Hyundai Takes Aim at Use of Facts Available, Specificity Analysis for Electricity for LTAR Program

The Commerce Department's decision not to give the South Korean government a chance to submit data from the Korean Electric Power Corporation as part of the agency's analysis of the provision of electricity for less than adequate remuneration was not backed by substantial evidence, exporter Hyundai Steel Co. argued (Hyundai Steel Co. v. United States, CIT # 23-00211).

Filing a complaint at the Court of International Trade on Nov. 3, the lone mandatory respondent in the 2021 review of the countervailing duty order on cut-to-length carbon-quality steel plate from South Korea railed against Commerce's use of facts available regarding the lack of 2021 KEPCO data. The complaint also more broadly challenged Commerce's finding that the provision of electricity for LTAR program was de facto specific.

The provision of electricity in South Korea has widely been scrutinized across a host of CVD reviews by Commerce, seeing as CVD petitioners routinely allege that KEPCO does not recover its costs when it provides electricity to certain CVD respondents. To assess the situation in the present review, Commerce asked the Korean government for KEPCO's cost data from 2021. However, due to a change in the electricity tariff rate system and a national audit of KEPCO, Seoul could not offer the data.

Commerce asked for a timeline for when the data would be ready, but the Korean government didn't have an answer due to the nature of the audit. As a result, the agency reverted to facts available, namely using cost and sales data from KEPCO's 2021 unconsolidated financial statements along with KEPCO's 20-F disclosure form filed with the Securities and Exchange Commission. The result was a 0.51% CVD rate for this program.

Later on in the review, though, the Korean government said the audit was "substantially complete" and that it was in a place to submit the cost data, requesting a supplemental questionnaire so that the Korean government could submit the data on the record. The agency rejected the request since the cost data was not fully audited and "insufficient time remained in the review to collect and fully analyze any final cost data."

Commerce affirmed this position in the review's final results, while also adding to its de facto specificity determination. The agency used data from the Korean government for the steel industry and top 10 largest electricity consuming industries that showed all of their consumption as a proportion of the total amount of electricity consumed in Korea and within the industrial classification. Commerce said the data showed that the steel industry, along with three other industries, consumed a "disproportionately large amount of electricity in Korea." The present suit was launched to contest that analysis, along with the use of facts available in place of KEPCO's 2021 cost data.