Korean Pay-What-You-Use Water Sewerage Scheme Not Countervailable Benefit, Hyundai Says

Hyundai Steel Co. did not receive a countervailable benefit through its payment of sewerage fees, the company argued in a June 22 motion for judgment. The Commerce Department's conclusion to the contrary in a countervailing duty administrative review of cut-to-length carbon-quality steel plate from South Korea is not supported by substantial evidence and is contrary to law, Hyundai said (Hyundai Steel Company v. United States, CIT #21-00012).

In South Korea, the regional government water authority assumes that however much water a customer consumes equals the amount of sewerage it discharges into the public sewer system, the brief said. The customers are therefore charged for this sewerage based on the level of water consumed. However, if a customer can prove that it did not discharge as much sewerage as the amount of water it consumed, that customer can be charged at the actual rate of water usage.

Hyundai said it uses water as part of its production process. Therefore, the company hired an "independent study" to find its actual level of sewerage. This study was accepted by the regional Korean water authority, lowering Hyundai's level at which it is charged for water consumption.

Commerce found in the final results of the CVD review that Hyundai's payment of these fees based on actual usage was a countervailable subsidy. The agency said that the South Korean government provided the company with a "financial contribution in the form of revenue forgone," the brief said.

The arrangement to pay only what you use does not result in the government forgoing any revenue, Hyundai said. The system actually "right sizes what is actually owed and prevents overcharge," the brief said. "Nor does it provide a benefit because the record shows that Hyundai Steel paid sewerage fees based on its actual proven discharge. It was not better off than it would have otherwise been absent the program." None of this even matters anyway, Hyundai said, since this arrangement was only in place for its production of non-subject merchandise at its Incheon production facility.