 of TERCL)

    On December 28, 1998, the TERCL was replaced by the Tax Reduction 
and Exemption Control Act (RSTA). Pursuant to this change in law, TERCL 
Article 8 is now identified as RSTA Article 9. Apart from the name 
change, the operation of RSTA Article 9 is the same as the previous 
TERCL Article 8 and its Enforcement Decree.
    This program allows a company operating in manufacturing or mining, 
or in a business prescribed by the Presidential Decree, to appropriate 
reserve funds to cover expenses related to the development or 
innovation of technology. These reserve funds are included in the 
company's losses and reduce the amount of taxes paid by the company. 
Under this program, capital goods companies and capital intensive 
companies can establish a reserve of five percent of total revenue, 
while companies in all other industries are only allowed to establish a 
three-percent reserve.
    In a prior segment of this proceeding, we determined that this 
program is specific under section 771(5A)(D)(i) of the Act because the 
capital goods industry is allowed to claim a larger tax reserve under 
this program than all other manufacturers. See Certain Corrosion-
Resistant Carbon Steel Flat Products from the Republic of Korea: 
Preliminary Results of Countervailing Duty Administrative Review, 72 FR 
51602, 51607-08 (2005 Preliminary Results of CORE from Korea) 
(unchanged in 2005 CORE from Korea. We also determined that this 
program provides a financial contribution within the meaning of section 
771(5)(D)(ii) of the Act in the form of revenue forgone and that it 
provides a benefit under section 771(5)(E) of the Act to the extent 
that companies in the capital goods industry, which includes steel 
manufacturers, pay less in taxes than they would absent the program. 
Id. In 2005 Preliminary Results of CORE from Korea, we continued to 
find the program countervailable, but found that the companies under 
investigation only contributed to the reserve at the lower three-
percent rate. Therefore, we found no countervailable benefit because 
the companies contributed at the lower rate, which was available to any 
Korean company. Id. No new information, or evidence of changed 
circumstances, was presented in this review to warrant reconsideration 
of the approaches adopted in the 2005 Preliminary Results of CORE from 
Korea.
    In this administrative review, POSCO and POCOS each reported 
contributing to the reserve at the three-percent rate during the POR. 
We continue to find this program to be potentially countervailable. 
However, as each company contributed to the reserve at the lower three-
percent rate, and in light of the Department's approach in 2005 
Preliminary Results of CORE from Korea, we preliminarily determine that 
no countervailable benefits were conferred under this program during 
the POR. Dongbu reported that it did not use this program during the 
POR.

B. Long-Term Lending Provided by the KDB and Other GOK-Owned 
Institutions From 2002 to 2006

    In the CFS Paper Investigation, we found that long-term loans 
issued by such GOK institutions as the KDB constitute a financial 
contribution within the meaning of section 771(5)(D)(i) of the Act and 
a benefit under section 771(5)(E) of the Act to the extent that 
interest payments on the government loans are lower than what would 
have been paid on comparable commercial loans. Regarding specificity, 
we found that long-term loans from the KDB are not de jure specific 
within the meaning of sections 771(5A)(D)(i) and (ii) of the Act 
because (1) they are not based on exportation, (2) they are not 
contingent on the use of domestic goods over imported goods, and (3) 
the legislation and/or regulations do not expressly limit access to the 
subsidy to an enterprise or industry, or groups thereof, as a matter of 
law. We then examined whether such loans were specific as a matter of 
fact under section 771(5A)(D)(iii) of the Act, that is, whether the 
program is de facto specific. We found that there was no evidence 
indicating that these loans were de facto specific. See CFS Paper 
Decision Memorandum at ``Long-Term Lending Provided by the KDB and 
Other GOK-Owned Institutions.''
    Dongbu reported receiving long-term loans from a GOK-owned bank 
after 2001. However, upon calculating the benefit to Dongbu during the 
POR by applying the benchmark interest rates described above, we 
preliminarily determine that any potential benefit to Dongbu during 
this POR is less than 0.005 percent As explained in CFS from China 
Investigation and CFS from China Decision Memorandum, where the 
countervailable subsidy rate for a program is less than 0.005 percent, 
the program is not included in the total

[[Page 52325]]

CVD rate. Hence, we preliminarily find that these loans do not confer a 
measurable benefit to Dongbu. Accordingly, it is unnecessary to make a 
finding as to the countervailability of this program for this POR. We 
will include an examination of this program in a future administrative 
review. POSCO and POSCOS reported that they did not receive any such 
lending after 2001.

C. D/A Loans Issued by the KDB and Other Government-Owned Banks

    In the CFS Investigation, the Department determined that D/A loans 
from the KDB and other government-owned banks constitute a financial 
contribution in the form of a direct transfer of funds within the 
meaning of section 771(5)(D)(i) of the Act. In addition, we determined 
that such loans confer a benefit, in accordance with section 
771(5)(E)(ii) of the Act, to the extent the amount exporters pay under 
the program is less than the amount they would pay on comparable 
commercial loans they could obtain on the market. Because receipt of D/
A loans is contingent upon export performance, we also determined that 
D/A loans from the KDB and other government-owned banks are specific 
within the meaning of section 771(5A)(B) of the Act. See CFS Paper 
Decision Memorandum at ``D/A Loans Issued by KDB and Other Government-
Owned Banks.''
    Dongbu reported receiving short-term D/A financing from a 
government-owned bank during the POR. To calculate the benefit, we 
compared the amount of interest paid on the government loans to the 
amount of interest that would have been paid on comparable commercial 
short-term financing that could have been obtained on the market. See 
19 CFR 351.505(a). We calculated the benefit to Dongbu by applying the 
benchmark interest rates described above. Because loans under this 
program are discounted (i.e., interest is paid up front at the time the 
loans are received), the effective rate paid by respondents on their D/
A loans is a discounted rate. Therefore, it was necessary to derive a 
discounted benchmark interest rate from respondents' respective 
company-specific weighted-average interest rates for short-term 
commercial loans. Because the benchmark interest rate was lower than 
the interest rates paid by Dongbu, we calculated a net subsidy rate of 
0.00 percent ad valorem for Dongbu. Therefore, as explained above, it 
is unnecessary to make a finding as to the countervailability of this 
program for this POR. POSCO and POCOS did not report any D/A financing 
from government-owned banks during the POR. We will include an 
examination of this program in a future administrative review.

D. Document Acceptance (D/A) Financing Provided Under KEXIM's Trade 
Rediscount Program

    Under section 771(5)(B)(iii) of the Act, a subsidy can be found 
whenever the government ``makes a payment to a funding mechanism to 
provide a financial contribution, or entrusts or directs a private 
entity to make a financial contribution* * * to a person and a benefit 
is thereby conferred.'' In the CFS Investigation, we determined that 
KEXIM's trade bill rediscount program constitutes a payment to a 
funding mechanism because the rediscount ceiling KEXIM provides to 
banks participating under the program is contingent on banks 
subsequently lending the funds to exporters. Section 771(5)(B)(iii) of 
the Act also states that financial contributions from funding 
mechanisms can be a subsidy only if providing the contribution would 
normally be vested in the government and the practice does not differ 
in substance from practices normally followed by the government. This 
is the ``government subsidy function'' prong of an indirect financial 
contribution. Here, the banks are performing a government subsidy 
function and, therefore, their loans can qualify as subsidies. 
Therefore, we find that loans from banks under the rediscount program 
constitute financial contributions within the meaning of section 
771(5)(D)(i) of the Act and confer a benefit upon exporters, in 
accordance with section 771(5)(E)(ii) of the Act, to the extent the 
amount exporters pay under the program is less than the amount they 
would pay on comparable commercial loans they could obtain on the 
market. Because receipt of the loans is contingent upon export 
performance, we also determine that KEXIM's rediscount program is 
specific within the meaning of section 771(5A)(B) of the Act. We 
further found that subsidies on the loans under KEXIM's trade bill 
rediscount program are tied to sales of subject merchandise to the 
United States in accordance with 19 CFR 351.525(b)(4) and (5). 
Accordingly, we limited our benefit calculations to D/A loans issued on 
sales of subject merchandise to the United States. See CFS Paper 
Decision Memorandum at ``Export Loans by Commercial Banks Under KEXIM's 
Trade Bill Rediscounting Program.''
    Dongbu reported receiving short-term D/A financing from commercial 
banks that participated in KEXIM's Trade Rediscount Program during the 
POR. To calculate the benefit to Dongbu under this program, we compared 
the amount that Dongbu paid on all of its D/A loans from commercial 
banks outstanding during the POI to the amount it would pay on 
comparable commercial short-term financing that it could obtain on the 
market. See 19 CFR 351.505(a). We calculated the benefit to Dongbu by 
applying the benchmark interest rates described above. Because loans 
under this program are discounted (i.e., interest is paid up front at 
the time the loans are received), the effective rate paid by 
respondents on their D/A loans is a discounted rate. Because the 
benchmark interest rate was lower than the interest rates paid by 
Dongbu, we calculated a net subsidy rate of 0.00 percent ad valorem for 
Dongbu. Therefore, as explained above, it is unnecessary to make a 
finding as to the countervailability of this program for this POR. 
POSCO and POCOS did not report any D/A financing from commercial banks 
during the POR. We will include an examination of this program in a 
future administrative review.

III. Programs Preliminarily Determined To Be Not Used

A. Overseas Resources Development Program

    The GOK enacted the Overseas Resource Development Business Act in 
order to establish the foundation for ensuring the long-term secure 
supply of essential energy and major material minerals, which are 
mostly imported because of scarce domestic resources. Pursuant to 
Article 11 of this Act, the Ministry of Commerce, Industry and Energy 
(MOCIE) annually announces its budget and the eligibility criteria to 
obtain an overseas resource development (ORD) loan. Any company that 
meets the eligibility criteria may apply for an ORD loan to MOCIE. The 
eligibility criteria for receiving an ORD loan are that the loan should 
be used for surveying, exploration, development, production, 
engineering services and financing for the development of overseas 
natural resources. The applicant submits its ORD plans to MOCIE in 
accordance with the Overseas Resources Development Business Act. MOCIE 
requests that the Korean Resources Corporation (KORES), a public 
corporation that is wholly owned by the GOK, conduct an eligibility 
review, feasibility study and credit evaluation. KORES was established 
in 1967 and has assumed a direct role in establishing and implementing 
the GOK's resources development policy, whose purpose is to secure 
mineral

[[Page 52326]]

resources for Korea. In the selection process, KORES uses a loan 
evaluation committee to select the recipients based on the criteria for 
the project to develop strategic minerals (e.g., bituminous coal, 
uranium, iron ore, copper, zinc, nickel, etc.), including co-
development with resource-owning countries, mining right of minerals, 
etc. KORES provides the evaluation result and its recommendation to 
MOCIE. If the result and recommendation are favorable, MOCIE approves 
the loan application and provides funds to KORES. KORES then lends the 
funds to the company for foreign resource development.
    During the POR, POSCO reported in its December 20, 2007, 
Questionnaire Response that it received ORD loans. POSCO's loans were 
related to an investment in a nickel mine. Nickel is not an input used 
in the production of subject merchandise. Therefore, we preliminarily 
determine that POSCO did not use this program with respect to the 
subject merchandise during the POR. We will continue to examine this 
program in future reviews.
B. Reserve for Investment (Special Cases of Tax for Balanced 
Development Among Areas Under TERCL Articles 41-45)
C. Electricity Discounts Under the Requested Loan Adjustment Program
D. Electricity Discounts Under the Emergency Load Reductions Program
E. Export Industry Facility Loans and Specialty Facility Loans
F. Reserve for Export Loss Under TERCL Article 16
G. Reserve for Overseas Market Development Under TERCL Article 17
H. Reserve for Export Loss Under TERCL Article 22
I. Exemption of Corporation Tax on Dividend Income from Overseas 
Resources Development Investment Under TERCL Article 24
J. Tax Credits for Temporary Investments Under TERCL Article 27
K. Tax Credits for Specific Investments Under TERCL Article 71
L. RSTA Article 94: Equipment Investment to Promote Worker's Welfare 
Under TERCL Article 88
M. Equipment Investment to Promote Worker's Welfare Under TERCL 
Article 88
N. Emergency Load Reduction Program
O. Local Tax Exemption on Land Outside of a Metropolitan Area
P. Short-Term Trade Financing Under the Aggregate Credit Ceiling 
Loan Program Administered by the Bank of Korea
Q. Industrial Base Fund
R. Excessive Duty Drawback
S. Private Capital Inducement Act
T. Social Indirect Capital Investment Reserve Funds Under TERCL 
Article 28
U. Energy-Savings Facilities Investment Reserve Funds Under TERCL 
Article 29
V. Scrap Reserve Fund
W. Special Depreciation of Assets on Foreign Exchange Earnings
X. Export Insurance Rates Provided by the Korean Export Insurance 
Corporation
Y. Loans from the National Agricultural Cooperation Federation
Z. Tax Incentives from Highly Advanced Technology Businesses Under 
the Foreign Investment and Foreign Capital Inducement Act

Preliminary Results of Review

    In accordance with 19 CFR 351.221(b)(4)(i), we calculated an 
individual subsidy rate for each of the producer/exporters subject to 
this administrative review. For the period January 1, 2006, through 
December 31, 2006, we preliminarily determine the net subsidy rate for 
POSCO to be 0.09 percent ad valorem and for Dongbu to be 0.22 percent 
ad valorem, both of which are de mimimis. See 19 CFR 351.106(c)(1).
    The Department intends to issue assessment instructions to U.S. 
Customs and Border Protection (CBP) 15 days after the date of 
publication of the final results of this review. If the final results 
remain the same as these preliminary results, the Department will 
instruct CBP to liquidate without regard to countervailable duties all 
shipments of subject merchandise produced by POSCO and Dongbu, entered, 
or withdrawn from warehouse, for consumption from January 1, 2006 
through December 31, 2006. The Department will also instruct CBP not to 
collect cash deposits of estimated countervailing duties on shipments 
of the subject merchandise produced by POSCO and Dongbu, entered, or 
withdrawn from warehouse, for consumption on or after the date of 
publication of the final results of this review.
    We will instruct CBP to continue to collect cash deposits for non-
reviewed companies at the most recent company-specific or country-wide 
rate applicable to the company. Accordingly, the cash deposit rates 
that will be applied to companies covered by this order, but not 
examined in this review, are those established in the most recently 
completed administrative proceeding for each company. These rates shall 
apply to all non-reviewed companies until a review of a company 
assigned these rates is requested.

Public Comment

    Pursuant to 19 CFR 351.224(b), the Department will disclose to 
parties to the proceeding any calculations performed in connection with 
these preliminary results within five days after the date of the public 
announcement of this notice. Pursuant to 19 CFR 351.309, interested 
parties may submit written comments in response to these preliminary 
results. Unless otherwise indicated by the Department, case briefs must 
be submitted within 30 days after the publication of these preliminary 
results. See 19 CFR 351.309(c)(1)(ii). Rebuttal briefs, which are 
limited to arguments raised in case briefs, must be submitted no later 
than five days after the time limit for filing case briefs, unless 
otherwise specified by the Department. See 19 CFR 351.309(d)(1). 
Parties who submit argument in this proceeding are requested to submit 
with the argument: (1) A statement of the issue; and (2) a brief 
summary of the argument. Parties submitting case and/or rebuttal briefs 
are requested to provide the Department copies of the public version on 
disk. Case and rebuttal briefs must be served on interested parties in 
accordance with 19 CFR 351.303(f). Also, pursuant to 19 CFR 351.310(c), 
within 30 days of the date of publication of this notice, interested 
parties may request a public hearing on arguments to be raised in the 
case and rebuttal briefs. Unless the secretary specifies otherwise, the 
hearing, if requested, will be held two days after the date for 
submission of rebuttal briefs.
    Pursuant to 19 CFR 351.305(b)(4), representatives of parties to the 
proceeding may request disclosure of proprietary information under 
administrative protective order no later than 10 days after the 
representative's client or employer becomes a party to the proceeding, 
but in no event later than the date the case briefs, under 19 CFR 
351.309(c)(i), are due. The Department will publish the final results 
of this administrative review, including the results of its analysis of 
issues raised in any case or rebuttal brief or at a hearing.
    These preliminary results of review are issued and published in 
accordance with sections 7519(a)(1) and 777(i)(1) of the Act and 19 CFR 
351.221(b)(4).

    Dated: September 2, 2008.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E8-20918 Filed 9-8-08; 8:45 am]
BILLING CODE 3510-DS-P
```