Korean Sewerage Fees Program Not Countervailable, Commerce Says on Remand at CIT

The Commerce Department said a South Korean sewerage fees program isn't countervailable, on remand from the Court of International Trade, dropping countervailing duty respondent Hyundai Steel's CVD rate to 0.50%. After learning more about the program, Commerce said Hyundai properly qualified for a reduction in its sewerage fees pursuant to the laws of South Korea and said this reduction wasn't received only by Hyundai (Hyundai Steel Co. v. U.S., CIT #21-00304).

The matter is the second of its kind after Commerce requested, and was granted, a redo of its consideration of the sewerage fees program in another case over a countervailing duty review (see 2111090034). Remand results are still outstanding in that case, also brought by Hyundai Steel.

The remand results at issue here come in a dispute over the 2018 administrative review of the countervailing duty order on corrosion-resistant steel products (CORE) from South Korea. Hyundai Steel challenged Commerce's finding that it received a financial contribution from the South Korean government with respect to sewerage fees and a countervailable benefit from the government with respect to sewerage fees payments. Commerce requested a voluntary remand after it said it learned more about the program. CIT granted the request (see 2201110041).

Under the program, the South Korean government charges companies sewerage fees based on how much water is provided to them. However, a company can be granted a reduction in those fees if it can show it pumps out less water than it uses. Hyundai did just that, but Commerce thought the fee reduction was a countervailable benefit. On remand, Commerce reversed its decision.

"Both federal and municipal regulations stipulate that sewerage fees shall be set according to the amount of sewerage a user discharges into the public sewerage system," the remand results said. "Hyundai Steel qualified for a reduction in its sewerage bill in the amount that it demonstrated to the government that it could not have discharged into the public sewerage system. ... There is no revenue forgone to the government because Hyundai Steel is simply being billed for the service which it has used according to the regulations that govern such fee."