[Federal Register Volume 79, Number 198 (Tuesday, October 14, 2014)]
[Notices]
[Pages 61602-61605]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-24375]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-583-852]


Non-Oriented Electrical Steel From Taiwan: Final Affirmative 
Countervailing Duty Determination

AGENCY: Enforcement and Compliance, International Trade Administration, 
Department of Commerce.

SUMMARY: The Department of Commerce (the Department) determines that 
countervailable subsidies are being provided to producers and exporters 
of non-oriented electrical steel from Taiwan. For information on the 
estimated subsidy rates, see the ``Suspension of Liquidation'' section 
of this notice.

DATES: Effective Date: October 14, 2014.

FOR FURTHER INFORMATION CONTACT: Patricia Tran or Christopher Hargett, 
Office III, Enforcement and Compliance, U.S. Department of Commerce, 
Room CC116, 14th Street and Constitution Avenue NW., Washington, DC 
20230; telephone: 202-482-1503 or 202-482-4161, respectively.

SUPPLEMENTARY INFORMATION:

Background

    The petitioner in this investigation is AK Steel Corporation 
(Petitioner). This investigation covers 22 government programs. The 
mandatory respondents in this investigation are China Steel Corporation 
(CSC) and its cross-owned affiliates Dragon Steel Corporation (DSC), 
HiMag Magnetic Corporation (HIMAG) and China Steel Global Trading 
Corporation (CSGT) (collectively, CSC Companies) and Leicong Industrial 
Company, Ltd. (Leicong).
    The events that occurred since the Department published the 
Preliminary Determination on March 25, 2014,\1\ are discussed in the 
Memorandum to Paul Piquado, Assistant Secretary for Enforcement and 
Compliance, ``Issues and Decision Memorandum for the Final Affirmative 
Countervailing Duty Determination in the Countervailing Duty 
Investigation of Non-Oriented Electrical Steel from Taiwan'' (Decision 
Memorandum), which is hereby adopted by this notice.\2\
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    \1\ See Non-Oriented Electrical Steel from Taiwan: Preliminary 
Countervailing Duty Determination and Alignment of Final 
Determination With Final Antidumping Determination, 79 FR 16290 
(March 25, 2014) (Preliminary Determination).
    \2\ Public versions of all business proprietary documents and 
all public documents are on file electronically via Enforcement and 
Compliance's Antidumping and Countervailing Duty Centralized 
Electronic Service System (IA ACCESS). Access to IA ACCESS is 
available to registered users at http://iaaccess.trade.gov and in 
the Central Records Unit (CRU), Room 7046 of the main Department of 
Commerce building.
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Period of Investigation

    The period of investigation for which we are measuring subsidies is 
January 1, 2012, through December 31, 2012.

Scope Comments

    In the AD Initiation Notice,\3\ the Department invited interested 
parties to ``to raise issues regarding product coverage.'' On November 
22, and 26, 2013, Petitioner requested that the Department clarify the 
scope by lowering the minimum silicon content from 1.25 percent to 1.00 
percent, removing altogether the maximum silicon content, and including 
language regarding surface oxide coating.\4\ On January 28, 2014, 
POSCO/DWI,\5\ a respondent in the companion less than fair value (LTFV) 
investigation of NOES from the Republic of Korea, filed scope comments 
with the Department in which it requested that the Department clarify 
whether laminations and cores, downstream products fabricated from 
NOES, and certain NOES specifications with silicon content less than 
the percentage identified in the scope of NOES investigations contained 
in the AD Initiation Notice, are covered by this and the companion 
investigations.\6\ On February 4, 2014, Petitioner responded to POSCO/
DWI's comments, stating (1) that laminations and cores are out of the 
scope of the investigations to the extent that exclusion only covers 
products that are suitable for use (without further processing) as a 
drop-in part of a core; and (2) that the Department should promptly 
implement the changes to the scope of the investigations relating to 
silicon content described in Petitioner's Proposed Scope Changes, and 
clarify for POSCO/DWI the data that it should report to the 
Department.\7\
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    \3\ See Non-Oriented Electrical Steel from the People's Republic 
of China, Germany, Japan, the Republic of Korea, Sweden, and Taiwan: 
Initiation of Antidumping Duty Investigations, 78 FR 69041 (November 
18, 2013) (AD Initiation Notice); concurrent antidumping duty (AD) 
investigation.
    \4\ See Letter from Petitioner to the Department, ``Petitions 
for the Imposition of Antidumping and Countervailing Duties against 
Non-Oriented Electrical Steel from China, Germany, Japan, Korea, 
Sweden, Taiwan/Petition Amendment to Clarify the Proposed Scope 
Definition,'' dated November 22, 2013 (``Petitioner's Proposed Scope 
Changes''); and Letter from Petitioner, ``Non-Oriented Electrical 
Steel from China, Germany, Japan, Korea, Sweden, Taiwan: 
Petitioner's Comments on the Scope of Investigations,'' dated 
November 26, 2013.
    \5\ On January 23, 2014, POSCO and Daewoo International 
Corporation (DWI) filed a joint response in the concurrent LTFV 
investigation of NOES from Korea. The Department preliminarily found 
these two companies to be a single entity in the AD investigation. 
See the memorandum from Senior Advisor, Gary Taverman, to Acting 
Assistant Secretary, Ronald K. Lorentzen entitled ``Decision 
Memorandum for the Preliminary Affirmative Determination in the 
Less-Than-Fair-Value Investigation of Non-Oriented Electrical Steel 
from the Republic of Korea'' dated May 15, 2014.
    \6\ See Letter from POSCO/DWI to the Department, ``Scope 
Clarification Requests,'' dated January 28, 2014.
    \7\ See Letter from Petitioner to the Department, ``Re: Non-
Oriented Electrical Steel from China, Germany, Japan, Korea, Sweden 
and Taiwan/Petitioner's Response to POSCO's Scope Clarification 
Requests,'' dated February 4, 2014.
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    After analyzing the scope comments regarding silicon content and 
surface oxide coatings, the Department decided to lower the minimum 
silicon content identified in the scope from 1.25 percent to 1.00 
percent and to include language regarding surface oxide coating in the 
scope. However, the Department decided not to eliminate the maximum 
silicon content in the scope. For a complete discussion of these 
decisions see the memorandum to Christian Marsh, Deputy Assistant 
Secretary for Antidumping and Countervailing Duty Operations from 
Robert Bolling, Program Manager for AD/CVD Operations, Office IV, 
regarding ``Scope Modification Requests,'' dated April 10, 2014, and 
hereby incorporated by reference into this memorandum. The scope 
language below reflects these decisions.
    With respect to the issue involving laminations and cores, POSCO/
DWI described laminations as products that are cut from NOES into their 
finished shape by a punch and die or, when in smaller quantities, by 
laser or wire erosion.\8\ The laminations are subsequently assembled 
together to form laminated transformer cores or electric motor stator 
and rotor parts.\9\

[[Page 61603]]

POSCO/DWI commented that it understands that laminations and cores 
manufactured from NOES are products not subject to these investigations 
because NOES is manufactured in sheet or strip form, either in coils or 
in straight lengths, and any subsequent processing is not simply an 
extension of the NOES production process, but, instead, processing 
performed by the end user or by a fabricator that sells to the end 
user.\10\ POSCO/DWI commented that NOES is consumed exclusively in the 
production of laminated cores for transformers as well as stators and 
rotors for motors, and generators.\11\ Depending on the design 
requirements of an end user, the standard lamination products are cut 
``E,'' ``I,'' or ``U,'' or varying combinations thereof, while highly 
complex lamination products are customized with numerous sides, curved 
edges, or numerous punched holes.\12\ POSCO/DWI commented that the 
process of converting NOES coil or strip into laminations or cores 
constitutes a substantial transformation into products with end uses 
and customer expectations different from those for NOES.\13\
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    \8\ See Letter from POSCO/DWI to the Department, ``Scope 
Clarification Requests,'' dated January 28, 2014, at 3.
    \9\ Id., at 3-4.
    \10\ POSCO refers to the production process for NOES described 
in the petitions and in the International Trade Commission's 
preliminary determination that POSCO understands to mean that the 
NOES production process ends with slitting. Id., at 4.
    \11\ See Letter from POSCO/DWI to the Department, ``Scope 
Clarification Requests,'' dated January 28, 2014, at 3-4.
    \12\ Id., at 4-5.
    \13\ Id., at 5.
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    In its reply to POSCO/DWI's scope clarification request, Petitioner 
stated that it agrees with POSCO/DWI that laminations and cores are 
outside the intended scope of the NOES investigations.\14\ Petitioner 
commented that to the extent the term ``laminations'' is used as a 
substitute for the term laminated ``cores,'' Petitioner likewise agrees 
that laminations that are ready for assembly into cores are excluded 
from the intended scope of the NOES investigations.\15\ Petitioner 
noted that it does not agree with POSCO/DWI that the production process 
for NOES necessarily ends with slitting; because the scope definition 
covers NOES ``whether or not in coils,'' simply cutting to length or 
cutting blanks from a coil (whether slit or not) does not take such 
products out of the scope.\16\ Petitioner stated that it agrees 
nevertheless with POSCO/DWI that laminations cut from NOES to their 
finished shape and are otherwise suitable for use, without further 
processing, as a drop-in part of the core, are outside the intended 
scope of the NOES investigations.\17\
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    \14\ See Letter from Petitioner to the Department, ``Non-
Oriented Electrical Steel from China, Germany, Japan, Korea, Sweden 
and Taiwan/Petitioner's Response to POSCO's Scope Clarification 
Requests,'' dated February 4, 2014, at 2.
    \15\ See id. Referring to POSCO/DWI's Scope Comments, Petitioner 
interprets POSCO/DWI's statement, that POSCO/DWI uses the terms 
laminations and cores interchangeably in the normal course of 
business, to mean that laminations are a substitute for cores.
    \16\ Id.
    \17\ Id.
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    On the basis of Petitioner's statements that it is not seeking 
relief from laminations and cores made from NOES, we modified the scope 
to reflect this exclusion.\18\
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    \18\ See Letter from Petitioner to the Department, ``Non-
Oriented Electrical Steel from The People's Republic of China, 
Germany, Japan, The Republic of Korea, Sweden, and Taiwan: Scope 
Clarification Language,'' dated May 12, 2014.
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Scope of the Investigation

    The merchandise subject to this investigation consists of NOES, 
which includes cold-rolled, flat-rolled, alloy steel products, whether 
or not in coils, regardless of width, having an actual thickness of 
0.20 mm or more, in which the core loss is substantially equal in any 
direction of magnetization in the plane of the material. The term 
``substantially equal'' means that the cross grain direction of core 
loss is no more than 1.5 times the straight grain direction (i.e., the 
rolling direction) of core loss. NOES has a magnetic permeability that 
does not exceed 1.65 Tesla when tested at a field of 800 A/m 
(equivalent to 10 Oersteds) along (i.e., parallel to) the rolling 
direction of the sheet (i.e., B<INF>800</INF> value). NOES contains by 
weight more than 1.00 percent of silicon but less than 3.5 percent of 
silicon, not more than 0.08 percent of carbon, and not more than 1.5 
percent of aluminum. NOES has a surface oxide coating, to which an 
insulation coating may be applied.
    The subject merchandise is provided for in subheadings 
7225.19.0000, 7226.19.1000, and 7226.19.9000 of the HTSUS. Subject 
merchandise may also be entered under subheadings 7225.50.8085, 
7225.99.0090, 7226.92.5000, 7226.92.7050, 7226.92.8050, 7226.99.0180 of 
the HTSUS. Although HTSUS subheadings are provided for convenience and 
customs purposes, the written description of the scope is 
dispositive.\19\
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    \19\ For a full description of the scope of this investigation, 
see the memorandum from Gary Taverman, Associate Deputy Assistant 
Secretary for Antidumping and Countervailing Duty Operations to Paul 
Piquado, Assistant Secretary for Enforcement and Compliance, 
``Issues and Decision Memorandum for the Final Affirmative 
Countervailing Duty Determination in the Countervailing Duty 
Investigation of Non-Oriented Electrical Steel from Taiwan'' (Issues 
and Decision Memorandum), dated concurrently with this notice.
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Analysis of Subsidy Programs and Comments Received

    The subsidy programs under investigation and the issues raised in 
the case and rebuttal briefs submitted by parties in this investigation 
are addressed in the Issues and Decision Memorandum, dated concurrently 
with this notice. A list of subsidy programs and the issues that 
parties raised, and to which we responded in the Decision Memorandum, 
is attached to this notice as Appendix I.
    The Issues and Decision and Scope Memoranda are public documents 
and are on file electronically via Enforcement and Compliance's 
Antidumping and Countervailing Duty Centralized Electronic Service 
System (IA ACCESS). IA ACCESS is available to registered users at 
http://iaaccess.trade.gov, and is available to all parties in the 
Central Records Unit, room 7046 of the main Department of Commerce 
building. In addition, complete versions of the Issues and Decision and 
Scope Memoranda can be accessed directly at http://enforcement.trade.gov/frn/index.html. The signed and the electronic 
versions of these memoranda are identical in content.

Use of Facts Otherwise Available, Including Adverse Inferences

    For purposes of this final determination, we continue to apply 
adverse facts available (AFA) to Leicong in accordance with sections 
776(a) and (b) of the Tariff Act of 1930, as amended (the Act). A full 
discussion of our decision to rely on AFA is presented in the Issues 
and Decision Memorandum under the section ``Use of Facts Otherwise 
Available and Adverse Inferences.''

Suspension of Liquidation

    In accordance with section 705(c)(1)(B)(i) of the Act, we 
calculated a rate for each respondent. Section 705(c)(5)(A)(i) of the 
Act states that for companies not individually investigated, we will 
determine an ``all others'' rate equal to the weighted average 
countervailable subsidy rates established for exporters and producers 
individually investigated, excluding any zero and de minimis 
countervailable subsidy rates, and any rates determined entirely under 
section 776 of the Act. If the rates established for all exporters and 
producers individually investigated are zero, de minimis, or determined 
entirely under facts available, the Department may use any reasonable

[[Page 61604]]

method to establish an all-others rate.\20\ Leicong's rate was 
determined entirely under facts available with an adverse inference. 
The CSC Companies' rate is de minimis. Thus, in accordance with section 
705(c)(5)(A)(ii) of the Act, we are applying as the all others rate the 
average of the rate calculated for Leicong and the rate calculated for 
the CSC Companies.
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    \20\ See section 705(c)(5)(A)(ii) of the Act.
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    We determine the total estimated net countervailable subsidy rates 
to be:

------------------------------------------------------------------------
           Producer/exporter                 Subsidy rate  (percent)
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China Steel Corporation (CSC) and its   0.48 (de minimis).
 cross-owned affiliates Dragon Steel
 Corporation (DSC), HiMag Magnetic
 Corporation (HIMAG) and China Steel
 Global Trading Corporation
 (CSGT)(collectively, CSC Companies.).
Leicong Industrial Company, Ltd         17.12.
 (Leicong).
All Others............................  8.80.
------------------------------------------------------------------------

    As a result of our Preliminary Determination and pursuant to 
section 703(d) of the Act, we instructed U.S. Customs and Border 
Protection (CBP) to suspend liquidation of all entries of subject 
merchandise from Taiwan \21\ which were entered or withdrawn from 
warehouse, for consumption on or after March 25, 2014, the date of the 
publication of the Preliminary Determination in the Federal Register. 
In accordance with section 703(d) of the Act, we later issued 
instructions to CBP to discontinue the suspension of liquidation for 
countervailing duty (CVD) purposes for subject merchandise entered, or 
withdrawn from warehouse, on or after July 23, 2014, but to continue 
the suspension of liquidation of all entries \22\ from March 25, 2014, 
through July 22, 2014.
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    \21\ Other than entries produced and/or exported by the CSC 
Companies for which we calculated a de minimis rate in the 
Preliminary Determination.
    \22\ Id.
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    If the U.S. International Trade Commission (ITC) issues a final 
affirmative injury determination, we will issue a CVD order and 
reinstate the suspension of liquidation under section 706(a) of the Act 
and will require a cash deposit of estimated CVDs for such entries of 
merchandise in the amounts indicated above, other than those produced 
and exported by the CSC Companies because the CSC Companies' rate is de 
minimis. If the ITC determines that material injury, or threat of 
material injury, does not exist, this proceeding will be terminated and 
all estimated duties deposited or securities posted as a result of the 
suspension of liquidation will be refunded or canceled.

ITC Notification

    In accordance with section 705(d) of the Act, we will notify the 
ITC of our determination. In addition, we are making available to the 
ITC all non-privileged and non-proprietary information related to this 
investigation. We will allow the ITC access to all privileged and 
business proprietary information in our files, provided the ITC 
confirms that it will not disclose such information, either publicly or 
under an administrative protective order (APO), without the written 
consent of the Assistant Secretary for Enforcement and Compliance.

Return or Destruction of Proprietary Information

    In the event that the ITC issues a final negative injury 
determination, this notice will serve as the only reminder to parties 
subject to an APO of their responsibility concerning the destruction of 
proprietary information disclosed under APO in accordance with 19 CFR 
351.305(a)(3). Timely written notification of the return/destruction of 
APO materials or conversion to judicial protective order is hereby 
requested. Failure to comply with the regulations and terms of an APO 
is a violation that is subject to sanction.
    This determination is published pursuant to sections 705(d) and 
777(i) of the Act.

    Dated: October 6, 2014.
Paul Piquado,
Assistant Secretary for Enforcement and Compliance.

Appendix I

List of Subsidy Programs and Issues in the Decision Memorandum

A. Programs Determined To Be Countervailable
    1. Tariff Exemption for Imported Equipment
    2. Income Tax Credit for Upgraded Equipment
    3. Shareholder's Investment Tax Credit for Participation in 
Infrastructure Projects
    4. Shareholder's Investment Tax Credit for Investment in Newly 
Emerging, Important and Strategic Industries
    5. Conventional Industry Technology Development
    6. Self-Evaluation Service
    7. Building and Land Value Tax Deduction for Supplying to Major 
Infrastructure Projects
    8. Major Infrastructure Projects--Land Lease Program
B. Program Determined To Be Not Countervailable
    1. Income Tax Credit for Research and Development Expenses
    2. Partial Payment for Electricity Bill of Strong-Motion 
Observation Station
C. Programs Determined To Not Confer a Benefit During the POI
    1. Industrial Technology Development Program
    2. Strengthen the Ability of Emerging Development Program
    3. Subsidy for Certain Photovoltaic Power Stations
    4. Payment for Trade Remedy Proceedings
    5. Five-Year Income Tax Exemption Incentive for New Investments
    6. Verification of Greenhouse Gas Emission Inventory
D. Programs Determined To Be Not Used
    1. Income Tax Credits for Investment in Designated Regions
    2. Income Tax Credits for Participating in Infrastructure 
Projects
    3. Grants for Developing an International Image and Brand
    4. Subsidies for Companies that Invest in Industrial Parks
E. Programs for Which More Information is Necessary
    1. Sustainable Employment Program
F. Comments From Interested Parties
    Comment 1: Whether the CSC Companies Were Disproportionate Users 
of Certain Programs
    Comment 2: Whether the Industrial Technology Development Program 
and the Ability of Emerging Development Program are Separate 
Programs
    Comment 3: Whether Certain Programs Are De Facto Specific by 
Virtue of Limited Use
    Comment 4: Whether Benefits Under the Grants for Photovoltaic 
Power Stations (SCPPS) Program Are Tied to Non-Subject Subject 
Merchandise
    Comment 5: Whether the Department Should Apply Total AFA to 
Leicong
    Comment 6: Whether the Department Should not Include Certain 
Programs in Leicong's Total AFA Rate
    Comment 7: Whether Subsidies Under the Companies that Invest in 
Industrial Parks and Major Infrastructure Projects--Land Lease 
Programs Are Separate Programs
    Comment 8: Whether the Department Should Use Benefit and Sales 
Data from the TA to Calculate a Rate for Leicong

[[Page 61605]]

with Regard to the Conventional Industry Technology Development 
Program and the Self Evaluation Service Program
    Comment 9: Whether the Verification of Greenhouse Gas Emission 
Inventory Program is Countervailable with Regard Leicong
    Comment 10: Corroboration of the AFA Rate Applied to Leicong
    Comment 11: Calculation of the All-Others Rate

[FR Doc. 2014-24375 Filed 10-10-14; 8:45 am]
BILLING CODE 3510-DS-P