01-6363. Notice of Amended Final Results of Antidumping Duty Administrative Reviews: Certain Cold-Rolled and Corrosion-Resistant Carbon Steel Flat Products from Korea

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of amendment to final results of antidumping duty administrative reviews and intent not to revoke antidumping duty order in part.

SUMMARY:

The Department of Commerce (“Department”) is amending its final results of reviews of the antidumping duty orders on certain cold-rolled and corrosion-resistant carbon steel flat products from Korea, published January 16, 2001, to reflect the correction of ministerial errors in those final results. The period covered by these amended final results is August 1, 1998 through July 31, 1999.

EFFECTIVE DATE:

March 14, 2001.

FOR FURTHER INFORMATION CONTACT:

Michael Panfeld (the POSCO Group), Marlene Hewitt (Dongbu) and (Union), or James Doyle, Enforcement Group III, Office 9, Import Administration, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue, NW., Washington, DC 20230, telephone [phone] (Panfeld), 202-482-1385 (Hewitt), or 202-482-0159 (Doyle), fax [phone].

SUPPLEMENTARY INFORMATION:

 

Applicable Statute

Unless otherwise indicated, all citations to the Tariff Act of 1930 (“Act”) are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Act by the Uruguay Round Agreements Act (“URAA”). In addition, unless otherwise indicated, all citations to the Department's regulations are to the regulations at 19 C.F.R. part 351 (1999).

Scope of the Reviews

The review of “certain cold-rolled carbon steel flat products” covers cold-rolled (cold-reduced) carbon steel flat-rolled products, of rectangular shape, neither clad, plated nor coated with metal, whether or not painted, varnished or coated with plastics or other nonmetallic substances, in coils (whether or not in successively superimposed layers) and of a width of 0.5 inch or greater, or in straight lengths which, if of a thickness less than 4.75 millimeters, are of a width of 0.5 inch or greater and which measures at least 10 times the thickness or if of a thickness of 4.75 millimeters or more are of a width which exceeds 150 millimeters and measures at least twice the thickness, as currently classifiable in the Harmonized Tariff Schedule (“HTS”) under item numbers 7209.15.0000, 7209.16.0030, 7209.16.0060, 7209.16.0090, 7209.17.0030, 7209.17.0060, 7209.17.0090, 7209.18.1530, 7209.18.1560, 7209.18.2550, 7209.18.6000, 7209.25.0000, 7209.26.0000, 7209.27.0000, 7209.28.0000, 7209.90.0000, 7210.70.3000, 7210.90.9000, 7211.23.1500, 7211.23.2000, 7211.23.3000, 7211.23.4500, 7211.23.6030, 7211.23.6060, 7211.23.6085, 7211.29.2030, 7211.29.2090, 7211.29.4500, 7211.29.6030, 7211.29.6080, 7211.90.0000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 7215.50.0015, 7215.50.0060, 7215.50.0090, 7215.90.5000, 7217.10.1000, 7217.10.2000, 7217.10.3000, 7217.10.7000, 7217.90.1000, 7217.90.5030, 7217.90.5060, 7217.90.5090. Included in this review are flat-rolled products of nonrectangular cross-section where such cross-section is achieved subsequent to the rolling process (i.e., products which have been “worked after rolling”)—for example, products which have been beveled or rounded at the edges. Excluded from this review is certain shadow mask steel, i.e., aluminum-killed, cold-rolled steel coil that is open-coil annealed, has a carbon content of less than 0.002 percent, is of 0.003 to 0.012 inch in thickness, 15 to 30 inches in width, and has an ultra flat, isotropic surface.

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

These HTS item numbers are provided for convenience and U.S. Customs purposes. The written descriptions remain dispositive.

Amendment of Final Results

On January 16, 2001, the Department published the final results of its administrative reviews of the antidumping duty orders on certain cold-rolled and corrosion-resistant carbon steel flat products from Korea, for the period August 1, 1998 through July 31, 1999. See Certain Cold-rolled and Corrosion-Resistant Carbon Steel Flat Products from Korea: Final Results of Antidumping Duty Administrative Reviews, 66 FR 3540 (hereinafter “Final Results”). The reviews covered shipments of subject merchandise by Dongbu Steel Co., Ltd. (“Dongbu”), Union Steel Manufacturing Co., Ltd. (“Union”), and Pohang Iron and Steel Co., Ltd. (“POSCO”). (POSCO and the companies collapsed with POSCO (Pohang Coated Steel Co., Ltd. (POCOS”) and Pohang Steel Industries Co., Ltd. (“PSI”), are collectively referred to as “the POSCO Group.”)

On January 22, 2001, Union submitted clerical error allegations with respect to its margin calculations, and Petitioners submitted clerical error allegations with respect to POSCO's margin calculations. On January 23, 2001, POSCO submitted clerical error allegations with respect to its margin calculations. On January 29, 2001, Petitioners and POSCO submitted comments on each other's respective allegations. The allegations and comments were filed in a timely fashion.

Union

Comment 1: Union alleges that the Department committed a clerical error, when, in implementing the fungibility principle adopted in the Final Results, it failed to employ a methodology which eliminates the double-counting of imputed credit expenses. Union proposes to the Department a methodology that it says is correct and consistent with the Department's statements in the Final Results. Union argues that the first step in the Department's calculation of the U.S. Indirect Selling Expense (“ISEs”) interest factor should be to identify the amount of actual interest expense allocated to Cold-Rolled (“CR”) and Corrosion-Resistant (“CORE”) as shown in Union's calculations. Only after identifying the amount of interest expense allocated can the Department perform an “apples-to-apples” calculation and deduct the amount of imputed credit expenses calculated for CR and CORE to determine if there is any basis to “add any remainder to the pool of ISEs.” Union claims that with its proposed methodology, the Department would find that Union's ISE for CR and CORE consist solely of non-financial ISEs.

Petitioners state this clerical error allegation argues the merit of an alternative methodology for calculating Union's imputed credit expenses, and that Union concedes that its argument is methodological, not ministerial. Petitioners conclude that as the alleged error is not ministerial, but methodological, Union's allegation with respect to the Department's methodology must be rejected.

Department's position: After reviewing both parties' comments, we have determined that the above mentioned points raised by Union do not meet the definition of ministerial error under section 751(h) of the Act and 19 CFR 351.224(f). The Department's decision of whether to calculate imputed credit expenses for all merchandise when correcting for double counting is not a mistake of “addition or subtraction or other arithmetic function” or “other similar types of unintentional error” within the meaning of 19 CFR 351.224(f). Instead, this allegation suggests a distinct methodology for correcting this double-counting. See Final Results, 66 FR at 3541 and accompanying Issues and Decision Memo at Comment 1.

Comment 2: Union argues that the Department erred in its calculation of Union's U.S. indirect selling expense (“ISE”) factor. Specifically, the Department failed to eliminate the double-counting of actual interest expenses and imputed credit expenses in its calculation by first subtracting imputed credit from net interest expenses and then adding imputed credit back to net interest expenses rather then adding the indirect selling expenses to the remaining interest expenses.

Petitioners agreed with Union that the Department made a clerical error in its calculations of Union's U.S. ISEs. The Department erroneously both subtracted from and added U.S. imputed credit expenses to the financial expense component of DKA's indirect selling expenses and thus failed to account for any double-counting of credit. Petitioners stated that in order to correct this error, the Department should correct its definitions of “interest factor” and “ISE Factor” such that non-financial ISEs are included in the ISEs calculations. Non-financial ISEs are presently omitted from the Department's calculations.

Department's Position: We reviewed the allegation and response and we agree with Union and Petitioners that there is an unintentional error in our calculation of Union's U.S. ISE Factor. Specifically, when the Department attempted to eliminate the double counting of imputed credit expenses in its calculation, it did not intend to both add and subtract U.S. imputed credit expense in the calculation. See Final Results, 66 FR at 3541 and accompanying Issues and Decision Memo at Comment 1. Accordingly, we recalculated the interest factor by deducting the imputed credit expense from the interest factor. We then recalculated the U.S. indirect selling expenses by using the corrected interest factor. We have corrected both our ISE calculations and the implementing programming language. See, the Memorandum from Marlene Hewitt to Edward Yang, dated February 16, 2001.

Comment 3: Union alleges that the Department erred by applying its VAT correction factor to local sales when calculating home market credit expenses. Specifically, Union argues that the Department should not have applied the VAT correction factor to local sales because the credit expense for local sales was calculated on a shipment by shipment basis. Instead, Union points out that it is the Department's practice to only apply the VAT correction factor to home market credit expenses reported using the receivables turnover methodology.

Petitioners stated that they agree with Union that the Department made a clerical error by applying its VAT correction factor for home market credit expenses to Union's local sales.

Department's Position: We agree with Union and Petitioners that the Department inadvertently applied its correction factor for calculating home market credit expenses to local sales. We have corrected the program to distinguish between local sales and home market sales that reported credit expense using the receivables-turnover method and applied the home credit expense only to home market sales that were reported using the receivables-turnover method. See, the Memorandum from Marlene Hewitt to Edward Yang, dated February 16, 2001.

POSCO

Comment 1: POSCO alleges that the Department committed a clerical error when, in implementing the fungibility principle adopted in the Final Results, (66 FR at 3541), it failed to allocate the U.S. affiliate's interest expenses to all activities (sales and investment) of the U.S. affiliate. Specifically, POSCO argues that the Department allocated the total interest expenses to the total sales, whereas the affiliate also has significant investment activities i.e. a joint venture. POSCO concludes that the Department should recalculate interest expense also considering the investment activities of affiliates.

Petitioners argue that the asserted “ministerial error” raised by POSCO is not the type of unintentional error listed in section 735(e) of the Act or 19 CFR 351.224(f) of the regulations. POSCO does not point to any incorrect operations of addition, subtraction, or any other arithmetic function. Instead, the issue POSCO raises deals with what methodology best allocates POSAM's U.S. interest expenses to subject merchandise. According to Petitioners, the Department's decision, which correctly assigned the financial indirect selling expenses of POSAM to the sales revenues that are absorbing those costs is not an unintentional ministerial error, but is instead an intentional methodological decision which the Department took after weighing POSCO's extensive briefing on this topic.

Department's Position: After reviewing POSCO's and Petitioners comments, we have determined that the above mentioned points raised by POSCO do not meet the definition of ministerial error under section 751(h) of the Act and 19 CFR 351.224(f). The Department's decision of whether to allocate interest expense to the activities of the joint venture is not a mistake of “addition or subtraction or other arithmetic function” or “other similar types of unintentional error” within the meaning of 19 CFR 351.224(f). Instead, this allegation suggests a distinct methodology for including interest expenses incurred by U.S. affiliates in the pool of U.S. ISEs. For a full discussion of the Department's methodological choice see the Final Results 66 FR at 3541 and its accompanying Issues and Decision Memorandum at Comment 1.

Comment 2: POSCO alleges that the Department committed a clerical error by failing to correct for double-counting of imputed credit expenses and inventory financing expenses. Specifically, when the Department adjusted interest expenses to avoid double-counting, it subtracted only those imputed credit expenses associated with subject merchandise and failed to subtract imputed credit expenses associated with non-subject merchandise. In addition, POSCO argues that under the fungibility principle that the Department adopted for its Final Result, (66 FR at 3541 and accompanying Issues and Decision Memorandum at Comment 1), all debt and equity finance all assets. Thus, the interest expense is by definition attributable, in part, to financing U.S. inventories. However, the Department's calculations erroneously failed to eliminate this portion of expense from the total interest expense.

Petitioners argue that the Department's decision not to deduct imputed credit expenses for non-subject merchandise was an intentional methodological decision, not a ministerial error. POSCO points to no arithmetic error or clerical error to support a ministerial error allegation. Instead, Petitioners assert that the issue POSCO raises deals with what methodology best accounts for imputed credit expenses on non-subject merchandise in U.S. interest expenses in order to avoid double-counting. POSCO's argument that the Department must deduct imputed credit expenses on non-subject merchandise from U.S. interest expense in order to avoid double-counting is wrong. According to Petitioners, the Department's margin calculations do not deduct imputed or actual credit expenses related to non-subject merchandise from U.S. price as suggested by POSCO. The Department should refuse to consider POSCO's second alleged “ministerial error” claim.

Department's Position: After reviewing POSCO's comments, we have determined that the above mentioned points raised by POSCO do not meet the definition of ministerial error in section 751(h) of the Act and 19 CFR 351.224(f). The Department's decision that no portion of U.S. interest expenses should be segregated and attributed to non-subject merchandise sales is not a mistake of “addition or subtraction or other arithmetic function” or “other similar types of unintentional error” within the meaning of 19 CFR 351.224(f). See Final Results, 66 FR at 3541 and accompanying Issues and Decision Memo at Comment 1.

Comment 3: Petitioners allege that the Department committed a clerical error when it attempted to offset total interest with interest income in the U.S. ISE calculations. Specifically, Petitioners argue that the Department used the total interest income as an offset, whereas it should have limited the offset to short-term interest income, as it is the Department's longstanding policy to allow an offset only for interest income that is short-term in nature.

POSCO argues that the Department correctly and appropriately relied on net interest expense as the starting point for calculating the interest expense component of POSCO's U.S. indirect selling expense. As indicated in the Decision Memorandum, the Department's calculation of U.S. indirect selling expenses includes all “money”, i.e. interest expense and interest income, of the U.S. affiliate. The Department's calculations thus correctly execute the Department's intent to include total interest expense and total interest income in the calculation of U.S. ISEs. Petitioners allegation of a clerical error should be rejected by the Department.

Department's Position: After reviewing Petitioners' and POSCO's comments, we have determined that the above mentioned points raised by Petitioners do not meet the definition of ministerial error under section 751(h) of the Act and 19 CFR 351.224(f). Our treatment of the interest income, used to offset the interest expense included in POSCO's U.S. indirect selling expenses, is not a mistake of “addition or subtraction or other arithmetic function” or “other similar types of unintentional error” within the meaning of 19 CFR 351.224(f).

Comment 4: Petitioners argue that the Department erred in making an adjustment to home market credit expenses in the corrosion-resistant margin calculations. Specifically, the adjusting factor was mis-typed at one point in the program.

Department's Position: We agree with Petitioners that the Department created a ministerial error in making this adjustment to home market credit in the corrosion-resistant margin program. The adjusting factor was incorrect. The Department has corrected the program accordingly.

Comment 5: Petitioners argue that the Department erred in creating two additional U.S. tolerance weights used in the cold-rolled margin program by naming them “CRTOLERM” rather than “CRTOLERS.”

Department's Position: We agree with Petitioners. The Department intended to name the tolerance weights “CRTOLERS”. We have corrected the program accordingly.

Amended Final Results of the Reviews

Amended Final Results of the Reviews

Producer/manufacturer/exporter	Weighted-average margin
Certain Cold-Rolled Carbon Steel Flat Products
*Dongbu	1.35
The POSCO Group	0.73
Union	1.94
Certain Corrosion-Resistant Carbon Steel Flat Products
*Dongbu	0.13
The POSCO Group	2.24
Union	0.29
*Not affected by these Amended Final Results.

The Department shall determine, and the U.S. Customs Service (“Customs”) shall assess, antidumping duties on all appropriate entries. In accordance with 19 CFR 351.212(b), we have calculated exporter/importer-specific assessment rates. With respect to both export price and constructed export price sales, we divided the total dumping margins for the reviewed sales by the total entered value of those reviewed sales for each importer. We will direct Customs to assess the resulting percentage margins against the entered Customs values for the subject merchandise on each of that importer's entries under the relevant order during the review period.

Cash Deposit Requirements

The following deposit requirements will be effective upon publication of this notice of amended final results of administrative reviews for all shipments of cold-rolled and corrosion-resistant carbon steel flat products from Korea entered, or withdrawn from warehouse, for consumption on or after the date of publication, as provided by section 751(a)(1) of the Act: (1) The cash deposit rates for the reviewed companies will be the rates shown above except that, for firms whose weighted-average margins are less than 0.5 percent and therefore de minimis, the Department shall require no deposit of estimated antidumping duties; (2) for previously reviewed or investigated companies not listed above, the cash deposit rate will continue to be the company-specific rate published for the most recent period; (3) if the exporter is not a firm covered in this review, a prior review, or the original less than fair value (“LTFV”) investigation, but the manufacturer is, the cash deposit rate will be the rate established for the most recent period for the manufacturer of the merchandise; and (4) the cash deposit rate for all other manufacturers or exporters will continue to be 14.44 percent (for certain cold-rolled carbon steel flat products) or 17.70 percent (for certain corrosion-resistant carbon steel flat products). These rates are the “all others” rates from the LTFV investigations. See Antidumping Duty Orders on Certain Cold-Rolled Carbon Steel Flat Products and Certain Corrosion-Resistant Carbon Steel Flat Products from Korea, 58 FR 44159 (August 19, 1993).

These deposit requirements shall remain in effect until publication of the final results of the next administrative review.

This notice also serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in the Secretary's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of doubled antidumping duties.

This notice also serves as the only reminder to parties subject to administrative protective orders (“APO”) of their responsibility concerning the return or destruction of proprietary notification of the return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.

We are issuing and publishing this determination and notice in accordance with sections 751(a)(1) and 777(i) of the Act. Effective January 20, 2001, Bernard T. Carreau is fulfilling the duties of Assistant Secretary of Import Administration.

Dated: March 6, 2001.

Bernard T. Carreau,

Deputy Assistant Secretary, Import Administration.