Dynamic Random Access Memory Semiconductors from the Republic of Korea: Preliminary Results of Countervailing Duty Administrative Review, 47131-47136 [E8-18772]
Download as PDF
<![CDATA[
Federal Register / Vol. 73, No. 157 / Wednesday, August 13, 2008 / Notices
included in the request for OMB
approval of this information collection;
they also will become a matter of public
record.
Dated: August 8, 2008.
Gwellnar Banks,
Management Analyst, Office of Chief
Information Officer.
[FR Doc. E8–18699 Filed 8–12–08; 8:45 am]
BILLING CODE 3510–06–P
DEPARTMENT OF COMMERCE
International Trade Administration
[C–580–851]
Dynamic Random Access Memory
Semiconductors from the Republic of
Korea: Preliminary Results of
Countervailing Duty Administrative
Review
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.
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.
AGENCY:
DEPARTMENT OF COMMERCE
International Trade Administration
North American Free Trade Agreement
(NAFTA), Article 1904 Binational Panel
Reviews: Notice of Completion of
Panel Review
NAFTA Secretariat, United
States Section, International Trade
Administration, Department of
Commerce.
AGENCY:
Notice of Completion of Panel
Review of the International Trade
Administration’s Final Scope Ruling
Regarding Entries Made Under HTSUS
4409.10.05 in Certain Softwood Lumber
Products from Canada (Secretariat File
No. USA–CDA–2006–1904–05).
ACTION:
SUMMARY: Pursuant to the Order of the
Binational Panel dated June 25, 2008,
the determination described above was
completed on June 25, 2008.
FOR FURTHER INFORMATION CONTACT:
Valerie Dees, United States Secretary,
NAFTA Secretariat, Suite 2061, 14th
and Constitution Avenue, Washington,
DC 20230, (202) 482–5438.
On June
25, 2008, the Binational Panel issued a
memorandum opinion and order, which
granted the International Trade
Administration’s Motion to Dismiss the
Complaints, concerning Certain
Softwood Lumber Products from
Canada. The Secretariat was instructed
to issue a Notice of Completion of Panel
Review on the 31st day following the
issuance of the Notice of Final Panel
Action, if no request for an
Extraordinary Challenge was filed. No
such request was filed. Therefore, on the
basis of the Panel Order and Rule 80 of
the Article 1904 Panel Rules, the Panel
Review was completed and the panelists
were discharged from their duties
effective June 25, 2008.
ebenthall on PRODPC60 with NOTICES
SUPPLEMENTARY INFORMATION:
Dated: August 7, 2008.
Valerie Dees,
United States Secretary, NAFTA Secretariat.
[FR Doc. E8–18637 Filed 8–12–08; 8:45 am]
BILLING CODE 3510–GT–P
VerDate Aug<31>2005
15:38 Aug 12, 2008
Jkt 214001
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
PO 00000
Frm 00006
Fmt 4703
Sfmt 4703
47131
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
1See 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’’).
E:\FR\FM\13AUN1.SGM
13AUN1
47132
Federal Register / Vol. 73, No. 157 / Wednesday, August 13, 2008 / Notices
ebenthall on PRODPC60 with NOTICES
Countervailing 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 dataout, synchronous dynamic RAM,
Rambus DRAM, and Double Data Rate
DRAM. The scope also includes any
future density, packaging, or assembling
of DRAMS. Also included in the scope
of 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 reimported 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
VerDate Aug<31>2005
15:38 Aug 12, 2008
Jkt 214001
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
PO 00000
Frm 00007
Fmt 4703
Sfmt 4703
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-toequity 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), nonrecurring subsidies are allocated over a
period corresponding to the AUL of the
renewable physical assets used to
produce the subject merchandise.
Section 351.524(d)(2) of the
Department’s regulations creates a
rebuttable presumption that the AUL
will be taken from the U.S. Internal
Revenue Service’s 1977 Class Life Asset
Depreciation Range System (the ‘‘IRS
Tables’’). For DRAMS, the IRS Tables
prescribe an AUL of five years. During
this review, none of the interested
parties disputed this allocation period.
Therefore, we continue to allocate nonrecurring benefits over the five-year
AUL.
Discount Rates and Benchmarks for
Loans
For loans that we found
countervailable in the investigation or
E:\FR\FM\13AUN1.SGM
13AUN1
Federal Register / Vol. 73, No. 157 / Wednesday, August 13, 2008 / Notices
in 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
ebenthall on PRODPC60 with NOTICES
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.
VerDate Aug<31>2005
15:38 Aug 12, 2008
Jkt 214001
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-forequity 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
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.
PO 00000
Frm 00008
Fmt 4703
Sfmt 4703
47133
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
E:\FR\FM\13AUN1.SGM
13AUN1
47134
Federal Register / Vol. 73, No. 157 / Wednesday, August 13, 2008 / Notices
ebenthall on PRODPC60 with NOTICES
to those of the G–7/HAN Program, and
for a similar purpose, i.e., to promote
greater competitiveness in science and
technology. The 21st Century Program
provides long-term interest-free loans in
the form of matching funds. Repayment
of program funds is made in the form of
‘‘technology usance fees’’ upon
completion of the project, pursuant to a
schedule established under a technology
execution or implementation contract.
Hynix reported that it had loans from
the 21st Century Program outstanding
during the POR. See Hynix’s 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
VerDate Aug<31>2005
15:38 Aug 12, 2008
Jkt 214001
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 NotUsed 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
PO 00000
Frm 00009
Fmt 4703
Sfmt 4703
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)
E:\FR\FM\13AUN1.SGM
13AUN1
Federal Register / Vol. 73, No. 157 / Wednesday, August 13, 2008 / Notices
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.
ebenthall on PRODPC60 with NOTICES
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.
VerDate Aug<31>2005
15:38 Aug 12, 2008
Jkt 214001
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
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’’).
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’’).
PO 00000
Frm 00010
Fmt 4703
Sfmt 4703
47135
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 nonrecurring 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
5 See,
also, SSSC from France and Uranium.
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.
7 See DRAMS 3rd AR Final and accompanying
Issues and Decision Memorandum at Comment 4
(‘‘DRAMS 3AR Final Decision Memo’’).
6 See
E:\FR\FM\13AUN1.SGM
13AUN1
47136
Federal Register / Vol. 73, No. 157 / Wednesday, August 13, 2008 / Notices
entries 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
ebenthall on PRODPC60 with NOTICES
Interested parties may submit written
arguments in case briefs within 30 days
of the date of publication of this notice.
Rebuttal briefs, limited to issues raised
in case briefs, may be filed not later than
five days after the date of filing the case
briefs. Parties who submit briefs in this
proceeding should provide a summary
of the arguments not to exceed five
pages and a table of statutes,
regulations, and cases cited. Copies of
case briefs and rebuttal briefs must be
served on interested parties in
accordance with 19 CFR 351.303(f).
Interested parties may request a
hearing within 30 days after the date of
publication of this notice. Unless
otherwise specified, the hearing, if
requested, will be held two days after
the scheduled date for submission of
rebuttal briefs.
The Department will publish a notice
of the final results of this administrative
review within 120 days from the
publication of these preliminary results.
We are issuing and publishing these
results in accordance with sections
751(a)(1) and 777(i)(1) of the Act.
Dated: July 31, 2008.
David M. Spooner,
Assistant Secretary for Import
Administration.
[FR Doc. E8–18772 Filed 8–12–08; 8:45 am]
15:38 Aug 12, 2008
National Oceanic and Atmospheric
Administration
RIN 0648–XJ67
Pacific Fishery Management Council;
Public Meeting
Jkt 214001
should be directed to Ms. Carolyn Porter
at (503) 820–2280 at least five days prior
to the meeting date.
Dated: August 8, 2008.
Tracey L. Thompson,
Acting Director, Office of Sustainable
Fisheries, National Marine Fisheries Service.
[FR Doc. E8–18750 Filed 8–12–08; 8:45 am]
National Marine Fisheries
Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA),
Commerce.
ACTION: Notice of public meetings.
BILLING CODE 3510–22–S
SUMMARY: The Pacific Fishery
Management Council’s (Council)
Salmon Advisory Subpanel (SAS) will
hold a work session by telephone
conference to develop recommendations
for the September 2008 Council
meeting.
Submission for OMB Review;
Comment Request
AGENCY:
The telephone conference will be
held Friday, September 5, 2008, from 9
a.m. to 12:30 p.m.
ADDRESSES: A public listening station
will be available at the Pacific Fishery
Management Council, Small Conference
Room, 7700 NE Ambassador Place,
Suite 101, Portland, OR 97220–1384;
telephone: (503) 820–2280.
Council address: Pacific Fishery
Management Council, 7700 NE
Ambassador Place, Suite 101, Portland,
OR 97220–1384.
FOR FURTHER INFORMATION CONTACT: Mr.
Chuck Tracy, Salmon Management Staff
Officer, Pacific Fishery Management
Council: (503) 820–2280.
SUPPLEMENTARY INFORMATION: The
purpose of the work session is to review
information in the Council’s September
2008 meeting briefing book related to
salmon management, and to develop
comments and recommendations for
consideration at the September 2008
Council meeting.
Although nonemergency issues not
contained in the meeting agenda may
come before the SAS for discussion,
those issues may not be the subject of
formal SAS action during this meeting.
SAS action will be restricted to those
issues specifically listed in this notice
and any issues arising after publication
of this notice that require emergency
action under section 305(c) of the
Magnuson-Stevens Fishery
Conservation and Management Act,
provided the public has been notified of
the SAS’s intent to take final action to
address the emergency.
DATES:
Special Accommodations
The public listening station is
physically accessible to people with
disabilities. Requests for sign language
interpretation or other auxiliary aids
BILLING CODE 3510–DS–P
VerDate Aug<31>2005
DEPARTMENT OF COMMERCE
PO 00000
Frm 00011
Fmt 4703
Sfmt 4703
DEPARTMENT OF COMMERCE
Patent and Trademark Office
The United States Patent and
Trademark Office (USPTO) will submit
to the Office of Management and Budget
(OMB) for clearance the following
proposal for collection of information
under the provisions of the Paperwork
Reduction Act (44 U.S.C. Chapter 35).
Agency: United States Patent and
Trademark Office (USPTO).
Title: Substantive Submissions Made
During the Prosecution of the
Trademark Application.
Form Number(s): PTO Form 1553,
1581, 2194, 2195, 2200, 2202.
Agency Approval Number: 0651–
0054.
Type of Request: Extension of a
currently approved collection.
Burden: 34,684 hours.
Number of Respondents: 228,115
responses.
Avg. Hours per Response: 3 to 20
minutes (0.05 to 0.33 hours). This
includes time to gather the necessary
information, create the documents, and
mail the completed request. The time
estimates shown for the electronic forms
in this collection are based on the
average amount of time needed to
complete and electronically file the
associated form.
Needs and Uses: The information in
this collection is a matter of public
record and is used by the public for a
variety of private business purposes
related to establishing and enforcing
trademark rights. The information is
available at USPTO facilities and also
can be accessed at the USPTO website.
Additionally, the USPTO provides the
information to other entities, including
Patent and Trademark Depository
Libraries (PTDLs). The PTDLs maintain
the information for use by the public.
Affected Public: Individuals or
households; business or other for-profit;
not-for-profit institutions.
Frequency: On occasion.
Respondent’s Obligation: Required to
obtain or retain benefits.
OMB Desk Officer: David Rostker,
(202) 395–3897.
E:\FR\FM\13AUN1.SGM
13AUN1
]]>Agencies
[Federal Register Volume 73, Number 157 (Wednesday, August 13, 2008)]
[Notices]
[Pages 47131-47136]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-18772]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[C-580-851]
Dynamic Random Access Memory Semiconductors from the Republic of
Korea: Preliminary Results of Countervailing Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce is conducting an administrative
review of the countervailing duty order on dynamic random access memory
semiconductors from the Republic of Korea for the period January 1,
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.
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.
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.
---------------------------------------------------------------------------
\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'').
---------------------------------------------------------------------------
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
[[Page 47132]]
Countervailing 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
[[Page 47133]]
in 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\
---------------------------------------------------------------------------
\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.
---------------------------------------------------------------------------
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
[[Page 47134]]
to those of the G-7/HAN Program, and for a similar purpose, i.e., to
promote greater competitiveness in science and technology. The 21st
Century Program provides long-term interest-free loans in the form of
matching funds. Repayment of program funds is made in the form of
``technology usance fees'' upon completion of the project, pursuant to
a schedule established under a technology execution or implementation
contract.
Hynix reported that it had loans from the 21st Century Program
outstanding during the POR. See Hynix's 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)
[[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\
---------------------------------------------------------------------------
\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'').
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\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'').
\5\ See, also, SSSC from France and Uranium.
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\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.
\7\ See DRAMS 3rd AR Final and accompanying Issues and Decision
Memorandum at Comment 4 (``DRAMS 3AR Final Decision Memo'').
---------------------------------------------------------------------------
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
[[Page 47136]]
entries 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.
Dated: July 31, 2008.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E8-18772 Filed 8-12-08; 8:45 am]
BILLING CODE 3510-DS-P
