Brass Rod From the Republic of Korea: Final Affirmative Countervailing Duty Determination

AGENCY:

Enforcement and Compliance, International Trade Administration, Department of Commerce.

SUMMARY:

The U.S. Department of Commerce (Commerce) determines that countervailable subsidies are being provided to producers and exporters of brass rod from the Republic of Korea (Korea). The period of investigation is January 1, 2022, through December 31, 2022.

DATES:

Applicable April 22, 2024.

FOR FURTHER INFORMATION CONTACT:

Toni Page or Lingjun Wang, AD/CVD Operations, Office OVII, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-1398 or (202) 482-2316, respectively.

SUPPLEMENTARY INFORMATION:

Background

On September 29, 2023, Commerce published the Preliminary Determination in the Federal Register and invited interested parties to comment on it. For a complete description of the events that followed the Preliminary Determination, see the Issues and Decision Memorandum. The Issues and Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at http://access.trade.gov . In addition, a complete version of the Preliminary Decision Memorandum can be accessed directly at https://access.trade.gov/public/FRNoticesListLayout.aspx .

Scope of the Investigation

The product covered by this investigation is brass rod from Korea. For a complete description of the scope of this investigation, see Appendix I.

Scope Comments

During this investigation, Commerce received scope comments from parties. Commerce issued a Preliminary Scope Decision Memorandum to address these comments and set aside a period for parties to address scope issues in scope-specific case and rebuttal briefs. We did not receive timely comments from any interested parties on the Preliminary Scope Decision Memorandum. Thus, we did not make any changes to the scope of the investigation from the scope published in the Preliminary Determination, as noted in Appendix I.

Analysis of Subsidy Programs and Comments Received

The subsidy programs under investigation and the issues raised in the case and rebuttal briefs by parties are discussed in the Issues and Decision Memorandum. For a list of topics discussed, and the issues raised by parties to which we responded in the Issues and Decision Memorandum, see Appendix II.

Verification

As provided in section 782(i) of the Tariff Act of 1930, as amended (the Act), between January 15 and February 2, 2024, Commerce conducted verification of the subsidy information reported by the Government of the Republic of Korea (GOK), Booyoung Industry (BYI), and Daechang Co. Ltd. (Daechang). We used standard verification procedures, including an examination of relevant accounting records and original source documents provided by the respondents.

Methodology

Commerce conducted this investigation in accordance with section 701 of the Act. For each of the subsidy programs found to be countervailable, Commerce preliminarily determines that there is a subsidy, i.e. , a financial contribution by an “authority” that gives rise to a benefit to the recipient, and that the subsidy is specific. For a full description of the methodology underlying our final determination, see the Issues and Decision Memorandum.

In making this final determination, Commerce relied, in part, on facts otherwise available, including adverse facts available (AFA), pursuant to sections 776(a) and (b) of the Act. For a full discussion of our application of AFA, see the section “Use of Facts Available and Adverse Inferences” in the accompanying Issues and Decision Memorandum.

Changes Since the Preliminary Determination

Based on our review and analysis of the information received during verification and comments received from parties, for this final determination, we made certain changes to the countervailable subsidy rate calculations for BYI, Daechang, and for all other producers/exporters. For a discussion of these changes, see the Issues and Decision Memorandum.

All-Others Rate

Pursuant to section 705(c)(5)(A)(i) of the Act, Commerce will determine an all-others rate equal to the weighted average countervailable subsidy rates established for those exporters and/or producers individually investigated, excluding any zero and de minimis countervailable subsidy rates and any rates based entirely under section 776 of the Act.

In this investigation, Commerce calculated rates for BYI and Daechang that are above de minimis and are not based entirely on facts available. For the all-others rate we are using the simple average of the subsidy rates calculated for BYI and Daechang. This is consistent with the methodology that we use in an investigation to establish the all-others rate, pursuant to section 705(c)(5)(A) of the Act.

Final Determination

Commerce determines that the following estimated countervailable subsidy rates exist for the period of January 1, 2022, through December 31, 2022:

Continuation of Suspension of Liquidation

As a result of our Preliminary Determination, and pursuant to sections 703(d)(1)(B) and (d)(2) of the Act, Commerce instructed U.S. Customs and Border Protection (CBP) to collect cash deposits and suspend liquidation of entries of subject merchandise as described in the scope of the investigation section entered, or withdrawn from warehouse, for consumption on or after September 29, 2023, the date of publication of the Preliminary Determination in the Federal Register .

Additionally, pursuant to section 705(c)(1)(B)(ii) of the Act and 19 CFR 351.210(d), where appropriate, Commerce will instruct CBP to require a cash deposit equal to the estimated individual countervailable subsidy rate or the estimated all-others rate, as indicated in the chart above, effective on the date of publication of this final determination.

If the U.S. International Trade Commission (ITC) issues a final affirmative injury determination, we will issue a countervailing duty order and require a cash deposit of estimated countervailing duties for such entries of subject merchandise in the amounts indicated above, in accordance with section 706(a) of the Act. If the ITC determines that material injury, or threat of material injury, does not exist, this proceeding will be terminated, and all estimated duties deposited or securities posted as a result of the suspension of liquidation will be refunded or canceled.

Disclosure

Commerce intends to disclose its calculations and analysis performed to interested parties in this final determination within five days of its public announcement, or if there is no public announcement, within five days of the date of this notice in accordance with 19 CFR 351.224(b).

ITC Notification

In accordance with section 705(d) of the Act, Commerce will notify the ITC of its final affirmative determination that countervailable subsidies are being provided to producers and exporters of brass rod from Korea. As Commerce's final determination is affirmative, in accordance with section 705(b) of the Act, the ITC will determine, within 45 days, whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports of brass rod from Korea. In addition, we are making available to the ITC all non-privileged and non-proprietary information related to this investigation. We will allow the ITC access to all privileged and business proprietary information in our files, provided the ITC confirms that it will not disclose such information, either publicly or under an administrative protective order (APO), without the written consent of the Assistant Secretary for Enforcement and Compliance.

Administrative Protective Order

In the event that the ITC issues a final negative injury determination, this notice will serve as the only reminder to parties subject to the APO of their responsibility concerning the destruction of proprietary information disclosed under APO, in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.

Notification to Interested Parties

This final determination is issued and published pursuant to sections 705(d) and 777(i) of the Act, and 19 CFR 351.210(c).

Appendix I—Scope of the Investigation

The products covered by this investigation are brass rod and bar (brass rod), which is defined as leaded, low-lead, and no-lead solid brass made from alloys such as, but not limited to the following alloys classified under the Unified Numbering System (UNS) as C27450, C27451, C27460, C34500, C35000, C35300, C35330, C36000, C36300, C37000, C37700, C48500, C67300, C67600, and C69300, and their international equivalents.

The brass rod subject to this investigation has an actual cross-section or outside diameter greater than 0.25 inches but less than or equal to 12 inches. Brass rod cross-sections may be round, hexagonal, square, or octagonal shapes as well as special profiles ( e.g., angles, shapes), including hollow profiles.

Standard leaded brass rod covered by the scope contains, by weight, 57.0-65.0 percent copper; 0.5-3.0 percent lead; no more than 1.3 percent iron; and at least 15 percent zinc. No-lead or low-lead brass rod covered by the scope contains by weight 59.0-76.0 percent copper; 0-1.5 percent lead; no more than 0.35 percent iron; and at least 15 percent zinc. Brass rod may also include other chemical elements ( e.g., nickel, phosphorous, silicon, tin, etc.).

Brass rod may be in straight lengths or coils. Brass rod covered by this investigation may be finished or unfinished, and may or may not be heated, extruded, pickled, or cold-drawn. Brass rod may be produced in accordance with ASTM B16, ASTM B124, ASTM B981, ASTM B371, ASTM B453, ASTM B21, ASTM B138, and ASTM B927, but such conformity to an ASTM standard is not required for the merchandise to be included within the scope.

Excluded from the scope of this investigation is brass ingot, which is a casting of unwrought metal unsuitable for conversion into brass rod without remelting, that contains, by weight, at least 57.0 percent copper and 15.0 percent zinc.

The merchandise covered by this investigation is currently classifiable under subheadings 7407.21.9000, 7407.21.7000, and 7407.21.1500 of the Harmonized Tariff Schedule of the United States (HTSUS). Products subject to the scope may also enter under HTSUS subheadings 7403.21.0000, 7407.21.3000, and 7407.21.5000. The HTSUS subheadings and UNS alloy designations are provided for convenience and customs purposes. The written description of the scope of the investigation is dispositive.

Appendix II—List of Topics Discussed in the Issues and Decision Memorandum

I. Summary

II. Background

III. Scope of the Investigation

IV. Subsidies Valuation

V. Use of Facts Otherwise Available and Adverse Inferences

VI. Analysis of Programs

VII. Discussion of the Issues

Comment 1: Whether to Revise Preliminary Determination on Provision of Electricity for Less Than Adequate Remuneration (LTAR)

Comment 2: Whether to Apply Adverse Facts Available (AFA) to BYI's Reported Loan

Comment 3: Whether to Apply AFA to Essentech's Loans

Comment 4: Whether Daechang Received Benefits from the Provision of Carbon Emission Permits by the GOK-Korea Emission Trading System (K-ETS)

Comment 5: Whether to Treat Seowon as a Cross-Owned Producer of Subject Merchandise for Purposes of Attribution

Comment 6: Whether to Allocate the Benefit Received Over Total Sales for the Energy Efficiency Utilizing Artificial Intelligence Program

Comment 7: Whether to Revise Daechang's Benefit Calculation for the Facility Improvement Fund to Reduce Air Pollutants in Sihwa Banwol Industrial Complex Program

Comment 8: Whether the Hwaseong City Export Logistics Support Program is Countervailable

VIII. Recommendation