Producer Implies Korean Government Tried to Dodge Imposition of CVD on Exporter

The Commerce Department was forced to use facts otherwise available in an investigation of Korean steel because the Korean government wasn't "forthcoming" when asked to provide data regarding an electricity subsidy’s costs, a petitioner said June 25 (Hyundai Steel Co. v. U.S., CIT # 23-00211).

In a motion supporting the government’s motion for judgment, petitioner Nucor Steel asked the trade court to affirm the results of the 2021 countervailing duty review on cut-to-length carbon-quality steel plate from Korea, which netted Hyundai a 1.08% rate after the Korean government gave untimely cost data for an electric company alleged to have provided electricity for less-than-adequate remuneration.

As a result, Commerce instead relied on facts otherwise available, using audited financial statements belonging to the electricity company, KEPCO, that the Korean government had supplied. Those statements included “the Company's business plan and external data for major unobservable inputs such as future sales volumes, unit sales price and cost of power purchase,” Nucor said.

Commerce asked the Korean government multiple times for KEPCO’s costs, but was unsuccessful, it said. It said the government wouldn’t offer the records until after Commerce had published its preliminary results.

The financial statements, however, showed that KEPCO had experienced a net loss of $3.7 trillion won, more than it had been able to recover in tariff rates, Nucor claimed.

It argued that the Korean government “should have been forthcoming to Commerce in explaining the current situation in its initial questionnaire” than it had been; it could have even “described the contents of unverified 2021 data in narrative form,” Nucor claimed. Instead, it had delayed, simultaneously offering Commerce KEPCO’s 2020 costs -- which didn’t reflect a similar loss, the petitioner said.

“This context is important because had the GOK been successful in its delay, Commerce would have relied on the 2020 data … and Commerce would have inappropriately found that the electricity for LTAR program provided no benefit to Hyundai Steel,” it said.

The petitioner also supported the government’s claim (see 2403130054) that the LTAR electricity was de facto specific to Hyundai, as the Korean steel industry “was among the top four electricity consuming industries” coming out of that program. And “certain individual steel producers alone benefitted [sic] disproportionately,” it said.

Hyundai argues that the reason it consumes more electricity is because the steel industry, as well as KEPCO’s three other top users, is highly energy intensive (see 2311030062).

But that isn’t a good explanation for why a subsidy isn’t de facto specific, Nucor argued. It said that the subsidized electricity likely contributes to Hyundai’s increased use of it “because consumption volumes are directly tied to prices paid -- i.e., an industry or enterprise benefitting from an LTAR subsidy is likely to consume more of the subsidized input than it otherwise would in large part because it is being subsidized.”

The petitioner also said that Hyundai based its argument on total electricity consumption instead of just industrial electricity consumption, even though Commerce explained that KEPCO “encompasses the provision of industrial electricity for LTAR.”

And it pushed back against the exporter’s description of electricity as a generally used good, equivalent to a road or bridge. In the past, Commerce has found, and the courts have affirmed, that electricity can be countervailable in a number of other cases, it said.