                                            Slip Op. 19-

                  UNITED STATES COURT OF INTERNATIONAL TRADE
  POSCO,

                        Plaintiff,

  NUCOR CORPORATION,

                        Consolidated Plaintiff,

 ARCELORMITTAL USA LLC and SSAB
 ENTERPRISES LLC,                                            Before: Gary S. Katzmann, Judge
                                                             Consol. Court No. 17-00137
                        Plaintiff-Intervenors,

            v.

  UNITED STATES,

                        Defendant,

            and

  SSAB ENTERPRISES LLC, NUCOR
  CORPORATION, ARCELORMITTAL USA LLC and
  POSCO,

                       Defendant-Intervenors.

                                            OPINION

[Plaintiff’s motion for reconsideration is granted in part and Commerce’s Final Results are remanded
consistent with this opinion.]
                                                             Dated:0D\

Brady W. Mills, Donald B. Cameron, Julie C. Mendoza, R. Will Planert, Brady W. Mills, Mary S.
Hodgins, Eugene Degnan, and Ragan W. Updegraff, Morris, Manning & Martin LLP, of
Washington, DC, for plaintiff and defendant-intervenor POSCO.

Christopher Weld, Alan H. Price, and Adam M. Teslik, Wiley Rein, LLP, of Washington, DC, for
consolidated plaintiff and defendant-intervenor Nucor Corporation.

      Kelly A. Krystyniak, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of Washington, DC, for defendant United States. With her on the brief were
Consol. Court Number 17-00137                                                               Page 2


Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director, Tara K. Hogan,
Assistant Director, and Vito S. Solitro, Attorney. Of counsel on the brief was Reza Karamloo,
Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department
of Commerce, of Washington, DC.

       Katzmann, Judge: Before the court is Plaintiff POSCO’s motion for reconsideration of the

court’s opinion in POSCO v. United States, 42 CIT __, 353 F. Supp. 3d 1357 (2018). This court

sustained in part the United States Department of Commerce’s (“Commerce”) final affirmative

determination in the countervailing subsidy investigation of certain carbon and alloy steel cut-to-

length plate from Korea. The court also remanded Commerce’s countervailability determination

for POSCO M-Tech’s research and development grants and Commerce’s application of the highest

adverse facts available (“AFA”) rate for reconsideration. POSCO, 353 F. Supp. 3d at 1363–64

(citing Certain Carbon and Alloy Steel Cut-To-Length Plate From the Republic of Korea: Final

Affirmative Countervailing Duty Determination and Final Negative Critical Circumstances

Determination, 82 Fed. Reg. 16,341 (Dep’t Commerce Apr. 4, 2017), P.R. 505 and accompanying

Issues and Decision Memorandum (“IDM”) (Mar. 29, 2017), P.R. 497). The relevant legal and

factual background of the underlying action is set forth in greater detail in POSCO, 353 F. Supp.

3d at 1363–69. POSCO now moves for the court to reconsider its affirmance of (1) Commerce’s

application of the 1.05 percent AFA rate to POSCO M-Tech for unreported government subsidies

received by Ricco Metal and Nine-Digit, both companies acquired by POSCO M-Tech; and (2)

Commerce’s application of the 1.05 percent AFA rate to Hyundai and attribution of this rate to

POSCO. The court addresses each in turn and issues additional remand instructions to Commerce.

I.     Commerce’s Application of the 1.05 Percent AFA Rate to POSCO

       In POSCO, the court concluded that Commerce failed to make factual findings on the

specificity and benefit requirements of 19 U.S.C. § 1677(5) and remanded to Commerce for

reconsideration its determination that the assistance received by Ricco Metal and Nine-Digit was
Consol. Court Number 17-00137                                                                   Page 3


countervailable. 353 F. Supp. 3d at 1376. See also Changzou Trina Solar Energy Co., Ltd. v.

United States, 40 CIT __, __, 195 F. Supp. 3d 1334, 1350 (2016). The court did, however, uphold

Commerce’s decision to use the countervailing duty rate from a different investigation, Washers

from Korea. POSCO, 353 F. Supp. 3d at 1377.

       POSCO now revisits the AFA methodology Commerce used in determining that it would

apply a 1.05 percent rate established for a tax credit program in Washers from Korea. Mot. of Pl.

POSCO for Reh’g. and Recons. at 2–3, Dec. 21, 2018, ECF No. 83 (“POSCO’s Mot.”). POSCO

argues that under Commerce’s hierarchal AFA methodology, Commerce needed to first determine

whether there was an identical program with an above-zero rate within the same investigation

before considering rates from other countervailing duty proceedings. Id. at 2–4. POSCO

maintains that Ricco Metal and Nine-Digit received assistance under the Industrial Technology

Innovation Promotion Act (“ITIPA”), and the .02 percent rate received by POSCO for another

ITIPA grant from the same investigation should apply. Id. That is, POSCO argues that there is an

identical program with an above-zero rate, and thus Commerce should have applied that rate.

       Commerce set forth its AFA rate methodology in the IDM:

       When selecting rates, we first determine if there is an identical program in the
       investigation and, if so, use the highest calculated rate for the identical program
       (excluding zero rates). If there is no identical program with a rate above zero in the
       investigation, we then determine if an identical program was examined in another
       CVD proceeding involving the same country, and apply the highest calculated rate
       for the identical program (excluding rates that are de minimis). If no identical
       program exists, we then determine if there is a similar/comparable program (based
       on the treatment of the benefit) in another CVD proceeding involving the same
       country, and apply the highest calculated rate for the similar/comparable program.

IDM at 11. See also 19 U.S.C. § 1677e(d)(1)(A). Commerce then applied this methodology to

the assistance received by Ricco Metal and Nine-Digit, concluding that there was no identical

program and instead using the rate for Washers from Korea. In its response brief in POSCO, the
Consol. Court Number 17-00137                                                                   Page 4


Government contended that, “[b]ecause Commerce must ‘verify all information relied upon in

making . . . a final determination in an investigation,’ Commerce properly disregarded POSCO M-

Tech’s statements regarding the nature of the subsidies at issue for purposes of selecting an adverse

facts available rate.” Def.’s Br. at 35, Mar. 23, 2018, ECF No. 53 (citing 19 U.S.C. § 1677m(i)(1)).

The Government now argues that “POSCO’s request for reconsideration ignores the [c]ourt’s

affirmance of Commerce’s finding that POSCO had not identified an identical program.” Def.’s

Resp. to POSCO’s Mot. (“Def.’s Resp.”) at 4–5, Mar. 23, 2018, ECF No. 89.

        Upon further consideration of the pleadings and record, the court concludes that Commerce

did not make the requisite factual findings to proceed to the second step of its AFA analysis. In

the IDM, Commerce noted POSCO’s Rebuttal Comment: “Should the Department treat this

program as unreported R&D grants, it should not use the 1.05 percent ad valorem rate that Nucor

argues for, but rather, per Department practice, the 0.02 percent ad valorem rate calculated for

POSCO’s ITIPA grants at the Preliminary Determination.” IDM at 41. Commerce then concluded

that:

        Consistent with the CVD AFA hierarchy, which directs us to seek the highest non-
        de minimis rate calculated for the same or similar program in another CVD
        proceeding involving Korea if there is no identical program in this proceeding, we
        determine that it is appropriate to apply, as AFA, a rate of 1.05 percent ad valorem,
        the subsidy rate calculated for an income tax program in Washers from Korea.

Id. at 44 (emphasis added). Commerce did not provide any additional explanation of how it

determined that there was no identical program before moving to the second step of its AFA

methodology -- using the rate in another investigation -- and thus did not make the requisite factual

findings to address POSCO’s contention that the ITIPA grant was an identical program in the

proceeding. “Commerce must . . . point to actual information on the record to make required

factual determinations.” Trina Solar, 195 F. Supp. 3d at 1350 (citing 19 U.S.C. §§ 1677e(a)-(c)).
Consol. Court Number 17-00137                                                               Page 5


The Government’s contention that there was no identical program because POSCO did not submit

the requisite information prior to verification for Commerce to establish what type of assistance

Ricco Metal and Nine-Digit may hold, but it must make the required factual determinations and

explain its conclusion. The court, therefore, remands the issue of whether an identical program

existed to Commerce for further consideration.

II.    Commerce’s Application of the 1.05 Percent AFA Rate to Hyundai and Attribution
       of the Rate to POSCO

       POSCO contends that the court overlooked an important argument it made “about

attributing the Hyundai AFA rate to POSCO based on the ratio of Hyundai’s exports to the United

States of subject merchandise that was produced by POSCO during the [period of investigation]

(based on value).” POSCO’s Mot. at 6. The Government, however, argues “[t]hat the Court did

not specifically address POSCO’s argument with regard to apportioning benefits does not mean

that the Court overlooked it; it means that the Court was not persuaded by it.” Def.’s Resp. at 5.

Defendant-Intervenor Nucor, likewise, argues that the opinion clearly indicates that the court “was

not persuaded by the argument and did not feel that separate discussion was necessary to support

its holding.” Nucor’s Resp. to POSCO’s Mot. at 5, Jan. 25, 2019, ECF No. 86. The court did

consider POSCO’s argument and was not persuaded. See Medtronic, Inc. v. Daig Corp., 789 F.2d

903, 906 (Fed. Cir. 1986) (noting that a court need not address every sub-argument so long as it

articulates its reasoning). The court affirmed -- and continues to affirm -- the application of AFA

to Hyundai and the attribution of that rate to POSCO, POSCO, 353 F. Supp. 3d at 1381–82, and

denies POSCO’s motion to reconsider the court’s decision on this claim.

                                            CONCLUSION

       The court remands to Commerce for further consideration the issue of whether, under the

first step of the AFA methodology, a program identical to the assistance received by Nine-Digit
Consol. Court Number 17-00137                                                                  Page 6


and Ricco Metal existed and denies POSCO’s motion to reconsider the application of AFA to

Hyundai and the attribution of that rate to POSCO. The court denies POSCO’s motion for a

rehearing on both issues. Commerce shall file with this court and provide to the parties its remand

results within 21 days of the date of this order; thereafter, the parties shall have 30 days to submit

to the court briefs addressing the revised final determination and the parties shall have 15 days

thereafter to file reply briefs with the court.

        SO ORDERED.

                                                              /s/ Gary S. Katzmann
                                                              Gary S. Katzmann, Judge
 Dated: 0D\
         New York, New York
