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Dynamic Random Access Memory Semiconductors from the Republic of Korea: Preliminary Results of Countervailing Duty Administrative Review

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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, 2006, through December 31, 2006. 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 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.

EFFECTIVE DATE:

August 13, 2008.

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FOR FURTHER INFORMATION CONTACT:

David Neubacher or Shane Subler, 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) 482-5823 and (202) 482-0189, respectively.

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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 (“ROK”). See Notice of Countervailing Duty Order: Dynamic Random Access Memory Semiconductors from the Republic of Korea, 68 FR 47546 (Aug. 11, 2003) (“CVD Order”). On August 2, 2007, the Department 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, 72 FR 42383 (Aug. 2, 2007). On August 27, 2007, we received a request for review from Hynix Semiconductor, Inc. (“Hynix”). On August 29, 2007, we received a request for review of Hynix 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 25, 2007. See Initiation of Antidumping and Countervailing Duty Administrative Reviews, 72 FR 54428 (September 25, 2007) (“Initiation Notice”).

On October 23, 2007, we issued countervailing duty questionnaires to the Government of the Republic of Korea (“GOK”) and Hynix. We received responses to these questionnaires on November 26, 2007. On April 1, 2008, we issued supplemental questionnaires to the GOK and Hynix. We received timely responses to these supplemental questionnaires on April 15, 2008. We issued additional supplemental questionnaires to the GOK and Hynix on June 12, and July 16, 2008, and received responses on June 26, and July 23, 2008, respectively.

We received new subsidy allegations from Micron on December 17, 2007.[1] On March 17, 2008, we initiated an investigation of one of the two new subsidies that Micron alleged in this administrative review. In addition, we stated that we did not intend to reexamine the timing of the benefit of a previously countervailed debt-to-equity swap (“DES”) for the preliminary results. See Fourth Countervailing Duty Administrative Review: Dynamic Random Access Memory Semiconductors from Korea: New Subsidy Allegations Memorandum (Mar. 17, 2008) (“New Subsidy Allegations—DOC Memorandum”), available in the Central Records Unit (“CRU”), Room 1117 of the main Department building. On March 25, 2008, we issued questionnaires concerning the new subsidy allegation to Hynix and the GOK. We received a response to this questionnaire from Hynix on April 8, 2008, and from the GOK on April 9, 2008. On July 14, 2008, Micron submitted comments for consideration in the preliminary results.

On April 7, 2008, we published a postponement of the preliminary results in this review until July 31, 2008. See Dynamic Random Access Memory Semiconductors from the Republic of Korea: Extension of Time Limit for Preliminary Results of the Start Printed Page 47132Countervailing Duty Administrative Review, 73 FR 18771 (Apr. 7, 2008).

Scope of the Order

The products covered by this order are DRAMS from the ROK, whether assembled or unassembled. Assembled DRAMS include all package types. Unassembled DRAMS include processed wafers, uncut die, and cut die. Processed wafers fabricated in the ROK, but assembled into finished semiconductors outside the ROK are also included in the scope. Processed wafers fabricated outside the ROK and assembled into finished semiconductors in the ROK are not included in the scope.

The scope of this order additionally includes memory modules containing DRAMS from the ROK. 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. This order also covers future DRAMS module types.

The scope of this 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 data-out, 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 this order are removable memory modules placed on motherboards, with or without a central processing unit, unless the importer of the motherboards certifies with 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 this order does not include DRAMS or memory modules that are re-imported for repair or replacement.

The DRAMS subject to this 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 the ROK, 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. (“Cisco”), 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 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, 2006, through December 31, 2006.

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) (“Modification Notice”). The Department's new methodology is based on a rebuttable “baseline” presumption that non-recurring, 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 during the POR because Hynix's Share Management Council decreased its ownership share in Hynix from 50.6 percent to 36 percent. However, during the current administrative review, Hynix has not rebutted the Department's baseline presumption that the non-recurring, allocable subsidies received prior to the equity conversions, asset sales, and POR ownership change continue to benefit the company throughout the allocation period. See Hynix's November 26, 2007, questionnaire response at pages 9 and 10.

Subsidies Valuation Information

Allocation Period

Pursuant to 19 CFR 351.524(b), non-recurring 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 non-recurring benefits over the five-year AUL.

Discount Rates and Benchmarks for Loans

For loans that we found countervailable in the investigation or Start Printed Page 47133in the first three administrative reviews, and which continued to be outstanding during the POR, we have used the benchmarks from the first, second, and third administrative reviews. These benchmarks are described below.

Long-Term Rates

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 (“IMF”). For long-term won-denominated loans originating in 1996 through 1999, we used annual weighted averages of the rates on Hynix's corporate bonds, which were not specifically related to any countervailable financing. 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 U.S. dollar-denominated loans, we relied on the lending rates as reported in the IMF's International Financial Statistics Yearbook.

For 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. 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.

Analysis of Programs

I. Programs Previously Determined To Confer Subsidies

We examined the following programs determined to confer subsidies in the investigation and first three administrative reviews and preliminarily find that Hynix continued to receive benefits under these programs during the POR.

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 (“D/A”) 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 the first three administrative reviews, the Department 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 DES and the extensions of maturities and/or interest rate deductions on existing debt.[2]

In an administrative review, we do not revisit past findings unless new factual information or evidence of changed circumstances has been placed on the record of the proceeding that would compel us to reconsider those findings. See, e.g., Certain Pasta from Italy: Preliminary Results and Partial Rescission of Seventh Countervailing Duty Administrative Review, 69 FR 45676 (July 30, 2004), unchanged in Certain Pasta From Italy: Final Results of Seventh Countervailing Duty Administrative Review, 69 FR 70657 (December 7, 2004). No such new factual information or evidence of changed circumstances has been placed on the record in this review. Thus, we preliminarily find that a re-examination of the Department's findings in the investigation, first administrative review, second administrative review, and third administrative review with respect to the debt forgiveness, 2002 DES, loans, and extensions of maturities and/or interest rate deductions on existing debt is unwarranted.

Because we found Hynix to be unequityworthy at the time of the 2002 DES, we have treated the full amount swapped as grants and allocated the benefit over the five-year AUL. See 19 CFR 351.507(a)(6) and (c). We used a discount rate that reflects our finding that Hynix was uncreditworthy at the time of the debt-to-equity conversions. For the loans, we have followed the methodology described at 19 CFR 351.505(c) using the benchmarks described in the “Subsidies Valuation Information” section of this notice.

We divided the total benefits allocated to the POR from the various financial contributions by Hynix's POR sales. On this basis, we preliminarily determine the countervailable subsidy to be 4.86 percent ad valorem during the POR.

B. Operation G-7/HAN Program

Implemented under the Framework on Science and Technology Act, the Operation G-7/HAN Program (“G-7/HAN Program”) began in 1992 and ended in 2001. The purpose of this program was to raise the GOK's technology standards to the level of the G-7 countries. The Department found that the G7/HAN Program ended in 2001. 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 page 25. However, during the POR, Hynix had outstanding interest-free loans that it had previously received under this program. See Hynix's November 26, 2007, questionnaire response at page 13 and Exhibit 10.

We found that the G-7/HAN Program provided countervailable subsidies in the investigation. 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 “Subsidy Valuation Information” section of this notice. Next, we divided the total benefit by Hynix's total sales of subject merchandise for the POR to calculate the countervailable subsidy. On this basis, we preliminarily determine the countervailable subsidy to be 0.03 percent ad valorem during the POR.

C. 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 Start Printed Page 47134to 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 November 26, 2007, questionnaire response at page 14 and Exhibit 10.

In the investigation, we determined that this program conferred a countervailable benefit 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 “Subsidy Valuation Information” section of this notice. We then divided the total 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. Consistent with our past practice, we did not include this program in our preliminary net countervailing duty rate because the rate of the program is less than 0.005 percent ad valorem. See, e.g., Coated Free Sheet Paper from the People's Republic of China: Final Determination of Countervailing Duty Investigation, 72 FR 60645 (October 25, 2007), and accompanying Issues and Decision Memorandum at 16 (“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,”' (citing Final Results of Administrative Review: 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”) (“Uranium from France”).

D. 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 (‘MOFE’) 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 November 26, 2007, questionnaire response at page 19 and Exhibit 14.

In the 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 section 771(5)(D)(ii) of the Tariff Act of 1930, as amended (the Act), and 19 CFR 351.510(a). See Dynamic Random Access Memory Semiconductors from the Republic of Korea: Final Results of Countervailing Duty Administrative Review, 73 FR 14218 (March 17, 2008) (“DRAMS 3rd AR Final”), and the accompanying Issues and Decision Memorandum at pages 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 determine the countervailable subsidy to be 0.02 ad valorem percent during the POR.

II. Newly Alleged Subsidy Program Preliminarily Determined To Be Not-Used Import-Export Bank of Korea Loan

Micron alleges that Hynix received a new, subsidized loan during the POR from the Import-Export Bank of Korea (“KEXIM”), which the Department previously found to be a government authority. Therefore, Micron alleges that KEXIM, as a government authority, provided a financial contribution within the meaning of section 771(5)(D) of the Act and a benefit within the meaning of section 771(5)(E) of the Act. Furthermore, Micron argues the loan was specific within the meaning of section 771(5A) of the Act as the loan was based on export performance, an import substitution program or another enumerated domestic program.

On March 17, 2008, the Department included this newly alleged subsidy in this review. As discussed above in the “History” section, we received questionnaire and supplemental responses from the GOK and Hynix with regard to this program.

In its April 9, 2008, questionnaire response, the GOK stated that Hynix received the loan under KEXIM's “Import Financing Program.” As outlined in Article 18, paragraph 1, subparagraph 4 of the 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.

Based on our analysis, any potential benefit to Hynix under this program is less than 0.005 percent ad valorem. To determine this, we applied Micron's proposed interest benchmark, the highest submitted rate on record, in the calculation. As explained above, where the countervailable subsidy rate for a program is less than 0.005 percent, the program is not included in the total countervailing duty rate. See CFS and Uranium from France. Accordingly, it is unnecessary in this review for the Department to make a finding as to the countervailability of this program for this POR. We will include an examination of this subsidy in a future administrative review.

III. 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. Short-Term Export Financing

B. Reserve for Research and Human Resources Development (formerly Technological Development Reserve) (Article 9 of RSTA / formerly, Article 8 of TERCL) Start Printed Page 47135

C. Tax Credit for Investment in Facilities for Productivity Enhancement (Article 24 of RSTA/Article 25 of TERCL)

D. Tax Credit for Investment in Facilities for Special Purposes (Article 25 of RSTA)

E. Reserve for Overseas Market Development (formerly, Article 17 of TERCL)

F. Reserve for Export Loss (formerly, Article 16 of TERCL)

G. Tax Exemption for Foreign Technicians (Article 18 of RSTA)

H. Reduction of Tax Regarding the Movement of a Factory That Has Been Operated for More Than Five Years (Article 71 of RSTA)

I. Tax Reductions or Exemption on Foreign Investments under Article 9 of the Foreign Investment Promotion Act (“FIPA”)/ FIPA (Formerly Foreign Capital Inducement Law)

J. Duty Drawback on Non-Physically Incorporated Items and Excessive Loss Rates

K. Export Insurance

L. Electricity Discounts Under the RLA Program

M. Import Duty Reduction for Cutting Edge Products.

See Hynix's November 26, 2007, questionnaire response at pages 13 and 16 and the GOK's November 26, 2007, questionnaire response at page 9.

In the first administrative review, the Department found that “any benefits provided to Hynix under the System IC 2010 Project are tied to non-subject merchandise” and, therefore, that “Hynix did not receive any countervailable benefits under this program during the POR,” in accordance with 19 CFR 351.525(b)(5). See Dynamic Random Access Memory Semiconductors from the Republic of Korea: Final Results of Countervailing Duty Administrative Review, 71 FR 14174 (March 21, 2006), and the accompanying Issues and Decision Memorandum at page 15. No new information has been provided with respect to this program. Therefore, we preliminarily find that Hynix did not receive any countervailable benefits from the System IC 2010 Project during the POR.

Preliminary Results of Review

In accordance with 19 CFR 351.221(b)(4)(i), we calculated an individual subsidy rate for Hynix Semiconductor, Inc., the producer/exporter covered by this administrative review. We preliminarily determine that the total estimated net countervailable subsidy rate for Hynix for calendar year 2006 is 4.91 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 U.S. Customs and Border Protection (“CBP”) to liquidate shipments of DRAMS by Hynix entered or withdrawn from warehouse, for consumption from January 1, 2006, through December 31, 2006, at 4.91 percent ad valorem of the entered value.

We will instruct CBP to continue to collect cash deposits for non-reviewed companies covered by this order at the most recent company-specific rate applicable to the company. Accordingly, the cash deposit rate that will be applied to non-reviewed companies covered by this order will be the rate for that company established in the investigation. See Notice of Amended Final Affirmative Countervailing Duty Determination: Dynamic Random Access Memory Semiconductors from the Republic of Korea, 68 FR 44290 (July 28, 2003). The all-others rate shall apply to all non-reviewed companies until a review of a company assigned this rate is requested. The Department has previously excluded Samsung Electronics Co., Ltd. from this order. Id.

On May 23, 2008, Hynix requested that the Department adjust Hynix's deposit rate to reflect a program-wide change and more accurately reflect countervailing duty liability. Citing 19 CFR 351.526, Hynix claims that the Department has regulations involving program-wide changes that allow it to adjust the deposit rate, as well as the discretion to effect changes in the deposit rate where circumstances do not fit the more formal program-wide change criteria under the regulations.[3]

Hynix claims that those circumstances exist in this case. Specifically, Hynix notes that the “change” is the termination of a known non-recurring subsidy benefit stream during the POR. Citing Magnesium from Canada,[4] Hynix states that the Department considers two key elements when adjusting a cash deposit rate when no formal change has occurred: (1) Whether the information needed to make the deposit rate adjustment was derived entirely from the POR; and (2) whether expiry of the subsidy meant that the expected countervailing duty rate for entries subject to the deposit rate in the review would be de minimis.[5] Hynix asserts that both conditions are met here.

In its pre-preliminary comments, Micron objects to Hynix's request. Micron first notes that the situation in the review does not meet the elements of a “program-wide” change as defined by 19 CFR 351.526, and that the Department has previously stated that expiration of benefits from a non-recurring subsidy does not qualify as a program-wide change.[6] Furthermore, citing the DRAMS 3AR Final Decision Memo,[7] Micron states that the Department rejected Hynix's request to adjust the cash deposit rate because expiration of a non-recurring subsidy in that review would lead to a lower but not de minimis rate, given the presence of other subsidy programs. In the instant case, Micron asserts that the same situation exists. Specifically, while Micron concedes the last non-recurring subsidy will expire during the POR, it argues that there are several remaining programs (e.g., Operation G-7/HAN Program and Import Duty Reduction Program) as well as loans from GOK entrustment or direction prior to 2004, and that Hynix cannot demonstrate that the combined total of these programs is de minimis or that the company will not continue to receive such benefits in the next review period.

It is the Department's general practice to adjust cash deposit rates to reflect the expected discontinuation of future subsidy benefits only where it has been demonstrated that a program-wide change has occurred, pursuant to 19 CFR 351.526. As we stated in the Magnesium from Canada at Comment 2 and restated in the DRAMS 3AR Final Decision Memo, the Department provided a narrowly circumscribed exception to this general practice only where certain, specific conditions were met; namely, (1) The information needed to make the adjustment is derived entirely from the POR and (2) the expiry of the subsidy means that the expected countervailing duty rate for Start Printed Page 47136entries subject to the deposit rate set in that review is de minimis. While those circumstances did not exist in the prior review, we have considered Hynix's request again in this review.

We preliminarily determine that the information submitted by Hynix supports the requested adjustment to the cash deposit rate. The information needed to calculate the adjustment, i.e., a subsidy of zero for the allocated subsidy that expired in the POR, is derived entirely from this POR. Also, removal of the subsidy for the expired program results in an ad valorem rate of 0.07 percent, which is de minimis (see 19 CFR 351.106(c)(1)). Therefore, we preliminarily find that if our preliminary subsidy calculations remain unchanged for the final results, merchandise produced and/or exported by Hynix will not be subject to cash deposits of estimated countervailing duties because the countervailing duty rate is de minimis.

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.

Start Signature

Dated: July 31, 2008.

David M. Spooner,

Assistant Secretary for Import Administration.

End Signature End Supplemental Information

Footnotes

1. See submission from Micron to the Department, Re: Dynamic Random Access Memory Semiconductors From South Korea/Petitioner's New Subsidies Allegation And New Issues Presented (Dec. 17, 2007) (“New Subsidy Allegations”).

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2.  The Department also found that Hynix received a benefit for a 2001 DES. However, the benefit was fully allocated as of the prior administrative review.

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3.  See Stainless Steel Sheet and Strip in Coils from France: Final Results of Countervailing Duty Administrative Review, 68 FR 53963 (September 15, 2003), and accompanying Issues and Decision Memorandum at Comment 3 (“SSSC from France”); and Low Enriched Uranium from Germany, the Netherlands, and the United Kingdom: Final Results of Countervailing Duty Administrative Reviews, 69 FR 40869 (July 7, 2004), and accompanying Issues and Decision Memorandum at Comment 3 (“Uranium”).

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4.  See Pure Magnesium and Alloy Magnesium from Canada: Final Results of Countervailing Duty Administrative Review, 70 FR 54367 (September 14, 2005), and accompanying Issues and Decision Memorandum at Comment 2 (“Magnesium from Canada”).

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5.  See, also, SSSC from France and Uranium.

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6.  See Carbon and Ally Steel Wire Rod from Canada: Final Affirmative Countervailing Duty Determination, 67 FR 55813 (August 30, 2002), and accompanying Issues and Decision Memorandum at Comment 11.

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7.  See DRAMS 3rd AR Final and accompanying Issues and Decision Memorandum at Comment 4 (“DRAMS 3AR Final Decision Memo”).

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[FR Doc. E8-18772 Filed 8-12-08; 8:45 am]

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