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

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Information about this document as published in the Federal Register.

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AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

The Department of Commerce (“the Department”) determines that structural steel beams from South Korea are being, or are likely to be, sold in the United States at less than fair value.

Based on our analysis of the comments received, we have made changes to our analysis. Therefore, this final determination differs from the preliminary determination. The final weighted-average dumping margins are listed below in the section entitled “Continuation of Suspension of Liquidation.”

EFFECTIVE DATE:

July 5, 2000.

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FOR FURTHER INFORMATION CONTACT:

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

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SUPPLEMENTARY INFORMATION:

The Applicable Statute and Regulations

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

Background

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

Scope of Investigation

The products covered by this investigation are doubly-symmetric shapes, whether hot- or cold-rolled, drawn, extruded, formed or finished, having at least one dimension of at least 80 mm (3.2 inches or more), whether of carbon or alloy (other than stainless) steel, and whether or not drilled, punched, notched, painted, coated or clad. These products include, but are not limited to, wide-flange beams (“W” shapes), bearing piles (“HP” shapes), standard beams (“S” or “I” shapes), and M-shapes.

All products that meet the physical and metallurgical descriptions provided above are within the scope of this investigation unless otherwise excluded. The following products, are outside and/or specifically excluded from the scope of this investigation: structural steel beams greater than 400 pounds per linear foot or with a web or section height (also known as depth) over 40 inches.

The merchandise subject to this investigation is classified in the Harmonized Tariff Schedule of the United States (“HTSUS”) at subheadings: 7216.32.0000, 7216.33.0030, 7216.33.0060, 7216.33.0090, 7216.50.0000, 7216.61,0000, 7216.69.0000, 7216.91.0000, 7216.99.0000, 7228.70.3040, 7228.70.6000. Although the HTSUS subheadings are provided for convenience and Customs purposes, the written description of the merchandise under investigation is dispositive.

Use of Facts Available

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

Fair Value Comparisons

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

Export Price

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

Inchon

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

b. We disregarded all of Inchon's U.S. Channel 3 sales to a particular customer. See Decision Memo, Comment 11.

c. We applied additional expenses for all Inchon's U.S. sales to account for various additional movement fees, excluding U.S. marine insurance, incurred on certain U.S. sales. See Decision Memo, Comment 13.

d. We adjusted Hyundai Corporation's indirect selling expenses for U.S. sales. See Decision Memo, Comment 14.

e. We adjusted Inchon's reported packing expenses for all U.S. sales. See Decision Memo, Comment 19.Start Printed Page 41438

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

Kangwon

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

Constructed Export Price

As discussed in Comment 28 of the Decision Memo, we now determine that Inchon's sales through Hyundai U.S.A. are CEP sales. For Inchon's sales to U.S. customers via Hyundai U.S.A. (Channel 1), we used CEP as defined section 772 of the Act. We calculated CEP, in accordance with subsections 772(b), (c), and (d) of the Act, for those sales to the first unaffiliated purchaser that took place after importation into the United States. We based CEP on the packed, delivered, duty paid or delivered prices to unaffiliated purchasers in the United States. We made deductions for movement expenses in accordance with section 772(c)(2)(A) of the Act; these included, where appropriate, foreign inland freight from the plant to the port of export, foreign wharfage, international freight, marine insurance, U.S. warehousing expenses, U.S. loading expenses, U.S. custom duty, U.S. wharfage expenses and U.S. brokerage expenses. In accordance with section 772(d)(1) of the Act, we deducted those selling expenses associated with economic activities occurring in the United States, including direct selling expenses (imputed credit expenses) and indirect selling expenses. For CEP sales, we also made an adjustment for profit in accordance with section 772(d)(3) of the Act. Additionally, we added to the U.S. price an amount for duty drawback pursuant to section 772(c)(1)(B) of the Act. For a further discussion of this issue, see Final Analysis Memo: Inchon. Additionally, we made the following adjustments:

a. We applied additional expenses for all of Inchon's U.S. sales to account for various additional movement fees, excluding U.S. marine insurance, incurred on certain U.S. sales. See Decision Memo, Comment 13.

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

c. We adjusted Hyundai Corporation's indirect selling expenses for U.S. sales. See Decision Memo, Comment 14.

d. We adjusted Inchon's reported packing expenses for all U.S. sales. See Decision Memo, Comment 19.

e. Based on our verification findings from the Hyundai U.S.A. verification, we are deducting U.S. brokerage expenses on a per invoice basis. See Final Analysis Memo: Inchon.

f. We deducted other discounts (which Inchon reported in its December 10, 1999, supplemental questionnaire response), where applicable, from the U.S. prices. See Final Analysis Memo: Inchon.

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

Normal Value

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

1. Cost of Production Analysis

Inchon

a. We increased Inchon's direct materials costs to account for materials supplied by affiliated parties. See Decision Memo, Comment 1.

b. We revised Inchon's reported depreciation expenses to account for machinery and equipment supplied by affiliated parties. See Decision Memo, Comment 3.

c. We revised Inchon's reported repairs and maintenance expenses to account for services supplied by affiliated parties. See Decision Memo, Comment 4.

d. We revised Inchon's reported R&D expenses. See Decision Memo, Comment 6.

e. We revised Inchon's reported interest expenses. See Decision Memo, Comment 9.

Kangwon

a. We adjusted Kangwon's interest expense to account for the disallowance of the gain on debt restructure. See Decision Memo, Comment 26.

b. We recalculated the foreign exchange gains and losses included in the interest expense calculation by using Kangwon's historical method of amortizing these amounts over the life of the related debt.

c. We adjusted Kangwon's G&A expense rate computation for various miscellaneous income and expense items. See Decision Memo, Comment 27.

2. Calculation of NV Based on Comparison Market Prices

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

3. Calculation of NV Based on Constructed Value

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

Level of Trade

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

Currency Conversions

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

Verification

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

Analysis of Comments Received

All issues raised in the case and rebuttal briefs by parties to this investigation are addressed in the Decision Memo dated June 26, 2000, which is hereby adopted. A list of the issues which parties have raised and to which we have responded, all of which are in the Decision Memo, is attached to this notice as an appendix. Parties can find a complete discussion of all issues raised in this investigation and the corresponding recommendations in this public memorandum which is on file in Room B-099. In addition, a complete version of the Decision Memo can be accessed directly on the Web at Start Printed Page 41439 www.ita.doc.gov/​import-admin/​records/​frn/​. The paper copy and electronic version of the Decision Memo are identical in content.

Continuation of Suspension of Liquidation

In accordance with section 735(c)(1)(A) of the Act, we are directing the U.S. Customs Service (“Customs”) to suspend liquidation of all imports of the subject merchandise from South Korea that are entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice in the Federal Register. Customs shall require a cash deposit or the posting of a bond equal to the weighted-average amount by which the NV exceeds the EP and CEP as indicated in the chart below. These suspension of liquidation instructions will remain in effect until further notice.

Article VI.5 of the General Agreement on Tariffs and Trade (GATT 1994) provides that “[n]o product * * * shall be subject to both antidumping and countervailing duties to compensate for the same situation of dumping or export subsidization.” This provision is implemented in section 772(c)(1)(C) of the Tariff Act. Since antidumping duties cannot be assessed on the portion of the margin attributed to export subsidies there is no reason to require a cash deposit or bond for that amount. The Department has determined in its concurrent countervailing duty investigation for structural steel beams from Korea that the product under investigation benefitted from export subsidies. Normally, where the product under investigation is also subject to a concurrent countervailing duty investigation, we instruct the Customs Service to require a cash deposit or posting of a bond equal to the weighted-average amount by which the NV exceeds the EP, as indicated below, minus the amount determined to constitute an export subsidy. See, e.g. Notice of Antidumping Duty Order: Stainless Steel Wire Rod From Italy, 63 FR 49327 (September 15, 1998). Accordingly, for cash deposit purposes we are subtracting from Kangwon's cash deposit rate that portion of the rate attributable to the export subsidies found in the countervailing duty investigation involving Kangwon(i.e., 0.09 percent). We have made the same adjustment to the “All Others” cash deposit rate by subtracting the rate attributable to export subsidies found in the countervailing duty investigation of Kangwon.

We will instruct the Customs Service to require a cash deposit or the posting of a bond for each entry equal to the weighted-average amount by which the NV exceeds the EP or CEP, adjusting for the export subsidy rate, as indicated below. These suspension-of-liquidation instructions will remain in effect until further notice. The weighted-average dumping margins are as follows:

[In percent]

Exporter/manufacturerWeighted-average marginBonding/cash deposit rate
Inchon25.5125.51
Kangwon49.7349.64
All others37.7237.67

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

ITC Notification

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

This determination is issued and published in accordance with sections 735(d) and 777(i)(1) of the Act.

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Dated: June 26, 2000.

Troy H. Cribb,

Acting Assistant Secretary for Import Administration.

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APPENDIX

List of Comments and Issues in the Decision Memo

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

A. Cost of Production/Constructed Value Issues

Comment 1: Applicant of Major Input Rule

Comment 2: Application of Major Input Rule to Other Affiliated-Party Transactions

Comment 3: Description

Comment 4: Overhead

Comment 5: SG&A Expenses

Comment 6: R&D Expenses

Comment 7: Interest Expense (Securities)

Comment 8: Interest Expense (Sales-Related Activities)

Comment 9: Loan Guarantees

Comment 10: Affiliated-Party Services for an Input

B. Sales and General Issues

Comment 11: Sales Price and Adjustments for U.S. Channel 3

Comment 12: Billing Adjustments for U.S. Channel 2 sales

Comment 13: U.S. Movement Expenses

Comment 14: Recalculation of Home Market and U.S. Indirect Selling Expenses

Comment 15: Home Market Sales to an Affiliated Customer

Comment 16: Fees to a Home Market Customer

Comment 17: Home Market Inland Freight

Comment 18: Application of Total Adverse Facts Available

Comment 19: Packing Expenses for U.S. Sales

Comment 20: Clarification of Home Market and U.S. Verification Reports

II. Issues Specific to Kangwon Industries Ltd.

A. Sales and General Issues

Comment 21: Commissions

Comment 22: Duty Drawback

Comment 23: Home Market Freight

Comment 24: Corrections to Kangwon's Response

Comment 25: Over- and Under-Reporting of Home Market Sales

B. Cost of Production/Constructed Value Issues

Comment 26: Gain on Exemption of Debt

Comment 27: G&A Expenses

III. Issues Applicable to Both Respondents

Comment 28: EP vs. CEP Sales

Comment 29: Cash Deposit Rate/Successorship

Comment 30: Home Market Sales of ASTM-Grade Merchandise

Comment 31: Banking Negotiation Fees

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[FR Doc. 00-16952 Filed 7-3-00; 8:45 am]

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