United States Court of International Trade

Slip Op. 22-3

Before the Court in POSCO, et. al., v. United States, et. al., Consol. Court No. 17-00137, Slip Op. 22-03 (January 13, 2022) was a challenge against Commerce’s determination that Korean producers of certain carbon and alloy steel cut-to-length plate (“CTL plate”) did not receive a countervailable benefit through the provision of electricity for less than adequate remuneration (“LTAR”). Id. at 2. Before the court was Commerce’s Second Remand Results, which were ordered following the decision in POSCO v. United States, 977 F.3d 1369 (Fed. Cir. 2020) (“POSCO IV”) so that Commerce could amend its CVD determination to comply with that decision. Id. Consolidated Plaintiff Nucor Corporation (“Nucor”) challenged Commerce’s Second Remand Results on the basis that “they do not comply with POSCO IV’s holdings that (1) a preferential-rate analysis is not a legally permissible method for the assessment of LTAR, and (2) Commerce’s failure to investigate KPX’s influence on KEPCO’s pricing constituted a failure to support its final determination with substantial evidence.” Id. Nucor contended that “Commerce has again neglected to adequately consider KPX’s generation costs in its LTAR analysis.” Id. at 7. Nucor further argued that “Commerce erred by failing to consider KEPCO’s cost data for the POI, and instead relying on pre-POI data.” Id. Defendant the United States (“Government”) requested that the court sustain Commerce’s Second Remand Results. Id. at 2. For the following reasons, the court sustained Commerce’s Remand Results. Id. at 3.

The standard of review in this action is set forth in 19 U.S.C. § 1516a(b)(1)(B)(i): “[t]he court shall hold unlawful any determination, finding or conclusion found . . . to be unsupported by substantial evidence on the record, or otherwise not in accordance with law.” Id. at 6. Here, the court agreed with Nucor that, “if Commerce had based its analysis exclusively on the consistent application of KEPCO’s standard pricing mechanism, Commerce’s determination on remand would fail to comply with POSCO IV and Nucor.” Id. at 10. However, the court explained that “neither POSCO IV nor Nucor requires that Commerce never consider the presence or absence of preferential pricing.” Id. “Here, Commerce did not rely only on the presence of absence of discrimination to conclude that KEPCO did not provide electricity to respondents for LTAR.” Id. at 11. In this case, the court found that Commerce’s analysis did not violate the requirements of Nucor and POSCO IV by failing to incorporate an analysis of “fair-market principles” and thus of the adequacy of remuneration. Id. Because Commerce’s Second Remand Results complied with the requirements of 19 U.S.C. § 1677(5)(E)(iv), Nucor, and POSCO IV, the court concluded that Commerce’s LTAR analysis was in accordance with law. Id. Furthermore, with respect to Commerce’s reliance on the 2014 KEPCO cost data, the 2015 overall cost data, and KEPCO’s Form 20-F for the POI, the court held that “Commerce’s reliance on data from outside the POI was reasonable, and that its cost recovery analysis was supported by substantial evidence.” Id. at 14. Moreover, the court found that “Commerce was not obligated to investigate KPX’s underlying generation costs beyond the analysis set out in the Second Remand Results because the information it received in response to its initial questions reasonably indicated that KPX’s pricing of generated electricity could not have constituted a subsidy under the statute.” Id. at 17. Accordingly, the court concluded that “Commerce’s investigation of KPX on remand complies with the Federal Circuit’s decision in POSCO IV and is supported by substantial evidence.” Id. at 18. As such, the court sustained Commerce’s Second Remand Results. Id. at 19.