55764 Federal Register / Vol. 75, No. 177 / Tuesday, September 14, 2010 / Notices 

used the audited financial statement of 

2005–2006 Infiniti Modules Pvt. Ltd. 

(Infiniti Modules). 

We are preliminarily granting an 

offset to Since Hardware for its scrap 

steel sales. See Factors Valuation 

Memorandum at page 3. 

Currency Conversion 

Where necessary, the Department 

made currency conversions into U.S. 

dollars, in accordance with section 

773(A) of the Act, based on the 

exchange rates in effect on the date of 

the U.S. sale, as certified by the Federal 

Reserve Board. 

Preliminary Results of Review 

We preliminarily determine that the 

following antidumping duty margins 

exist: 

Exporter Margin (percent) 

Since Hardware ............ 52.06 

Assessment Rates 

Pursuant to 19 CFR 351.212(b), the 

Department will determine, and CBP 

shall assess, antidumping duties on all 

appropriate entries. The Department 

will issue appropriate assessment 

instructions directly to CBP 15 days 

after the date of publication of the final 

results of this review. For assessment 

purposes, where possible, we calculated 

importer-specific ad valorem assessment 

rates for ironing tables from the PRC 

based on the ratio of the total amount of 

the dumping duties calculated for the 

examined sales to the total entered 

value of those same sales. We will 

instruct CBP to assess antidumping 

duties on all appropriate entries covered 

by this review if any assessment rate 

calculated in the final results of this 

review is above de minimis. The final 

results of this review shall be the basis 

for the assessment of antidumping 

duties on entries of merchandise 

covered by the final results of these 

reviews and for future deposits of 

estimated duties, where applicable. 

Cash Deposit Requirements 

The following cash deposit 

requirements will be effective upon 

publication of the final results of this 

administrative review for all shipments 

of the subject merchandise entered, or 

withdrawn from warehouse, for 

consumption on or after the publication 

date, as provided for by section 

751(a)(2)(C) of the Act: (1) For the 

exporters listed above, the cash deposit 

rate will be established in the final 

results of this review (except, if the rate 

is zero or de minimis, i.e., less than 0.5 

percent, no cash deposit will be 

required for that company); (2) for 

previously investigated or reviewed PRC 

and non-PRC exporters not listed above 

that have separate rates, the cash 

deposit rate will continue to be the 

exporter-specific rate published for the 

most recent period; (3) for all PRC 

exporters of subject merchandise which 

have not been found to be entitled to a 

separate rate, the cash deposit rate will 

be the PRC-wide rate of 157.68 percent 

(see Amended Final and Order); and (4) 

for all non-PRC exporters of subject 

merchandise which have not received 

their own rate, the cash deposit rate will 

be the rate applicable to the PRC 

exporters that supplied that non-PRC 

exporter. These deposit requirements, 

when imposed, shall remain in effect 

until publication of the final results of 

the next administrative review. 

Public Comment 

The Department will disclose 

calculations performed in connection 

with the preliminary results of this 

review within five days of the date of 

publication of this notice in accordance 

with 19 CFR 351.224(b). Any interested 

party may request a hearing within 30 

days of publication of this notice in 

accordance with 19 CFR 351.310(c). 

Any hearing will be held 37 days after 

the publication of this notice, or the first 

workday thereafter unless the 

Department alters the date pursuant to 

19 CFR 351.310(d). Individuals who 

wish to request a hearing must submit 

a written request within 30 days of the 

publication of this notice in the Federal 

Register to the Assistant Secretary for 

Import Administration, U.S. Department 

of Commerce, Room 1870, 14th Street 

and Constitution Avenue, NW., 

Washington, DC 20230. Requests for a 

public hearing should contain: (1) The 

party’s name, address, and telephone 

number; (2) the number of participants; 

and (3) to the extent practicable, an 

identification of the arguments to be 

raised at the hearing. 

Unless otherwise notified by the 

Department, interested parties may 

submit case briefs within 30 days of the 

date of publication of this notice in 

accordance with 19 CFR 

351.309(c)(1)(ii). As part of the case 

brief, parties are encouraged to provide 

a summary of the arguments and a table 

of authorities in accordance with 19 

CFR 351.309(c)(2). Rebuttal briefs, 

which must be limited to issues raised 

in the case briefs, must be filed within 

five days after the case brief is filed in 

accordance with 19 CFR 351.309(d). If a 

hearing is held, an interested party may 

make an affirmative presentation only 

on arguments included in that party’s 

case brief and may make a rebuttal 

presentation only on arguments 

included in that party’s rebuttal brief in 

accordance with 19 CFR 351.310(c). 

Parties should confirm by telephone the 

time, date, and place of the hearing 

within 48 hours before the scheduled 

time. The Department will issue the 

final results of this review, which will 

include the results of its analysis of 

issues raised in the briefs, not later than 

120 days after the date of publication of 

this notice in accordance with section 

751(a)(3)(A) of the Act and 19 CFR 

351.213(h)(1). 

Notification to Importers 

This notice also serves as a 

preliminary reminder to importers of 

their responsibility under 19 CFR 

351.402(f) to file a certificate regarding 

the reimbursement of antidumping 

duties prior to liquidation of the 

relevant entries during these review 

periods. 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 administrative 

review are issued and this notice is 

published in accordance with sections 

751(a)(1) and 777(i)(1) of the Act. 

Dated: September 7, 2010. 

Ronald K. Lorentzen, 

Deputy Assistant Secretary for Import 

Administration. 

[FR Doc. 2010–22898 Filed 9–13–10; 8:45 am] 

BILLING CODE 3510–DS–P 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[C–580–851] 

Dynamic Random Access Memory 

Semiconductors 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 

is conducting an administrative review 

of the countervailing duty order on 

dynamic random access memory 

semiconductors from the Republic of 

Korea for the period January 1, 2008, 

through August 10, 2008. We 

preliminarily find that Hynix 

Semiconductor, Inc. received 

countervailable subsidies during the 

period of review. If these preliminary 

results are adopted in our final results 

of this review, we will instruct U.S. 

Customs and Border Protection to assess 


jlentini on DSKJ8SOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 177 / Tuesday, September 14, 2010 / Notices 55765 

1See submission from Micron to the Department, 

Re: Dynamic Random Access Memory 

Semiconductors From Korea: New Subsidy 

Allegations (October 5, 2009) (‘‘New Subsidy 

Allegations’’). 

countervailing duties as detailed in 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 14, 

2010. 

FOR FURTHER INFORMATION CONTACT: 

Shane Subler or Jennifer Meek, Office of 

AD/CVD Operations, Office 1, Import 

Administration, International Trade 

Administration, U.S. Department of 

Commerce, Room 3069, 14th Street, and 

Constitution Avenue, NW., Washington, 

DC 20230; telephone: (202) 482–0189 

and (202) 482–2778, respectively. 

SUPPLEMENTARY INFORMATION: 

Background 

On August 11, 2003, the Department 

of Commerce (‘‘the Department’’) 

published a countervailing duty order 

on dynamic random access memory 

semiconductors (‘‘DRAMS’’) From the 

Republic of Korea (‘‘Korea’’). See Notice 

of Countervailing Duty Order: Dynamic 

Random Access Memory 

Semiconductors From the Republic of 

Korea, 68 FR 47546 (August 11, 2003) 

(‘‘CVD Order’’). On August 14, 2009, we 

published a notice of ‘‘Opportunity to 

Request Administrative Review’’ for this 

countervailing duty order. See 

Antidumping or Countervailing Duty 

Order, Finding, or Suspended 

Investigation; Opportunity to Request 

Administrative Review, 74 FR 41120 

(August 14, 2009). On August 18, 2009, 

we received a request for review from 

Hynix Semiconductor, Inc. (‘‘Hynix’’). 

On August 21, 2009, we received a 

request for review of Hynix and its 

affiliates from the petitioner, Micron 

Technology, Inc. (‘‘Micron’’). In 

accordance with 19 CFR 

351.221(c)(1)(i), we published a notice 

of initiation of the review on September 

22, 2009. See Initiation of Antidumping 

and Countervailing Duty Administrative 

Reviews and Request for Revocation in 

Part, 74 FR 48224 (September 22, 2009). 

On December 22, 2009, we issued 

countervailing duty questionnaires to 

the Government of Korea (‘‘GOK’’) and 

Hynix. We received responses to these 

questionnaires on February 25, 2010, 

and February 26, 2010, from Hynix and 

the GOK, respectively. On May 27, 

2010, we issued supplemental 

questionnaires to Hynix and the GOK. 

We received responses on June 3, 2010, 

and June 25, 2010, respectively. 

We received new subsidy allegations 

from Micron on October 5, 2009.1 On 

December 22, 2009, we initiated an 

investigation of preferential income tax 

treatment for Hynix’s 2001 and 2002 

debt restructurings. See Memorandum 

to Susan Kuhbach, Director, Office 1, 

‘‘Sixth Countervailing Duty 

Administrative Review: Dynamic 

Random Access Memory 

Semiconductors From Korea: New 

Subsidy Allegations Memorandum’’ 

(December 22, 2009) (‘‘NSA Memo’’), 

available in the Central Records Unit, 

Room 1117 of the main Department 

building. 

On April 20, 2010, we published a 

postponement of the preliminary results 

in this review until September 7, 2010. 

See Dynamic Random Access Memory 

Semiconductors From the Republic of 

Korea: Extension of Time Limit for 

Preliminary Results of Countervailing 

Duty Administrative Review, 75 FR 

20564 (April 20, 2010). 

Scope of the Order 

The products covered by the order are 

DRAMS from Korea, whether assembled 

or unassembled. Assembled DRAMS 

include all package types. Unassembled 

DRAMS include processed wafers, 

uncut die, and cut die. Processed wafers 

fabricated in Korea, but assembled into 

finished semiconductors outside Korea 

are also included in the scope. 

Processed wafers fabricated outside 

Korea and assembled into finished 

semiconductors in Korea are not 

included in the scope. 

The scope of the order additionally 

includes memory modules containing 

DRAMS from Korea. A memory module 

is a collection of DRAMS, the sole 

function of which is memory. Memory 

modules include single in-line 

processing modules, single in-line 

memory modules, dual in-line memory 

modules, small outline dual in-line 

memory modules, Rambus in-line 

memory modules, and memory cards or 

other collections of DRAMS, whether 

unmounted or mounted on a circuit 

board. Modules that contain other parts 

that are needed to support the function 

of memory are covered. Only those 

modules that contain additional items 

which alter the function of the module 

to something other than memory, such 

as video graphics adapter boards and 

cards, are not included in the scope. 

The order also covers future DRAMS 

module types. 

The scope of the order additionally 

includes, but is not limited to, video 

random access memory and 

synchronous graphics random access 

memory, as well as various types of 

DRAMS, including fast page-mode, 

extended data-out, burst extended dataout, synchronous dynamic RAM, 

Rambus DRAM, and Double Data Rate 

DRAM. The scope also includes any 

future density, packaging, or assembling 

of DRAMS. Also included in the scope 

of the order are removable memory 

modules placed on motherboards, with 

or without a central processing unit, 

unless the importer of the motherboards 

certifies with U.S. Customs and Border 

Protection (‘‘CBP’’) that neither it, nor a 

party related to it or under contract to 

it, will remove the modules from the 

motherboards after importation. The 

scope of the order does not include 

DRAMS or memory modules that are reimported for repair or replacement. 

The DRAMS subject to the order are 

currently classifiable under subheadings 

8542.21.8005, 8542.21.8020 through 

8542.21.8030, and 8542.32.0001 through 

8542.32.0023 of the Harmonized Tariff 

Schedule of the United States 

(‘‘HTSUS’’). The memory modules 

containing DRAMS from Korea, 

described above, are currently 

classifiable under subheadings 

8473.30.1040, 8473.30.1080, 

8473.30.1140, and 8473.30.1180 of the 

HTSUS. Removable memory modules 

placed on motherboards are classifiable 

under subheadings 8443.99.2500, 

8443.99.2550, 8471.50.0085, 

8471.50.0150, 8517.30.5000, 

8517.50.1000, 8517.50.5000, 

8517.50.9000, 8517.61.0000, 

8517.62.0010, 8517.62.0050, 

8517.69.0000, 8517.70.0000, 

8517.90.3400, 8517.90.3600, 

8517.90.3800, 8517.90.4400, 

8542.21.8005, 8542.21.8020, 

8542.21.8021, 8542.21.8022, 

8542.21.8023, 8542.21.8024, 

8542.21.8025, 8542.21.8026, 

8542.21.8027, 8542.21.8028, 

8542.21.8029, 8542.21.8030, 

8542.31.0000, 8542.33.0000, 

8542.39.0000, 8543.89.9300, and 

8543.89.9600 of the HTSUS. However, 

the product description, and not the 

HTSUS classification, is dispositive of 

whether merchandise imported into the 

United States falls within the scope. 

Scope Rulings 

On December 29, 2004, the 

Department received a request from 

Cisco Systems, Inc., to determine 

whether removable memory modules 

placed on motherboards that are 

imported for repair or refurbishment are 

within the scope of the order. See CVD 

Order. The Department initiated a scope 

inquiry pursuant to 19 CFR 351.225(e) 

on February 4, 2005. On January 12, 

2006, the Department issued a final 


jlentini on DSKJ8SOYB1PROD with NOTICES
55766 Federal Register / Vol. 75, No. 177 / Tuesday, September 14, 2010 / Notices 

2 In the NSA Memo, we initiated an investigation 

into the GOK’s tax treatment of the debt-for-equity 

swaps for which Hynix issued shares in 2002 and 

2003. Based on proprietary information in Hynix’s 

February 25, 2010, questionnaire response, 

however, we preliminarily find that only the 2002 

issuance applies to this POR. See Memorandum 

from Shane Subler to Susan Kuhbach, ‘‘Preliminary 

Results Calculations for Hynix Semiconductor, 

Inc.,’’ (September 7, 2010). 

scope ruling, finding that removable 

memory modules placed on 

motherboards that are imported for 

repair or refurbishment are not within 

the scope of the CVD Order provided 

that the importer certifies that it will 

destroy any memory modules that are 

removed for repair or refurbishment. 

See Memorandum from Stephen J. 

Claeys to David M. Spooner, regarding 

Final Scope Ruling, Countervailing Duty 

Order on DRAMs From the Republic of 

Korea (January 12, 2006). 

Period of Review 

The period for which we are 

measuring subsidies, i.e., the period of 

review (‘‘POR’’), is January 1, 2008, 

through August 10, 2008. 

Changes in Ownership 

Effective June 30, 2003, the 

Department adopted a new methodology 

for analyzing privatizations in the 

countervailing duty context. See Notice 

of Final Modification of Agency Practice 

Under Section 123 of the Uruguay 

Round Agreements Act, 68 FR 37125 

(June 23, 2003). The Department’s new 

methodology is based on a rebuttable 

‘‘baseline’’ presumption that nonrecurring, allocable subsidies continue 

to benefit the subsidy recipient 

throughout the allocation period (which 

normally corresponds to the average 

useful life (‘‘AUL’’) of the recipient’s 

assets). However, an interested party 

may rebut this baseline presumption by 

demonstrating that, during the 

allocation period, a change in 

ownership occurred in which the former 

owner sold all or substantially all of a 

company or its assets, retaining no 

control of the company or its assets, and 

that the sale was an arm’s-length 

transaction for fair market value. 

Hynix’s ownership changed during the 

AUL period as a result of debt-to-equity 

conversions in December 2002 and 

various asset sales. In addition, Hynix 

reported that its ownership changed in 

2006 because Hynix’s Share 

Management Council decreased its 

ownership share in Hynix from 50.6 

percent to 36 percent. However, in this 

administrative review, Hynix did not 

challenge this baseline presumption. 

See Hynix’s February 25, 2010, 

questionnaire response at 13. 

Subsidies Valuation Information 

Allocation Period 

Pursuant to 19 CFR 351.524(b), nonrecurring subsidies are allocated over a 

period corresponding to the AUL of the 

renewable physical assets used to 

produce the subject merchandise. 

Section 351.524(d)(2) of the 

Department’s regulations creates a 

rebuttable presumption that the AUL 

will be taken from the U.S. Internal 

Revenue Service’s 1977 Class Life Asset 

Depreciation Range System (the ‘‘IRS 

Tables’’). For DRAMS, the IRS Tables 

prescribe an AUL of five years. During 

this review, none of the interested 

parties disputed this allocation period. 

Therefore, we continue to allocate nonrecurring benefits over the five-year 

AUL. 

Discount Rates and Benchmarks for 

Loans 

For loans that we found 

countervailable in the investigation or 

in the prior administrative reviews, and 

which continued to be outstanding 

during the POR, we have used the 

benchmarks from the prior 

administrative reviews. 

For long-term, won-denominated 

loans originating in 1986 through 1995, 

we used the average interest rate for 

three-year corporate bonds as reported 

by the Bank of Korea (‘‘BOK’’) or the 

International Monetary Fund’s (‘‘IMF’s’’) 

International Financial Statistics 

Yearbook. 

For long-term won-denominated loans 

that originated in the years in which we 

previously determined Hynix to be 

uncreditworthy (2000 through 2003), we 

used the formula described in 19 CFR 

351.505(a)(3)(iii) to determine the 

benchmark interest rate. We did not use 

the rates on Hynix’s corporate bonds for 

2000–2003 for any calculations because 

Hynix either did not obtain bonds or 

obtained bonds through countervailable 

debt restructurings during those years. 

For the probability of default by an 

uncreditworthy company, we used the 

average cumulative default rates 

reported for the Caa- to C-rated category 

of companies as published in Moody’s 

Investors Service, ‘‘Historical Default 

Rates of Corporate Bond Issuers, 1920– 

1997’’ (February 1998). For the 

probability of default by a creditworthy 

company, we used the cumulative 

default rates for investment grade bonds 

as published in Moody’s Investors 

Service: ‘‘Statistical Tables of Default 

Rates and Recovery Rates’’ (February 

1998). For the commercial interest rates 

charged to creditworthy borrowers, we 

used the rates for won-denominated 

corporate bonds as reported by the BOK 

and the U.S. dollar lending rates 

published by the IMF for each year. 

For countervailable short-term and 

long-term foreign currency-denominated 

loans, pursuant to 19 CFR 

351.505(a)(2)(iv), we would normally 

use an annual average of the interest 

rates on comparable commercial loans 

during the year in which the 

government-provided loans were taken 

out. For countervailable variable-rate 

loans outstanding during the POR, 

pursuant to 19 CFR 351.505(a)(5)(i), we 

used the interest rates of variable-rate 

lending instruments issued during the 

year in which the government loans 

were issued. Where such loans were 

unavailable, the Department, consistent 

with 19 CFR 351.505(a)(3)(ii), followed 

our prior practice and relied upon 

lending rates reported in the IMF’s 

International Financial Statistics 

Yearbook. See Final Affirmative 

Countervailing Duty Determination: 

Dynamic Random Access Memory 

Semiconductors From the Republic of 

Korea, 68 FR 37122 (June 23, 2003) and 

accompanying Issues and Decision 

Memorandum at 5–7. 

Analysis of Programs 

I. Program Preliminarily Determined To 

Confer Subsidies—Income Tax 

Treatment of Hynix’s Debt 

Restructurings 

In the NSA Memo, we initiated an 

investigation into the tax treatment of 

Hynix’s debt restructurings under which 

Hynix issued shares in 2002 and 2003. 

In their respective February 25, 2010 

and February 26, 2010, questionnaire 

responses, Hynix and the GOK 

responded to the Department’s standard 

questions on this program and provided 

additional explanation. On May 27, 

2010, we sent a supplemental 

questionnaire to the GOK on this 

program. The GOK responded on June 

25, 2010. 

Based on information in the GOK’s 

and Hynix’s responses, we preliminarily 

find the GOK’s tax treatment of the debtfor-equity swap for which Hynix issued 

shares in 2002 to be countervailable.2 A 

ruling by the Korean tax authority in 

2000 (Bubin 46012–1608, July 20, 2000) 

established new rules for the tax 

treatment of debt-for-equity swaps by 

companies undergoing voluntary 

restructuring. The ruling stated: 

In case a domestic corporation carries out 

debt-equity swap in accordance with the 

corporate normalization plan, with respect to 

the amount accounted, pursuant to the 

corporate financial accounting standards, as 

debt exemption gains resulting from the 

amount of difference between the issuance 

price of the concerned stock and its market 

price, said amount ought to be deemed as the 


jlentini on DSKJ8SOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 177 / Tuesday, September 14, 2010 / Notices 55767 

3See Micron’s New Subsidy Allegations at 6 and 

Exhibit 13. 

4See ‘‘Korean Taxation,’’ Ministry of Finance and 

Economy (2005), at page 90, Chapter III, 5(a)(7); 

provided at Attachment 2 of Micron’s New Subsidy 

Allegations. Even though the guide is a 2005 

edition, the guide presents established Korean tax 

principles, not a set of new principles or rules for 

2005. 

5Hynix’s financial statements show that the issue 

price of the shares was 708 won per share; the 

market price of Hynix’s shares on June 7, 2002, was 

390 won per share. See Hynix’s 2002 NonConsolidated Financial Statements at page 60 (in 

Micron’s New Subsidy Allegations at Attachment 

7); see also Micron’s New Subsidy Allegations at 

Attachment 9. 

6See the GOK’s June 25, 2010, supplemental 

questionnaire response at 3. 

7See Attachment 7 of Micron’s New Subsidy 

Allegations (Hynix’s 2002 Non-Consolidated 

Financial Statements at 60; see also id. at 

Attachment 8 (Hynix’s 2003 Non-Consolidated 

Financial Statements at 45). The financial 

statements show that Hynix swapped debts totaling 

4.84 trillion won for equity through the 2002 and 

2003 stock issuances. The FSS press release 

(Attachment 26 of Micron’s New Subsidy 

Allegations) shows that companies swapped a total 

of 13.6 trillion won of debt for equity under the 

CRPA. Thus, 4.84 trillion won / 13.6 trillion won 

= 36 percent. 

amount in excess of the par value of the stock 

shares issued * * * and as such, said 

amount shall not be included into the taxable 

income or deductible expense of each 

(applicable) business year.3

General Korean tax principles treat 

decreased liabilities through the 

exemption or lapse of debts as a taxable 

gain for income tax purposes.4 Under 

the Bubin 46012–1608 ruling, however, 

the GOK deemed that any gain from 

debt forgiveness occurring through a 

debt-for-equity swap could be excluded 

from taxable income. 

On June 7, 2002, in the context of its 

restructuring under the GOK’s Corporate 

Restructuring Promotion Act (‘‘CRPA’’), 

Hynix converted bonds to equity and 

issued shares to its creditors. Hynix’s 

2002 financial statements show that the 

issue price of these shares exceeded the 

market value of the shares on June 7, 

2002.5 Because of the Bubin 46012– 

1608 ruling, Hynix did not include the 

difference between the issue price and 

the market price of the shares as a gain 

for its 2002 tax year taxable income. Due 

to losses and loss carryforwards in 2002 

and subsequent years, the exclusion of 

this amount from Hynix’s taxable 

income in 2002 did not affect the 

amount of taxes owed by Hynix until 

tax year 2007. 

We preliminarily find that the 

exclusion of the gain from Hynix’s 

taxable income constitutes a financial 

contribution within the meaning of 

section 771(5)(D)(ii) of the Tariff Act of 

1930, as amended (‘‘the Act’’), because 

the GOK forewent income tax revenue 

that it otherwise would have collected 

in the absence of the exclusion. We also 

find that Hynix received a benefit under 

19 CFR 351.509(a) because the 

exemption reduced the base (i.e., 

Hynix’s taxable income) used to 

calculate Hynix’s income taxes for the 

2007 tax year. Thus, a benefit exists to 

the extent that the income taxes paid by 

Hynix as a result of the exclusion were 

less than the taxes Hynix would have 

paid in the absence of the exclusion. 

Regarding timing, under 19 CFR 

351.509(b), the Department will 

normally consider the date of receipt of 

a benefit from a tax exemption or 

remission as the date on which the firm 

filed its tax return. Because Hynix 

received this benefit when it filed its 

2007 tax year tax return, we 

preliminarily find that Hynix received 

the benefit during the POR. 

Regarding specificity, in our May 27, 

2010, supplemental questionnaire, we 

asked the GOK to report the number of 

companies that underwent debt-forequity swaps in the ROK from 2001 

through 2003. The GOK responded that 

it does not maintain information on 

which or how many companies went 

through debt-to-equity swaps during the 

period.6 Thus, record information does 

not allow us to determine actual use of 

the program. 

Section 776(a)(1) of the Act states that 

the Department may use ‘‘facts 

available’’ if necessary information is 

not on the record. Information in 

Hynix’s financial statements and in a 

press release from the GOK’s Financial 

Supervisory Service (‘‘FSS’’) shows that 

Hynix accounted for approximately 36 

percent of the debt swapped for equity 

under the CRPA.7 We preliminarily 

determine that this percentage provides 

the best proxy for measuring Hynix’s 

share of the benefit provided by the 

Bubin 46012–1608 ruling. We believe 

this is a reasonable measure because a 

company’s share of the benefit provided 

by the exclusion is likely to be roughly 

equal to the company’s share of debtfor-equity swaps under the CRPA. On 

this basis, we preliminarily find the 

exclusion to be specific to Hynix under 

section 771(5A)(D)(iii)(III) of the Act 

because Hynix received a 

disproportionately large share of the 

income tax benefits relative to its size 

among all companies in Korea. 

To calculate the benefit under this 

program, in accordance with 19 CFR 

351.509(a), we divided the income taxes 

Hynix otherwise would have paid in the 

absence of the exclusion by Hynix’s 

total sales during the POR. On this 

basis, we preliminarily determine that 

Hynix received a countervailable 

subsidy of 2.84 percent ad valorem. 

II. Programs Previously Determined To 

Confer Subsidies 

We examined the following programs 

determined to confer subsidies in the 

investigation and prior administrative 

reviews. 

A. GOK Entrustment or Direction Prior 

to 2004 

In the investigation, the Department 

determined that the GOK entrusted or 

directed creditor banks to participate in 

financial restructuring programs, and to 

provide credit and other funds to Hynix, 

in order to assist Hynix through its 

financial difficulties. The financial 

assistance provided to Hynix by its 

creditors took various forms, including 

new loans, convertible and other bonds, 

extensions of maturities and interest 

rate reductions on existing debt (which 

we treated as new loans), Documents 

Against Acceptance financing, usance 

financing, overdraft lines of credit, debt 

forgiveness, and debt-for-equity swaps. 

The Department determined that these 

were financial contributions that 

constituted countervailable subsidies 

during the period of investigation. 

In prior administrative reviews, the 

Department also found that the GOK 

continued to entrust or direct Hynix’s 

creditors to provide financial assistance 

to Hynix throughout 2002 and 2003. 

The financial assistance provided to 

Hynix during this period included the 

December 2002 debt-for-equity swap 

and the extensions of maturities and/or 

interest rate deductions on existing 

debt. 

With the exception of loans 

outstanding during the POR, all forms of 

assistance under GOK Entrustment or 

Direction Prior to 2004 were either fully 

allocated prior to the POR or were not 

outstanding during the POR. Thus, we 

have only calculated the benefit from 

loans outstanding during the POR. In 

calculating the benefit, we have 

followed the same methodology used in 

prior administrative reviews. We 

followed the methodology described at 

19 CFR 351.505, using the benchmarks 

described in the ‘‘Discount Rates and 

Benchmarks for Loans’’ section above. 

We divided the total benefit from the 

outstanding loans by Hynix’s POR sales. 

On this basis, we preliminarily 

determine the countervailable subsidy 

from this program to be less than 0.005 

percent ad valorem during the POR. 

Therefore, consistent with our past 

practice, we did not include this 

program in our preliminary net 

countervailing duty rate. See, e.g., 

Coated Free Sheet Paper from the 

People’s Republic of China: Final 

Affirmative Countervailing Duty 


jlentini on DSKJ8SOYB1PROD with NOTICES
55768 Federal Register / Vol. 75, No. 177 / Tuesday, September 14, 2010 / Notices 

Determination, 72 FR 60645 (October 

25, 2007), and accompanying Issues and 

Decision Memorandum at 15 (‘‘CFS’’); 

and Final Results of Countervailing Duty 

Administrative Review: Low Enriched 

Uranium from France, 70 FR 39998 

(July 12, 2005), and accompanying 

Issues and Decision Memorandum at 

‘‘Purchases at Prices that Constitute 

‘More than Adequate Remuneration,’ ’’ 

(‘‘Uranium from France’’) (citing Notice 

of Final Results of Countervailing Duty 

Administrative Review and Rescission 

of Certain Company-Specific Reviews: 

Certain Softwood Lumber Products 

From Canada, 69 FR 75917 (December 

20, 2004), and accompanying Issues and 

Decision Memorandum at ‘‘Other 

Programs Determined to Confer 

Subsidies’’). 

B. 21st Century Frontier R&D Program 

The 21st Century Frontier R&D 

Program (‘‘21st Century Program’’) was 

established in 1999 with a structure and 

governing regulatory framework similar 

to those of the G–7/HAN Program, and 

for a similar purpose, i.e., to promote 

greater competitiveness in science and 

technology. The 21st Century Program 

provides long-term interest-free loans in 

the form of matching funds. Repayment 

of program funds is made in the form of 

‘‘technology usance fees’’ upon 

completion of the project, pursuant to a 

schedule established under a technology 

execution or implementation contract. 

Hynix reported that it had loans from 

the 21st Century Program outstanding 

during the POR. See Hynix’s February 

25, 2010 questionnaire response at 

16–17 and Exhibit 10. 

In the investigation, we determined 

that this program conferred a 

countervailable subsidy on Hynix. No 

interested party provided new evidence 

that would lead us to reconsider our 

earlier finding. Therefore, we continue 

to find that these loans confer a 

countervailable subsidy. 

To calculate the benefit of these loans 

during the POR, we compared the 

interest actually paid on the loans 

during the POR to what Hynix would 

have paid under the benchmark 

described in the ‘‘Discount Rates and 

Benchmarks for Loans’’ section above. 

We then divided the benefit by Hynix’s 

total sales in the POR to calculate the 

countervailable subsidy rate. On this 

basis, we preliminarily find 

countervailable benefits of less than 

0.005 percent ad valorem during the 

POR. Therefore, consistent with our past 

practice, we did not include this 

program in our preliminary net 

countervailing duty rate. See CFS and 

Uranium from France. 

C. Import Duty Reduction Program for 

Certain Factory Automation Items 

Article 95(1).4 of the Korean Customs 

Act provides for import duty reductions 

on imports of ‘‘machines, instruments 

and facilities (including the constituent 

machines and tools) and key parts 

designated by the Ordinance of the 

Ministry of Finance and Economy for a 

factory automatization applying 

machines, electronics or data processing 

techniques.’’ 

Hynix reported that it had received 

duty reductions under this program 

during the POR. See Hynix’s February 

25, 2010 questionnaire response at 

17–18 and Exhibit 13. 

In a prior administrative review, the 

Department found that the above 

program provided a financial 

contribution in the form of revenue 

forgone and a benefit in the amount of 

the duty savings. See Dynamic Random 

Access Memory Semiconductors from 

the Republic of Korea: Final Results of 

Countervailing Duty Administrative 

Review, 73 FR 14218 (March 17, 2008), 

and the accompanying Issues and 

Decision Memorandum at 6—7 and 

Comment 6. The Department also found 

the program to be de facto specific 

under section 771(5A)(D)(iii)(III) of the 

Act. Id. No interested party provided 

new evidence that would lead us to 

reconsider our earlier finding. 

Therefore, we continue to find that 

these duty reductions confer a 

countervailable subsidy. 

To calculate the benefit, we divided 

the total duty savings Hynix received 

during the POR by Hynix’s total sales 

during the POR. On this basis, we 

preliminarily find countervailable 

benefits of less than 0.005 percent ad 

valorem during the POR. Therefore, 

consistent with our past practice, we 

did not include this program in our 

preliminary net countervailing duty 

rate. See CFS and Uranium from France. 

D. Import-Export Bank of Korea Import 

Financing 

As outlined in Article 18, paragraph 

1, subparagraph 4 of the Import-Export 

Bank of Korea (‘‘KEXIM’’) Act, the 

‘‘Import Financing Program’’ is provided 

to Korean importers to facilitate their 

purchase of essential materials, major 

resources, and operating equipment, the 

stable and timely supply of which is 

essential to the stability of the general 

economy. The equipment and materials 

eligible to be imported under the 

program fall under 13 headings listed in 

Article 14 of the KEXIM Business 

Manual. The listed items range from raw 

materials to factory automation 

equipment and include products and 

materials described in government 

notices. 

Further, according to the GOK, any 

Korean company is eligible for the 

‘‘Import Financing Program’’ as long as 

the equipment or material appears 

under the 13 headings of eligible items, 

the company can satisfy the financial 

criteria laid out in ‘‘KEXIM’s Credit 

Extension Regulation,’’ and KEXIM’s 

Credit Extension Committee approves 

the financing application. Regarding the 

last item, the GOK stated that all 

decisions to offer this financing are 

based on the application and financial 

status of the applicant company. 

Hynix carried balances into the POR 

on loans received from KEXIM under 

this program in 2006 and 2007. See 

Hynix’s February 25, 2010 supplemental 

questionnaire response at 18 and 

Exhibit 10. 

In a prior administrative review, the 

Department found that the above 

program provided a financial 

contribution pursuant to sections 

771(5)(B)(i) and 771(5)(D)(i) of the Act, 

and also provided benefits equal to the 

difference between what Hynix paid on 

its loans and the amount it would have 

paid on comparable commercials loans 

within the meaning of section 

771(5)(E)(ii) of the Act. See Dynamic 

Random Access Memory 

Semiconductors from the Republic of 

Korea: Final Results of Countervailing 

Duty Administrative Review, 74 FR 

60238, 60239 (November 20, 2009). The 

Department also found the program to 

be de facto specific within the meaning 

of section 771(5A)(D)(iii)(I) of the Act. 

Id. No interested party provided new 

evidence that would lead us to 

reconsider our earlier finding. 

Therefore, we continue to find this 

program to be countervailable. 

To calculate the benefit under this 

program, we used the benchmarks 

described in the ‘‘Discount Rates and 

Benchmarks for Loans’’ section above, as 

well as the methodology described in 19 

CFR 351.505. We then divided the 

benefit during the POR by Hynix’s total 

sales during the POR. On this basis, we 

preliminarily determine that Hynix 

received a countervailable subsidy of 

0.10 percent ad valorem under this 

program. 

III. Programs Preliminarily Found To 

Have Provided No Benefits 

A. KEXIM Short-Term Export Financing 

KEXIM provides short-term export 

financing to small-, medium- and largesized companies (not including 

companies included in the largest five 

conglomerates in the ROK, unless the 

company’s headquarters is located 


jlentini on DSKJ8SOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 177 / Tuesday, September 14, 2010 / Notices 55769 

1See Initiation of Antidumping and 

Countervailing Duty Administrative Reviews and 

Request for Revocation in Part, 74 FR 48224, 48225 

(September 22, 2009) (Initiation Notice). 

outside the Seoul Metropolitan area). 

The loans are not tied to particular 

export transactions. However, a 

company, along with the financing 

application, must provide its export 

performance periodically for review by 

KEXIM. Further, any loan agreement 

may only cover an amount ranging from 

50 to 90 percent of the company’s 

export performance up to 30 billion 

won. 

Hynix carried a balance on a loan 

under this program during the POR and 

provided documentation (e.g. loan 

application, approval document, and 

loan agreement), as well as data 

regarding the loan amount and interest 

paid during the POR. See Hynix’s 

February 25, 2010 questionnaire 

response at Exhibits 10, 12, and 18. 

Based on Hynix’s submitted interest 

payment information for this loan, we 

preliminarily determine that the interest 

Hynix paid was greater than the interest 

Hynix would have paid under the 

benchmark interest rate. Thus, we 

preliminarily determine that Hynix 

received no benefit from these loans 

during the POR. 

B. Export Insurance 

At pages 22–25 of its February 25, 

2010, questionnaire response, Hynix 

reported that it purchased short-term 

export insurance from the Korea Export 

Insurance Corporation (‘‘KEIC’’) during 

the POR. On page 1 of its supplemental 

questionnaire response dated June 3, 

2010, Hynix stated that it received no 

insurance payouts from the KEIC during 

the POR and otherwise made no claims 

on KEIC insurance. 

Under 19 CFR 351.520(a)(2), the 

Department will normally calculate the 

benefit from an export insurance 

program as the difference between the 

amount of premiums paid by the firm 

and the amount received by the firm 

under the insurance program. Because 

Hynix stated that it did not receive any 

payouts from the KEIC during the POR, 

we preliminarily determine that Hynix 

received no benefit from this program 

during the POR. 

IV. Programs Previously Found Not To 

Have Been Used or Provided No Benefits 

We preliminarily determine that the 

following programs were not used 

during the POR: 

A. Reserve for Research and Human 

Resources Development (formerly 

Technological Development Reserve) 

(Article 9 of the Restriction of Special 

Taxation Act (‘‘RSTA’’)/formerly, Article 

8 of Tax Reduction and Exemption 

Control Act (‘‘TERCL’’)) 

B. Tax Credit for Investment in 

Facilities for Productivity Enhancement 

(Article 24 of RSTA/Article 25 of 

TERCL) 

C. Tax Credit for Investment in 

Facilities for Special Purposes (Article 

25 of RSTA) 

D. Reserve for Overseas Market 

Development (formerly, Article 17 of 

TERCL) 

E. Reserve for Export Loss (formerly, 

Article 16 of TERCL) 

F. Tax Exemption for Foreign 

Technicians (Article 18 of RSTA) 

G. Reduction of Tax Regarding the 

Movement of a Factory That Has Been 

Operated for More Than Five Years 

(Article 71 of RSTA) 

H. Tax Reductions or Exemption on 

Foreign Investments under Article 9 of 

the Foreign Investment Promotion Act 

(‘‘FIPA’’)/FIPA (Formerly Foreign 

Capital Inducement Law) 

I. Duty Drawback on Non-Physically 

Incorporated Items and Excessive Loss 

Rates 

J. Electricity Discounts Under the 

Requested Load Adjustment (‘‘RLA’’) 

Program 

K. Import Duty Reduction for Cutting 

Edge Products 

L. System IC 2010 Project 

M. Operation G–7/HAN Program 

Preliminary Results of Review 

In accordance with 19 CFR 

351.221(b)(4)(i), we calculated an 

individual subsidy rate for Hynix, the 

producer/exporter covered by this 

administrative review. We preliminarily 

determine that the total estimated net 

countervailable subsidy rate for Hynix 

for the POR is 2.94 percent ad valorem. 

If these preliminary results are 

adopted in our final results of this 

review, 15 days after publication of the 

final results of this review the 

Department will instruct CBP to 

liquidate shipments of DRAMS by 

Hynix entered or withdrawn from 

warehouse, for consumption from 

January 1, 2008, through August 10, 

2008, at 2.94 percent ad valorem of the 

entered value. 

On October 3, 2008, the Department 

published a Federal Register notice 

that, inter alia, revoked this order, 

effective August 11, 2008. See Dynamic 

Random Access Memory 

Semiconductors From the Republic of 

Korea: Final Results of Sunset Review 

and Revocation of Order, 73 FR 57594 

(October 3, 2008). As a result, CBP is no 

longer suspending liquidation for 

entries of subject merchandise occurring 

after the revocation. Therefore, there is 

no need to issue new cash deposit 

instructions in the final results of this 

administrative review. 

Public Comment 

Interested parties may submit written 

arguments in case briefs within 30 days 

of the date of publication of this notice. 

Rebuttal briefs, limited to issues raised 

in case briefs, may be filed not later than 

five days after the date of filing the case 

briefs. Parties who submit briefs in this 

proceeding should provide a summary 

of the arguments not to exceed five 

pages and a table of statutes, 

regulations, and cases cited. Copies of 

case briefs and rebuttal briefs must be 

served on interested parties in 

accordance with 19 CFR 351.303(f). 

Interested parties may request a 

hearing within 30 days after the date of 

publication of this notice. Unless 

otherwise specified, the hearing, if 

requested, will be held two days after 

the scheduled date for submission of 

rebuttal briefs. 

The Department will publish a notice 

of the final results of this administrative 

review within 120 days from the 

publication of these preliminary results. 

We are issuing and publishing these 

results in accordance with sections 

751(a)(1) and 777(i)(1) of the Act. 

Dated: September 7, 2010. 

Ronald K. Lorentzen, 

Deputy Assistant Secretary for Import 

Administration. 

[FR Doc. 2010–22889 Filed 9–13–10; 8:45 am] 

BILLING CODE 3510–DS–P 

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 Sixteenth Antidumping Duty 

Administrative Review 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

SUMMARY: In response to timely 

requests, the Department of Commerce 

(the Department) is conducting the 

sixteenth administrative review of the 

antidumping order on corrosionresistant carbon steel flat products 

(CORE) from the Republic of Korea 

(Korea).1 This review covers eight 

manufacturers and/or exporters 

(collectively, the respondents) of the 

subject merchandise: LG Chem., Ltd. 

(LG Chem); Haewon MSC Co. Ltd. 

(Haewon); Dongbu Steel Co., Ltd., 


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