Korean Port Rights Program Didn't Provide a Countervailable Benefit to Hyundai, Company Argues at CIT
The Korean Government's Port Rights Program did not provide Hyundai Steel Company with a countervailable benefit, the company said in its May 8 remand comments at the Court of International Trade (Hyundai Steel Company v. U.S., CIT # 21-00536).
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Hyundai brought the case to contest the final results of the 2018 administrative review of the CVD order on hot-rolled steel flat products from South Korea, in which Hyundai served as the only mandatory respondent. CIT ordered a reexamination of Commerce's decisions to countervail the port usage rights and sewerage fee reduction programs in its Feb. 10 remand order (see 2302100052).
On remand, Commerce said that instead of using a less than adequate remuneration analysis, it looked at the program as revenue forgone because the port rights were forgone revenue by the Korean government and "not a subsidy." Commerce said that an LTAR analysis would apply only to "the provision of goods or services" (see 2304100033).
Hyundai argued that the Port Rights Program did not provide it with a countervailable benefit and asked the court to remand the case to Commerce. The government of Korea granted Hyundai Steel port rights as reimbursement for construction costs incurred by Hyundai Steel prior to reverting ownership to the Korean government, and the reimbursements were not excessive, Hyundai said.
Instead of considering the “other conditions of purchase or sale” surrounding the program as ordered by the court, Commerce said that it is not required to consider the context or conditions of purchase or sale, Hyundai said. The “other conditions of purchase or sale” include that the Korean government provided the port rights to Hyundai Steel as reimbursement for the costs incurred in building the port. Commerce must analyze the Port Rights Program to determine if Hyundai Steel paid less for those rights than it would otherwise pay in the absence of the program, or received more revenues than it otherwise would have earned, Hyundai said.
Hyundai argued that Commerce focused on "irrelevant issues" on remand to obscure the court's direction that it failed to consider the “other conditions of purchase or sale." In its remand order, the court held that Commerce must take into account the conditions that led to the Korean government giving Hyundai Steel port rights as part of its benefit analysis but Hyundai said Commerce attempted to reframe the issue of the costs incurred by Hyundai Steel in constructing the port in terms of statutory offsets. Hyundai argued that the length of the port rights period was set so that Hyundai Steel would be reimbursed for its construction costs "and nothing more."