SOUTH KOREA — GENERAL SUBSIDIES

SOUTH KOREA

SUBSIDY PROGRAMS: GENERAL

Last Reviewed October 2008

Effective February 15, 2000, Import Administration began publishing "Decision Memos" to reduce the size of antidumping and countervailing duty Federal Register notices. In cases in which a Decision Memo was published, you will find a link to the memo listed below.

In addition, in the following programs, in instances below in which a proceeding was a Sunset Review, you will see the letters SR after the product name.

COUNTERVAILABLE SUBSIDY PROGRAMS

The subsidy programs listed below have been investigated by the Department and have been found to be "countervailable" based on the criteria established in the Tariff and Trade Act of 1930, as amended. Please refer to this Act for further detail of the criteria applied. In addition, you may click on the cases listed below the subsidy program title for a full explanation of the Department"s analysis in those cases.

Tax Reduction for Operating in Regional and National Industrial Complexes

Coated Free Sheet Paper (2005) 72 FR 17507 (4/09/07 - Prelim); 72 FR 609639 (10/25/07 - Final); Decision Memo

[CFS Paper (2005)] Under Article 46 of the Industrial Cluster Development and Factory Establishment Act ("ICDFE Act"), a state or local government may provide tax exemptions as prescribed by the Restriction of Special Taxation Act. In accordance with this authority, Article 276 of the Local Tax Act provides that entities that acquire real estate in a designated industrial complex for the purpose of constructing new buildings or enlarging existing facilities are eligible for acquisition, registration, and property tax exemptions. Property taxes are reduced by either 50 or 100 percent for five years from the date the tax liability becomes effective. The 100 percent property tax exemption applies to land, buildings, or facilities located in industrial complexes outside of the Seoul metropolitan area. The GOK established the tax exemption program under Article 276 in December 1994, to provide incentives for companies to relocate from populated areas in the Seoul metropolitan region to industrial sites in less populated parts of the country. . . . the Department preliminarily determines that the property tax exemption that Namhan received is regionally specific under section 771(5A)(D)(iv) of the Act, as being limited to an enterprise or industry located within a designated geographical region. We preliminarily determine that a financial contribution is provided under section 771(5)(D)(ii) of the Act, in the form of revenue foregone. A benefit is conferred in the form of a tax exemption.

Import Duty Reduction Program for Certain Factory Automation Items

DRAMS (2005) 73 FR 14218 (3/17/08 - Final); Decision Memo

[DRAMS (2005)] We initiated a review of this program in the New Subsidy Allegations - DOC Initiation Memorandum./4/ Based on our analysis of the GOK’s submissions and the results of verification, we find that the Import Duty Reduction Program provided a countervailable subsidy to Hynix during the POR. Specifically, we determine that the import duty reductions provide a financial contribution in the form of revenue forgone by the GOK and a benefit in the amount of the duty savings. See section 771(5)(D)(ii) of the Tariff Act of 1930, as amended (the Act), and 19 CFR 351.510(a).

Duty Drawback on Non-Physically Incorporated Items and Excessive Loss Rates

Coated Free Sheet Paper (2005) 72 FR 17507 (4/09/07 - Prelim); 72 FR 609639 (10/25/07 - Final); Decision Memo
Certain Steel (1991) 57 FR 57769 (12/7/92 - Prelim); 57 FR 37349 (7/9/93 - Final); Amended Final
DRAMS (4/03-12/03) 70 FR 54523 (9/15/05 - Prelim); 71 FR 14174 (3/21/06 - Final); Decision Memo-not used Amended Final
DRAMS (1/01-6/02) 68 FR 16766 (4/7/03 - Prelim); 68 FR 37122 (6/23/03 - Final); Decision Memo; Amended Final-not used
Industrial Belts (1987) 53 FR 48675 (12/2/88 - Prelim); 54 FR 15516 (4/18/89 - Final)
Stainless Steel Cooking Ware (SR) (Expedited review - no prelim); 70 FR 57856 (10/4/05 - Final); Decision Memo
Stainless Steel Cooking Ware (SR) (Expedited Review-no prelim); 64 FR 48374 (9/3/99 - Final)
Cold-Rolled & Corrosion-Resistant Flat Products (SR) (Expedited Review-no prelim); 65 FR 18973 (4/10/00 - Final); Decision Memo; Amended Final
Stainless Steel Cooking Ware (1985) 51 FR 15522 (4/24/86 - Prelim); 51 FR 42870 (11/26/86 - Final)

The Government of Korea establishes an authorized loss rate for raw materials used in the manufacture of exported goods. Duty drawback includes the amount of duty remitted on the loss or wastage for the raw materials. The Government of Korea reduces the amount of duty drawback received on the exported product to account for the sale of by-products produced from the excess raw materials used in the production of the exported goods. Duty drawback for loss or wastage only becomes countervailable when the allowance for this loss or wastage is unreasonable or excessive. We determined that the amounts of duty drawback received by exporters in "Industrial Belts" and "Stainless Steel Cooking Ware" were excessive and therefore, we found this program to be countervailable. However, in "Certain Steel Products", we found the duty drawback was not excessive and, therefore, was not countervailable.

Electricity Discounts Under the Requested Load Adjustment Program

Carbon Steel Plate (SR) (Expedited review - no prelim); 70 FR 45689 (8/8/05 - Final); Decision Memo
Carbon Steel Plate (2004) 71 FR 11397 (3/7/06 - Prelim); 71 FR 38861 (7/10/06 - Final)-not used
Carbon Steel Plate (1998) 64 FR 40445 (6/26/99 - Prelim); 64 FR 73176 (12/29/99 - Final)
Cold-Rolled Carbon Flat Products (2000) 67 FR 9685 (03/04/02 - Prelim); 67 FR 62102 (10/03/02 - Final); Decision Memo
Corrosion-Resistant Flat Products (2004) 71 FR 53413 (9/11/06 - Prelim)-not used
DRAMS (4/03-12/03) 70 FR 54523 (9/15/05 - Prelim); 71 FR 14174 (3/21/06 - Final); Decision Memo-not used Amended Final
DRAMS (1/01-6/02) 68 FR 16766 (4/7/03 - Prelim); 68 FR 37122 (6/23/03 - Final); Decision Memo; Amended Final
Stainless Sheet & Strip in Coils (2004) 71 FR 50886 (8/28/06 - Prelim)-not used
Stainless Sheet & Strip in Coils (2000) 67 FR 57399 (9/10/02 - Prelim); 68 FR 13267 (3/19/03 - Final & partial rescission); Decision Memo
Stainless Sheet & Strip in Coils (11/98-12/99) 66 FR 47008 (9/10/01 - Prelim); 66 FR 1964 (01/15/02 - Final & partial rescission); Decision Memo
Steel Plate in Coils (1997) 63 FR 47260 (9/4/98 - Prelim); 64 FR 15535 (3/31/99 - Final)
Steel Sheet & Strip in Coils (1997) 63 FR 63896 (11/17/98 - Prelim); 64 FR 30636 (6/8/99 - Final)
Structural Steel Beams (SR) (Expedited review - no prelim); 70 FR 53167 (9/7/05 - Final); Decision Memo
Structural Steel Beams (1998) 64 FR 69731 (12/14/99 - Prelim); 65 FR 41051 (7/3/00 - Final); Decision Memo

The Government of Korea introduced the Requested Loan Adjustment (RLA) in 1990 to address emergencies in KEPCO"s ability to supply electricity. Under this program, customers with a contract demand of 5,000 KW or more, who can curtail their maximum demand by 20 percent or suppress their maximum demand by 3,000 KW or more, are eligible to enter in to a RLA contract with KEPCO.. Under this contract, a basic discount of 440 won per KW is granted between July 1 and August 31, regardless of whether KEPCO makes a request for a customer to reduce its load. Because the electricity discounts were only provided to a small number of customers, this program provides a countervailable benefit.

Exemption from the Acquisition Tax

Industrial Belts (1987) 53 FR 48675 (12/2/88 - Prelim); 53 FR 15516 (4/18/89 - Final)
Stainless Steel Cooking Ware (SR) (Expedited review - no prelim); 70 FR 57856 (10/4/05 - Final); Decision Memo
Stainless Steel Cooking Ware (1985) 51 FR 15522 (4/24/86 - Prelim); 51 FR 42869 (11/26/86 - Final)

Under the Law for the Promotion of Income Sources in Rural Areas, companies which establish factories in rural areas may be exempted from paying the acquisition tax on purchases of land, buildings, and capital equipment. Since the tax exemption is limited to companies located in certain regions of the country, we found the program to be countervailable.

Export Credit Financing from Export-Import Bank of Korea

Coated Free Sheet Paper (2005) 72 FR 17507 (4/09/07 - Prelim); 72 FR 609639 (10/25/07 - Final); Decision Memo
Structural Steel Beams (1998) 64 FR 69731 (12/14/99 - Prelim); 65 FR 41051 (7/3/00 - Final); Decision Memo-not used
Carbon Steel Plate (1998) 64 FR 40445 (6/26/99 - Prelim); 64 FR 73176 (12/29/99 - Final)
Certain Steel (1991) 57 FR 57770 (12/7/92 - Prelim); 58 FR 37351 (7/9/93 - Final); Amended Final
Industrial Belts (1987) 53 FR 48676 (12/2/88 - Prelim); 53 FR 15516 (4/18/89 - Final)
Oil Country Tubular Goods (1983) 49 FR 35836 (9/12/84 - Prelim); 49 FR 46776 (11/28/84 - Final)
Platform Jackets and Piles (1983)(1985) 50 FR 29462 (7/19/85 - Prelim); 51 FR 11780 (4/7/86 - Final)
Stainless Steel Cooking Ware (1985) 51 FR 15522 (4/24/86 - Prelim); 51 FR 42871(11/26/86 - Final)

[Coated Free Sheet Paper 2005] The Department has previously determined that the GOK's short-term export financing program is countervailable. See e.g., Preliminary Results of Countervailing Duty Administrative Review: Corrosion-Resistant Carbon Steel Flat Products from the Republic of Korea, 71 FR 53413, 53419 (September 11, 2006), (unchanged at the final results, see Final Results of Countervailing Duty Administrative Review: Corrosion-Resistant Carbon Steel Flat Products from the Republic of Korea, 72 FR 119 (January 3, 2007)); see also Final Affirmative Countervailing Duty Determination: Certain Cut-to- Length Carbon-Quality Steel Plate From the Republic of Korea, 64 FR 73176, 73180 (December 29, 1999). No new information from interested parties has been presented in this investigation to warrant a reconsideration of the countervailability of this program. Therefore, we preliminarily find that this program is countervailable. We preliminarily determine that the program is specific, pursuant to section 771(5A)(B) of the Act, because receipt of the financing is contingent upon exporting. In addition, we preliminarily determine that the export financing constitutes a financial contribution in the form of a loan within the meaning of section 771(5)(D)(i) of the Act and confers a benefit within the meaning of section 771(5)(E)(ii) of the Act.

Export Industry Facility Loans (EIFLs)

Coated Free Sheet Paper (2005) 72 FR 17507 (4/09/07 - Prelim); -not used
Carbon Steel Plate (2004) 71 FR 11397 (3/7/06 - Prelim); 71 FR 38861 (7/10/06 - Final)-not used
Carbon Steel Plate (1998) 64 FR 40445 (6/26/99 - Prelim); 64 FR 73176 (12/29/99 - Final)-not used
Corrosion-Resistant Flat Products (2004) 71 FR 53413 (9/11/06 - Prelim)-not used
Stainless Sheet & Strip in Coils (SR) (Expedited review - no prelim); 69 FR 75513 (12/17/04 - Final); Decision Memo
Steel Sheet & Strip in Coils (1997) 63 FR 63893 (11/17/98 - Prelim); 64 FR 30636 (6/8/99 - Final)
Structural Steel Beams (SR) (Expedited review - no prelim); 70 FR 53167 (9/7/05 - Final); Decision Memo
Structural Steel Beams (1998) 64 FR 69731 (12/14/99 - Prelim); 65 FR 41051 (7/3/00 - Final); Decision Memo

We found that the export industry facility loans (EIFKs) are contingent upon export, and are therefore export subsidies to the extent that they are provided at preferential rates.

Tax Reductions of Exemption on Foreign Investments - Article 9 of the Foreign Investment Promotion Act (FIPA)

Bicycle Tires and Tubes (1981) 48 FR 44602 (9/29/83 - Prelim); 48 FR 50914 (11/4/83 - Final)
DRAMS (4/03-12/03) 70 FR 54523 (9/15/05 - Prelim); 71 FR 14174 (3/21/06 - Final); Decision Memo-not used Amended Final
Oil Country Tubular Goods (1983) 49 FR 35836 (9/12/84 - Prelim); 49 FR 46776 (11/28/84 - Final)-not used
Steel Flat-Rolled Products (1984) 49 FR 36544 (9/18/84 - Prelim); 49 FR 47292 (12/3/84 - Final)
Structural Steel Beams (1998) 64 FR 69731 (12/14/99 - Prelim); 65 FR 41051 (7/3/00 - Final); Decision Memo-not used

(Formerly known as the Foreign Capital Inducement Law (FCIL)) The Foreign Capital Inducement Law provides partial forgiveness of income and property tax liabilities.

Loans from the Energy Savings Fund

Carbon Steel Plate (1998) 64 FR 40445 (6/26/99 - Prelim); 64 FR 73176 (12/29/99 - Final)
DRAMS (1/01-6/02) 68 FR 16766 (4/7/03 - Prelim); 68 FR 37122 (6/23/03 - Final); Decision Memo; Amended Final
Steel Plate in Coils (1997) 63 FR 47257 (9/4/98 - Prelim); 64 FR 15533 (3/31/99 - Final)
Steel Sheet & Strip in Coils (1997) 63 FR 63890 (11/17/98 - Prelim); 64 FR 30636 (6/8/99 - Final)

In accordance with Article 51 of the Rationalization of Energy Utilization Act, the Energy Savings Fund provides financing at below-market interest rates for investment by businesses in facilities that rationally and efficiently use energy. The Ministry of Industry and Energy (MIE), under the Energy Use Rationalization Act, provides financing for this program from special government accounts. Because interest rates charged to certain companies are less than the program interest rates prescribed by the program"s regulations, the program provides a countervailable subsidy.

Loans from the National Agricultural Cooperation Federation

Corrosion-Resistant Flat Products (2004) 71 FR 53413 (9/11/06 - Prelim)-not used
Stainless Sheet & Strip in Coils (2004) 71 FR 50886 (8/28/06 - Prelim)-not used
Stainless Sheet & Strip in Coils (2001) 68 FR 53116 (9/9/03 - Prelim); 69 FR 2113 (1/14/04 - Final); Decision Memo; Amended Final-not used
Stainless Sheet & Strip in Coils (2000) 67 FR 57399 (9/10/02 - Prelim); 68 FR 13267 (3/19/03 - Final & partial rescission); Decision Memo-not used
Stainless Sheet & Strip in Coils (11/98-12/99) 66 FR 47008 (9/10/01 - Prelim); 66 FR 1964 (01/15/02 - Final & partial rescission); Decision Memo; Amended Final-not used
Steel Sheet & Strip in Coils (1997) 63 FR 63896 (11/17/98 - Prelim); 64 FR 30636 (6/8/99 - Final)

The National Agriculture Cooperation Federation administers loans which are given at interest rates below the benchmark interest rate. Applications for these loans are evaluated on a point system. The applicant receives 5 out of a possible 100 points if it is a promising small and medium business. However, the most heavily weighed factor in the approval of a loan application is the applicant"s "ratio of export sales to total sales." With the exception of the evaluation item "enterprise ability", which is weighted at 15 points, the export sales factor accounts for twice as many points as any other ranking factor. This program is a countervailable subsidy because it is contingent upon export performance.

Loans to Promising Small and Medium Enterprises

Industrial Belts (1987) 53 FR 48675 (12/2/88 - Prelim); 53 FR 15516 (4/18/89 - Final)
Stainless Steel Cooking Ware (SR) (Expedited review - no prelim); 70 FR 57856 (10/4/05 - Final); Decision Memo
Stainless Steel Cooking Ware (SR) (Expedited Review-no prelim); 64 FR 48374 (9/3/99 - Final)
Stainless Steel Cooking Ware (1985) 51 FR 15522 (4/24/86 - Prelim); 51 FR 42870 (11/26/86 - Final)

Under this program, the Bank of Korea directs banks to provide loans to select "promising" small and medium-sized companies. The Ministry of Trade and Industry provides the guidelines to be used by the banks designating promising companies. Because loans received under this program are not available to all, they are countervailable to the extent that they provide preferential interest rates.

Reserve for Investment

Industries that engage in manufacturing and mining using production facilities outside of metropolitan Seoul are allowed to establish a reserve amounting to ten percent of the value of their assets used in these activities. The reserve operates in the same manner as the reserves for export loss and overseas market development, i.e., any amounts in the reserve must be returned to income over a three-year period. Because this program provides benefits only to those industries that use certain production facilities outside of metropolitan Seoul, this program is a regional subsidy.

Short-Term Export Financing

There are two types of trade financing: production financing and raw material financing. A bank provides production financing when a company needs funds for the production of export merchandise or the production of raw materials used in the production of exported merchandise. We found this program to be countervailable because the interest rates charged on the loans were less than what a firm would have had to pay on a comparable short-term commercial loan.

Loans under the Industrial Base Fund (IBF)

Coated Free Sheet Paper (2005) 72 FR 17507 (4/09/07 - Prelim); 72 FR 609639 (10/25/07 - Final); Decision Memo

[CFS Paper (2005)] The IBF, managed by Ministry of Commerce, Industry, and Energy (MOCIE), provides policy loans to companies that expand their facilities and make investments in projects that strengthen the competitiveness and productivity of national industries. The IBF consists of eight separate parts, one of which, the Promotion of Industrial Parts and Material, provided loans to Namhan that were outstanding during the POI. The application that Namhan filed with MOCIE includes a section on the anticipated "effects" of the project, including the degree to which the project will promote exports and import substitution. Evidence collected at verification indicates that export and import substitution activities are one of several factors considered by MOCIE when providing loans under the Promotion of Industrial Parts and Material sub-program of the IBF. No other respondent received loans from the IBF. We find that the loans Namhan received from MOCIE constitute a financial contribution, in the form of a direct transfer of funds within the meaning of section 771(5)(D)(i) of the Act, and confers a benefit, in accordance with section 771(5)(E)(ii) of the Act, to the extent the amount companies pay under the program is less than what they would pay on comparable commercial loans they could obtain on the market. We also find that, because Namhan’s receipt of the loans was contingent upon export performance, the Promotion of Industrial Parts and Material sub-program of the IBF is a de jure specific export export subsidy within the meaning of section 771(5A)(B) of the Act.

Export Loans by Commercial Banks Under KEXIM’s Trade Bill Rediscounting Program

Coated Free Sheet Paper (2005) 72 FR 609639 (10/25/07 - Final); Decision Memo

[CFS Paper (2005)] We find that KEXIM’s trade bill rediscount program constitutes a payment to a funding mechanism because the rediscount ceiling KEXIM provides to banks participating under the program is contingent on banks subsequently lending the funds to exporters. Section 771(5)(B)(iii) of the Act also states that financial contributions from funding mechanisms can be a subsidy only if providing the contribution would normally be vested in the government and the practice does not differ in substance from practices normally followed by the government. This is the "government subsidy function" prong of an indirect financial contribution. Here, the banks are performing a government subsidy function and, therefore, their loans can qualify as subsidies. Therefore, we find that loans from banks under the rediscount program constitute financial contributions within the meaning of section 771(5)(D)(i) of the Act and confer a benefit upon exporters, in accordance with section 771(5)(E)(ii) of the Act, to the extent the amount exporters pay under the program is less than the amount they would pay on comparable commercial loans they could obtain on the market. Because receipt of the loans is contingent upon export performance, we also determine that KEXIM’s rediscount program is specific within the meaning of section 771(5A)(B) of the Act.

D/A Loans Issued by the KDB and Other Government-Owned Banks

Coated Free Sheet Paper (2005) 72 FR 609639 (10/25/07 - Final); Decision Memo

[CFS Paper (2005)] Of the D/A loans rediscounted under KEXIM’s trade bill rediscount program, respondents received several D/A loans from such government-owned banks as the KDB. We find that that D/A loans from the KDB and other government-owned banks constitute a financial contribution in the form of a direct transfer of funds within the meaning of section 771(5)(D)(i) of the Act. In addition, we determine that such loans confer a benefit, in accordance with section 771(5)(E)(ii) of the Act, to the extent the amount exporters pay under the program is less than the amount they would pay on comparable commercial loans they could obtain on the market. Because receipt of D/A loans is contingent upon export performance, we also determine that D/A loans from the KDB and other government-owned banks are specific within the meaning of section 771(5A)(B) of the Act.

Tax Programs Under RSTA (TERCL)

Investment Tax Credits

Carbon Steel Plate (SR) (Expedited review - no prelim); 70 FR 45689 (8/8/05 - Final); Decision Memo
Carbon Steel Plate (1998) 64 FR 40445 (6/26/99 - Prelim); 64 FR 73176 (12/29/99 - Final)
Cold-Rolled Carbon Flat Products (2000) 67 FR 9685 (03/04/02 - Prelim); 67 FR 62102 (10/03/02 - Final); Decision Memo
Cold-Rolled & Corrosion-Resistant Flat Products (SR) (Expedited Review-no prelim); 65 FR 18973 (4/10/00 - Final); Decision Memo; Amended Final
Oil Country Tubular Goods (1983) 49 FR 35836 (9/12/84 - Prelim); 49 FR 46776 (11/28/84 - Final)
Steel Flat-Rolled Products (1984) 49 FR 36543 (9/18/84 - Prelim); 49 FR 47291 (12/3/84 - Final)
Steel Plate in Coils (1997) 63 FR 47259 (9/4/98 - Prelim); 64 FR 15534 (3/31/99 - Final)
Stainless Sheet & Strip in Coils (2004) 71 FR 50886 (8/28/06 - Prelim)-not used
Stainless Sheet & Strip in Coils (2001) 68 FR 53116 (9/9/03 - Prelim); 69 FR 2113 (1/14/04 - Final); Decision Memo; Amended Final
Stainless Sheet & Strip in Coils (2000) 67 FR 57399 (9/10/02 - Prelim); 68 FR 13267 (3/19/03 - Final & partial rescission); Decision Memo-not used
Stainless Sheet & Strip in Coils (11/98-12/99) 66 FR 47008 (9/10/01 - Prelim)-not used
Steel Sheet & Strip in Coils (1997) 63 FR 63895 (11/17/98 - Prelim); 64 FR 30636 (6/8/99 - Final)
Structural Steel Beams (1998) 64 FR 69731 (12/14/99 - Prelim); 65 FR 41051 (7/3/00 - Final); Decision Memo

[The TERCL program was replaced by the Restriction of Special Taxation Act (RSTA) on December 28, 1998] Under the Tax Exemption and Reduction Control Act (TERCL), companies in Korea are allowed to claim tax credits for various kinds of investments. If the tax credits cannot all be used at the time they are claimed, the company is authorized to carry them forward for use in later tax years. Because Korean companies receive a higher tax credit for investments made in domestically- produced facilities, investment tax credits received under Articles 10, 18, 25, 26, 27 and 71 constitute import substitution subsidies. In addition, because the Government of Korea foregoes collecting tax revenue otherwise due under this program, a financial contribution is provided. This program is, therefore, countervailable.

Reserve for Export Loss--Article 16 of the TERCL

Bicycle Tires and Tubes (1981) 48 FR 44602 (9/29/83 - Prelim); 48 FR 50914 (11/4/83 - Final)-not used
Carbon Steel Plate (SR) (Expedited review - no prelim); 71 FR 32519 (6/6/06 - Final); Decision Memo
Carbon Steel Plate (SR) (Expedited review - no prelim); 70 FR 45689 (8/8/05 - Final); Decision Memo
Carbon Steel Plate (1998) 64 FR 40445 (6/26/99 - Prelim); 64 FR 73176 (12/29/99 - Final)
Cold-Rolled Carbon Flat Products (2000) 67 FR 9685 (03/04/02 - Prelim); 67 FR 62102 (10/03/02 - Final); Decision Memo
DRAMS (4/03-12/03) 70 FR 54523 (9/15/05 - Prelim); 71 FR 14174 (3/21/06 - Final); Decision Memo-not used Amended Final
DRAMS (1/01-6/02) 68 FR 16766 (4/7/03 - Prelim); 68 FR 37122 (6/23/03 - Final); Decision Memo; Amended Final-not used
Stainless Sheet & Strip in Coils(SR) (Expedited review - no prelim); 69 FR 75513 (12/17/04 - Final); Decision Memo
Stainless Sheet & Strip in Coils (2004) 71 FR 50886 (8/28/06 - Prelim)-not used
Stainless Sheet & Strip in Coils (2001) 68 FR 53116 (9/9/03 - Prelim); 69 FR 2113 (1/14/04 - Final); Decision Memo; Amended Final
Stainless Sheet & Strip in Coils (2000) 67 FR 57399 (9/10/02 - Prelim); 68 FR 13267 (3/19/03 - Final & partial rescission); Decision Memo
Stainless Sheet & Strip in Coils (11/98-12/99) 66 FR 47008 (9/10/01 - Prelim); 66 FR 1964 (01/15/02 - Final & partial rescission); Decision Memo-not used
Steel Plate in Coils (1997) 63 FR 47259 (9/4/98 - Prelim); 64 FR 15534 (3/31/99 - Final)
Steel Sheet & Strip in Coils (1997) 63 FR 63894 (11/17/98 - Prelim); 64 FR 30636 (6/8/99 - Final)
Structural Steel Beams (SR) (Expedited review - no prelim); 70 FR 53167 (9/7/05 - Final); Decision Memo
Structural Steel Beams (1998) 64 FR 69731 (12/14/99 - Prelim); 65 FR 41051 (7/3/00 - Final); Decision Memo

Under Article 16 of the Tax Exemption and Reduction Control Act (TERCL), a domestic person engaged in a foreign-currency earning business can establish a reserve amounting to the lesser of one percent of foreign exchange earnings or 50 percent of net income for the respective tax year. Losses accruing from the cancellation of an export contract, or from the execution of a disadvantageous export contract, may be offset by returning an equivalent amount from the reserve fund to the income account. Any amount that is not used to offset a loss must be returned to the income account and taxed over a three-year period, after a one-year grace period. This program constitutes an export subsidy because the use of the program is contingent upon export performance.

Reserve for Export Loss-Article 22 of the TERCL

Corrosion-Resistant Flat Products (SR) (Expedited Review-no prelim) (2006) 71 FR 32519 (6/06/06 - Final); Decision Memo
Cold-Rolled & Corrosion-Resistant Flat Products (SR) (Expedited Review-no prelim); 65 FR 18973 (4/10/00 - Final); Decision Memo; Amended Final
Certain Steel (1991) 57 FR 57768 (12/7/92 - Prelim); 58 FR 37348 (7/9/93 - Final); Amended Final

Under Article 22 of the Tax Exemption and Reduction Control Act (TERCL), a corporation engaged in export activities can establish a reserve amounting to the lesser of one percent of foreign exchange earnings or 50 percent of net income for the respective tax year. If certain export losses occur, they are offset from the reserve fund. Any amount that is not used for offset must be returned to the income account and taxed over a three-year period, after a one-year grace period. The balance in the reserve fund is not subject to corporate income tax in that year, although all of the money in the reserve is eventually reported as income and subject to corporate tax either when it offsets export losses or when the one-year grace period expires. This export reserve program confers a benefit that constitutes an export subsidy because it provides a deferment, contingent upon export performance, of direct taxes.

Reserve for Investment Under Article 43-5 of TERCL

Carbon Steel Plate (1998) 64 FR 40445 (6/26/99 - Prelim); 64 FR 73176 (12/29/99 - Final)
Stainless Sheet & Strip in Coils (2000) 67 FR 57399 (9/10/02 - Prelim); 68 FR 13267 (3/19/03 - Final & partial rescission); Decision Memo-not used
Steel Plate in Coils (1997) 63 FR 47262 (9/4/98 - Prelim); 64 FR 15537 (3/31/99 - Final)-not used
Steel Sheet & Strip in Coils (1997) 63 FR 63899 (11/17/98 - Prelim); 64 FR 30636 (6/8/99 - Final)-not used
Structural Steel Beams (1998) 64 FR 69731 (12/14/99 - Prelim); 65 FR 41051 (7/3/00 - Final); Decision Memo

No program description available.

Reserve for Overseas Market Development - Article 17 of the TERCL

A domestic person engaged in a foreign trade business can establish a reserve fund equal to one percent of its foreign trade business exchange earnings from its export business for the respective tax year. Expenses incurred in developing overseas markets may be offset by returning from the reserve, to the income account, an amount equivalent to the expense. Any part of the fund that is not placed in the income account for the purpose of offsetting overseas market development expenses must be returned to the income account over a three-year period, after a one year grace period. This program constitutes an export subsidy because the use of the program is contingent upon export performance.

RSTA Article 9 Reservce for Research and Human Resources Development (formerly Technical Development Fund

Corrosion-Resistant Flat Products (2005) 72 FR 51602 (9/10/07 - Prelim); 73 FR 2444 (1/15/08 - Final); Decision Memo-not used
Corrosion-Resistant Flat Products (2004) 71 FR 53413 (9/11/06 - Prelim);
Cold-Rolled Carbon Flat Products (2000) 67 FR 9685 (03/04/02 - Prelim); 67 FR 62102 (10/03/02 - Final); Decision Memo-not used
DRAMS (1/01-6/02) 68 FR 16766 (4/7/03 - Prelim); 68 FR 37122 (6/23/03 - Final); Decision Memo; Amended Final; not countervailable
Stainless Sheet & Strip in Coils (2004) 71 FR 50886 (8/28/06 - Prelim);
Stainless Sheet & Strip in Coils (2001) 68 FR 53116 (9/9/03 - Prelim); 69 FR 2113 (1/14/04 - Final); Decision Memo; Amended Final
Stainless Sheet & Strip in Coils (2000) 67 FR 57399 (9/10/02 - Prelim); 68 FR 13267 (3/19/03 - Final & partial rescission); Decision Memo

(Replaced TERCL Article 8) This program allows a company operating in manufacturing or mining, or in a business prescribed by the Presidential Decree, to appropriate reserve funds to cover the expenses needed for development or innovation of technology. These reserve funds are included in the company"s losses and reduces the amount of taxes paid by the company. Under this program, capital good and capital intensive companies can establish a reserve of five percent, while companies in all other industries are only allowed to establish a three percent reserve. We determined that this program is countervailable because the capital goods industry is allowed to claim a larger tax reserve under this program than all other manufacturers. We also determined that this program provides a financial contribution within the meaning of section 771(5)(D)(i) of the Act in the form of a loan.

Selective Depreciation Due to Revaluation of Assets

Carbon Steel Plate (1998) 64 FR 40445 (6/26/99 - Prelim); 64 FR 73176 (12/29/99 - Final)
Certain Steel (1991) 57 FR 57769 (12/7/92 - Prelim); 58 FR 37350 (7/9/93 - Final); Amended Final
TERCL Article 56(2) (Special Treatment for Revaluation of Assets at the Time of Going Public) allows a company that is making an initial public offering to revalue its assets without meeting the requirement in the Asset Revaluation Act of a 25 percent change in the wholesale price index since the company"s last revaluation.

Technical Development Reserve Funds Under Article 8 of TERCL

[The TERCL was replaced by the Tax Reduction and Exemption Control Act (RSTA) on December 28, 1998] (Article 8 of the TERCL was replaced by RSTA Article 9)Article 8 of the TERCL allows a company operating in manufacturing or mining, or in a busiess prescribed by the Presidential Decree, to appropriate reserve funds to cover the expenses needed for development or innovation of technology. Article 8 specifies that capital good and capital intensive companies can establish a reserve of five percent, while companies in all other industries are only allowed to establish a three percent reserve. Because the capital goods industry is allowed to claim a larger tax reserve under this program than all other manufacturers, we determined that the program is countervailable.

Other Tax Programs

Tax Exemptions for Land Acquisition

Bicycle Tires and Tubes (1981) 48 FR 44602 (9/29/83 - Prelim); 48 FR 50914 (11/4/83 - Final)-not used
Carbon Steel Plate (2004) 71 FR 11397 (3/7/06 - Prelim); 71 FR 38861 (7/10/06 - Final)-not used
Cold-Rolled Carbon Flat Products (2000) 67 FR 9685 (03/04/02 - Prelim); 67 FR 62102 (10/03/02 - Final); Decision Memo
Corrosion-Resistant Flat Products (2004) 71 FR 53413 (9/11/06 - Prelim)-not used
Stainless Sheet & Strip in Coils (2004) 71 FR 50886 (8/28/06 - Prelim)-not used
Stainless Sheet & Strip in Coils (2001) 68 FR 53116 (9/9/03 - Prelim); 69 FR 2113 (1/14/04 - Final); Decision Memo; Amended Final-not used
Stainless Sheet & Strip in Coils (2000) 67 FR 57399 (9/10/02 - Prelim); 68 FR 13267 (3/19/03 - Final & partial rescission); Decision Memo

Under Korean tax law, companies are exempt from the registration and acquisition taxes on industrial land outside of a metropolitan area. The Department finds that these exemptions are regionally specific under section 771(5A)(D)(iv) of the Act, as being limited to an enterprise or industry located within a designated geographical region. Therefore, these tax exemptions are countervailable.

Tax Incentives for Exporters/Export Tax Reserves

Oil Country Tubular Goods (1983) 49 FR 35836 (9/12/84 - Prelim); 49 FR 46776 (11/28/84 - Final)
Platform Jackets and Piles (1983)(1985) 50 FR 29463 (7/19/85 - Prelim); 51 FR 11783(4/7/86 - Final)
Stainless Steel Cooking Ware (SR) (Expedited review - no prelim); 70 FR 57856 (10/4/05 - Final); Decision Memo
Stainless Steel Cooking Ware (SR) (Expedited Review-no prelim); 64 FR 48374 (9/3/99 - Final)
Stainless Steel Cooking Ware (1985) 51 FR 15521 (4/24/86 - Prelim); 51 FR 42869 (11/26/86 - Final)
Steel Flat-Rolled Products (1984) 49 FR 36542 (9/18/84 - Prelim); 49 FR 47287 (12/3/84 - Final)

Articles 22, 23 and 24 of the Act Concerning the Regulation of Tax Reduction and Exemption provide for the deduction from taxable income of a number of different reserves covering export losses, overseas market development and price fluctuation losses. The balance in all three reserve funds is not subject to corporate tax, although all moneys in the reserve funds are eventually reported as income and subject to corporate tax either when they offset export losses or when the one-year grace period expires. These programs constitute export subsidies because they provide a deferral, contingent upon exports, of direct taxes.

SUBSIDY PROGRAMS FOUND TO BE NOT COUNTERVAILABLE

The subsidy programs listed below have been investigated by the Department and have been found to be "not countervailable" based on the criteria established in the Tariff and Trade Act of 1930, as amended. Please refer to this Act for further detail of the criteria applied. In addition, you may click on the cases listed under the subsidy program title for a full explanation of the Department"s analysis in each case where the subsidy program has been examined.

Electricity Discounts Under Direct Load Interruption(DLI)

Carbon Steel Plate (2004) 71 FR 11397 (3/7/06 - Prelim); 71 FR 38861 (7/10/06 - Final)
Stainless Sheet & Strip in Coils (2004) 71 FR 50886 (8/28/06 - Prelim);

By agreeing to allow the possible interruption of service to occur during July and August, a company receives a rebate from either KEPCO or KEMCO. If a company applies for and participates in the DLI program, KEPCO/KEMCO installs equipment to control the usage of electricity during the designated periods, at KEPCO/KEMCO"s discretion. The company is compensated for giving up an assured electricity supply by a flat fee that is paid in July and August regardless of whether the supply is interrupted. We determined that this program is not countervailable.

Electricity Discounts Under Power Factor Adjustment and Summer Vacation and Repair Adjustment Programs

Carbon Steel Plate (1998) 64 FR 40445 (6/26/99 - Prelim); 64 FR 73176 (12/29/99 - Final)
Steel Plate in Coils (1997) 63 FR 47260 (9/4/98 - Prelim); 64 FR 15535 (3/31/99 - Final)
Stainless Sheet & Strip in Coils (2001) 68 FR 53116 (9/9/03 - Prelim); 69 FR 2113 (1/14/04 - Final); Decision Memo; Amended Final
Steel Sheet & Strip in Coils (1997) 63 FR 63897 (11/17/98 - Prelim); 64 FR 30636 (6/8/99 - Final)

The goal of the Power Factor Adjustment (PFA) program is to improve the energy efficiency of KEPCO"s customers which in turn, provides savings to KEPCO. Customers who achieve a higher efficiency than the performance standard receive a discount on their base demand charge. There are no limitations on the types of customers or industries which can receive the PFA discounts from KEPCO. Under the Summer Vacation and Repair Adjustment (VRA) program, a discount of 550 won per KW is given to customers if they curtail their maximum demand by more than 50 percent or 3,000 KW, through a load adjustment or maintenance shutdown of their facilities during the summer months. The discounts provided under the PFA and the VRA are distributed to a large number of firms in a wide variety of industries and are therefore not countervailable.

Electricity Discounts under the Voluntary Electric Power Savings Adjustment Program

Stainless Sheet & Strip in Coils (2001) 68 FR 53116 (9/9/03 - Prelim); 69 FR 2113 (1/14/04 - Final); Decision Memo; Amended Final

The voluntary electric power savings adjustment (VEPS) program, is part of Article 107-2 of the Regulation on Optional Electricity Supply. For a companyto receive discounts under this program, the company would have to decrease its usage by 20 percent or more over 30 minutes on the contracted dates. The total average for all of the contracted dates must be 20 percent or more and the curtailed period must be over five days or five 30-minute periods, or units, to receive the discount. The discount amount is calculated on the actual curtailment of power. We determined that the VEPS electricity program is not de jure specific under section 771(5A)(D)(i) of the Act. We found that the VEPS program is notcountervailable.

Export Credit Insurance by the Export-Import Bank of Korea

Platform Jackets and Piles (1983)(1985) 50 FR 29464 (7/19/85 - Prelim); 51 FR 11784 (4/7/86 - Final)

The Export Import Bank of Korea (KXMB) operates an export insurance program which provides commercial, political and managerial risk insurance. A separate budget for this program is maintained by the KXMB. Purchase of this insurance is compulsory on all loans provided by the KXMB. To be a subsidy, a government-operated export insurance program has to charge premiums which are inadequate to cover the long-term operating costs and losses of the program. Because the premiums charged to exporters allow the KXMB to cover its losses and its long-term operating expenses, we determined that this program does not constitute a subsidy.

Import Duty Deferrals

Oil Country Tubular Goods (1983) 49 FR 35836 (9/12/84 - Prelim); 49 FR 46776 (11/28/84 - Final)
Steel Flat-Rolled Products (1984) 49 FR 36542 (9/18/84 - Prelim); 49 FR 47291 (12/3/84 - Final)

Article 36 of the Customs Act of Korea permits the Ministry of Finance to designate an industry as eligible to pay customs duties on an installment basis, rather than upon entry. There is no limitation to the companies within the twenty-four industries which receive duty deferrals, and any company which applies is granted that status. Because this program is not limited to a specific enterprise or industry, it does not constitute a subsidy.

Medium-and Long-Term Credit

Oil Country Tubular Goods (1983) 49 FR 35836 (9/12/84 - Prelim); 49 FR 46776 (11/28/84 - Final)
Steel Flat-Rolled Products (1984) 49 FR 36543 (9/18/84 - Prelim); 49 FR 47288 (12/3/84 - Final)

Lending institutions in Korea when viewed as a whole, provide medium- and long-term loans to all sectors and all major industry groups.

Usance Loans Issued by the KDB and Other Government-Owned Banks

Coated Free Sheet Paper (2005) 72 FR 609639 (10/25/07 - Final); Decision Memo

[CFS Paper (2005)] For the same reasons discussed above in the "D/A Loans Issued by KDB and Other Government-Owned Banks" section of this memorandum, we determine that usance loans from the KDB and other government-owned banks constitute financial contributions in the form of a direct transfer of funds within the meaning of section 771(5)(D)(i) of the Act and confer a benefit, in accordance with section 771(5)(E)(ii) of the Act, to the extent the amount companies pay under the program is less than the amount they would pay on comparable commercial loans they could obtain on the market. Regarding specificity, we find that usance loans issued by the KDB and other GOK authorities are not de jure specific within the meaning of sections 771(5A)(D)(i) and (ii) of the Act, because (1) they are not based on exportation, (2) they are not contingent on the use of domestic goods over imported goods, and (3) the legislation and/or regulations do not expressly limit access to the subsidy to an enterprise or industry, or groups thereof, as a matter of law. Regarding de facto specificity under section 771(5A)(D)(iii) of the Act, we find they are not specific under sub-paragraphs (I) through (IV) for the same reasons discussed above in the "Long-Term Lending Provided by the KDB and Other GOK-Owned Institutions" section of this decision memorandum.

System IC 2010 Project

DRAMS (4/03-12/03) 70 FR 54523 (9/15/05 - Prelim); 71 FR 14174 (3/21/06 - Final); Decision Memo Amended Final

The System IC 2010 Project was established by the Government of Korea"s MOST and the Mininstry of Industry and Resources in 1998 as a joint research and development project. The goal of this project is to make Korea the 3rd largest producer of semiconductors by 2012. The project is structured in three stages to be implemented over the period 1998-2011. Based on the information provided, we preliminarily determine that any benefits provided to Hynix under the System IC 2010 Project are tied to non-subject merchandise in accordance with 19 CFR 351.525(b)(5). Therefore, we determined that Hynix did not receive any countervailing benefits under this program during the POR.

Tax Programs Under RSTA (TERCL)

Special Tax Credit for Boosting Employment (RSTA Articles 30-34)

Under Articles 30-34 of the RSTA, the GOK created "The Special Tax Credit for Boosting Employment" in July 2004. The program expired in December 31, 2005. It was designed to boost employment, and tax credits were allowed for any Korean company that met the requirements of employing more full-time workers in 2004 and 2005 than it employed the previous year. It provided for a credit of one million won for each full-time worker employed in 2004 or 2005 in excess of the numbers of full-time workers employed the previous year. . . . Based on information supplied by DSM and the GOK, we determine that this program is not specific within the meaning of Section 771(5A)(D) of the Act.

Reserve for Energy-Saving Equipment (RSTA Article 30)

Stainless Sheet & Strip in Coils (2001) 68 FR 53116 (9/9/03 - Prelim); 69 FR 2113 (1/14/04 - Final); Decision Memo; Amended Final
Cold-Rolled Carbon Flat Products (2000) 67 FR 9685 (03/04/02 - Prelim); 67 FR 62102 (10/03/02 - Final); Decision Memo

[Cold-Rolled Carbon Flat Products] Under TERCL article 29, all domestic companies are able to establish a reserve for investment in energy-saving facilities amounting to 15 percent of the total investment value of the facility. The balance in the reserve is not subject to corporate income tax in the year it is invested or the following two years; afterwards, it is returned to income and is subject to taxation. This article was replaced with RSTA article 30 on December 28, 1998. Information on the record demonstrates that this program is not limited to any industry and is therefore not specific, as required under section 771(5A) of the Act. We received no comments on this program and, as it is not specific, we find that this program is not countervailable.

Tax Credits for Improving Enterprise"s Bill System Under Article 7-2 of RSTA

Stainless Sheet & Strip in Coils (2005) 72 FR 51615 (3/07/07 - Prelim); 73 FR 2456 (7/13/07 - Final); no Decision Memo
Corrosion-Resistant Flat Products (2004) 71 FR 53413 (9/11/06 - Prelim);
Stainless Sheet & Strip in Coils (2004) 71 FR 50886 (8/28/06 - Prelim);

The program permits any company that uses a modern corporate billing/promissory note system to make payments for its purchases from small or medium enterprises to claim a tax credit on its income taxes. We determined this program was not countervailable.

Tax Credit for Investment in Facilities for Special Purposes (RSTA Article 25)

Article 25 of the RSTA provides tax credits equal to three percent of the company"s investment in specified facilities related to, among other things, environmental and health and safety measures. The credits are deducted from the company"s corporate income tax liability. Article 25 of the RSTA was among the programs found in Cold-Rolled Steel to have eliminated the import substitution tax advantage for eligible investments made after April 10, 1998. Thus, tax credits based on investments made after that date are not countervailable.

Tax Credit for Investments in Productivity Improvement Facilities Under Restriction of Special Taxation (RSTA) Article 24

Carbon Steel Plate (2004) 71 FR 11397 (3/7/06 - Prelim); 71 FR 38861 (7/10/06 - Final)
DRAMS (1/01-6/02) 68 FR 16766 (4/7/03 - Prelim); 68 FR 37122 (6/23/03 - Final); Decision Memo; Amended Final
Stainless Sheet & Strip in Coils (2004) 71 FR 50886 (8/28/06 - Prelim)-not used
Stainless Sheet & Strip in Coils (2001) 68 FR 53116 (9/9/03 - Prelim); 69 FR 2113 (1/14/04 - Final); Decision Memo; Amended Final-not used
Stainless Sheet & Strip in Coils (2000) 67 FR 57399 (9/10/02 - Prelim); 68 FR 13267 (3/19/03 - Final & partial rescission); Decision Memo
Stainless Sheet & Strip in Coils (11/98-12/99) 66 FR 47008 (9/10/01 - Prelim); 66 FR 1964 (01/15/02 - Final & partial rescission); Decision Memo; Amended Final-not used
Steel Flat-Rolled Products (1984) 49 FR 36542 (9/18/84 - Prelim); 49 FR 47288 (12/3/84 - Final)
Structural Steel Beams (1998) 64 FR 69731 (12/14/99 - Prelim); 65 FR 41051 (7/3/00 - Final); Decision Memo-not used

[Formerly Article 25 of the Act Concerning the Regulation of Tax Reduction and Exemption: Special Depreciation Under the Act Concerning the Regulation of Tax Reduction and Exemption]
Article 24 of the RSTA, which is the Tax Credit for Investment in Facilities for Productivity Enhancement, provides tax credits for investments in specified capital equipment. We determined that tax credits received pursuant to these investment programs for investments made after April 10, 1998 are not countervailable because a distinction between investment in domestic versus foreign-made goods was eliminated.

Tax Credit for Research and Human Resources Development Expenses (RSTA Article 10)

DRAMS (1/01-6/02) 68 FR 16766 (4/7/03 - Prelim); 68 FR 37122 (6/23/03 - Final); Decision Memo; Amended Final

(Replaced Article 9 of the TERCL at the beginning of 2001) RSTA Article 10 provides a tax credit for certain qualifying expenses related to research and human resources development ("R&HRD"), deductible from individual or corporate income tax. Under Article 9 of the TERCL, the credit was limited to certain mining, manufacturing, or other businesses (including computer companies), as specified by the implementing Presidential Decree. Under Article 10 of the RSTA, however, eligibility was extended to all domestic businesses, except for those in real estate or consumptive services. We determined that this program was not specific, and, as such, was not countervailable.

Tax Credits for Temporary Investments Under RSTA Article 26 (formerly TERCL Article 27)

Stainless Sheet & Strip in Coils (2004) 71 FR 50886 (8/28/06 - Prelim);
Stainless Sheet & Strip in Coils (2001) 68 FR 53116 (9/9/03 - Prelim); 69 FR 2113 (1/14/04 - Final); Decision Memo; Amended Final
Stainless Sheet & Strip in Coils (2000) 67 FR 57399 (9/10/02 - Prelim)
Stainless Sheet & Strip in Coils (11/98-12/99) 66 FR 47008 (9/10/01 - Prelim); 66 FR 1964 (01/15/02 - Final & partial rescission); Decision Memo; Amended Final
Structural Steel Beams (1998) 64 FR 69731 (12/14/99 - Prelim); 65 FR 41051 (7/3/00 - Final); Decision Memo

Article 27 of TERCL was replaced by Article 26 of RSTA in 1998. This article authorizes a tax credit equaling a maximum of ten percent of the amount a domestic company temporarily invests in eligible machinery and equipment. In the 1997 investigation for this case, the Department found this program to constitute an import substitution subsidy. Since the 1997 investigation, the Department has found that the import substitution advantage under this program was abolished in 1996 under the TERCL. We determined this program was not countervailable.

Other Tax Programs

Tax Exemptions for Imported Capital Equipment

Structural Steel Beams (1998) 64 FR 69731 (12/14/99 - Prelim); 65 FR 41051 (7/3/00 - Final); Decision Memo

Pursuant to Article 28-7 of the Customs Duties Act, the program provides tariff reductions on four categories of imported machines, provided that the machinery or equipment is not made in Korea: (1) machines and equipment used for preventing pollution; (2) machines and equipment used for the disposal of waste; (3) machines and equipment related to industrial safety; and (4) machines and equipment used for factory automatization. . . . Because the program does not meet the specificity criteria of section 771(5A) of the Act, we determine that the tariff reductions received under this program do not confer a subsidy and, thus, are not countervailable.

SUBSIDY PROGRAMS THAT HAVE BEEN TERMINATED

The subsidy programs listed below have been investigated by the Department and have been found to have been terminated based on the criteria established in the Tariff and Trade Act of 1930, as amended. Please refer to this act for further detail of the criteria applied. In addition, you may click on the cases listed below the subsidy program title for a full explanation of the Department"s analysis in each of these cases.

Short-Term Export Financing Under the Foreign Trade Transactions Act

Oil Country Tubular Goods (1983) 49 FR 35836 (9/12/84 - Prelim); 49 FR 46776 (11/28/84 - Final);
Steel Flat-Rolled Products (1984) 49 FR 36543 (9/18/84 - Prelim); 49 FR 47284 (12/3/84 - Final)

[Steel Flat-Rolled Products] Petitioner alleged that the government of Korea provides the steel industry with preferential short-term export financing under the Foreign Trade Transaction Act. The Foreign Trade Transactions Act has been repealed and was not in effect during the period for which we are measuring subsidizaion.

Loans Under the KDB’s Rediscount Program

Coated Free Sheet Paper (2005) 72 FR 17507 (4/09/07 - Prelim); 72 FR 609639 (10/25/07 - Final); Decision Memo

[CFS Paper (2005)] We find that this program no longer exists and was not used during the POI. Our finding is unchanged from the Preliminary Decision Memorandum. Interested parties did not comment on this issue.

Accelerated Depreciation

Bicycle Tires and Tubes (1981) 48 FR 44602 (9/29/83 - Prelim); 48 FR 50914 (11/4/83 - Final);
Industrial Belts (1987) 53 FR 48675 (12/2/88 - Prelim); 53 FR 15516 (4/18/89 - Final);
Oil Country Tubular Goods (1983) 49 FR 35836 (9/12/84 - Prelim); 49 FR 46776 (11/28/84 - Final);
Platform Jackets and Piles (1983)(1985) 50 FR 29463 (7/19/85 - Prelim); 51 FR 11783 (4/7/86 - Final);
Stainless Steel Cooking Ware (1985) 51 FR 15522 (4/24/86 - Prelim); 51 FR 42871 (11/26/86 - Final);
Steel Flat-Rolled Products (1984) 49 FR 36544 (9/18/84 - Prelim); 49 FR 47292 (12/3/84 - Final);
Steel Sheet & Strip in Coils (1997) 63 FR 63899 (11/17/98 - Prelim); 64 FR 30636 (6/8/99 - Final)

Article 25 of the Act Concerning the Regulation of Tax Reduction and Exemption permits a firm earning more than 50 percent of its total proceeds in a business year from foreign exchange to increase its normal depreciation by 30 percent. If the corporation has received less than 50 percent of its total proceeds from foreign exchange, it can still claim some accelerated depreciation, determined by a formula based on the firm"s foreign exchange earnings and total business earnings.

Export Tariff Reserves Under Article 24

Industrial Belts (1987) 53 FR 48675 (12/2/88 - Prelim); 53 FR 15516 (4/18/89 - Final)

No program description available.

Special Depreciation Under Article 11 of the Act Concerning the Regulation of Tax Reduction and Exemption (ACTRE)

Industrial Belts (1987) 53 FR 48676 (12/2/88 - Prelim); 53 FR 15516 (4/18/89 - Final)

This program was abolished December 26, 1986. No program description available.

Tariff Reductions on Plant and Equipment

Industrial Belts (1987) 53 FR 48676 (12/2/88 - Prelim); 53 FR 15516 (4/18/89 - Final);
Stainless Steel Cooking Ware (1985) 51 FR 15522 (4/24/86 - Prelim); 51 FR 42871 (11/26/86 - Final);
Steel Flat-Rolled Products (1984) 49 FR 36543 (9/18/84 - Prelim); 49 FR 47288 (12/3/84 - Final)

Article 28 of the Customs Law allowed for reductions of import duties for certain industries on particular items designated by the Ministry of Finance.

Unlimited Deduction of Overseas Entertainment Expenses

Corrosion-Resistant Flat Products (SR) (Expedited Review-no prelim) (2006) 71 FR 32519 (6/06/06 - Final); Decision Memo
Carbon Steel Plate (SR) (Expedited review - no prelim); 71 FR 32519 (6/6/06 - Final); Decision Memo;
Cold-Rolled & Corrosion-Resistant Flat Products (SR) (Expedited Review-no prelim); 65 FR 18973 (4/10/00 - Final); Decision Memo; Amended Final;
Stainless Steel Cooking Ware (SR) (Expedited Review-no prelim); 64 FR 48374 (9/3/99 - Final);
Certain Steel (1991) 57 FR 57769 (12/7/92 - Prelim); 58 FR 37348 (7/9/93 - Final); Amended Final
Industrial Belts (1987) 53 FR 48675 (12/2/88 - Prelim); 53 FR 15516 (4/18/89 - Final);
Stainless Steel Cooking Ware (1985) 51 FR 15522 (4/24/86 - Prelim); 51 FR 42869 (11/26/86 - Final);
Steel Plate in Coils (1997) 63 FR 47262 (9/4/98 - Prelim); 64 FR 15538 (3/31/99 - Final);
Steel Sheet & Strip in Coils (1997) 63 FR 63899 (11/17/98 - Prelim); 64 FR 30636 (6/8/99 - Final)

Under Article 18-2 of the Corporation Tax Act and supporting legislation, entertainment expenses for domestic clients and foreign clients are eligible to be deducted from taxable income. The amount which can be deducted for domestic entertainment expenses is subject to a ceiling according to an established formula and depending on the amount of any overseas entertainment expenses claimed. There is no cap on overseas entertainment expenses. Because entertainment expense deductions are unlimited only for overseas clients, this program confers benefits which constitute export subsidies, to the extent that the overseas expenses claimed are greater than those which would have been allowed using the domestic cap formula. This program was repealed in December 29, 1995.

Tax Programs Under RSTA (TERCL)

Energy-Savings Facilites Investment Reserve Funds (TERCL Article 29)

Carbon Steel Plate (2004) 71 FR 11397 (3/7/06 - Prelim); 71 FR 38861 (7/10/06 - Final);
Carbon Steel Plate (1998) 64 FR 40445 (6/26/99 - Prelim); 64 FR 73176 (12/29/99 - Final);
Corrosion-Resistant Flat Products (2004) 71 FR 53413 (9/11/06 - Prelim);
Stainless Sheet & Strip in Coils (2001) 68 FR 53116 (9/9/03 - Prelim); 69 FR 2113 (1/14/04 - Final); Decision Memo; Amended Final;
Structural Steel Beams (1998) 64 FR 69731 (12/14/99 - Prelim); 65 FR 41051 (7/3/00 - Final); Decision Memo

[Cold-Rolled Carbon Flat Products (2000)] Under TERCL article 29, all domestic companies are able to establish a reserve for investment in energy-saving facilities amounting to 15 percent of the total investment value of the facility. The balance in the reserve is not subject to corporate income tax in the year it is invested or the following two years; afterwards, it is returned to income and is subject to taxation. This program was replaced by RSTA Article 30 on December 28, 1998.

Special Cases of Tax for Balanced Development Among Areas (TERCL Articles 41, 42, 43, 44, and 45)

Carbon Steel Plate (2004) 71 FR 11397 (3/7/06 - Prelim); 71 FR 38861 (7/10/06 - Final);
Carbon Steel Plate (1998) 64 FR 40445 (6/26/99 - Prelim); 64 FR 73176 (12/29/99 - Final);
Cold-Rolled Carbon Flat Products (2000) 67 FR 9685 (03/04/02 - Prelim); 67 FR 62102 (10/03/02 - Final); Decision Memo;
Structural Steel Beams (SR) (Expedited review - no prelim); 70 FR 53167 (9/7/05 - Final); Decision Memo;
Stainless Sheet & Strip in Coils (2004) 71 FR 50886 (8/28/06 - Prelim);
Structural Steel Beams (1998) 64 FR 69731 (12/14/99 - Prelim); 65 FR 41051 (7/3/00 - Final); Decision Memo

TERCL Article 41 allowed a company who planned to relocate its facility from a large city to a local area to establish a reserve equal to 15 percent of the facility"s value. The balance in the reserve was not subject to corporate income tax in that year but all monies in the reserve must eventually be returned to the income account and are then subject to tax at the expiration of the grace period. This program was replaced by Article 58 of RSTA. Subsequent to the establishment of Article 58 of RSTA, the program was terminated and the last date that this reserve could be established was August 31, 1999. We determined that this program is specific within the meaning of section 771(5A)(D)(iv) of the Act, because the program is limited to enterprises or industries located within a designated geographical region. Because the deferral of taxes owed provided under this program amounts to an interest-free loan equal to the company"s tax savings, we also determined that this program provided a financial contribution within the meaning of section 771(5)(D)(i) of the Act in the form of a loan.

Other Tax Programs

Tax Credit for Investment for Key Industries

Industrial Belts (1987) 53 FR 48676 (12/2/88 - Prelim); 53 FR 15516 (4/18/89 - Final)

This program was abolished effective December 26, 1986.

SUBSIDY PROGRAMS FOUND NOT USED OR PROVIDED NO BENEFITS

When potential subsidy programs are investigated and found not to be used by the companies being investigated, the Department makes no determination as to their countervailability. If you click on the cases listed under the subsidy program title, you will be linked to each case in which the subsidy program was referenced.

Cleaner Production Development Project (CPDP)

Coated Free Sheet Paper (2005) 72 FR 17507 (4/09/07 - Prelim);

The Cleaner Production Development Project (``CPDP'') of the Korea National Cleaner Production Center (``KNCPC'') is a research and development (``R&D'') program. The GOK reported that the government and companies make cash and in-kind contributions to a research institution and then share the results of the project. The CPDP was established in 1995, under the Act on the Promotion of the Conversion into Environment-Friendly Industrial Structure and its Enforcement Decree. The KNCPC, with the support of the Ministry of Commerce, Industry and Energy (``MOCIE''), finances and manages the cleaner production technology development projects that seek to prevent or reduce the generation of waste during product designing, manufacture, delivery, use, and disposal. Specifically, MOCIE decides which projects will be approved and the level of the GOK's contribution to the project, according to criteria specified in the Guidelines for the CPDP Operation. The GOK's monetary contribution depends on the type of project (general or common), the entity in charge (company, research institution, or university), and whether the project is a collaboration of companies and research institutions or a project being conducted by a single entity. The GOK states that the purpose of this collaboration is to allow for the sharing of the results of the R&D project. . . . We preliminarily determine that this funding is a non-recurring grant under 19 CFR 351.524(c)(2)(ii) because receipt of the assistance is not automatic, requiring the express approval of the GOK. Therefore, in accordance with 19 CFR 351.524(b)(2), we have applied the "0.5 percent expense test." The calculation demonstrates that the total funding amount approved (i.e., GOK's total contribution to the project) is less than 0.5 percent of Namham's 2003 total sales. As such, we have expensed the benefit in the year of receipt, 2003. Therefore, because the CPDP did not confer a benefit to Namhan during the POI, we preliminarily find that we need not conduct a specificity analysis of this program.

Emergency Load Reduction Program (ELR)

Carbon Steel Plate (2004) 71 FR 11397 (3/7/06 - Prelim); 71 FR 38861 (7/10/06 - Final)
Corrosion-Resistant Flat Products (2004) 71 FR 53413 (9/11/06 - Prelim)
Stainless Sheet & Strip in Coils (2004) 71 FR 50886 (8/28/06 - Prelim)

No program description available.

Energy Saving Facility Loan

Stainless Sheet & Strip in Coils (2004) 71 FR 50886 (8/28/06 - Prelim)

No program description available.

Excessive Duty Drawback

Under the Korean Customs Act, Korean exporters may receive an excessive abatement, exemption, or refund of import duties payable on raw materials used in the production of exported goods. The drawback is countervailable when the raw materials are not physically incorporated into the exported item, and therefore the amount of duty drawback is excessive.

Export Credit Insurance (KEIC)

DRAMS (4/03-12/03) 70 FR 54523 (9/15/05 - Prelim); 71 FR 14174 (3/21/06 - Final); Decision Memo; Amended Final
DRAMS (1/01-6/02) 68 FR 16766 (4/7/03 - Prelim); 68 FR 37122 (6/23/03 - Final); Decision Memo; Amended Final
Cold-Rolled Carbon Flat Products (2000) 67 FR 9685 (03/04/02 - Prelim); 67 FR 62102 (10/03/02 - Final); Decision Memo
Cold-Rolled & Corrosion-Resistant Flat Products (SR) (Expedited Review-no prelim); 65 FR 18973 (4/10/00 - Final); Decision Memo; Amended Final
Oil Country Tubular Goods (1983) 49 FR 35836 (9/12/84 - Prelim); 49 FR 46776 (11/28/84 - Final)
Steel Flat-Rolled Products (1984) 49 FR 36544 (9/18/84 - Prelim); 49 FR 47292 (12/3/84 - Final)

[DRAMS] The GOK reports that the KEIC export insurance program has experienced operating losses for all of these years, and that the GOK has been covering the losses incurred by this program. Therefore, we determine that the premium rates that are being charged are inadequate pursuant to 19 CFR 351.520(a)(1). If the Department determines that premium rates are inadequate, pursuant to 19 CFR 351.520(a)(2), the benefit amount is calculated as the net amount of compensation received (compensation received less premium fees paid). Thus, consistent with the Final Affirmative Countervailing Duty Determination: Carbon Steel Butt-Weld Pipe Fittings From Israel, 60 FR 10569, 10571 (February 27, 1995), we examined export insurance expressly related to DRAMS exported to the United States. We verified that SEC did not make any claims or receive any pay-outs from the KEIC related to DRAMS during the POI, and that Hynix did not receive any pay-outs during the POI. Therefore, neither SEC nor Hynix received a countervailable benefit pursuant to this program within the meaning of section 771(5)(E) of the Act during the POI.

Export Guarantees from the KXMB

Carbon Steel Plate (1998) 64 FR 40445 (6/26/99 - Prelim); 64 FR 73176 (12/29/99 - Final)
Industrial Belts (1987) 53 FR 48676 (12/2/88 - Prelim); 53 FR 15516 (4/18/89 - Final)
Platform Jackets and Piles (1983)(1985) 50 FR 29464 (7/19/85 - Prelim); 51 FR 11784 (4/7/86 - Final)
Stainless Steel Cooking Ware (1985) 51 FR 15522 (4/24/86 - Prelim); 51 FR 42871(11/26/86 - Final)

The Export-Import Bank of Korea provides guarantees for exports of large capital goods and projects, and no guarantees are offered for sales of consumer goods.

Export Industry Facility Loans and Special Facility Loans

Corrosion-Resistant Flat Products (2004) 71 FR 53413 (9/11/06 - Prelim)
Stainless Sheet & Strip in Coils (2004) 71 FR 50886 (8/28/06 - Prelim)
Stainless Sheet & Strip in Coils (2001) 68 FR 53116 (9/9/03 - Prelim); 69 FR 2113 (1/14/04 - Final); Decision Memo; Amended Final
Stainless Sheet & Strip in Coils (2000) 67 FR 57399 (9/10/02 - Prelim); 68 FR 13267 (3/19/03 - Final & partial rescission); Decision Memo
Stainless Sheet & Strip in Coils (11/98-12/99) 66 FR 47008 (9/10/01 - Prelim); 66 FR 1964 (01/15/02 - Final & partial rescission); Decision Memo; Amended Final
Steel Plate in Coils (1997) 63 FR 47262 (9/4/98 - Prelim); 64 FR 15537 (3/31/99 - Final)

No program description available.

Trade Financing Under the ACCL Program

Coated Free Sheet Paper (2005) 72 FR 17507 (4/09/07 - Prelim); 72 FR 609639 (10/25/07 - Final); Decision Memo

[CFS Paper (2005)] We find that information obtained at verification indicates that respondents’ outstanding D/A loans and usance loans do not constitute countervailable trade financing under the ACCL Program. Therefore, we find that respondents did not use trade financing under the ACCL program during the POI. Our approach is unchanged from the Preliminary Decision Memorandum.

Commercial Paper Loans Under the ACCL Program

Coated Free Sheet Paper (2005) 72 FR 17507 (4/09/07 - Prelim); 72 FR 609639 (10/25/07 - Final); Decision Memo

[CFS Paper (2005)] In the Preliminary Decision Memorandum, we explained that assuming arguendo that commercial paper loans constitute a financial contribution and are specific under sections 771(5)(D) and 771(5A) of the Act, they would not result in a measurable net subsidy rate (i.e., a net subsidy rate greater than or equal to 0.005 percent ad valorem). As such, we found that it is not necessary to reach a finding on this program because it does not have any quantitative impact on the outcome of the case. We received comments from interested parties regarding this program. See Comment 20. However, we find that comments from interested parties do not warrant a reconsideration of our finding from the Preliminary Decision Memorandum. Therefore, we continue to find that this program is not measurable and, therefore, does not require a countervailable finding.

Corporate Procurement Loans Under the ACCL Program

Coated Free Sheet Paper (2005) 72 FR 17507 (4/09/07 - Prelim); 72 FR 609639 (10/25/07 - Final); Decision Memo

[CFS Paper (2005)] In the Preliminary Decision Memorandum, we explained that assuming arguendo that corporate procurement loans constitute a financial contribution and are specific under sections 771(5)(D) and 771(5A) of the Act, they would not result in a measurable net subsidy rate (i.e., a net subsidy rate greater than or equal to 0.005 percent ad valorem) for Moorim. We explained that that there is no benefit to Kyesung as the benchmark interest rate is lower than the interest rates the company paid against the corporate procurement loans. As such, we preliminarily found that it is not necessary to reach a finding on this program because it does not have any quantitative impact on the outcome of the case. We received comments from interested parties regarding this issue. See Comment 20. However, we find that comments from interested parties do not warrant a reconsideration of our finding from the Preliminary Decision Memorandum. Therefore, we continue to find that this program is not measurable and, therefore, does not require a countervailable finding.

Electronically Processed Secured Receivables Loans

Coated Free Sheet Paper (2005) 72 FR 17507 (4/09/07 - Prelim); 72 FR 609639 (10/25/07 - Final); Decision Memo

[CFS Paper (2005)] We find that respondents did not use these loans under the ACCL program during the POI. Our finding is unchanged from the Preliminary Decision Memorandum. Interested parties did not comment on this issue.

Funds for the Production of Basic Materials or Parts

Coated Free Sheet Paper (2005) 72 FR 17507 (4/09/07 - Prelim); 72 FR 609639 (10/25/07 - Final); Decision Memo

Export Insurance Rates Provided by the Korean Export Insurance Corporation

Carbon Steel Plate (2004) 71 FR 11397 (3/7/06 - Prelim); 71 FR 38861 (7/10/06 - Final)
Carbon Steel Plate (1998) 64 FR 40445 (6/26/99 - Prelim); 64 FR 73176 (12/29/99 - Final)
Corrosion-Resistant Flat Products (2004) 71 FR 53413 (9/11/06 - Prelim)
Stainless Sheet & Strip in Coils (2004) 71 FR 50886 (8/28/06 - Prelim)
Stainless Sheet & Strip in Coils (2001) 68 FR 53116 (9/9/03 - Prelim); 69 FR 2113 (1/14/04 - Final); Decision Memo; Amended Final
Stainless Sheet & Strip in Coils (2000) 67 FR 57399 (9/10/02 - Prelim); 68 FR 13267 (3/19/03 - Final & partial rescission); Decision Memo
Stainless Sheet & Strip in Coils (11/98-12/99) 66 FR 47008 (9/10/01 - Prelim); 66 FR 1964 (01/15/02 - Final & partial rescission); Decision Memo; Amended Final
Steel Plate in Coils (1997) 63 FR 47262 (9/4/98 - Prelim); 64 FR 15537 (3/31/99 - Final)
Steel Sheet & Strip in Coils (1997) 63 FR 63899 (11/17/98 - Prelim); 64 FR 30636 (6/8/99 - Final)
Structural Steel Beams (1998) 64 FR 69731 (12/14/99 - Prelim); 65 FR 41051 (7/3/00 - Final); Decision Memo

No program description available.

Free Export Zone Program

Industrial Belts (1987) 53 FR 48675 (12/2/88 - Prelim); 53 FR 15516 (4/18/89 - Final)
Oil Country Tubular Goods (1983) 49 FR 35836 (9/12/84 - Prelim); 49 FR 46776 (11/28/84 - Final)
Stainless Steel Cooking Ware (1985) 51 FR 15522 (4/24/86 - Prelim); 51 FR 42871 (11/26/86 - Final)
Steel Flat-Rolled Products (1984) 49 FR 36544 (9/18/84 - Prelim); 49 FR 47292 (12/3/84 - Final)

Companies located in free export zones receive certain tax exemptions.

Grants Under the Technology Development Promotion Act

Structural Steel Beams (1998) 64 FR 69731 (12/14/99 - Prelim); 65 FR 41051 (7/3/00 - Final); Decision Memo

No program description available.

Overseas Resource Development Programs

Carbon Steel Plate (1998) 64 FR 40445 (6/26/99 - Prelim); 64 FR 73176 (12/29/99 - Final)
Cold-Rolled & Corrosion-Resistant Flat Products (SR) (Expedited Review-no prelim); 65 FR 18973 (4/10/00 - Final); Decision Memo; Amended Final
Structural Steel Beams (1998) 64 FR 69731 (12/14/99 - Prelim); 65 FR 41051 (7/3/00 - Final); Decision Memo

[Cold-Rolled and Corrosion-Resistant] In 1998, the Department investigated POSCO in the Cut-To-Length Plate Carbon Quality Steel Plate from the Republic of Korea (64 FR 40445-52) investigation to determine if POSCO had received countervailable subsidies under this program. In this investigation, the Department preliminarily determined that POSCO had not used this program.

Private Capital Inducement Act

Carbon Steel Plate (2004) 71 FR 11397 (3/7/06 - Prelim); 71 FR 38861 (7/10/06 - Final)
Corrosion-Resistant Flat Products (2004) 71 FR 53413 (9/11/06 - Prelim)

No program description available.

Reserve Funds for Export Market Development

Bicycle Tires and Tubes (1981) 48 FR 44602 (9/29/83 - Prelim); 48 FR 50914 (11/4/83 - Final)

No program description available.

Social Indirect Capital Investment Reserve Funds (Article 28)

No program description available.

Special Depreciation of Assets on Foreign Exchange Earnings

No program description available.

Special Depreciation Under Article 11 of the "Act Concerning the Regulation of the Tax Reduction and Exemption"

Platform Jackets and Piles (1983)(1985) 50 FR 29464 (7/19/85 - Prelim); 51 FR 11784 (4/7/86 - Final)
Stainless Sheet & Strip in Coils (2001) 68 FR 53116 (9/9/03 - Prelim); 69 FR 2113 (1/14/04 - Final); Decision Memo; Amended Final

No program description available.

Special Depreciation as a Tax Deductible Cost Contingent on Exports

Certain Steel (1991) 57 FR 57770 (12/7/92 - Prelim); 58 FR 37351 (7/9/93 - Final); Amended Final

No program description available.

Training Aid

Oil Country Tubular Goods (1983) 49 FR 35836 (9/12/84 - Prelim); 49 FR 46776 (11/28/84 - Final)
Steel Flat-Rolled Products (1984) 49 FR 36544 (9/18/84 - Prelim); 49 FR 47292 (12/3/84 - Final)

The Government of Korea provides training grants and other training funds.

Tax Programs Under RSTA (TERCL)

Equipment Investment to Promote Worker"s Welfare Under Article 88 of TERCL

Corrosion-Resistant Flat Products (2004) 71 FR 53413 (9/11/06 - Prelim)
Stainless Sheet & Strip in Coils (2004) 71 FR 50886 (8/28/06 - Prelim)

No program description available

Investment Tax Credits Under RSTA Article 94

Stainless Sheet & Strip in Coils (2005) 72 FR 51615 (3/07/07 - Prelim); 73 FR 2456 (7/13/07 - Final); no Decision Memo -not countervailable
Stainless Sheet & Strip in Coils (2001) 68 FR 53116 (9/9/03 - Prelim); 69 FR 2113 (1/14/04 - Final); Decision Memo; Amended Final

No program description available.

Reduction of Tax Regarding the Movement of a Factory That Has Been Operated for More Than Five Years (Article 71 of RSTA)

Coated Free Sheet Paper (2005) 72 FR 17507 (4/09/07 - Prelim);
DRAMS (4/03-12/03) 70 FR 54523 (9/15/05 - Prelim); 71 FR 14174 (3/21/06 - Final); Decision Memo Amended Final
DRAMS (1/01-6/02) 68 FR 16766 (4/7/03 - Prelim); 68 FR 37122 (6/23/03 - Final); Decision Memo; Amended Final
Stainless Sheet & Strip in Coils (2004) 71 FR 50886 (8/28/06 - Prelim)
Stainless Sheet & Strip in Coils (2001) 68 FR 53116 (9/9/03 - Prelim); 69 FR 2113 (1/14/04 - Final); Decision Memo; Amended Final

No program description available.

Tax Credit in Equipment to Develop Technology and Manpower Under Article 10 of the TERCL

Stainless Sheet & Strip in Coils (2000) 67 FR 57399 (9/10/02 - Prelim)
Stainless Sheet & Strip in Coils (11/98-12/99) 66 FR 47008 (9/10/01 - Prelim); 66 FR 1964 (01/15/02 - Final & partial rescission); Decision Memo; Amended Final
Structural Steel Beams (1998) 64 FR 69731 (12/14/99 - Prelim); 65 FR 41051 (7/3/00 - Final); Decision Memo

No program description available.

Tax Credits for Investments in Specific Facilities Under Article 26 of the TERCL

DRAMS (1/01-6/02) 68 FR 16766 (4/7/03 - Prelim); 68 FR 37122 (6/23/03 - Final); Decision Memo; Amended Final
Stainless Sheet & Strip in Coils (2000) 67 FR 57399 (9/10/02 - Prelim)
Stainless Sheet & Strip in Coils (11/98-12/99) 66 FR 47008 (9/10/01 - Prelim); 66 FR 1964 (01/15/02 - Final & partial rescission); Decision Memo; Amended Final
Structural Steel Beams (1998) 64 FR 69731 (12/14/99 - Prelim); 65 FR 41051 (7/3/00 - Final); Decision Memo

[DRAMS] Although the Article itself permits a ten percent tax credit, this is a ceiling; the actual allowed percentage is prescribed in a Presidential Enforcement Decree. Various decrees implemented different tax credit percentages between 1992 and 2002. While the Article itself has not drawn a distinction between investments made in domestically produced facilities versus imported facilities since 1996, the Presidential Enforcement Decree has, in the past, authorized tax credits for investments in domestically produced equipment only. However, beginning on June 3, 1997, and extending through the end of the POI, the Decree does not distinguish between investments in domestic-origin versus foreign-origin machinery and equipment.

Tax Credits for Specific Investments Under Article 71 of the TERCL

No program description available.

Tax Credits for Vocational Training Under Article 18 of the TERCL

No program description available.

Tax Exemption for Foreign Technicians - Article 18 of RSTA

DRAMS (4/03-12/03) 70 FR 54523 (9/15/05 - Prelim); 71 FR 14174 (3/21/06 - Final); Decision Memo Amended Final

No program description available.

Other Tax Programs

Tax Incentives for Highly-Advanced Technology Businesses Under the Foreign Investment and Foreign Investment and Foreign Capital Inducement Act

Carbon Steel Plate (1998) 64 FR 40445 (6/26/99 - Prelim); 64 FR 73176 (12/29/99 - Final)
Corrosion-Resistant Flat Products (2004) 71 FR 53413 (9/11/06 - Prelim)
DRAMS (1/01-6/02) 68 FR 16766 (4/7/03 - Prelim); 68 FR 37122 (6/23/03 - Final); Decision Memo; Amended Final

Stainless Sheet & Strip in Coils (2004) 71 FR 50886 (8/28/06 - Prelim)
Stainless Sheet & Strip in Coils (2001) 68 FR 53116 (9/9/03 - Prelim); 69 FR 2113 (1/14/04 - Final); Decision Memo; Amended Final
Stainless Sheet & Strip in Coils (2000) 67 FR 57399 (9/10/02 - Prelim); 68 FR 13267 (3/19/03 - Final & partial rescission); Decision Memo
Stainless Sheet & Strip in Coils (11/98-12/99) 66 FR 47008 (9/10/01 - Prelim); 66 FR 1964 (01/15/02 - Final & partial rescission); Decision Memo; Amended Final
Steel Plate in Coils (1997) 63 FR 47262 (9/4/98 - Prelim); 64 15537 (3/31/99 - Final)
Steel Sheet & Strip in Coils (1997) 63 FR 63899 (11/17/98 - Prelim); 64 FR 30636 (6/8/99 - Final)
Structural Steel Beams (1998) 64 FR 69731 (12/14/99 - Prelim); 65 FR 41051 (7/3/00 - Final); Decision Memo

The Export-Import Bank of Korea (KXMB) provides financing for large capital goods, and no financing is provided for exports of consumer goods.

Tax Exemptions for Imported Capital Equipment

Bicycle Tires and Tubes (1981) 48 FR 44602 (9/29/83 - Prelim); 48 FR 50914 (11/4/83 - Final)
Oil Country Tubular Goods (1983) 49 FR 35836 (9/12/84 - Prelim); 49 FR 46776 (11/28/84 - Final)
Petitioners allege that the government of Korea allows reductions of import duties for certain industries on certain items designated by the Ministry of Finance. According to the responses of the government of Korea and the companies, this program was not used by OCTG producers or exporters.

Other Programs Not Used

Stainless Sheet & Strip in Coils (2005) 72 FR 51615 (3/07/07 - Prelim); 73 FR 2456 (7/13/07 - Final); no Decision Memo
Cut-to-Length Steel Plate (2005) 72 FR 10163 (3/07/07 - Prelim); 72 FR 38565 (7/13/07 - Final); Decision Memo
Corrosion-Resistant Flat Products (2005) 72 FR 51602 (9/10/07 - Prelim); 73 FR 2444 (1/15/08 - Final); Decision Memo
DRAMS (2005) 72 FR 51609 (9/10/07 - Prelim); 73 FR 14218 (3/17/08 - Final); Decision Memo
DRAMS (2004) 71 FR 46192 (8/11/06-prelim); 72 FR 7015 (2/14/07 - Final); Decision Memo

SUBSIDY PROGRAMS DETERMINED NOT TO EXIST

The following subsidy programs were alleged by the petitioning industries and were investigated by the Department. However, during the investigation we found no evidence that such programs actually existed. If you click on the cases listed under the subsidy program title, you will be linked to each case in which the subsidy program was referenced. It is possible that, while the program named did not exist, a similar program having a different name actually was investigated. If this is the case, you will find that program listed elsewhere in this library.

Assistance for Trading Companies

The Government of Korea allows trading companies to increase their foreign exchange holdings and allows them to increase their reserve funds to cover export losses in foreign markets. Trading companies are authorized to maintain foreign currency accounts of over $300,000. However, no evidence exists to show that other companies are limited in their foreign exchange holdings. Also, no evidence exists to suggest that the allowance for foreign exchange holding provides a countervailable benefit to trading companies. Furthermore, no special provisions exist to allow trading companies to claim additional export loss reserves.

Deferred Payment Export Loans

Oil Country Tubular Goods (1983) 49 FR 35836 (9/12/84 - Prelim); 49 FR 46776 (11/28/84 - Final)

Export loans are limited to a period of 90 days, except for certain exempted items. Therefore, we determined that there is no program offering deferred payment export loans that provide countervailable benefits.

Equipment Funds for Export Strategy Industries and Funding for Industrialization of New Technology

The Ministry of Trade and Industry (MTI) is studying proposals concerning these two projects but there has been no final decision on whether to set them up.

Free Trade Zones (FTZ) at Pusan and Kwangyang

Carbon Steel Plate (1998) 64 FR 40445 (6/26/99 - Prelim); 64 FR 73176 (12/29/99 - Final)

There are only two FTZs in Korea. One is in Masan and the other is in Iksan. Therefore, we determined that this program does not exist.

Loans for Expansion or Construction of Manufacturing Facilities

Industrial Belts (1987) 53 FR 48676 (12/2/88 - Prelim); 53 FR 15516 (4/18/89 - Final)

Petitioner's allegation that all commercial bank loans are targeted to specific enterprises or industries was first raised in the March 13, 1989, pre-hearing brief, and is, therefore, untimely and cannot be considered for purposes of this final determination.

Preferential Exchange Rates for Export Loans

Petitioner alleged that producers and exporters of shapes and sheet receive preferential exchange rates for export loans based on letters of credit. Petitioner alleged that the exchange rate used for loans based on letters of credit was 10 percent more favorable to Korean exporters than the actual exchange rate. There is no preferential exchange rate used to convert export financing. For export loans granted under the Export Financing Regulations, a Won/U.S. dollar conversion factor which is lower than the official exchange rate is utilized when a loan is received against a letter of credit. Therefore, we determine that there is no program of preferential exchange rates for export loans that provides countervailable benefits to shapes and sheet producers and exporters.

Won 680 Billion Bond Guarantee

DRAMS (1/01-6/02) 68 FR 16766 (4/7/03 - Prelim); 68 FR 37122 (6/23/03 - Final); Decision Memo; Amended Final

No program description available.