Ni-Resist Piston Inserts from the Republic of Korea: Preliminary Negative Countervailing Duty Determination, 31919-31922 [E9-15967]
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Federal Register / Vol. 74, No. 127 / Monday, July 6, 2009 / Notices
DEPARTMENT OF COMMERCE
International Trade Administration
(C–580–862)
Ni–Resist Piston Inserts from the
Republic of Korea: Preliminary
Negative Countervailing Duty
Determination
AGENCY: Import Administration,
International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce
(the Department) preliminarily
determines that countervailable
subsidies are not being provided to
producers and exporters of Ni–resist
piston inserts from the Republic of
Korea (Korea).
EFFECTIVE DATE: July 6, 2009.
FOR FURTHER INFORMATION CONTACT: John
Conniff, AD/CVD Operations, Office 3,
Operations, Import Administration, U.S.
Department of Commerce, Room 4014,
14th Street and Constitution Avenue,
NW, Washington, DC 20230; telephone:
(202) 482–1009.
SUPPLEMENTARY INFORMATION:
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Case History
On January 26, 2009, the Department
received a countervailing duty (CVD)
petition concerning Ni–resist piston
inserts from Korea filed in proper form
by Korff Holdings, LLC, doing business
as Quaker City Castings (Petitioner).
This investigation was initiated on
February 17, 2009. See Ni–Resist Piston
Inserts from Argentina and the Republic
of Korea: Initiation of Countervailing
Duty Investigations, 74 FR 8054
(February 23, 2009) (Initiation Notice),
and accompanying Initiation
Checklist..1 On March 20, 2009, the
Department postponed the deadline for
the preliminary determination by 65
days to no later than June 29, 2009. See
Ni–Resist Piston Inserts from Argentina
and the Republic of Korea: Notice of
Postponement of Preliminary
Determination in the Countervailing
Duty Investigations, 74 FR 11910 (March
20, 2009).
On March 4, 2009, the Department
selected Incheon Metal Co., Ltd.
(Incheon Metal) as the mandatory
respondent in this investigation. See
Memorandum from the Team through
Melissa Skinner, Director, Office 3,
Operations, to John M. Andersen,
Acting Deputy Assistant Secretary for
Antidumping and Countervailing Duty
1 A public version of this and all public
Departmental memoranda is on file in the Central
Records Unit (CRU), room 1117 in the main
building of the Commerce Department.
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Operations, regarding ‘‘Respondent
Selection’’ (March 4, 2009).2
On March 6, 2009, we issued the
initial CVD questionnaire to the
Government of Korea (GOK) and
Incheon Metal. On April 8, 2009, the
GOK submitted its response to the
initial CVD questionnaire. On April 28,
2009, Incheon Metal submitted its
initial questionnaire response. On April
17, 2009, we issued a supplemental
questionnaire to the GOK, to which it
responded on April 28, 2009. On May
1, 2009, we issued a supplemental
questionnaire to Incheon Metal, to
which it submitted a response on May
29, 2009. On May 11, 2009, we issued
a second supplemental questionnaire to
the GOK, which submitted its response
on May 18, 2009. On June 2, 2009, we
issued a third supplemental
questionnaire to the GOK. On June 11,
2009, the GOK submitted its response to
the third supplemental questionnaire.
On April 20, 2009, petitioner
submitted new subsidy allegations
regarding six programs. On May 13,
2009, the Department initiated
investigations of the six newly alleged
subsidy programs pursuant to section
775 of the Tariff Act of 1930, as
amended (the Act). See Memorandum to
Melissa G. Skinner, Director, Office 3
Operations, regarding ‘‘New Subsidy
Allegations’’ (May 13, 2009).
Questionnaires regarding these newly
alleged subsidies were sent to the GOK
and Incheon Metal on May 13, 2009.
The GOK and Incheon Metal submitted
their response to the questionnaires on
the new subsidy allegations on June 10,
2009.
On May 11, 2009, petitioner
submitted additional new subsidy
allegations regarding one program. On
May 27, 2009, the Department initiated
an investigation of the one newly
alleged subsidy program pursuant to
section 775 of the Act. See
Memorandum to Melissa G. Skinner,
Director, Office 3 Operations, regarding
‘‘Additional New Subsidy Allegations’’
(May 27, 2009). Questionnaires
regarding this newly alleged subsidy
were sent to the GOK and Incheon Metal
on May 29, 2009. The GOK and Incheon
Metal submitted their responses to the
questionnaires on the additional new
subsidy allegation on June 12, 2009.
including, but not limited to, ‘‘Ring
Carriers,’’ or ‘‘Alfin Inserts.’’ Ni–resist
piston inserts are alloyed cast iron rings,
with or without a sheet metal cooling
channel pressed and welded into the
interior of the insert. Ni–resist piston
inserts are composed of the material
known as Ni–resist, of the chemical
composition: 13.5% - 17.5% Ni (nickel),
5.5% - 8.0% Cu (copper), 0.8% - 2.5%
Cr (chromium), 0.5% - 1.5% Mn
(manganese), 1.0% - 3.0% Si (silicon),
2.4% - 3.0% C (carbon). The cast iron
composition is produced primarily to
the material specifications of the
American Society for Testing and
Materials (ASTM), ASTM A–436 grade
1.
The scope of this investigation does
not include piston rings nor did any
other product manufacture using the
Ni–resist material. The subject imports
are properly classified under
subheading 8409.99.91.90 of the
Harmonized Tariff Schedule of the
United States (HTSUS), but have been
imported under HTSUS 7326.90. The
HTSUS subheadings are provided for
convenience and customs purposes. The
written description is dispositive of the
scope of these investigations.
Scope of the Investigation
The scope of this investigation
includes all Ni–resist piston inserts
regardless of size, thickness, weight, or
outside diameter. Ni–resist piston
inserts may also be called other names
Allocation Period
Under 19 CFR 351.524(b), non–
recurring subsidies are allocated over a
period corresponding to the average
useful life (AUL) of the renewable
physical assets used to produce the
subject merchandise. Pursuant to 19
CFR 351.524(d)(2), there is a rebuttable
presumption that the AUL will be taken
2 A public version of this memorandum is
available in the CRU.
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Injury Test
Because Korea is a ‘‘Subsidies
Agreement Country’’ within the
meaning of section 701(b) of the Act, the
International Trade Commission (ITC) is
required to determine whether imports
of the subject merchandise from Korea
materially injure, or threaten material
injury to, a U.S. industry. On March 25,
2009, the ITC published its preliminary
determination that there is a reasonable
indication that an industry in the
United States is materially injured by
reason of imports from Korea of subject
merchandise. See Ni–Resist Piston
Inserts from Argentina and Korea,
USITC Pub.4066, Inv. Nos. 701–TA–
460–461, (March 2009) (Prelim.).
Period of Investigation
The period of investigation (the POI)
for which we are measuring subsidies is
January 1, 2008, through December 31,
2008, which corresponds to the most
recently completed fiscal year for the
two respondents. See 19 CFR
351.204(b)(2).
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from the U.S. Internal Revenue Service’s
1977 Class Life Asset Depreciation
Range System (IRS Tables), as updated
by the Department of Treasury. For the
subject merchandise, the IRS Tables
prescribe an AUL of 13 years. No
interested party has claimed that the
AUL of 13 years is unreasonable.
ANALYSIS OF PROGRAMS
Program Preliminarily Determined To
Be Countervailable
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A. Tax Benefits under the Namdong
National Industrial Complex Program
During the POI Incheon Metal
received tax benefits under the
Namdong National Industrial Complex
pursuant to the Framework Act on small
and medium–sized enterprises (SMEs)
from the GOK. Any SME involved in
manufacturing, transportation, or
information technology can locate
inside the Namdong National Industrial
Complex and receive assistance from
the government. Under the program,
firms inside the complex are eligible to
receive exemptions from acquisition
and registration taxes that are normally
due on real estate transactions. Incheon
Metal reported receiving such tax
exemptions during the POI in
connection with real estate transactions
during the POI.
We preliminarily determine that the
Incheon Metal received a financial
contribution in the form of revenue
forgone from the GOK within the
meaning of section 771(5)(D)(ii) of the
Act and that the exemptions are specific
within the meaning of section
771(5A)(D)(iv) of the Act, because they
limited to enterprises located inside the
Namdong National Industrial Complex.
Incheon Metal is located within this
complex.
Pursuant to section 771(5)(E) of the
Act, we find the tax exemption confers
a benefit in the amount equal to the
exemption during the POI. We divided
the benefit under this program by
Incheon Metal’s total sales. The
resulting net subsidy rate is less than
0.005 percent ad valorem. Therefore, in
accordance with the Department’s
practice, we will find that the
countervailable benefit is not
measurable. See, e.g., Certain Hot–
Rolled Carbon Steel Flat Products from
India: Final Results and Partial
Rescission of Countervailing Duty
Administrative Review, 74 FR 20923
(May 6, 2009) (HRC from India), and
accompanying Issues and Decision
Memorandum (HRC from India Decision
Memorandum) at ‘‘Exemption from the
CST.’’
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II. Programs Preliminarily Determined
To Be Not Countervailable
A. Technical Development for
Innovation Production Environment
(TDIPE)
Incheon Metal’s annual report
indicates that it received grants from the
GOK during the POI. See Incheon
Metal’s April 24, 2009 response at
Exhibit 5. Supplemental questionnaire
responses from Incheon Metal and the
GOK indicate that Incheon Metal
received two grants from the GOK’s
Small and Medium Business
Administration under the TDIPE. See
Incheon Metal’s May 29, 2009 response
at 2–3. In the narrative of its
supplemental questionnaire response,
Incheon Metal indicated that SME’s that
purchase equipment classified under
Harmonized Tariff System (HTS)
Chapters 10 through 33 are eligible to
receive grants under the TDIPE. The
GOK’s description of the program and
the portions of the TDIPE regulations
and sample application forms submitted
by the GOK do not make any reference
to the grants being limited to purchases
of equipment under HTS chapters 10
through 33. See GOK’s June 12, 2009
response at Exhibits S–29 and S–30. In
response to our request, the GOK also
submitted information concerning the
enterprises and industries that received
grants under the TDIPE program during
the period 2005 through 2008. See
GOK’s June 12, 2009 response at 19.
Based on our analysis of the
information submitted by the GOK
regarding the TDIPE program, including
a copy of the relevant legislation, we
preliminarily determine that the grants
under the program are not de jure
specific within the meaning of sections
771(5A)(A), (B), (C) and (D)(i) and (ii) of
the Act. See also 19 CFR 351.502(e) and
see also the GOK’s June 12, 2009,
response at Exhibits S–29 and S–30.
Where the Department finds no de
jure specificity, section 771(5A)(D)(iii)
of the Act also directs the Department
to examine whether the benefits
provided under the program are de facto
specific, that is, whether the benefits are
specific as a matter of fact.
Subparagraphs under section
771(5A)(D)(iii) of the Act stipulate that
a program is de facto specific if one or
more of the following factors exist:
(I) The actual recipients of the
subsidy, whether considered on an
enterprise or industry basis, are
limited in number.
(II) An enterprise or industry is a
predominant user of the subsidy.
(III) An enterprise or industry receives
a disproportionately large amount
of the subsidy.
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(IV) The manner in which the
authority providing the subsidy has
exercised discretion in the decision
to grant the subsidy indicates that
an enterprise or industry is favored
over others.
In response to the Department’s
request for information regarding these
factors, the GOK provided the
Department with a breakdown of the
issuance of grants (both in terms of
amounts and number of recipients), by
industry, for the years 2005 through
2008. See GOK’s June 12, 2009,
questionnaire response at 19 and the
Department’s June 25, 2009,
Memorandum to the File (Preliminary
De Facto Specificity Analysis
Memorandum), of which a public
version is available in the Central
Records Unit in Room 1117. In
conducting our de facto specificity
analysis, we examined the grant
amounts issued by the GOK as well as
the number of recipients, by industry,
during the POI and each of the
preceding three years. Specifically, we
compared the amount of grants under
the TDIPE program that were issued to
the metals industry to the amount of
grants that were issued to other
industries under this program. We
conducted the same analysis with
regard to the number of recipients. See
Preliminary De Facto Specificity
Analysis Memorandum.
Based on our analysis of the data for
the TDIPE program, we preliminarily
determine that the benefits received by
Incheon Metal or the metals industry
under this program were not de facto
specific within the meaning of sections
771(5A)(D)(iii)(I) through (III) of the Act,
i.e., we find no limitation as to the
number of recipients, predominant use
or disproportionate share, of the
subsidy. Lastly, we preliminarily
determine that there is no evidence on
the record of the investigation
indicating that the GOK exercised
discretion in the decision to issue
TDIPE grants which indicates that the
metals industry was favored over other
industries within the meaning of section
771(5A)(D)(iii)(IV) of the Act.
Consequently, the Department
preliminarily determines that the grants
received by Incheon Metal under this
program are neither de jure nor de facto
specific and, therefore, not
countervailable. We will continue to
examine this program in this
proceeding.
B. Reserve for Research and Manpower
Development Fund Under RSTA Article
9 (Formerly Article 8 of TERCL)
This program allows a company
operating in manufacturing or mining,
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or in a business prescribed by the
Presidential Decree, to appropriate
reserve funds to cover expenses related
to the development or innovation of
technology. These reserve funds are
included in the company’s losses and
reduce the amount of taxes paid by the
company. Under this program, capital
goods companies and capital intensive
companies can establish a reserve of five
percent of total revenue, while
companies in all other industries are
only allowed to establish a three–
percent reserve.
The Department has previously
determined that firms that are entitled
to establish a reserve up to the three
percent level do not receive a
countervailable subsidy. See e.g.,
Preliminary Results of Countervailing
Duty Administrative Review: Corrosion
Resistant Carbon Steel Flat Products
from the Republic of Korea, 71 FR
53413, 53419 (September 11, 2006)
(unchanged in final results). Incheon
Metal indicated in its questionnaire
response that it established its reserve
up to the three percent level.
Consequently, we preliminarily
determine that Incheon Metal’s use of
the program is not countervailable.
C. Programs Preliminarily Determined
To Have Been Terminated
1. Energy Rate Reductions Under the
Request Load Adjustment Program
Petitioner contends that the GOK
provides reduced energy rates to
companies that reduce their demand by
twenty percent. Businesses are eligible
for a discount of 440 won per kW under
the Requested Load Adjustment
program. The GOK reported in its
response that the program had been
terminated as of January 1, 2005, by the
Korean Electric Power Corporation and
did not provide any residual benefits.
See GOK’s April 8, 2009, response at 5.
Information submitted by the GOK,
including translated copies of the
relevant regulation, shows that the
regulation covering the program has
been abolished. See GOK’s April 28,
2009, supplemental response at 3 and
Exhibits S–1 and S–2. The GOK also
stated that it has not implemented a
successor program. Therefore, subject to
verification, we preliminarily determine
that this program has been terminated.
2. Reserve for Investment Funds
Petitioner alleged that this program
allowed Korean firms engaged in
manufacturing and mining outside of
Seoul to establish a tax reserve.
Petitioner further contended that the tax
reserve allows eligible firms to reduce
their taxable income in a given year and
that the program is limited to a
geographic area outside of Seoul. The
GOK reported that the program was
terminated on August 31, 1999, and that
the relevant portion of the Restriction of
Special Taxation Act was deleted. The
GOK provided documentation
demonstrating its assertion. See GOK’s
April 8, 2009, response at 7 and Exhibit
7. Therefore, subject to verification, we
preliminarily determine that this
program has been terminated.
D. Programs Preliminarily Determined
To Be Not Used
1. Short–Term Export Financing
2. Loans under the Industrial Base Fund
3. Export Loans by Commercial Banks
Under KEXIM’s Trade Bill
Rediscounting Program
4. Subsidized Loans and Guarantees
through the Korea Development Bank
5. Export Insurance and Guarantees
through the Korea Export Insurance
Corporation
6. SME Financing through the Industrial
Bank of Korea
7. Export and Import Credit Financing
and Guarantees from the Korean
Export–Import Bank
8. Export and Import Credit Financing
and Guarantees from the Korean
Export–Import Bank
9. Financial Aid, Training Assistance
and Export Services through the Small
and Medium Business Administration
10. Free Economic Zone of Incheon
Verification
In accordance with section 782(i)(1) of
the Act, we intend to verify the
information submitted by Incheon Metal
and the GOK prior to making our final
determination.
Suspension of Liquidation
In accordance with section
703(d)(1)(A)(i) of the Act, we have
calculated an individual rate for each
producer/exporter of the subject
merchandise. We preliminarily
determine the total estimated net
countervailable subsidy rates to be:
Producer/Exporter
Subsidy Rate
Incheon Metal Co., Ltd. .............................................................................................................................................
All Others ...................................................................................................................................................................
de minimis percent ad valorem
de minimis percent ad valorem
Therefore, we preliminarily determine
that no countervailable subsidies are
being provided to the production or
exportation of Ni–resist pistons in
Korea. Further, we will direct U.S.
Customs and Border Patrol (CBP) not to
require suspension of liquidation of all
entries of Ni–resist pistons from Korea.
mstockstill on PROD1PC66 with NOTICES
ITC Notification
In accordance with section 703(f) of
the Act, we will notify the ITC of our
determination. In addition, we are
making available to the ITC all non–
privileged and non–proprietary
information relating to this
investigation. We will allow the ITC
access to all privileged and business
proprietary information in our files,
provided the ITC confirms that it will
not disclose such information, either
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17:06 Jul 02, 2009
Jkt 217001
publicly or under an administrative
protective order, without the written
consent of the Assistant Secretary for
Import Administration.
In accordance with section 705(b) (2)
of the Act, if our final determination is
affirmative, the ITC will make its final
determination within 45 days after the
Department makes its final
determination.
Disclosure and Public Comment
In accordance with 19 CFR
351.224(b), the Department will disclose
to the parties the calculations for this
preliminary determination within five
days of its announcement. Case briefs
for this investigation must be submitted
no later than one week after the
issuance of the last verification report.
See 19 CFR 351.309(c) (for a further
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discussion of case briefs). Rebuttal
briefs, which must be limited to issues
raised in the case briefs, must be filed
within five days after the deadline for
submission of case briefs. See 19 CFR
351.309(d). A list of authorities relied
upon, a table of contents, and an
executive summary of issues should
accompany any briefs submitted to the
Department. Executive summaries
should be limited to five pages total,
including footnotes.
In accordance with 19 CFR
351.310(c), we will hold a public
hearing, if requested, to afford interested
parties an opportunity to comment on
this preliminary determination.
Individuals who wish to request a
hearing must submit a written request
within 30 days of the publication of this
notice in the Federal Register to the
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Assistant Secretary for Import
Administration, U.S. Department of
Commerce, Room 1870, 14th Street and
Constitution Avenue, NW, Washington,
DC 20230. Parties will be notified of the
schedule for the hearing and parties
should confirm the time, date, and place
of the hearing 48 hours before the
scheduled time. Requests for a public
hearing should contain: (1) party’s
name, address, and telephone number;
(2) the number of participants; and (3)
to the extent practicable, an
identification of the arguments to be
raised at the hearing.
This determination is issued and
published pursuant to sections 703(f)
and 777(i) of the Act and 19 CFR
351.221(b)(4).
Dated: June 29, 2009.
John M. Andersen,
Acting Deputy Assistant Secretary for
Antidumping and Countervailing Duty
Operations.
[FR Doc. E9–15967 Filed 7–2–09; 8:45 am]
BILLING CODE 3510–DS–S
DEPARTMENT OF COMMERCE
International Trade Administration
[A–580–807]
mstockstill on PROD1PC66 with NOTICES
Polyethylene Terephthalate Film,
Sheet, and Strip From the Republic of
Korea: Preliminary Results of
Antidumping Duty Administrative
Review
AGENCY: Import Administration,
International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce
is conducting an administrative review
of the antidumping duty order on
polyethylene terephthalate film, sheet
and strip (PET film) from the Republic
of Korea (Korea). This review covers one
company, Kolon Industries Inc. (Kolon)
and the period October 2, 2007, through
May 31, 2008. We preliminarily
determine that Kolon has not made sales
below normal value (NV). If these
preliminary results are adopted in the
final results of review, we will instruct
U.S. Customs and Border Protection
(CBP) to assess antidumping duties on
all appropriate entries.
Interested parties are invited to
comment on these preliminary results.
We will issue the final results no later
than 120 days from the date of
publication of this notice.
DATES: Effective Date: July 6, 2009.
FOR FURTHER INFORMATION CONTACT:
Michael J. Heaney or Robert James, AD/
CVD Operations, Office 7, Import
Administration, International Trade
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17:06 Jul 02, 2009
Jkt 217001
Administration, U.S. Department of
Commerce, 14th Street and Constitution
Avenue, NW., Washington, DC 20230;
telephone: (202) 482–4475 or (202) 482–
0649, respectively.
SUPPLEMENTARY INFORMATION:
Background
On June 9, 2008, the Department
published in the Federal Register a
notice of ‘‘Opportunity to Request
Administrative Review’’ of the
antidumping duty order on PET film
from Korea. See Antidumping or
Countervailing Duty Order, Finding, or
Suspended Investigation; Opportunity
to Request Administrative Review, 73
FR 32557 (June 9, 2008).
In accordance with Section 751 (a)(1)
of the Tariff Act, as amended (the Act)
and 19 CFR 351.213(b)(2), on June 30,
2008, Kolon requested an administrative
review of the antidumping duty order
on PET film from Korea. On June 30,
2008, DuPont Teijin Films (DuPont),
Mitsubishi Polyester Film, Inc.
(Mitsubishi), and Toray Plastics
America Inc. (Toray) (collectively
‘‘Petitioners’’), also requested a review
of Kolon.
On July 30, 2008, the Department
initiated an administrative review for
Kolon covering the period October 2,
2007, through May 31, 2008. See
Initiation of Antidumping and
Countervailing Duty Administrative
Reviews, Request for Revocation in Part,
and Deferral of Administrative Review,
73 FR 44220 (July 30, 2008).
On June 30, 2008, we issued our
antidumping questionnaire to Kolon.
We received Kolon’s response to our
questionnaire on September 10, 2008
(Section A) and October 3, 2008
(Sections B, C, and D). During the
period December 18, 2008, through
April 1, 2009, we issued supplemental
questionnaires to Kolon. We received
responses to those questionnaires from
January 23, 2009, through April 24,
2009.
On February 23, 2009, we extended
the deadline for the preliminary results
of this review until no later than June
30, 2009. See Polyethylene
Terephthalate Film, Sheet and Strip
from the Republic of Korea: Extension of
Time Limit for the Preliminary Results
of the 2007/2008 Administrative
Review, 74 FR 8054 (February 23, 2009).
On May 26, 2009, Petitioners
submitted comments concerning the
profitability of Kolon’s home market
and U.S. sales and the model match
methodology that should be employed
in this review. On June 9, 2009, Kolon
submitted rebuttal comments to
Petitioner’s May 26, 2009 letter. See the
‘‘Product Comparisons’’ section of this
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Notice, infra, for a discussion of the
Model match methodology that we have
employed in this review.
Scope of the Order
Imports covered by this review are
shipments of all gauges of raw,
pretreated, or primed polyethylene
terephthalate film, sheet, and strip,
whether extruded or coextruded. The
films excluded from this review are
metallized films and other finished
films that have had at least one of their
surfaces modified by the application of
a performance enhancing resinous or
inorganic layer of more than 0.00001
inches (0.254 micrometers) thick.
PET film is currently classifiable
under Harmonized Tariff Schedule
(HTS) subheading 3920.62.00. The HTS
subheading is provided for convenience
and for customs purposes. The written
description remains dispositive as to the
scope of the product coverage.
Period of Review
On August 20, 2008, Kolon requested
that the Department amend the time
frame covered by the review to the
period April 3, 2008, to May 31, 2008.
See Kolon’s August 20, 2008, letter.
Kolon noted that April 3, 2008, is the
date that the Department published its
final results of the changed
circumstances review in which Kolon
was formally reinstated within the
order. See Polyethylene Terephthalate
Film, Sheet, and Strip from Korea: Final
Results of Antidumping Duty Changed
Circumstances Review and
Reinstatement of the Antidumping Duty
Order, 73 FR 18259 (April 3, 2008)
(Final Results of CC Review). Kolon
asserted the Department has no basis to
review transactions prior to the date
Kolon was formally reinstated into the
order.
On August 27, 2008, Petitioners filed
a rebuttal to Kolon’s August 20, 2008
letter. See Petitioners’ August 27, 2008,
letter. Petitioners noted the Department
ordered CBP to suspend liquidation of
Kolon’s entries on October 2, 2007,
which is the date the Department issued
its Preliminary Results of the Changed
Circumstances Review. See
Polyethylene Terephthalate Film, Sheet,
and Strip from the Republic of Korea:
Preliminary Results of Changed
Circumstances Review and Intent to
Reinstate Kolon Industries, Inc. in the
Antidumping Duty Order, 72 FR 56048
(October 2, 2007). Petitioners assert that
because the Department ordered
suspension of liquidation with respect
to Kolon’s entries effective October 2,
2007, that date is the proper date for the
beginning of the review period.
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]]>Agencies
[Federal Register Volume 74, Number 127 (Monday, July 6, 2009)]
[Notices]
[Pages 31919-31922]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-15967]
[[Page 31919]]
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DEPARTMENT OF COMMERCE
International Trade Administration
(C-580-862)
Ni-Resist Piston Inserts from the Republic of Korea: Preliminary
Negative Countervailing Duty Determination
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce (the Department) preliminarily
determines that countervailable subsidies are not being provided to
producers and exporters of Ni-resist piston inserts from the Republic
of Korea (Korea).
EFFECTIVE DATE: July 6, 2009.
FOR FURTHER INFORMATION CONTACT: John Conniff, AD/CVD Operations,
Office 3, Operations, Import Administration, U.S. Department of
Commerce, Room 4014, 14th Street and Constitution Avenue, NW,
Washington, DC 20230; telephone: (202) 482-1009.
SUPPLEMENTARY INFORMATION:
Case History
On January 26, 2009, the Department received a countervailing duty
(CVD) petition concerning Ni-resist piston inserts from Korea filed in
proper form by Korff Holdings, LLC, doing business as Quaker City
Castings (Petitioner). This investigation was initiated on February 17,
2009. See Ni-Resist Piston Inserts from Argentina and the Republic of
Korea: Initiation of Countervailing Duty Investigations, 74 FR 8054
(February 23, 2009) (Initiation Notice), and accompanying Initiation
Checklist..\1\ On March 20, 2009, the Department postponed the deadline
for the preliminary determination by 65 days to no later than June 29,
2009. See Ni-Resist Piston Inserts from Argentina and the Republic of
Korea: Notice of Postponement of Preliminary Determination in the
Countervailing Duty Investigations, 74 FR 11910 (March 20, 2009).
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\1\ A public version of this and all public Departmental
memoranda is on file in the Central Records Unit (CRU), room 1117 in
the main building of the Commerce Department.
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On March 4, 2009, the Department selected Incheon Metal Co., Ltd.
(Incheon Metal) as the mandatory respondent in this investigation. See
Memorandum from the Team through Melissa Skinner, Director, Office 3,
Operations, to John M. Andersen, Acting Deputy Assistant Secretary for
Antidumping and Countervailing Duty Operations, regarding ``Respondent
Selection'' (March 4, 2009).\2\
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\2\ A public version of this memorandum is available in the CRU.
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On March 6, 2009, we issued the initial CVD questionnaire to the
Government of Korea (GOK) and Incheon Metal. On April 8, 2009, the GOK
submitted its response to the initial CVD questionnaire. On April 28,
2009, Incheon Metal submitted its initial questionnaire response. On
April 17, 2009, we issued a supplemental questionnaire to the GOK, to
which it responded on April 28, 2009. On May 1, 2009, we issued a
supplemental questionnaire to Incheon Metal, to which it submitted a
response on May 29, 2009. On May 11, 2009, we issued a second
supplemental questionnaire to the GOK, which submitted its response on
May 18, 2009. On June 2, 2009, we issued a third supplemental
questionnaire to the GOK. On June 11, 2009, the GOK submitted its
response to the third supplemental questionnaire.
On April 20, 2009, petitioner submitted new subsidy allegations
regarding six programs. On May 13, 2009, the Department initiated
investigations of the six newly alleged subsidy programs pursuant to
section 775 of the Tariff Act of 1930, as amended (the Act). See
Memorandum to Melissa G. Skinner, Director, Office 3 Operations,
regarding ``New Subsidy Allegations'' (May 13, 2009). Questionnaires
regarding these newly alleged subsidies were sent to the GOK and
Incheon Metal on May 13, 2009. The GOK and Incheon Metal submitted
their response to the questionnaires on the new subsidy allegations on
June 10, 2009.
On May 11, 2009, petitioner submitted additional new subsidy
allegations regarding one program. On May 27, 2009, the Department
initiated an investigation of the one newly alleged subsidy program
pursuant to section 775 of the Act. See Memorandum to Melissa G.
Skinner, Director, Office 3 Operations, regarding ``Additional New
Subsidy Allegations'' (May 27, 2009). Questionnaires regarding this
newly alleged subsidy were sent to the GOK and Incheon Metal on May 29,
2009. The GOK and Incheon Metal submitted their responses to the
questionnaires on the additional new subsidy allegation on June 12,
2009.
Scope of the Investigation
The scope of this investigation includes all Ni-resist piston
inserts regardless of size, thickness, weight, or outside diameter. Ni-
resist piston inserts may also be called other names including, but not
limited to, ``Ring Carriers,'' or ``Alfin Inserts.'' Ni-resist piston
inserts are alloyed cast iron rings, with or without a sheet metal
cooling channel pressed and welded into the interior of the insert. Ni-
resist piston inserts are composed of the material known as Ni-resist,
of the chemical composition: 13.5% - 17.5% Ni (nickel), 5.5% - 8.0% Cu
(copper), 0.8% - 2.5% Cr (chromium), 0.5% - 1.5% Mn (manganese), 1.0% -
3.0% Si (silicon), 2.4% - 3.0% C (carbon). The cast iron composition is
produced primarily to the material specifications of the American
Society for Testing and Materials (ASTM), ASTM A-436 grade 1.
The scope of this investigation does not include piston rings nor
did any other product manufacture using the Ni-resist material. The
subject imports are properly classified under subheading 8409.99.91.90
of the Harmonized Tariff Schedule of the United States (HTSUS), but
have been imported under HTSUS 7326.90. The HTSUS subheadings are
provided for convenience and customs purposes. The written description
is dispositive of the scope of these investigations.
Injury Test
Because Korea is a ``Subsidies Agreement Country'' within the
meaning of section 701(b) of the Act, the International Trade
Commission (ITC) is required to determine whether imports of the
subject merchandise from Korea materially injure, or threaten material
injury to, a U.S. industry. On March 25, 2009, the ITC published its
preliminary determination that there is a reasonable indication that an
industry in the United States is materially injured by reason of
imports from Korea of subject merchandise. See Ni-Resist Piston Inserts
from Argentina and Korea, USITC Pub.4066, Inv. Nos. 701-TA-460-461,
(March 2009) (Prelim.).
Period of Investigation
The period of investigation (the POI) for which we are measuring
subsidies is January 1, 2008, through December 31, 2008, which
corresponds to the most recently completed fiscal year for the two
respondents. See 19 CFR 351.204(b)(2).
Allocation Period
Under 19 CFR 351.524(b), non-recurring subsidies are allocated over
a period corresponding to the average useful life (AUL) of the
renewable physical assets used to produce the subject merchandise.
Pursuant to 19 CFR 351.524(d)(2), there is a rebuttable presumption
that the AUL will be taken
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from the U.S. Internal Revenue Service's 1977 Class Life Asset
Depreciation Range System (IRS Tables), as updated by the Department of
Treasury. For the subject merchandise, the IRS Tables prescribe an AUL
of 13 years. No interested party has claimed that the AUL of 13 years
is unreasonable.
ANALYSIS OF PROGRAMS
Program Preliminarily Determined To Be Countervailable
A. Tax Benefits under the Namdong National Industrial Complex Program
During the POI Incheon Metal received tax benefits under the
Namdong National Industrial Complex pursuant to the Framework Act on
small and medium-sized enterprises (SMEs) from the GOK. Any SME
involved in manufacturing, transportation, or information technology
can locate inside the Namdong National Industrial Complex and receive
assistance from the government. Under the program, firms inside the
complex are eligible to receive exemptions from acquisition and
registration taxes that are normally due on real estate transactions.
Incheon Metal reported receiving such tax exemptions during the POI in
connection with real estate transactions during the POI.
We preliminarily determine that the Incheon Metal received a
financial contribution in the form of revenue forgone from the GOK
within the meaning of section 771(5)(D)(ii) of the Act and that the
exemptions are specific within the meaning of section 771(5A)(D)(iv) of
the Act, because they limited to enterprises located inside the Namdong
National Industrial Complex. Incheon Metal is located within this
complex.
Pursuant to section 771(5)(E) of the Act, we find the tax exemption
confers a benefit in the amount equal to the exemption during the POI.
We divided the benefit under this program by Incheon Metal's total
sales. The resulting net subsidy rate is less than 0.005 percent ad
valorem. Therefore, in accordance with the Department's practice, we
will find that the countervailable benefit is not measurable. See,
e.g., Certain Hot-Rolled Carbon Steel Flat Products from India: Final
Results and Partial Rescission of Countervailing Duty Administrative
Review, 74 FR 20923 (May 6, 2009) (HRC from India), and accompanying
Issues and Decision Memorandum (HRC from India Decision Memorandum) at
``Exemption from the CST.''
II. Programs Preliminarily Determined To Be Not Countervailable
A. Technical Development for Innovation Production Environment (TDIPE)
Incheon Metal's annual report indicates that it received grants
from the GOK during the POI. See Incheon Metal's April 24, 2009
response at Exhibit 5. Supplemental questionnaire responses from
Incheon Metal and the GOK indicate that Incheon Metal received two
grants from the GOK's Small and Medium Business Administration under
the TDIPE. See Incheon Metal's May 29, 2009 response at 2-3. In the
narrative of its supplemental questionnaire response, Incheon Metal
indicated that SME's that purchase equipment classified under
Harmonized Tariff System (HTS) Chapters 10 through 33 are eligible to
receive grants under the TDIPE. The GOK's description of the program
and the portions of the TDIPE regulations and sample application forms
submitted by the GOK do not make any reference to the grants being
limited to purchases of equipment under HTS chapters 10 through 33. See
GOK's June 12, 2009 response at Exhibits S-29 and S-30. In response to
our request, the GOK also submitted information concerning the
enterprises and industries that received grants under the TDIPE program
during the period 2005 through 2008. See GOK's June 12, 2009 response
at 19.
Based on our analysis of the information submitted by the GOK
regarding the TDIPE program, including a copy of the relevant
legislation, we preliminarily determine that the grants under the
program are not de jure specific within the meaning of sections
771(5A)(A), (B), (C) and (D)(i) and (ii) of the Act. See also 19 CFR
351.502(e) and see also the GOK's June 12, 2009, response at Exhibits
S-29 and S-30.
Where the Department finds no de jure specificity, section
771(5A)(D)(iii) of the Act also directs the Department to examine
whether the benefits provided under the program are de facto specific,
that is, whether the benefits are specific as a matter of fact.
Subparagraphs under section 771(5A)(D)(iii) of the Act stipulate that a
program is de facto specific if one or more of the following factors
exist:
(I) The actual recipients of the subsidy, whether considered on an
enterprise or industry basis, are limited in number.
(II) An enterprise or industry is a predominant user of the
subsidy.
(III) An enterprise or industry receives a disproportionately large
amount of the subsidy.
(IV) The manner in which the authority providing the subsidy has
exercised discretion in the decision to grant the subsidy indicates
that an enterprise or industry is favored over others.
In response to the Department's request for information regarding
these factors, the GOK provided the Department with a breakdown of the
issuance of grants (both in terms of amounts and number of recipients),
by industry, for the years 2005 through 2008. See GOK's June 12, 2009,
questionnaire response at 19 and the Department's June 25, 2009,
Memorandum to the File (Preliminary De Facto Specificity Analysis
Memorandum), of which a public version is available in the Central
Records Unit in Room 1117. In conducting our de facto specificity
analysis, we examined the grant amounts issued by the GOK as well as
the number of recipients, by industry, during the POI and each of the
preceding three years. Specifically, we compared the amount of grants
under the TDIPE program that were issued to the metals industry to the
amount of grants that were issued to other industries under this
program. We conducted the same analysis with regard to the number of
recipients. See Preliminary De Facto Specificity Analysis Memorandum.
Based on our analysis of the data for the TDIPE program, we
preliminarily determine that the benefits received by Incheon Metal or
the metals industry under this program were not de facto specific
within the meaning of sections 771(5A)(D)(iii)(I) through (III) of the
Act, i.e., we find no limitation as to the number of recipients,
predominant use or disproportionate share, of the subsidy. Lastly, we
preliminarily determine that there is no evidence on the record of the
investigation indicating that the GOK exercised discretion in the
decision to issue TDIPE grants which indicates that the metals industry
was favored over other industries within the meaning of section
771(5A)(D)(iii)(IV) of the Act.
Consequently, the Department preliminarily determines that the
grants received by Incheon Metal under this program are neither de jure
nor de facto specific and, therefore, not countervailable. We will
continue to examine this program in this proceeding.
B. Reserve for Research and Manpower Development Fund Under RSTA
Article 9 (Formerly Article 8 of TERCL)
This program allows a company operating in manufacturing or mining,
[[Page 31921]]
or in a business prescribed by the Presidential Decree, to appropriate
reserve funds to cover expenses related to the development or
innovation of technology. These reserve funds are included in the
company's losses and reduce the amount of taxes paid by the company.
Under this program, capital goods companies and capital intensive
companies can establish a reserve of five percent of total revenue,
while companies in all other industries are only allowed to establish a
three-percent reserve.
The Department has previously determined that firms that are
entitled to establish a reserve up to the three percent level do not
receive a countervailable subsidy. See e.g., Preliminary Results of
Countervailing Duty Administrative Review: Corrosion Resistant Carbon
Steel Flat Products from the Republic of Korea, 71 FR 53413, 53419
(September 11, 2006) (unchanged in final results). Incheon Metal
indicated in its questionnaire response that it established its reserve
up to the three percent level. Consequently, we preliminarily determine
that Incheon Metal's use of the program is not countervailable.
C. Programs Preliminarily Determined To Have Been Terminated
1. Energy Rate Reductions Under the Request Load Adjustment Program
Petitioner contends that the GOK provides reduced energy rates to
companies that reduce their demand by twenty percent. Businesses are
eligible for a discount of 440 won per kW under the Requested Load
Adjustment program. The GOK reported in its response that the program
had been terminated as of January 1, 2005, by the Korean Electric Power
Corporation and did not provide any residual benefits. See GOK's April
8, 2009, response at 5. Information submitted by the GOK, including
translated copies of the relevant regulation, shows that the regulation
covering the program has been abolished. See GOK's April 28, 2009,
supplemental response at 3 and Exhibits S-1 and S-2. The GOK also
stated that it has not implemented a successor program. Therefore,
subject to verification, we preliminarily determine that this program
has been terminated.
2. Reserve for Investment Funds
Petitioner alleged that this program allowed Korean firms engaged
in manufacturing and mining outside of Seoul to establish a tax
reserve. Petitioner further contended that the tax reserve allows
eligible firms to reduce their taxable income in a given year and that
the program is limited to a geographic area outside of Seoul. The GOK
reported that the program was terminated on August 31, 1999, and that
the relevant portion of the Restriction of Special Taxation Act was
deleted. The GOK provided documentation demonstrating its assertion.
See GOK's April 8, 2009, response at 7 and Exhibit 7. Therefore,
subject to verification, we preliminarily determine that this program
has been terminated.
D. Programs Preliminarily Determined To Be Not Used
1. Short-Term Export Financing
2. Loans under the Industrial Base Fund
3. Export Loans by Commercial Banks Under KEXIM's Trade Bill
Rediscounting Program
4. Subsidized Loans and Guarantees through the Korea Development Bank
5. Export Insurance and Guarantees through the Korea Export Insurance
Corporation
6. SME Financing through the Industrial Bank of Korea
7. Export and Import Credit Financing and Guarantees from the Korean
Export-Import Bank
8. Export and Import Credit Financing and Guarantees from the Korean
Export-Import Bank
9. Financial Aid, Training Assistance and Export Services through the
Small and Medium Business Administration
10. Free Economic Zone of Incheon
Verification
In accordance with section 782(i)(1) of the Act, we intend to
verify the information submitted by Incheon Metal and the GOK prior to
making our final determination.
Suspension of Liquidation
In accordance with section 703(d)(1)(A)(i) of the Act, we have
calculated an individual rate for each producer/exporter of the subject
merchandise. We preliminarily determine the total estimated net
countervailable subsidy rates to be:
------------------------------------------------------------------------
Producer/Exporter Subsidy Rate
------------------------------------------------------------------------
Incheon Metal Co., Ltd.................... de minimis percent ad
valorem
All Others................................ de minimis percent ad
valorem
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Therefore, we preliminarily determine that no countervailable
subsidies are being provided to the production or exportation of Ni-
resist pistons in Korea. Further, we will direct U.S. Customs and
Border Patrol (CBP) not to require suspension of liquidation of all
entries of Ni-resist pistons from Korea.
ITC Notification
In accordance with section 703(f) of the Act, we will notify the
ITC of our determination. In addition, we are making available to the
ITC all non-privileged and non-proprietary information relating to this
investigation. We will allow the ITC access to all privileged and
business proprietary information in our files, provided the ITC
confirms that it will not disclose such information, either publicly or
under an administrative protective order, without the written consent
of the Assistant Secretary for Import Administration.
In accordance with section 705(b) (2) of the Act, if our final
determination is affirmative, the ITC will make its final determination
within 45 days after the Department makes its final determination.
Disclosure and Public Comment
In accordance with 19 CFR 351.224(b), the Department will disclose
to the parties the calculations for this preliminary determination
within five days of its announcement. Case briefs for this
investigation must be submitted no later than one week after the
issuance of the last verification report. See 19 CFR 351.309(c) (for a
further discussion of case briefs). Rebuttal briefs, which must be
limited to issues raised in the case briefs, must be filed within five
days after the deadline for submission of case briefs. See 19 CFR
351.309(d). A list of authorities relied upon, a table of contents, and
an executive summary of issues should accompany any briefs submitted to
the Department. Executive summaries should be limited to five pages
total, including footnotes.
In accordance with 19 CFR 351.310(c), we will hold a public
hearing, if requested, to afford interested parties an opportunity to
comment on this preliminary determination. Individuals who wish to
request a hearing must submit a written request within 30 days of the
publication of this notice in the Federal Register to the
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Assistant Secretary for Import Administration, U.S. Department of
Commerce, Room 1870, 14th Street and Constitution Avenue, NW,
Washington, DC 20230. Parties will be notified of the schedule for the
hearing and parties should confirm the time, date, and place of the
hearing 48 hours before the scheduled time. Requests for a public
hearing should contain: (1) party's name, address, and telephone
number; (2) the number of participants; and (3) to the extent
practicable, an identification of the arguments to be raised at the
hearing.
This determination is issued and published pursuant to sections
703(f) and 777(i) of the Act and 19 CFR 351.221(b)(4).
Dated: June 29, 2009.
John M. Andersen,
Acting Deputy Assistant Secretary for Antidumping and Countervailing
Duty Operations.
[FR Doc. E9-15967 Filed 7-2-09; 8:45 am]
BILLING CODE 3510-DS-S
