[Federal Register Volume 73, Number 175 (Tuesday, September 9, 2008)]
[Notices]
[Pages 52267-52272]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-20920]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-580-816]


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

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

SUMMARY: In response to requests from petitioners,\1\ the Department of 
Commerce (the Department) is conducting the fourteenth administrative 
review of the antidumping order on corrosion-resistant carbon steel 
flat products (CORE) from the Republic of (Korea). This review covers 
seven manufacturers and exporters (collectively, the respondents) of 
the subject merchandise: LG Chem., Ltd. (LG), Haewon MSC Co. Ltd. 
(Haewon), Dongkuk Industries Co., Ltd. (Dongkuk), Dongbu Steel Co., 
Ltd., (Dongbu); Hyundai HYSCO (HYSCO); Pohang Iron & Steel Co., Ltd. 
(POSCO) and Pohang Coated Steel Co., Ltd. (POCOS) (collectively, the 
POSCO Group); and Union Steel Manufacturing Co., Ltd. (Union). The 
period of review (POR) is August 1, 2006, through July 31, 2007. We 
preliminarily determine that during the POR, Dongbu, HYSCO, the POSCO 
Group, and Union, made sales of subject merchandise at less than normal 
value (NV). In addition, based on the preliminary results for the 
respondents

[[Page 52268]]

selected for individual review, we have preliminarily determined a 
weighted-average margin for those companies that were not selected for 
individual review. If these preliminary results are adopted in the 
final results of this administrative review, we will instruct U.S. 
Customs and Border Protection (CBP) to assess antidumping duties on all 
appropriate entries of subject merchandise during the POR.
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    \1\ Petitioners are the United States Steel Corporation (U.S. 
Steel), Nucor Corporation (Nucor), and Mittal Steel USA ISG, Inc. 
(Mittal Steel USA).

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DATES: Effective Date: September 9, 2008.

FOR FURTHER INFORMATION CONTACT: Jolanta Lawska (Union), Cindy Robinson 
(Dongbu), Christopher Hargett (HYSCO) and Victoria Cho (the POSCO 
Group, and non-selected companies), AD/CVD Operations, Office 3, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 
20230; telephone: (202) 482-8362, (202) 482-3797, (202) 482-4161, and 
(202) 482-5075, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On August 19, 1993, the Department published the antidumping order 
on CORE from Korea. See Antidumping Duty Orders on Certain Cold-Rolled 
Carbon Steel Flat Products and Certain Corrosion-Resistant Carbon Steel 
Flat Products from Korea, 58 FR 44159 (August 19, 1993) (Orders on 
Certain Steel from Korea). On August 2, 2007, we published in the 
Federal Register the Antidumping or Countervailing Duty Order, Finding, 
or Suspended Investigation; Opportunity to Request Administrative 
Review, 72 FR 42383 (August 2, 2007). On August 31, 2007, respondents 
and petitioners requested a review of Dongbu, HYSCO, the POSCO Group, 
Union, Dongkuk, Haewon and LG. The Department initiated this review on 
September 19, 2007. See Initiation of Antidumping and Countervailing 
Duty Administrative Reviews and Requests for Revocation in Part, 72 FR 
54428 (September 25, 2007).
    On December 6, 2007, the Department selected Dongbu, HYSCO, the 
POSCO Group and Union as mandatory respondents in this review. See 
Memorandum from Christopher Hargett, International Trade Compliance 
Analyst, through James Terpstra, Program Manager, to Melissa Skinner, 
Director, Office 3, entitled ``2006-2007 Antidumping Duty 
Administrative Review of Corrosion-Resistant Carbon Steel Flat Products 
from the Republic of Korea: Selection of Respondents for Individual 
Review,'' dated December 6, 2007. The Department indicated that it 
would calculate a weighted-average of the mandatory respondents' 
margins to apply to those companies not selected for individual 
examination.
    During the most recently completed segments of the proceeding in 
which Dongbu, HYSCO, the POSCO Group, and Union participated,\2\ the 
Department disregarded sales below the cost of production (COP) that 
failed the cost test. Therefore, pursuant to section 773(b)(2)(A)(ii) 
of the Tariff Act of 1930, as amended (the Act), we had reasonable 
grounds to believe or suspect that sales by these companies of the 
foreign like product under consideration for the determination of NV in 
this review were made at prices below the COP. We instructed Dongbu, 
HYSCO, the POSCO Group, and Union to respond to sections A-D of the 
initial questionnaire,\3\ which we issued on December 6, 2007.
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    \2\ See Certain Corrosion-Resistant Carbon Steel Flat Products 
from the Republic of Korea: Notice of Preliminary Results of 
Antidumping Duty Administrative Review, 71 FR 53370, 53375 
(September 11, 2006) (unchanged in Notice of Final Results of the 
Twelfth Administrative Review of the Antidumping Duty Order on 
Certain Corrosion-Resistant Carbon Steel Flat Products from the 
Republic of Korea, 72 FR 13086 (March 20, 2007); and Certain 
Corrosion-Resistant Carbon Steel Flat Products from the Republic of 
Korea; Notice of Amended Final Results of the Twelfth Administrative 
Review, 72 FR 20815 (April 26, 2007)).
    \3\ Section A: Organization, Accounting Practices, Markets and 
Merchandise.
    Section B: Comparison Market Sales.
    Section C: Sales to the United States.
    Section D: Cost of Production and Constructed Value.
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    On May 2, 2008, the Department published a notice extending the 
time period for issuing the preliminary results of the fourteenth 
administrative review to September 2, 2008. See Corrosion-Resistant 
Carbon Steel Flat Products from the Republic of Korea: Extension of 
Time Limits for the Preliminary Results of Antidumping Duty 
Administrative Review, 73 FR 24220 (May 2, 2008).

Dongbu

    On January 22, 2008, Dongbu submitted its section A response to the 
initial questionnaire. On February 5, 2008, Dongbu submitted its 
sections B-D response to the initial questionnaire. On July 14, 2007, 
Dongbu submitted its supplemental questionnaire response for sections 
A-D.

HYSCO

    On February 4, 2008, HYSCO submitted its section A-D response to 
the Department's initial questionnaire. HYSCO submitted its responses 
to the Department's two section A-D supplemental questionnaires on May 
15, 2008, and June 19, 2008, respectively.

The POSCO Group

    On February 4, 2008, the POSCO Group submitted its sections A-D 
response to the Department's initial questionnaire. On June 10, 2008, 
the POSCO Group submitted its sections A-C supplemental questionnaire 
responses. The POSCO Group submitted its section D supplemental 
questionnaire responses on June 12, 2008, June 18, 2008, and July 29, 
2008, respectively.
    On August 31, 2007, the POSCO Group requested revocation, in part, 
of the antidumping duty order of CORE from Korea with respect to the 
POSCO Group. On June 11, 2008, the POSCO Group withdrew its request for 
revocation and continued to participate as a mandatory respondent in 
this proceeding.
    On January 22, 2008, Union submitted its section A response to the 
initial questionnaire. On February 4, 2008, Union submitted its 
sections B-C response to the initial questionnaire. Union submitted its 
response to the Department's sections A-D supplemental questionnaire on 
July 16, 2008.

Period of Review

    The POR covered by this review is August 1, 2006, through July 31, 
2007.

Scope of the Order

    This order covers flat-rolled carbon steel products, of rectangular 
shape, either clad, plated, or coated with corrosion-resistant metals 
such as zinc, aluminum, or zinc-, aluminum-, nickel-or iron-based 
alloys, whether or not corrugated or painted, varnished or coated with 
plastics or other nonmetallic substances in addition to the metallic 
coating, in coils (whether or not in successively superimposed layers) 
and of a width of 0.5 inch or greater, or in straight lengths which, if 
of a thickness less than 4.75 millimeters, are of a width of 0.5 inch 
or greater and which measure 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 measure at least twice the thickness, as currently 
classifiable in the Harmonized Tariff Schedule of the United States 
(HTSUS) under item numbers 7210.30.0030, 7210.30.0060, 7210.41.0000, 
7210.49.0030, 7210.49.0090, 7210.49.0091, 7210.49.0095, 7210.61.0000, 
7210.69.0000, 7210.70.6030, 7210.70.6060, 7210.70.6090, 7210.90.1000, 
7210.90.6000,

[[Page 52269]]

7210.90.9000, 7212.20.0000, 7212.30.1030, 7212.30.1090, 7212.30.3000, 
7212.30.5000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 7212.60.0000, 
7215.90.1000, 7215.90.3000, 7215.90.5000, 7217.20.1500, 7217.30.1530, 
7217.30.1560, 7217.90.1000, 7217.90.5030, 7217.90.5060, and 
7217.90.5090. Included in the order are flat-rolled products of non-
rectangular cross-section where such cross-section is achieved 
subsequent to the rolling process including products which have been 
beveled or rounded at the edges (i.e., products which have been 
``worked after rolling''). Excluded from this order are flat-rolled 
steel products either plated or coated with tin, lead, chromium, 
chromium oxides, both tin and lead (``terne plate''), or both chromium 
and chromium oxides (``tin-free steel''), whether or not painted, 
varnished or coated with plastics or other nonmetallic substances in 
addition to the metallic coating. Also excluded from this order are 
clad products in straight lengths of 0.1875 inch or more in composite 
thickness and of a width which exceeds 150 millimeters and measures at 
least twice the thickness. Also excluded from this order are certain 
clad stainless flat-rolled products, which are three-layered corrosion-
resistant carbon steel flat-rolled products less than 4.75 millimeters 
in composite thickness that consist of a carbon steel flat-rolled 
product clad on both sides with stainless steel in a 20%-60%-20% ratio.
    These HTSUS item numbers are provided for convenience and customs 
purposes. The written descriptions remain dispositive.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
CORE products produced by the respondents, covered by the scope of the 
order, and sold in the home market during the POR to be foreign like 
products for the purpose of determining appropriate product comparisons 
to CORE sold in the United States.
    Where there were no sales in the ordinary course of trade of 
identical merchandise in the home market to compare to U.S. sales, we 
compared U.S. sales to the next most similar foreign like product on 
the basis of the characteristics listed in Appendix V of the 
Department's antidumping questionnaire. In making the product 
comparisons, we matched foreign like products based on the Appendix V 
physical characteristics reported by each respondent.

Collapsing the POSCO Group and Union

    On April 9, 2008, U.S. Steel submitted comments asking the 
Department to seek additional information regarding the POSCO Group's 
and Union's interest in each other's company. We have received 
additional information from the POSCO Group and Union. Based on our 
analysis of the facts of this case and the evidence on the record, we 
will treat the POSCO Group and Union as separate entities for these 
preliminary results. While the POSCO Group and Union are affiliated 
pursuant to section 771(33)(E) of the Act, we have determined that the 
criteria for 19 CFR 351.401(f) have not been satisfied. Therefore, for 
these preliminary results, the Department will not collapse the POSCO 
Group and Union. Due to the proprietary nature of this issue, see the 
collapsing memo.\4\
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    \4\ See the Department's September 2, 2008, Memorandum from the 
Team to Melissa Skinner, Director, AD/CVD Operations, Office 3, 
titled, ``Whether to Collapse the Antidumping Duty Order with 
Respect to Subject Merchandise Produced and Exported by Pohang Iron 
& Steel Co., Ltd. (POSCO) and Pohang Coated Steel Co., Ltd. (POCOS) 
(collectively, the POSCO Group); and Union Steel Manufacturing Co. 
Ltd. (Union)'' (the collapsing memo).
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Normal Value Comparisons

    To determine whether sales of CORE by the respondents to the United 
States were made at less than NV, we compared the Export Price (EP) or 
Constructed Export Price (CEP) to the NV, as described in the ``Export 
Price/Constructed Export Price'' and ``Normal Value'' sections of this 
notice. In accordance with section 777A(d)(2) of the Act, we calculated 
monthly weighted-average prices for NV and compared these to individual 
U.S. transactions.

Export Price/Constructed Export Price

    For the price to the United States, we used, as appropriate, EP or 
CEP, in accordance with sections 772(a) and (b) of the Act. We 
calculated EP when the merchandise was sold by the producer or exporter 
outside of the United States directly to the first unaffiliated 
purchaser in the United States prior to importation and when CEP was 
not otherwise warranted based on the facts on the record. We calculated 
CEP for those sales where a person in the United States, affiliated 
with the foreign exporter or acting for the account of the exporter, 
made the sale to the first unaffiliated purchaser in the United States 
of the subject merchandise.
    In determining whether to classify U.S. sales as either EP or CEP 
sales, the Department must examine the totality of the circumstances 
surrounding the U.S. sales process, and assess where the reviewed sales 
or agreements of sale were made for purposes of section 772(b) of the 
Act. In accordance with section 772(c)(2) of the Act, we made 
deductions, where appropriate, for movement expenses including inland 
freight from plant or warehouse to port of exportation, foreign 
brokerage, handling and loading charges, export duties, international 
freight, marine insurance, U.S. inland freight expenses, warehousing, 
and U.S. duties.
    In accordance with section 772(a) of the Act, we calculated EP for 
a number of Union's and HYSCO's U.S. sales because these sales were 
made before the date of importation and were sales directly to 
unaffiliated customers in the United States, and because CEP 
methodology was not otherwise indicated. We based EP on the packed and/
or delivered duty paid prices to unaffiliated customers in the United 
States. We made deductions for movement expenses in accordance with 
section 772(c)(2)(A) of the Act, which included, where appropriate, 
foreign inland freight from the mill to the U.S. border, inland freight 
from the border to the customer or warehouse, and U.S. brokerage and 
handling. We adjusted for direct expenses (credit expenses) in 
accordance with section 772(c)(2)(A) of the Act.
    In accordance with section 772(b) of the Act, we calculated CEP 
sales where the record established that sales made by Dongbu, HYSCO, 
the POSCO Group, and Union were made in the United States after 
importation. Dongbu's, HYSCO's, the POSCO Group's, and Union's 
respective affiliates in the United States (1) took title to the 
subject merchandise and (2) invoiced and received payment from the 
unaffiliated U.S. customers for their sales of the subject merchandise 
to those U.S. customers. Thus, where appropriate, the Department has 
determined that these U.S. sales should be classified as CEP 
transactions under section 772(b) of the Act. Where appropriate, we 
also made deductions from the starting price for foreign inland 
freight, foreign inland insurance, foreign brokerage and handling, 
international freight, marine insurance, U.S. warehousing expenses, 
U.S. wharfage, U.S. inland freight, U.S. brokerage and handling, 
loading expenses, other U.S. transportation expenses, U.S. customs 
duties, commissions, credit expenses, letter of credit expenses, 
warranty expenses, other direct selling expenses, inventory

[[Page 52270]]

carrying costs incurred in the United States, and other indirect 
selling expenses in the country of manufacture and the United States 
associated with economic activity in the United States. See section 
772(c)(2)(A) of the Act. Pursuant to section 772(d)(3) of the Act, we 
made an adjustment for CEP profit. Where appropriate, we added interest 
revenue to the gross unit price.
    Consistent with the Department's normal practice, for Union we 
added the reported duty drawback to the gross unit price. We did so in 
accordance with the Department's long-standing test, which requires 
that: (1) The import duty and rebate be directly linked to, and 
dependent upon, one another; and (2) the company claiming the 
adjustment demonstrates that there were sufficient imports of imported 
raw materials to account for the duty drawback received on the exports 
of the manufactured product. See Certain Polyethylene Terephthalate 
Film, Sheet and Strip From India: Preliminary Results of Antidumping 
Duty Administrative Review, 72 FR 44086, 44087 (August 7, 2007) 
(unchanged in Certain Polyethylene Terephthalate Film, Sheet and Strip 
from India: Final Results of Antidumping Duty Administrative Review, 73 
FR 7252 (February 7, 2008)); see also section 772(c)(1)(B) of the Act.

HYSCO's Sales of Subject Merchandise That Were Further Manufactured and 
Sold as Non-Subject Merchandise in the United States

    In its Section A questionnaire response and its June 19, 2008 
submission, HYSCO requested that the Department excuse it from 
reporting information for certain POR sales of subject merchandise 
imported by its wholly owned U.S. subsidiary, HYSCO America Company 
(HAC), that were further manufactured after importation and sold as 
non-subject merchandise in the United States, claiming that determining 
CEP for sales through HAC would be unreasonably burdensome.
    Section 772(e) of the Act provides that when the value added in the 
United States by an affiliated party is likely to exceed substantially 
the value of the subject merchandise, the Department shall use one of 
the following prices to determine CEP if there is a sufficient quantity 
of sales to provide a reasonable basis of comparison and the use of 
such sales is appropriate: (1) The price of identical subject 
merchandise sold by the exporter or producer to an unaffiliated person; 
or (2) the price of other subject merchandise sold by the exporter or 
producer to an unaffiliated person.
    The record evidence shows that the value added by the affiliated 
party to the subject merchandise after importation in the United States 
was significantly greater than the 65 percent threshold we use in 
determining whether the value added in the United States by an 
affiliated party substantially exceeds the value of the subject 
merchandise. See 19 CFR 351.402(c)(2); see also HYSCO's Second 
Supplemental Sections A-C Response, dated June 19, 2008, at S-6. We 
then considered whether there were sales of identical subject 
merchandise or other subject merchandise sold in sufficient quantities 
by the exporter or producer to an unaffiliated person that could 
provide a reasonable basis of comparison. In addition to the sales to 
HAC that were further manufactured, HYSCO also had CEP sales of 
similar, but not identical, subject merchandise to unaffiliated 
customers in the United States in back-to-back transactions through 
another HYSCO affiliate in the United States, Hyundai HYSCO USA (HHU), 
and EP sales through an unaffiliated trading company.
    Decisions as to the appropriate methodology for determining CEP for 
sales involving further manufacturing generally must be made on a case-
by-case basis. In this instance, we find that there is a reasonable 
quantity of sales of identical or other subject merchandise to an 
unaffiliated person. See ``Calculation Memorandum for Hyundai HYSCO,'' 
dated September 2, 2008. Further, another reasonable method for 
determining CEP for the HAC CEP sales is not evident. In this case, 
HYSCO reported that the value added after importation is very large and 
the further manufacturing very complex. See HYSCO's Second Supplemental 
Sections A-C Response, dated June 19, 2008, at S-6. Therefore, 
consistent with the previous administrative review of CORE from Korea, 
and similar to our practice in other cases,\5\ we relied on HYSCO's 
other sales of similar merchandise to unaffiliated parties in the 
United States as the basis for calculating CEP for HYSCO's sales 
through HAC.
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    \5\ See, e.g., Certain Corrosion-Resistant Carbon Steel Flat 
Products from the Republic of Korea: Notice of Preliminary Results 
and Partial Rescission of Antidumping Duty Administrative Review, 72 
FR 51584, 51587 (September 10, 2007) (unchanged in Certain 
Corrosion-Resistant Carbon Steel Flat Products from the Republic of 
Korea: Notice of Final Results of the Thirteenth Administrative 
Review, 73 FR 14220 (March 17, 2008); Certain Hot-Rolled Carbon 
Steel Flat Products from the Netherlands; Final Results of 
Antidumping Duty Administrative Reviews, 72 FR 28676 (May 22, 
2007)).
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Normal Value

    Based on a comparison of the aggregate quantity of home market and 
U.S. sales, we determined that the quantity of the foreign like product 
sold in the exporting country was sufficient to permit a proper 
comparison with the sales of the subject merchandise to the United 
States, pursuant to section 773(a) of the Act. Therefore, in accordance 
with section 773(a)(1)(B)(i) of the Act, we based NV on the price at 
which the foreign like product was first sold for consumption in the 
home market, in the usual commercial quantities and in the ordinary 
course of trade.
    Where appropriate, we deducted rebates, discounts, inland freight 
(offset, where applicable, by freight revenue), inland insurance, and 
packing. Additionally, we made adjustments to NV, where appropriate, 
for credit expenses, warranty expenses, post-sale warehousing, and 
differences in weight basis. We also made adjustments, where 
appropriate, for home market indirect selling expenses and inventory 
carrying costs to offset U.S. commissions.
    We also increased NV by U.S. packing costs in accordance with 
section 773(a)(6)(A) of the Act. We made adjustments to NV for 
differences in cost attributable to differences in physical 
characteristics of the merchandise, pursuant to section 
773(a)(6)(C)(ii) of the Act.
    For purposes of calculating NV, section 771(16) of the Act defines 
``foreign like product'' as merchandise which is either (1) identical 
or (2) similar to the merchandise sold in the United States. When no 
identical products are sold in the home market, the products which are 
most similar to the product sold in the United States are identified. 
For the non-identical or most similar products which are identified 
based on the Department's product matching criteria, an adjustment is 
made to the home market sales price to account for the actual physical 
differences between the products sold in the United States and the home 
market or third country market. See 19 CFR 351.411 and section 
773(a)(6)(C)(ii) of the Act.

Level of Trade

    In accordance with section 773(a)(1)(B) of the Act, we determined 
NV based on sales in the comparison market at the same level of trade 
(LOT) as the CEP sales, to the extent practicable. When there were no 
sales at the same LOT, we compared U.S. sales to comparison market 
sales at a different LOT.
    Pursuant to 19 CFR 351.412, to determine whether CEP sales and NV

[[Page 52271]]

sales were at different LOTs, we examine stages in the marketing 
process and selling functions along the chain of distribution between 
the producer and the unaffiliated (or arm's-length) customers. If the 
comparison market sales are at a different LOT and the differences 
affect price comparability, as manifested in a pattern of consistent 
price differences between sales at different LOTs in the country in 
which NV is determined, we will make an LOT adjustment under section 
773(a)(7)(A) of the Act. For CEP sales, if the NV LOT is at a more 
advanced stage of distribution than the CEP LOT and the data available 
do not provide an appropriate basis to determine an LOT adjustment, we 
will grant a CEP offset, as provided in section 773(a)(7)(B) of the 
Act. See Notice of Final Determination of Sales at Less Than Fair 
Value: Certain Cut-to-Length Carbon Steel Plate from South Africa, 62 
FR 61731, 61732-33 (November 19, 1997).
    We did not make an LOT adjustment under 19 CFR 351.412(e) because, 
as there was only one home market LOT for each respondent, we were 
unable to identify a pattern of consistent price differences 
attributable to differences in LOTs (see 19 CFR 351.412(d)). Under 19 
CFR 351.412(f), we are preliminarily granting a CEP offset for Dongbu, 
HYSCO, the POSCO Group, and Union because the NV for each company is at 
a more advanced LOT than the LOT for their U.S. CEP sales.
    For a detailed description of our LOT methodology and a summary of 
company-specific LOT findings for these preliminary results, see the 
September 2, 2008, ``Calculation Memorandum for Dongbu Steel Co., 
Ltd;'' ``Calculation Memorandum for Hyundai HYSCO;'' ``Calculation 
Memorandum for the POSCO Group;'' and ``Calculation Memorandum for 
Union Steel Manufacturing Co., Ltd.;'' the public versions of which are 
on file in the Central Records Unit, Room 1117 of the main Department 
building.

Cost of Production

A. Calculation of COP

    We are investigating COP for Dongbu, HYSCO, the POSCO Group, and 
Union because during the most recently completed segments of the 
proceeding in which Dongbu, HYSCO, the POSCO Group, and Union 
participated, the Department found and disregarded sales that failed 
the cost test for each of these companies. We calculated company-
specific COPs for Dongbu, HYSCO, the POSCO Group, and Union based on 
the sum of each respondent's cost of materials and fabrication for the 
foreign like product, plus amounts for home-market selling expenses, 
selling, general and administrative expenses (SG&A), and packing costs 
in accordance with section 773(b)(3) of the Act. See ``Test of Home 
Market Sales Prices'' section below for treatment of home market 
selling expenses.
    We relied on the COP data as submitted by Dongbu, HYSCO, and Union. 
We also relied on the COP data submitted by the POSCO Group except in 
the calculation of G&A expense ratios for POSCO and POCOS. 
Specifically, we disallowed the gains related to trading securities as 
offsets to G&A expenses in the calculation of POSCO's G&A expense rate 
and, for POCOS, we disallowed the gains on tangible assets and the 
gains related to available for sale securities as offsets to the G&A 
expenses. See Memorandum from Frederick W. Mines to Neal M. Halper, 
Director Office of Accounting, titled ``Cost of Production and 
Constructed Value Calculation Adjustments for the Preliminary Results--
POSCO,'' dated September 2, 2008.

B. Test of Home-Market Prices

    In determining whether to disregard home market sales made at 
prices below the COP, as required under sections 773(b)(1)(A) and (B) 
of the Act, we compared the weighted-average COP figures to home market 
sales of the foreign like product and we examined whether (1) within an 
extended period of time, such sales were made in substantial 
quantities, and (2) such sales were made at prices which permitted the 
recovery of all costs within a reasonable period of time. On a product-
specific basis, we compared the COP to the home market prices (not 
including VAT), less any applicable movement charges, discounts, and 
rebates.

C. Results of COP Test

    Pursuant to section 773(b)(1) of the Act, we may disregard below-
COP sales in the determination of NV if these sales have been made 
within an extended period of time in substantial quantities and were 
not at prices which permit recovery of all costs within a reasonable 
period of time. Where 20 percent or more of a respondent's sales of a 
given product during the POR were at prices less than the COP for at 
least six months of the POR, we determined that sales of that model 
were made in ``substantial quantities'' within an extended period of 
time, in accordance with sections 773(b)(2)(B) and (C) of the Act. 
Where prices of a respondent's sales of a given product were below the 
per-unit COP at the time of sale and below the weighted-average per-
unit costs for the POR, we determined that sales were not at prices 
which would permit recovery of all costs within a reasonable period of 
time, in accordance with section 773(b)(2)(D) of the Act. In such 
cases, we disregarded the below-cost sales in accordance with section 
773(b)(1) of the Act.
    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of a respondent's sales of a given product were at prices less 
than the COP, we did not disregard any below-cost sales of that product 
because we determined that the below-cost sales were not made in 
``substantial quantities.''
    We tested and identified below-cost home market sales for Dongbu, 
HYSCO, the POSCO Group, and Union. We disregarded individual below-cost 
sales of a given product and used the remaining sales as the basis for 
determining NV, in accordance with section 773(b)(1) of the Act. See 
the September 2, 2008, ``Calculation Memorandum for Dongbu Steel Co., 
Ltd.''; ``Calculation Memorandum for Hyundai HYSCO''; ``Calculation 
Memorandum for the POSCO Group''; and ``Calculation Memorandum for 
Union Steel Manufacturing Co., Ltd.''

Arm's-Length Sales

    Dongbu, HYSCO, and the POSCO Group also reported that they made 
sales in the home market to affiliated parties. The Department 
calculates NV based on a sale to an affiliated party only if it is 
satisfied that the price to the affiliated party is comparable to the 
price at which sales are made to parties not affiliated with the 
producer or exporter, i.e. , sales at arm's length. See 19 CFR 
351.403(c).
    To test whether these sales were made at arm's length, we compared 
the starting prices of sales to affiliated and unaffiliated customers 
net of all movement charges, direct selling expenses, discounts and 
packing. In accordance with the Department's current practice, if the 
prices charged to an affiliated party were, on average, between 98 and 
102 percent of the prices charged to unaffiliated parties for 
merchandise identical or most similar to that sold to the affiliated 
party, we considered the sales to be at arm's-length prices. See Notice 
of Preliminary Results and Partial Rescission of Antidumping Duty 
Administrative: Ninth Administrative Review of the Antidumping Duty 
Order on Certain Pasta from Italy, 71 FR 45017, 45020 (August 8, 2006) 
(unchanged in Notice of Final Results of the Ninth Administrative 
Review of the Antidumping Duty Order on Certain Pasta from Italy, 72 FR 
7011 (February

[[Page 52272]]

14, 2007)); and 19 CFR 351.403(c). Conversely, where we found sales to 
the affiliated party that did not pass the arm's-length test, all sales 
to that affiliated party have been excluded from the NV calculation. 
See Antidumping Proceedings: Affiliated Party Sales in the Ordinary 
Course of Trade, 67 FR 69186, 69187 (November 15, 2002).

Currency Conversion

    For purposes of these preliminary results, we made currency 
conversions in accordance with section 773A(a) of the Act, based on the 
official exchange rates published by the Federal Reserve Bank.

Preliminary Results of the Review

    As a result of this review, we preliminarily find that the 
following weighted-average dumping margins exist:

------------------------------------------------------------------------
                                                                Percent
                    Manufacturer/exporter                        margin
------------------------------------------------------------------------
Dongbu.......................................................       1.91
HYSCO........................................................       1.17
The POSCO Group..............................................       0.79
Union........................................................       1.90
Review-Specific Average Rate Applicable to the Following
 Companies: \6\
    LG, Haewon, and Dongkuk..................................       1.69
------------------------------------------------------------------------
\6\ This rate is based on the weighted average of the margins calculated
  for those companies selected individual review, excluding de minimis
  margins or margins based entirely on adverse facts available.

    The Department will disclose calculations performed within five 
days of the date of publication of this notice to the parties of this 
proceeding in accordance with 19 CFR 351.224(b). Interested parties may 
submit case briefs and/or written comments no later than 30 days after 
the date of publication of these preliminary results of review. See 19 
CFR 351.309(c)(ii). Rebuttal briefs are limited to issues raised in 
such briefs or comments and may be filed no later than five days after 
the time limit for filing the case briefs or comments. See 19 CFR 
351.309(d). Parties submitting arguments in this proceeding are 
requested to submit with the argument: (1) A statement of the issue, 
(2) a brief summary of the argument, and (3) a table of authorities. 
Case and rebuttal briefs and comments must be served on interested 
parties in accordance with 19 CFR 351.303(f). Further, parties 
submitting written comments are requested to provide the Department 
with an additional copy of the public version of any such comments on a 
diskette.
    An interested party may request a hearing within 30 days of 
publication of these preliminary results. See 19 CFR 351.310(c). Any 
hearing, if requested, ordinarily will be held two days after the due 
date of the rebuttal briefs. The Department will issue the final 
results of this administrative review, which will include the results 
of its analysis of issues raised in any such comments, or at a hearing, 
if requested, within 120 days of publication of these preliminary 
results.

Assessment Rate

    Upon completion of the administrative review, the Department shall 
determine, and CBP shall assess, antidumping duties on all appropriate 
entries. Pursuant to 19 CFR 351.212(b)(1), for all sales made by the 
respondent for which it has reported the importer of record and the 
entered value of the U.S. sales, we have calculated importer-specific 
assessment rates based on the ratio of the total amount of antidumping 
duties calculated for the examined sales to the total entered value of 
those sales. Where the respondent did not report the entered value for 
U.S. sales, we have calculated importer-specific assessment rates for 
the merchandise in question by aggregating the dumping margins 
calculated for all U.S. sales to each importer and dividing this amount 
by the total quantity of those sales. To determine whether the duty 
assessment rates were de minimis, in accordance with the requirement 
set forth in 19 CFR 351.106(c)(2), we calculated importer-specific ad 
valorem rates based on the estimated entered value. Where the 
assessment rate is above de minimis, we will instruct CBP to assess 
duties on all entries of subject merchandise by that importer. Pursuant 
to 19 CFR 351.106(c)(2), we will instruct CBP to liquidate without 
regard to antidumping duties any entries for which the assessment rate 
is de minimis (i.e., less than 0.50 percent). The Department will issue 
assessment instructions directly to CBP 15 days after publication of 
the final results of this review.
    The Department clarified its ``automatic assessment'' regulation on 
May 6, 2003. See Antidumping and Countervailing Duty Proceedings: 
Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003). This 
clarification will apply to entries of subject merchandise during the 
POR produced by the respondents for which it did not know its 
merchandise was destined for the United States. In such instances, we 
will instruct CBP to liquidate unreviewed entries at the all-others 
rate if there is no rate for the intermediate company(ies) involved in 
the transaction. For a full discussion of this clarification, see 
Antidumping and Countervailing Duty Proceedings: Assessment of 
Antidumping Duties, 68 FR 23954 (May 6, 2003).

Cash Deposit Requirements

    The following deposit rates will be effective upon publication of 
the final results of this administrative review for all shipments of 
CORE for Korea entered, or withdrawn from warehouse, for consumption on 
or after the publication date, as provided by section 751(a)(2)(C) of 
the Act: (1) The cash deposit rates for the companies listed above will 
be the rates established in the final results of this review, except if 
the rate is less than 0.5 percent and, therefore, de minimis, the cash 
deposit will be zero; (2) for previously reviewed or investigated 
companies not listed above, the cash deposit rate will continue to be 
the company-specific rate published for the most recent final results 
in which that manufacturer or exporter participated; (3) if the 
exporter is not a firm covered in these reviews, a prior review, or the 
original less-than-fair-value (LTFV) investigation, but the 
manufacturer is, the cash deposit rate will be the rate established for 
the most recent final results for the manufacturer of the merchandise; 
and (4) if neither the exporter nor the manufacturer is a firm covered 
in these or any previous review conducted by the Department, the cash 
deposit rate will be 17.70 percent, the all-others rate established in 
the LTFV. See Orders on Certain Steel from Korea. These cash deposit 
requirements, when imposed, shall remain in effect until further 
notice.

Notification to Importers

    This notice serves as a preliminary reminder to importers of their 
responsibility under 19 CFR 351.402(f)(2) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    These preliminary results of review are issued and published in 
accordance with sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: September 2, 2008.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E8-20920 Filed 9-8-08; 8:45 am]
BILLING CODE 3510-DS-P