Certain Corrosion-Resistant Carbon Steel Flat Products from the Republic of Korea: Notice of Preliminary Results and Partial Rescission of Antidumping Duty Administrative Review, 53153-53159 [E5-4867]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 70, Number 172 (Wednesday, September 7, 2005)]
[Notices]
[Pages 53153-53159]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-4867]


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DEPARTMENT OF COMMERCE

International Trade Administration

(A-580-816)


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

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: In response to requests from petitioners, the Department of 
Commerce (the Department) is conducting the eleventh administrative 
review of the antidumping order on corrosion-resistant carbon steel 
flat products (CORE) from Korea.\1\ This review covers five 
manufacturers and exporters (collectively, the respondents) of the 
subject merchandise: Dongshin Special Steel Co., Ltd., (Dongshin); 
Dongbu Steel Co., Ltd. (Dongbu); Hyundai HYSCO (HYSCO); Pohang Iron & 
Steel Company, Ltd. and Pohang Coated Steel Co., Ltd. (POCOS), and 
Pohang Steel Industries Co., Ltd. (PSI) (collectively, the POSCO 
Group); and Union Steel Manufacturing Co., Ltd. (Union). The period of 
review (POR) for this review is August 1, 2003, through July 31, 2004. 
We preliminarily determine that during the POR, Dongbu, the POSCO 
Group, and Union made sales of subject merchandise at less than normal 
value (NV). However, we preliminary determine that HYSCO did not make 
sales of subject merchandise at less than NV (i.e., sales were made at 
``zero'' or de minimis dumping margins). If these preliminary results 
are adopted in the final results of this administrative review, we will 
instruct U.S. Customs and Border Protection (CBP) to assess HYSCO's 
appropriate entries at an antidumping liability of zero percent of the 
entered value and instruct CBP to assess Dongbu, Dongshin, the POSCO 
Group, and Union at the rates referenced in the ``Preliminary Results 
of the Review'' section of this notice.
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    \1\ Petitioners are the Mittal Steel USA ISG, Inc., United 
States Steel Corporation, and Nucor Corporation.
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    Furthermore, we are rescinding the request for review of the 
antidumping order for SeAH Steel Corporation (SeAH) because SeAH and 
its affiliates did not have exports or sales in the United States of 
subject merchandise manufactured or produced by SeAH during the POR. 
Because Dongshin failed to respond to the Department's questionnaire, 
we preliminarily

[[Page 53154]]

determine to resort to adverse facts available to determine Dongshin's 
dumping margin. Interested parties are invited to comment on these 
preliminary results. Parties who submit comments in this segment of the 
proceeding should also submit with them: (1) a statement of the issues 
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and (2) a brief summary of the comments.

EFFECTIVE DATE: September 7, 2005.

FOR FURTHER INFORMATION CONTACT: Jolanta Lawska (Union), Preeti Tolani 
(Dongbu), Victoria Cho (the POSCO Group), and Joy Zhang (HYSCO), AD/CVD 
Operations, Office 3, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
8362, (202) 482-0395, (202) 482-5075, and (202) 482-1168, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On August 19, 1993, the Department published the antidumping order 
on CORE from Korea. See Antidumping Duty Orders on Certain Cold-Rolled 
Carbon Steel Flat Products and Certain Corrosion-Resistant Carbon Steel 
Flat Products from Korea, 58 FR 44159 (August 19, 1993) (Orders on 
Certain Steel from Korea). On August 3, 2004, we published in the 
Federal Register the notice of Antidumping or Countervailing Duty 
Order, Finding, or Suspended Investigation; Opportunity to Request 
Administrative Review, 69 FR 46496 (August 3, 2004). On August 31, 
2004, petitioners requested a review of Dongbu, Dongshin, HYSCO, the 
POSCO Group, SeAH, and Union. The Department initiated this review on 
September 22, 2004. See Notice of Initiation of Antidumping and 
Countervailing Duty Administrative Reviews and Request for Revocation 
in Part, 69 FR 56745 (September 22, 2004).
    During the most recently completed segments of the proceeding in 
which Dongbu, HYSCO, the POSCO Group, and Union participated, the 
Department disregarded sales below the cost of production (COP) that 
failed the cost test.\2\ Therefore, pursuant to section 
773(b)(2)(A)(ii) of the Tariff Act of 1930, as amended (the Act), we 
had reasonable grounds to believe or suspect that sales by these 
companies of the foreign like product under consideration for the 
determination of NV in this review were made at prices below the COP. 
We instructed Dongshin, Dongbu, HYSCO,\3\ the POSCO Group, and Union to 
respond to sections A-D of the initial questionnaire,\4\ which we 
issued on November 1, 2004.
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    \2\ Certain Corrosion-Resistant Carbon Steel Flat Products from 
the Republic of Korea: Notice of Preliminary Results of Antidumping 
Duty Administrative Review and Antidumping Duty New Shipper Review, 
69 FR 54101, 54106-7 (September 7, 2004) (Preliminary Results from 
the 10th Review of CORE from KOREA); Notice of Final Result of the 
Tenth Administrative Review and New Shipper of the Antidumping Duty 
Order on Certain Corrosion Resistant Carbon Steel Flat Products from 
the Republic of Korea, 70 FR 12443 (March 14, 2005) (Final Results 
from the10th Review of CORE from Korea) and accompanying Issues and 
Decisions Memorandum (10th Review Decision Memo) at 10.
    \3\ In the previous segment the Department included a new 
shipper review of HYSCO. See Preliminary Results from the 10th 
Review of CORE from KOREA, 69 FR 54101 and Final Results from the 
10th Review of CORE from Korea, 70 FR 12443.
    \4\ Section A: Organization, Accounting Practices, Markets and 
Merchandise
    Section B: Comparison Market Sales
    Section C: Sales to the United States
    Section D: Cost of Production and Constructed Value
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    On April 7, 2005, the Department published an extension of 
preliminary results of the eleventh administrative review until August 
31, 2005. See Corrosion Resistant Carbon Steel Flat Products From 
Korea: Extension of Time Limits for the Preliminary Results of 
Antidumping Duty Administrative Review, 70 FR 17648 (April 7, 2005).

Rescission of Administrative Review for SeAH

    On November 29, 2004, SeAH submitted a letter certifying that 
neither SeAH nor its affiliates exported or sold in the United States 
subject merchandise manufactured or produced by SeAH during the POR. We 
conducted an internal customs data query on August 1, 2005. The data 
query indicated that SeAH and its affiliates did not have entries of 
subject merchandise manufactured or produced by SeAH into the United 
States during the POR. See August 10, 2005, Internal Customs Data Query 
memorandum to the file from the team, which is available in the Central 
Records Unit (CRU) room B099 in the main Department of Commerce 
building.

Dongshin

    Dongshin failed to respond to the initial questionnaire sent by the 
Department on November 1, 2004. On January 5, 2005, the Department sent 
a follow up letter to Dongshin inquiring whether it intended to respond 
to the Department's initial questionnaire and indicating that its 
failure to do so could result in the use of adverse facts available. 
Dongshin failed to respond to the questionnaire or to the January 5, 
2005, letter.

Dongbu

    On January 10, 2005, Dongbu submitted its sections A-C response to 
the initial questionnaire. On February 25, 2005, Dongbu submitted its 
section D response to the initial questionnaire. On June 9, 2005, 
Dongbu submitted its supplemental questionnaire response to the 
Department's May 17, 2005, questionnaire for sections A through D. On 
July 22, 2005, Dongbu submitted its second supplemental questionnaire 
response to the Department's July 1, 2005 questionnaire for sections B 
through D. On August 17, 2005, Dongbu submitted its third supplemental 
questionnaire response to the Department's August 3, 2005, supplemental 
questionnaire.

Union

    On January 19, 2005, Union submitted its sections A-C responses to 
the initial questionnaire. On February 25, 2005, Union submitted its 
section D response to the initial questionnaire. On May 6, 2005, Union 
submitted its supplemental questionnaire response to the Department's 
April 8, 2005 questionnaire for sections A through C. On June 30, 2005, 
Union submitted its supplemental questionnaire response to the 
Department's June 3, 2005 questionnaire for section D. On August 17, 
2005, Union submitted its second supplemental questionnaire response to 
the Department's August 3, 2005, questionnaire for sections A through 
D.

The POSCO Group

    On January 31, 2005, the POSCO Group submitted its sections A 
through D response to the initial questionnaire. On June 23, 2005, the 
POSCO Group submitted its supplemental questionnaire response to the 
Department's May 25, 2005, questionnaire for sections A through D.

HYSCO

    On January 10, 2005, HYSCO submitted its sections A through C 
response to the initial questionnaire. On April 12, 2005, HYSCO 
submitted its section D response to the initial questionnaire. On May 
5, 2005, HYSCO submitted its supplemental questionnaire response to the 
Department's April 8, 2005 questionnaire for sections A through C. On 
July 15, 2005, HYSCO submitted its second supplemental questionnaire 
response to the Department's June 24, 2005 questionnaire for sections A 
through D. On August 9, 2005, HYSCO submitted a second supplemental 
questionnaire response to the Department's July 22, 2005 and August 3, 
2005 questionnaires for section D.

[[Page 53155]]

Period of Review

    The POR covered by this review is August 1, 2003, through July 31, 
2004.

Scope of the Order

    This order covers flat-rolled carbon steel products, of rectangular 
shape, either clad, plated, or coated with corrosion-resistant metals 
such as zinc, aluminum, or zinc-, aluminum-, nickel- or iron-based 
alloys, whether or not corrugated or painted, varnished or coated with 
plastics or other nonmetallic substances in addition to the metallic 
coating, in coils (whether or not in successively superimposed layers) 
and of a width of 0.5 inch or greater, or in straight lengths which, if 
of a thickness less than 4.75 millimeters, are of a width of 0.5 inch 
or greater and which measures at least 10 times the thickness or if of 
a thickness of 4.75 millimeters or more are of a width which exceeds 
150 millimeters and measures at least twice the thickness, as currently 
classifiable in the Harmonized Tariff Schedule of the United States 
(HTSUS) under item numbers 7210.30.0030, 7210.30.0060, 7210.41.0000, 
7210.49.0030, 7210.49.0090, 7210.61.0000, 7210.69.0000, 7210.70.6030, 
7210.70.6060, 7210.70.6090, 7210.90.1000, 7210.90.6000, 7210.90.9000, 
7212.20.0000, 7212.30.1030, 7212.30.1090, 7212.30.3000, 7212.30.5000, 
7212.40.1000, 7212.40.5000, 7212.50.0000, 7212.60.0000, 7215.90.1000, 
7215.90.3000, 7215.90.5000, 7217.20.1500, 7217.30.1530, 7217.30.1560, 
7217.90.1000, 7217.90.5030, 7217.90.5060, 7217.90.5090. Included in the 
order are flat-rolled products of non-rectangular cross-section where 
such cross-section is achieved subsequent to the rolling process 
including products which have been beveled or rounded at the edges 
(i.e., products which have been ``worked after rolling''). Excluded 
from this review are flat-rolled steel products either plated or coated 
with tin, lead, chromium, chromium oxides, both tin and lead (``terne 
plate''), or both chromium and chromium oxides (``tin-free steel''), 
whether or not painted, varnished or coated with plastics or other 
nonmetallic substances in addition to the metallic coating. Also 
excluded from this review are clad products in straight lengths of 
0.1875 inch or more in composite thickness and of a width which exceeds 
150 millimeters and measures at least twice the thickness. Also 
excluded from this review are certain clad stainless flat-rolled 
products, which are three-layered corrosion-resistant carbon steel 
flat-rolled products less than 4.75 millimeters in composite thickness 
that consist of a carbon steel flat-rolled product clad on both sides 
with stainless steel in a 20%-60%-20% ratio.
    These HTSUS item numbers are provided for convenience and customs 
purposes. The written descriptions remain dispositive.

Use of Adverse Facts Available

    In accordance with section 776(a)(2) of the Act, the Department has 
determined that the use of facts available is appropriate for purposes 
of determining the preliminary dumping margins for the subject 
merchandise sold by Dongshin. Section 776(a)(2) of the Act provides in 
relevant part:
    If an interested party (A) withholds information that has been 
requested by the administrating authority; (B) fails to provide such 
information by the deadlines for submission of the information or in 
the form and manner requested, subject to subsections (c)(I) and (e) of 
section 782; (C) significantly impedes a proceeding under this 
subtitle; or (D) provides such information but the information cannot 
be verified as provided in section 782(I), the administering authority 
shall, subject to section 782(d) of this title, use the facts otherwise 
available in reaching the applicable determination under this subtitle.
     Moreover, section 776(b) of the Act provides in relevant part 
that:
    If the administering authority finds that an interested party has 
failed to cooperate by not acting to the best of its ability to comply 
with a request for information from the administering authority, the 
administering authority, in reaching the applicable determination under 
this subtitle, may use an inference that is adverse to the interests of 
the party in selecting from among the facts otherwise available.
    As explained above in the ``Background'' section of these 
preliminary results, Dongshin, despite the Department's repeated 
inquiries, failed to provide a response to the Department's initial 
questionnaire. Therefore, we have determined that Dongshin's failure to 
respond to the Department's questionnaire warrants the use of facts 
otherwise available pursuant to sections 776(a)(2)(A) and (C) of the 
Act. Furthermore, because of Dongshin's failure to respond to the 
Department's questionnaire and letter of January 5, 2005, we find that 
Dongshin failed to cooperate by not acting to the best of its ability 
to comply with the Department's request for information. Accordingly, 
the Department is using an inference that is adverse to Dongshin in the 
preliminary results pursuant to section 776(b) of the Act. 
Specifically, as described below, we are using the highest calculated 
margin in this proceeding as AFA.
    Section 776(c) of the Act provides that when the Department selects 
from among the facts otherwise available and relies on ``secondary 
information,'' the Department shall, to the extent practicable, 
corroborate that information from independent sources reasonably at the 
Department's disposal. The Statement of Administrative Action (SAA) 
provides that ``corroborate'' means simply that the Department will 
satisfy itself that the secondary information to be used has probative 
value. See Statement of Administrative Action accompanying the Uruguay 
Round Agreements Act, H.R. Doc. No. 103-316 at 870 (1994) and 19 CFR 
351.308(d). However, unlike other types of information, such as input 
costs or selling expenses, there are no independent sources for 
calculated dumping margins. The only source for calculated margins is 
administrative determinations. Thus, in an administrative review, if 
the Department chooses as total adverse facts available a calculated 
dumping margin from a prior segment of the proceeding, it does not 
question the reliability of the margin for that time period. See Grain-
Oriented Electrical Steel from Italy: Preliminary Results of 
Antidumping Duty Administrative Review, 61 FR 36551, 36552 (July 11, 
1996). With respect to the relevance aspect of corroboration, however, 
the Department will consider information reasonably at its disposal to 
determine whether a margin continues to have relevance. Where 
circumstances indicate that the selected margin is not appropriate as 
adverse facts available, the Department will disregard the margin and 
determine an appropriate margin.
    For example, in Fresh Cut Flowers from Mexico: Final Results of 
Antidumping Administrative Review, 61 FR 6812, 6814 (February 22, 
1996), the Department disregarded the highest margin in that case as 
adverse best information available (the predecessor to facts available) 
because the margin was based on another company's rate that was 
uncharacteristic of the industry, resulting in an unusually high 
margin. Similarly, the Department does not apply a margin that has been 
discredited. See D & L Supply Co. v. United States, 113 F.3d 1220, 1223 
(Fed. Cir. 1997) (the Department will not use

[[Page 53156]]

a margin that has been invalidated); see also F. Lli De Cecco di 
Filippo v. United States, 216 F.3d 1027 (Fed. Cir. 2000). Accordingly, 
for Dongshin we have resorted to adverse facts available and have used 
17.70 percent,\5\ the highest margin upheld in this proceeding, as the 
margin for these preliminary results because there is no evidence on 
the record indicating that such a margin is not appropriate as adverse 
facts available. See Orders on Certain Steel from Korea.
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    \5\ This rate was a calculated rate based on the weighted-
average margin for Pohang Iron and Steel, the sole respondent in the 
investigation of corrosion-resistant steel from Korea. See Final 
Determinations of Sales at Less Than Fair Value: Certain Hot-Rolled 
Carbon Steel Flat Products, Certain Cold-Rolled Carbon Steel Flat 
Products, Certain Corrosion-Resistant Carbon Steel Flat Products, 
and Certain Cut-to-Length Carbon Steel Plate From Korea, 58 FR 
37176, 37191-2 (July 9, 1993); see also Amendment of Final 
Determinations of Sales at Less Than Fair Value: Certain Hot-Rolled 
Carbon Steel Flat Products, Certain Cold-Rolled Carbon Steel Flat 
Products, Certain Corrosion-Resistant Carbon Steel Flat Products, 
and Certain Cut-to-Length Carbon Steel Plate From Korea, 58 FR 
41083, 41084 (August 2, 1993).
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Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
CORE products produced by the respondents, covered by the scope of the 
order, and sold in the home market during the POR to be foreign like 
products for the purpose of determining appropriate product comparisons 
to CORE sold in the United States.
    Where there were no sales in the ordinary course of trade of 
identical merchandise in the home market to compare to U.S. sales, we 
compared U.S. sales to the next most similar foreign like product on 
the basis of the characteristics listed in Appendix V of the 
Department's antidumping questionnaire. In making the product 
comparisons, we matched foreign like products based on the physical 
characteristics reported by the respondent. Where sales were made in 
the home market on a different weight basis from the U.S. market 
(theoretical versus actual weight), we converted all quantities to the 
same weight basis, using the conversion factors supplied by the 
respondent, before making our fair-value comparisons.

Normal Value Comparisons

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

Export Price/Constructed Export Price

    We calculated the price of U.S. sales based on CEP, in accordance 
with section 772(b) of the Act. The Act defines the term ``constructed 
export price'' as ``the price at which the subject merchandise is first 
sold (or agreed to be sold) in the United States before or after the 
date of importation by or for the account of the producer or exporter 
of such merchandise or by a seller affiliated with the producer or 
exporter, to a purchaser not affiliated with the producer or exporter, 
as adjusted under subsections (c) and (d) of this section.'' (19 U.S.C. 
1677a(b)). In contrast, section 772(a) of the Act defines ``export 
price'' as ``the price at which the subject merchandise is first sold 
(or agreed to be sold) before the date of importation by the producer 
or exporter of the subject merchandise outside of the United States to 
an unaffiliated purchaser in the United States or to an unaffiliated 
purchaser for exportation to the United States, as adjusted under 
subsection (c) of this section.'' (19 U.S.C. 1677a(a)).
    In determining whether to classify U.S. sales as either EP or CEP 
sales, the Department must examine the totality of the circumstances 
surrounding the U.S. sales process, and assess whether the reviewed 
sales were made ``in the United States'' for purposes of section 772(b) 
of the Act. In the instant case, the record establishes that Dongbu's, 
the POSCO Group's, Union's, and HYSCO's affiliates in the United States 
(1) took title to the subject merchandise and (2) invoiced and received 
payment from the unaffiliated U.S. customers for their sales of the 
subject merchandise to those U.S. customers. Thus, the Department has 
determined that these U.S. sales should be classified as CEP 
transactions.
    For Dongbu, the POSCO Group, Union, and HYSCO, we calculated CEP 
based on packed prices to unaffiliated customers in the United States. 
Where appropriate, we made deductions from the starting price for 
foreign inland freight, foreign inland insurance, foreign brokerage and 
handling, international freight, marine insurance, U.S. warehousing 
expenses, U.S. wharfage, U.S. inland freight, U.S. brokerage and 
handling, loading expenses, other U.S. transportation expenses, U.S. 
customs duties, commissions, credit expenses, letter of credit 
expenses, warranty expenses, other direct selling expenses, inventory 
carrying costs incurred in the United States, and other indirect 
selling expenses in the country of manufacture and the United States 
associated with economic activity in the United States. Pursuant to 
section 772(d)(3) of the Act, we made an adjustment for CEP profit. 
Where appropriate, we added interest revenue to the gross unit price.
    In order to ensure that we have accounted for all appropriate U.S. 
interest expenses (i.e. both imputed and actual) without double-
counting, we have utilized the following interest expense methodology. 
As in a previous review, in the U.S. indirect selling expenses, we have 
included net financial expenses incurred by the respondent's U.S. 
affiliates; however, we added U.S. interest expenses only after 
deducting U.S. imputed credit expenses and U.S. inventory carrying 
costs, so as to eliminate the possibility of double-counting U.S. 
interest expenses.\6\
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    \6\ See Issues and Decision Memorandum for the Final Results of 
Antidumping Administrative Review of Cold-Rolled (CR) and Corrosion- 
Resistant (CORE) Carbon Steel Flat Products from Korea, from Joseph 
A. Spetrini to Faryar Shirzad, Comment 1, (March 11, 2002) (Final 
Results of the 7th Administrative Review), on file in the CRU.
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    Consistent with the Department's normal practice, we added the 
reported duty drawback to the gross unit price. We did so in accordance 
with the Department's long-standing test, which requires: (1) that the 
import duty and rebate be directly linked to, and dependent upon, one 
another; and (2) that the company claiming the adjustment demonstrate 
that there were sufficient imports of imported raw materials to account 
for the duty drawback received on the exports of the manufactured 
product. See Certain Cold-Rolled and Corrosion-Resistant Carbon Steel 
Flat Products from Korea: Preliminary Results, 65 FR 54197, 54202 
(September 7, 2000) (Preliminary Results of the 6th Review of CORE from 
Korea).

Normal Value

    Based on a comparison of the aggregate quantity of home market and 
U.S. sales, we determined that the quantity of the foreign like product 
sold in the exporting country was sufficient to permit a proper 
comparison with the sales of the subject merchandise to the United 
States, pursuant to section 773(a) of the Act. Therefore, in accordance 
with section 773(a)(1)(B)(I) of the Act, we based NV on the price at 
which the foreign like product was first sold for consumption in the 
home market, in the usual commercial quantities and in the ordinary 
course of trade.
    Where appropriate, we deducted rebates, discounts, inland freight 
(offset,

[[Page 53157]]

where applicable, by freight revenue), inland insurance, and packing. 
Additionally, we made adjustments to NV, where appropriate, for credit 
expenses (offset, where applicable, by interest income), warranty 
expenses, post-sale warehousing, and differences in weight basis. We 
also made adjustments, where appropriate, for home market indirect 
selling expenses and inventory carrying costs to offset U.S. 
commissions.
    We also increased NV by U.S. packing costs in accordance with 
section 773(a)(6)(A) of the Act. We made adjustments to NV for 
differences in cost attributable to differences in physical 
characteristics of the merchandise, pursuant to section 
773(a)(6)(C)(ii) of the Act. In accordance with the Department's 
practice, where all contemporaneous matches to a U.S. sale observation 
resulted in difference-in-merchandise adjustments exceeding 20 percent 
of the cost of manufacturing (COM) of the U.S. product, we based NV on 
constructed value (CV). See Policy Bulletin, Number 92.2, Difmer 20% 
Rule, July 29, 1992.
    For purposes of calculating the NV, section 771(16) of the Act 
defines ``foreign like product'' as merchandise which is either (1) 
identical or (2) similar to the merchandise sold in the U.S. When there 
are no identical products sold in the home market, the products which 
are most similar to the product sold in the U.S. are identified. For 
the non-identical or most similar products which are identified based 
on the Department's product matching criteria, an adjustment is made to 
the home market sales price to account for the actual physical 
differences between the products sold in the U.S. and the home market 
or third country market. See 19 CFR 351.411 and section 
773(a)(6)(C)(ii) of the Act.

Level of Trade

    In accordance with section 773(a)(1)(B) of the Act, we determined 
NV based on sales in the comparison market at the same level of trade 
(LOT) as the CEP sales, to the extent practicable. When there were no 
sales at the same LOT, we compared U.S. sales to comparison market 
sales at a different LOT. When NV is based on CV, the NV LOT is that of 
the sales from which we derive selling expenses, general, and 
administrative expenses (SG&A), and profit.
    Pursuant to section 351.412 of the Department's regulations, to 
determine whether comparison market sales were at a different LOT, we 
examine stages in the marketing process and selling functions along the 
chain of distribution between the producer and the unaffiliated (or 
arm's-length) customers. If the comparison-market sales are at a 
different LOT and the differences affect price comparability, as 
manifested in a pattern of consistent price differences between the 
sales on which NV is based and comparison-market sales at the LOT of 
the export transaction, we will make a LOT adjustment under section 
773(a)(7)(A) of the Act. For CEP sales, if the NV LOT is more remote 
from the factory than the CEP LOT and there is no basis for determining 
whether the differences in LOT between NV and CEP affected price 
comparability, we will grant a CEP offset, as provided in section 
773(a)(7)(B) of the Act. See Notice of Final Determination of Sales at 
Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate from 
South Africa, 62 FR 61731, 61732-33 (November 19, 1997).
    We did not make an adjustment under section 351.412(e) of the 
Department's regulations because, as there was only one home market 
level of trade for each respondent, we were unable to identify a 
pattern of consistent price differences attributable to differences in 
levels of trade (see 19 CFR 351.412(d)). Under section 351.412(f) of 
the Department's regulations, we are preliminarily granting a CEP 
offset for Dongbu, HYSCO, the POSCO group, and Union because NV for 
these companies are at a more advanced level of trade than the U.S. CEP 
sales.
    For a detailed description of our LOT methodology and a summary of 
company-specific LOT findings for these preliminary results, see the 
August 31, 2005, company-specific calculation memoranda for Dongbu, 
HYSCO, the POSCO group, and Union, which are on file in the CRU.

Cost of Production/Constructed Value

A. Calculation of COP

    We are investigating COP for Dongbu, HYSCO, the POSCO group, and 
Union because during the most recently completed segments of the 
proceeding in which Dongbu, HYSCO, the POSCO Group, and Union 
participated, the Department found and disregarded sales that failed 
the cost test. We calculated a company-specific COP for Dongbu, HYSCO, 
the POSCO Group, and Union based on the sum of each respondent's cost 
of materials and fabrication for the foreign like product, plus amounts 
for home-market selling expenses, SG&A, and packing costs in accordance 
with section 773(b)(3) of the Act. We relied on Dongbu's, the POSCO 
Group's, Union's and HYSCO's information as submitted.

B. Major Input Rule

    Pursuant to section 773(f)(2) and (3) of the Act and section 
351.407(b) of the Department's regulations, the Department may value 
major inputs purchased from affiliated suppliers at the higher of the 
transfer price, the market price, or the affiliate's COP. HYSCO 
reported purchases of raw material input accounting for a significant 
portion of its total material cost from an affiliated supplier. We 
requested that HYSCO supply its affiliate supplier's COP information 
for the major material input. In HYSCO's letter dated July 12, 2005 and 
supplemental questionnaire response dated July 15, 2005, HYSCO 
indicated that, despite its repeated requests, its affiliated supplier 
has refused to provide the COP information. Where an interested party 
or any other person withholds necessary information that has been 
requested, the application of facts available is appropriate in 
reaching a determination, in accordance with section 776(a) of the Act. 
Under section 776(b) of the Act, we may use an inference adverse to the 
interests of an interested party that has failed to cooperate by not 
acting to the best of its ability to comply with a request for 
information. In determining whether a respondent has acted to the best 
of its ability in seeking the COP information from its affiliate, the 
Department usually examines the nature of the affiliation, in addition 
to other facts. See Certain Cut-to-Length Carbon Steel Plate from 
Brazil: Final Results of Antidumping Duty Administrative Review, 63 FR 
12744, 1275l (March 16, 1998) (Plate from Brazil). Given the nature of 
the affiliation, we determine that HYSCO made reasonable attempts to 
obtain the requested COP information from its affiliate. Therefore, we 
are not applying an adverse inference in selecting from the facts 
available.
    In prior cases, we have turned to other COP information on the 
record, if available, as non-adverse ``gap-filling'' facts available. 
However, the record contains no other information about the affiliated 
supplier's COP. In prior cases, when there is no such COP data on the 
record and no indication that the affiliated supplier's COP is higher 
than the transfer or market price, we have used the higher of the 
transfer price or the market price as facts available. See Plate from 
Brazil at 12751; Notice of Final Determination of Sales at Less Than 
Fair Value: Certain Polyester Staple Fiber from the Republic of Korea, 
65 FR 16880 (March 30, 2000) and accompanying Issues and Decision 
Memorandum at Comment 6. As facts

[[Page 53158]]

available for the major input, we are using the market prices that 
HYSCO reported for its purchases of the major input from unaffiliated 
suppliers. See the August 31, 2005 Calculation Memorandum for Hyundai 
HYSCO, on file in the CRU.

C. Test of Home-Market Prices

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

D. Results of COP Test

    Pursuant to section 773(b)(1) of the Act, we may disregard below 
COP sales in the determination of NV if these sales have been made 
within an extended period of time in substantial quantities and were 
not at prices which permit recovery of all costs within a reasonable 
period of time. Where 20 percent or more of a respondent's sales of a 
given product during the POR were at prices less than the COP for at 
least six months of the POR, we determined that sales of that model 
were made in ``substantial quantities'' for an extended period of time, 
in accordance with sections 773(b)(2)(B) and (C) of the Act. Where 
prices of a respondent's sales of a given product were below the per-
unit COP at the time of sale and below the weighted-average per unit 
costs for the POR, we determined that sales were not at prices which 
would permit recovery of all costs within a reasonable period of time, 
in accordance with section 773(b)(2)(D) of the Act. In such cases, we 
disregarded the below-cost sales in accordance with section 773(b)(1) 
of the Act.
    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of a respondent's sales of a given product were at prices less 
than the COP, we did not disregard any below-cost sales of that product 
because we determined that the below-cost sales were not made in 
``substantial quantities.''
    We tested and identified below-cost home market sales for Dongbu, 
Union, the POSCO Group, and HYSCO. We disregarded individual below-cost 
sales of a given product of 20 percent or more and used the remaining 
sales as the basis for determining NV, in accordance with section 
773(b)(1) of the Act. See the August 31, 2005 Calculation Memorandum 
for Dongbu Steel Co., Ltd., Calculation Memorandum for Hyundai HYSCO; 
Calculation Memorandum for Pohang Iron & Steel Company, Ltd. (POSCO), 
Pohang Coated Steel Co., Ltd. (POCOS), and Pohang Steel Industries Co., 
Ltd. (PSI) - (collectively, the POSCO Group); and Calculation 
Memorandum for Union which are on file in the CRU.

E. Calculation of CV

    In accordance with section 773(e)(1) of the Act, we calculated CV 
based on the sum of each respondent's cost of materials, fabrication, 
SG&A, including interest expenses, U.S. packing costs, and profit. In 
accordance with section 773(e)(2)(A) of the Act, we based SG&A and 
profit on the actual amounts incurred and realized by the respondent in 
connection with the production and sale of the foreign like product in 
the ordinary course of trade, for consumption in the foreign country. 
For selling expenses, we used the weighted-average home-market selling 
expenses. We also made adjustments, where appropriate, for home-market 
indirect selling expenses to offset U.S. commissions in CEP 
comparisons.

Arm's Length Sales

    The POSCO Group reported sales of the foreign like product to an 
affiliated reseller/service center. Dongbu and HYSCO also reported that 
they made sales in the home market to affiliated parties. The 
Department calculates NV based on a sale to an affiliated party only if 
it is satisfied that the price to the affiliated party is comparable to 
the price at which sales are made to parties not affiliated with the 
producer or exporter, i.e., sales at arm's length. See 19 CFR 
351.403(c).
    To test whether these sales were made at arm's length, we compared 
the starting prices of sales to affiliated and unaffiliated customers 
net of all movement charges, direct selling expenses, discounts and 
packing. In accordance with the Department's current practice, if the 
prices charged to an affiliated party were, on average, between 98 and 
102 percent of the prices charged to unaffiliated parties for 
merchandise identical or most similar to that sold to the affiliated 
party, we considered the sales to be at arm's-length prices. See 19 CFR 
351.403(c). Conversely, where we found sales to the affiliated party 
did not pass the arm's-length test, all sales to that affiliated party 
have been excluded from the NV calculation. Id.

Currency Conversion

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

Preliminary Results of the Review

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

------------------------------------------------------------------------
                                                       Weighted-Average
                Producer/Manufacturer                       Margin
------------------------------------------------------------------------
Dongbu..............................................               2.42%
Dongshin............................................              17.70%
HYSCO...............................................                 0.0
The POSCO Group.....................................               4.13%
Union...............................................               2.19%
------------------------------------------------------------------------

    The Department will disclose calculations performed within five 
days of the date of publication of this notice to the parties of this 
proceeding in accordance with 19 CFR 351.224(b). Interested parties may 
submit case and rebuttal briefs. The Department will announce the due 
date of the case briefs at a later date. Rebuttal briefs must be 
limited to issues raised in the case briefs. Parties who submit 
arguments are requested to submit with the argument (1) a statement of 
the issue, and (2) a brief summary of the argument. Further, parties 
submitting written comments are requested to provide the Department 
with an additional copy of the public version of any such comments on a 
diskette. An interested party may request a hearing within 30 days of 
publication of these preliminary results. See 19 CFR 351.310(c). Any 
hearing, if requested, ordinarily will be held two days after the due 
date of the rebuttal briefs. The Department will issue the final 
results of this administrative review, which will include the results 
of its analysis of issues raised in any such comments, or at a hearing, 
if requested, within 120 days of publication of these preliminary 
results.

Assessment Rate

    Pursuant to 19 CFR 351.212(b), the Department calculated an 
assessment rate for each importer of the subject merchandise. Upon 
issuance of the final results of this administrative review, if any 
importer-specific assessment rates calculated in the final results are 
above de minimis (i.e., at or above 0.5 percent), the Department will 
issue appraisement instructions directly to CBP to assess antidumping 
duties on appropriate

[[Page 53159]]

entries by applying the assessment rate to the entered value of the 
merchandise. For assessment purposes, we calculated importer-specific 
assessment rates for the subject merchandise by aggregating the dumping 
margins for all U.S. sales to each importer and dividing the amount by 
the total entered value of the sales to that importer. In instances 
where entered value was not reported, we calculated importer-specific 
assessment rates by aggregating the dumping margins calculated for all 
of the U.S. sales examined and dividing this amount by the total 
quantity of the sales examined. To determine whether the duty 
assessment rates were de minimis, in accordance with the requirement 
set forth in 19 CFR 351.106 (c)(2), we calculated importer-specific ad 
valorem ratios based on export prices. The Department will issue 
appropriate assessment instructions directly to CBP within 15 days of 
publication of the final results of review.

Cash Deposit Requirements

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

Notification to Importers

    This notice 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 this review period. Failure to comply with this 
requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This administrative review is issued and published in accordance 
with sections 751(a)(1) and 777(I)(1) of the Act.

    Dated: August 31, 2005.
Barbara E. Tillman,
Acting Assistant Secretary for Import Administration.
[FR Doc. E5-4867 Filed 9-6-05; 8:45 am]
BILLING CODE 3510-DS-S