CIT Remands de Facto Specificity of Korean Off-Peak Electricity Pricing Again
Court of International Trade Judge Claire Kelly again remanded the Commerce Department’s de facto specificity finding regarding South Korea’s below-cost provision of off-peak electricity in a countervailing duty administrative review, saying the department still hasn’t rationally explained why it grouped three unrelated industries and found that they, together, disproportionately received the subsidy.
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The opinion comes in a 2023 case brought by Hyundai Steel Company challenging the final results of the CVD review on South Korean cut-to-length carbon-quality steel plate. The department initially found, and continues to find, that a South Korean program providing electricity for less-than-adequate remuneration during off-peaks hours was disproportionately used by the Korean steel industry. To do so, it grouped the steel industry with the other largest beneficiaries of the program.
The program has been the target of other litigation in the past. Two recent CIT decisions have both instructed that it not be countervailed (see 2503210064 and 2508080026).
In her Aug. 12 opinion in Hyundai’s case, made public Aug. 19, Kelly said that Commerce “again misinterprets the meaning of disproportionality.”
She said the department defines a company or industry that receives a “disproportionate” share of a subsidy as one that simply receives “more of the subsidy” than others.
But that isn’t what “disproportionate” means, she said. To be a disproportionate subsidy recipient, a company or industry needs to receive more of a subsidy “‘than would be expected’ in relation to some other comparator,” she said. This comparator could be, for example, the size or value of a subsidy recipient, she said.
In its remand results, the department argued that the statute doesn’t explicitly state another comparator is required for a disproportionality analysis. But that’s covered by the definition of “disproportionate,” she said.
Further, she said, “Commerce acknowledges that it simply disagrees with this Court’s instruction regarding the meaning of disproportionality in Hyundai I”; but the department then “rejects” the instruction and undertakes a three-prong analysis based on its preferred interpretation in its remand results.
For that alone, the department’s remand results have to be remanded again, she said. But she also said that its explanation for grouping the three largest users of the South Korean electricity program subsidy for its analysis “is also deficient.”
She said that “it may be reasonable to group enterprises or industries in a disproportionality analysis,” such as, for example, when several different industries all produce inputs for the same product.
But the only reason Commerce has offered for its groupings in the South Korean steel CVD review is that the grouped industries all receive a similar share of the subsidy, she said — first the top four subsidy users, then the top three.
“The Court cannot say that it would never be possible to have a grouping of top recipients in connection with a disproportionality analysis, but the reason for such a grouping here is not discernable,” she said.
(Hyundai Steel Co. v. United States, Slip Op. 25-102, CIT # 23-00211, dated 8/12/25; Judge: Claire Kelly; Attorneys: Brady Mills of Morris Manning for plaintiff Hyundai Steel Co.; Yujin McNamara of Akin Gump for plaintiff-intervenor South Korean government; Emma Bond for defendant U.S. government; Alan Price of Wiley Rein for defendant-intervenor Nucor Corp.)