CIT Upholds de Minimis Rate for South Korean Port Usage Rights Program in CVD Review

The Commerce Department properly dropped its use of facts available over a South Korean port usage rights program in a countervailing duty review, the Court of International Trade ruled Sept. 19. Judge Jennifer Choe-Groves also found that because the result is a de minimis rate, reviewing whether the program is countervailable "would have no practical significance and is mooted," sustaining Commerce's remand results.

The case concerns the 2017 administrative review of the countervailing duty order on hot-rolled steel flat products from South Korea in which Hyundai Steel served as the sole mandatory respondent. In the review, it was alleged that Hyundai received a subsidy from a program involving port usage rights at the Port of Incheon since it built the port. The company was scheduled to receive berthing income from shipping operators along with "other" income from Hyundai itself and third parties. Commerce found Hyundai received a countervailable benefit relating to this "other" income -- namely, certain fees it received -- and subsequently slapped a 0.51% final subsidy rate on Hyundai. Commerce based this rate on facts available.

Hyundai argued at the trade court that because Commerce didn't find deficiencies in the company's submissions, it can't use facts otherwise available. Commerce then requested a voluntary remand to rethink its use of facts available. Petitioner Nucor was the only party to oppose the request. Choe-Groves granted the request, giving deference to the agency to fix its own mistakes (see 2108270037). Commerce issued a follow-up questionnaire to Hyundai, requesting information on how the port usage rights related to harbor exclusive fees. The respondent provided that information, leading Commerce to drop its reliance on facts available and give the company a 0.01% CVD rate for the port usage program and a total 0.46% rate (see 2110200075).

Choe-Groves first upheld the agency's decision to drop its reliance on facts available. Nucor argued that Commerce still should have used facts available since Hyundai's responses to the follow-up questionnaire "were incomplete," with the company giving estimates of the harbor exclusive usage fees for which it did not provide the source information. Commerce said nothing on the record delegitimizes Hyundai's responses.

"The Court sustains Commerce’s decision to not apply facts available," the opinion said. "On remand, Commerce reopened the record and requested the information regarding the harbor exclusive usage fees that Commerce had determined in the Final IDM was not available on the record. Commerce determined that there were no deficiencies in Hyundai Steel’s responses and determined specifically that the reported areas used to calculate the fee estimates were reasonable."

Despite the rate, Hyundai contested the remand results on the grounds that the port usage rights program is not countervailable. Since Commerce has countervailed this program in other reviews and may do so in the future, the respondent wanted the issue settled. However, Choe-Groves ruled that consideration of the countervailability of the program would have no practical significance and is thus moot.

(Hyundai Steel v. U.S., Slip Op. 22-109, CIT #20-03799, dated 09/19/22, Judge Jennifer Choe-Groves. Attorneys: Brady Mills of Morris Manning for plaintiff Hyundai; Kelly Krystyniak for defendant U.S. government; Alan Price of Wiley for defendant-intervenor Nucor; Thomas Beline of Cassidy Levy for defendant-intervenor U.S. Steel)