We determine that imports of narrow bottom mount combination refrigerator-freezers (bottom mount refrigerators) from the Republic of Korea (Korea) are being, or are likely to be, sold in the United States at less than fair value (LTFV), as provided in section 735 of the Tariff Act of 1930, as amended (the Act). In addition, we determine that there is no reasonable basis to believe or suspect that critical circumstances exist with respect to the subject merchandise exported from Korea.
Based on our analysis of the comments received, we have made changes in the margin calculations. Therefore, the final determination differs from the preliminary determination. The final weighted-average dumping margins for the investigated companies are listed below in the section entitled “Final Determination Margins.”
Effective Date: March 26, 2012.
FOR FURTHER INFORMATION CONTACT:
Elizabeth Eastwood or Henry Almond, AD/CVD Operations, Office 2, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-3874 and (202) 482-0049, respectively.
On November 2, 2011, the Department published in the Federal Register the preliminary determination of sales at LTFV in the antidumping duty investigation of bottom mount refrigerators from Korea.
Since the preliminary determination, the following events have occurred.
In November 2011, we issued supplemental questionnaires to two respondents, LG Electronics, Inc. (LG), and Samsung Electronics Co., Ltd. (Samsung), and we received responses to these supplemental questionnaires in this same month.
In November and December 2011, we verified the questionnaire responses of three respondents in this case, Daewoo Electronics Corporation (Daewoo), LG, and Samsung, in accordance with section 782(i) of the Act.
In January 2012, the Government of Korea submitted comments on certain aspects of the Department's preliminary determination.
In February 2012, Whirlpool Corporation (hereafter, the petitioner) and two of the three respondents submitted case and rebuttal briefs. Daewoo submitted only a rebuttal brief. Also in February 2012, the Department held a public hearing at the request of the petitioner and the three respondents.
Subsequent to the Preliminary Determination, the Department revised the computer programs used to calculate the respondents' dumping margins to ensure that they accurately reflected the methodological choices made in that determination. These revisions to the programming, had they been included in the preliminary determination, would not have altered the weighted-average dumping margins calculated there.
Period of Investigation
The period of investigation (POI) is January 1, 2010, through December 31, 2010.
Scope of Investigation
The products covered by the investigation are all bottom mount combination refrigerator-freezers and certain assemblies thereof from Korea. For purposes of the investigation, the term “bottom mount combination refrigerator-freezers” denotes freestanding or built-in cabinets that have an integral source of refrigeration using compression technology, with all of the following characteristics:
- The cabinet contains at least two interior storage compartments accessible through one or more separate external doors or drawers or a combination thereof;
- An upper-most interior storage compartment(s) that is accessible through an external door or drawer is either a refrigerator compartment or convertible compartment, but is not a freezer compartment; 
- There is at least one freezer or convertible compartment that is mounted below an upper-most interior storage compartment(s).
For purposes of the investigation, a refrigerator compartment is capable of storing food at temperatures above 32 degrees F (0 degrees C), a freezer compartment is capable of storing food at temperatures at or below 32 degrees F (0 degrees C), and a convertible compartment is capable of operating as either a refrigerator compartment or a freezer compartment, as defined above.
Also covered are certain assemblies used in bottom mount combination refrigerator-freezers, namely: (1) Any assembled cabinets designed for use in bottom mount combination refrigerator-freezers that incorporate, at a minimum: (a) An external metal shell, (b) a back panel, (c) a deck, (d) an interior plastic liner, (e) wiring, and (f) insulation; (2) any assembled external doors designed for use in bottom mount combination refrigerator-freezers that incorporate, at a minimum: (a) An external metal shell, (b) an interior plastic liner, and (c) insulation; and (3) any assembled external drawers designed for use in bottom mount combination refrigerator-freezers that incorporate, at a minimum: (a) An external metal shell, (b) an interior plastic liner, and (c) insulation.
The products subject to the investigation are currently classifiable under subheadings 8418.10.0010, 8418.10.0020, 8418.10.0030, and 8418.10.0040 of the Harmonized Tariff System of the United States (HTSUS). Products subject to this investigation may also enter under HTSUS subheadings 8418.21.0010, 8418.21.0020, 8418.21.0030, 8418.21.0090, and 8418.99.4000, 8418.99.8050, and 8418.99.8060. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the merchandise subject to this scope is dispositive.
In the Preliminary Determination, we did not modify the description of the scope of this investigation in the manner requested by certain interested parties. Specifically, we did not modify the scope to be consistent with the Association of Home Appliance Manufacturers (AHAM) definition, nor did we exclude kimchi refrigerators or Quatro Cooling Refrigerators from the scope. We did, however, clarify the scope to eliminate any ambiguity with respect to the inclusion of Quatro Cooling Refrigerators in the scope of the investigation. See Preliminary
Determination, 76 FR at 67677. No party commented on our preliminary scope determination. Therefore, we made no further changes to the description of the scope, as stated in the Preliminary Determination.
Cost of Production
As discussed in the preliminary determination, we conducted an investigation to determine whether the respondents made comparison market sales of the foreign like product during the POI at prices below their COP within the meaning of section 773(b) of the Act. See Preliminary Determination, 76 FR 67684-85 (Nov. 2, 2011). For this final determination, we performed the cost test following the same methodology as in the Preliminary Determination.
We found that 20 percent or more of each respondent's sales of a given product during the POI were at prices less than the weighted-average COP for this period. Thus, we determined that these below-cost sales were made in “substantial quantities” within an extended period of time and at prices which did not permit the recovery of all costs within a reasonable period of time in the normal course of trade. See sections 773(b)(1)-(2) of the Act.
Therefore, for purposes of this final determination, we found that each respondent made below-cost sales not in the ordinary course of trade. Consequently, we disregarded these sales and used the remaining sales as the basis for determining normal value for each respondent pursuant to section 773(b)(1) of the Act.
The Act allows the Department to employ the average-to-transaction margin calculation methodology under the following circumstances: (1) There is a pattern of export prices that differ significantly among purchasers, regions or periods of time; and (2) the Department explains why such differences cannot be taken into account using the average-to-average or transaction-to-transaction methodology. See section 777A(d)(1)(B) of the Act.
In the Preliminary Determination, we conducted time-period targeted dumping analyses for LG and Samsung based on timely allegations of targeted dumping filed by the petitioner, using the methodology adopted in Certain Steel Nails from the United Arab Emirates: Notice of Final Determination of Sales at Not Less Than Fair Value, 73 FR 33985 (June 16, 2008), and Certain Steel Nails from the People's Republic of China: Final Determination of Sales at Less Than Fair Value and Partial Affirmative Determination of Critical Circumstances, 73 FR 33977 (June 16, 2008), and applied in more recent investigations.
As a result, we preliminarily determined that there was a pattern of U.S. prices for comparable merchandise that differed significantly among certain time periods for Samsung and LG, in accordance with section 777A(d)(1)(B)(i) of the Act.
Further, for both Samsung and LG, we found that the standard average-to-average methodology did not take into account the price differences because the alternative average-to-transaction methodology yielded a material difference in the margin. Accordingly, we preliminarily applied the average-to-transaction methodology to all U.S. sales made by LG and Samsung. See Preliminary Determination, 76 FR at 67678-67679.
For purposes of the final determination, we performed our targeted-dumping analysis following the methodology employed in the Preliminary Determination, after taking into account the petitioner's revised targeted dumping allegation with respect to Samsung, and making certain revisions to LG's and Samsung's reported U.S. sales data based on verification findings and other comments submitted by the parties, as enumerated in the “Margin Calculations” section of the “Issues and Decision Memorandum” (Decision Memorandum) from Gary Taverman, Acting Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, Import Administration, to Paul Piquado, Assistant Secretary for Import Administration, dated March 16, 2012. In so doing, we found that the results of our final targeted-dumping analysis were generally consistent with those of our preliminary targeted-dumping analysis. Therefore, we continued to apply the alternative average-to-transaction methodology for LG's and Samsung's U.S. sales, in the final determination. See the LG Calculation Memo and the Samsung Calculation Memo for further discussion.
In the Preliminary Determination, we found that critical circumstances do not exist with respect to imports of bottom mount refrigerators produced in, and exported from, Korea. See Preliminary Determination, 76 FR at 67686-67687. Samsung submitted comments in support of our preliminary negative critical circumstances determination with respect to it, and reiterated, among other things, that its imports have not been massive since the filing of the petition.
For the final determination, we relied on updated shipment data provided by Daewoo, LG, and Samsung, which we examined at verification. Based on our analysis of these data and the comments submitted by the parties, we continue to find that critical circumstances do not exist with respect to imports of bottom mount refrigerators from Korea, as explained below.
Section 735(a)(3) of the Act provides that the Department will determine that critical circumstances exist if there is a reasonable basis to believe or suspect that: (A)(i) There is a history of dumping and material injury by reason of dumped imports in the United States or elsewhere of the subject merchandise; or (ii) the person by whom, or for whose account, the merchandise was imported knew or should have known that the exporter was selling the subject merchandise at less than its fair value and that there was likely to be material injury by reason of such sales; and (B) there have been massive imports of the subject merchandise over a relatively short period. Section 351.206(h)(1) of the Department's regulations provides that, in determining whether imports of the subject merchandise have been “massive,” the Department normally will examine: (i) The volume and value of the imports; (ii) seasonal trends; and (iii) the share of domestic consumption accounted for by the imports. In addition, 19 CFR 351.206(h)(2) provides that an increase in imports of 15 percent during the “relatively short period” of time may be considered “massive.” Section 351.206(i) of the Department's regulations defines “relatively short period” as normally being the period beginning on the date the proceeding begins (i.e., the date the petition is filed) and ending at least three months later. The regulations also provide, however, that if the Department finds that importers, exporters, or producers had reason to believe, at some time prior to the beginning of the proceeding, that a proceeding was likely, the Department may consider a period of not less than three months from that earlier time.
In determining whether the above criteria have been satisfied, we examined: (1) The evidence placed on the record by the respondents and the petitioner; and (2) the International Trade Commission's (ITC's) preliminary determination of injury (see Bottom Mount Refrigerator Freezers from Mexico and Korea, Investigation Nos. 701-TA-477 and 731-TA-1180-1181 (Preliminary), 76 FR 29791 (May 23, 2011) (ITC Preliminary Determination)).
To determine whether there is a history of injurious dumping of the merchandise under investigation, in accordance with section 735(a)(3)(A)(i) of the Act, the Department normally considers evidence of an existing antidumping duty order on the subject merchandise in the United States or elsewhere to be sufficient.
As mentioned in the Preliminary Determination, while the petitioner noted that New Zealand imposed antidumping duties on the subject merchandise produced in Korea in 2001, this order was terminated in 2006. Moreover, the petitioner did not identify any additional proceedings with respect to Korean-origin products, nor are we aware of any antidumping duty order in any country on bottom mount refrigerators from Korea. For this reason, the Department does not find a history of injurious dumping of the subject merchandise from Korea pursuant to section 735(a)(3)(A)(i) of the Act.
To determine whether the person by whom, or for whose account, the merchandise was imported knew or should have known that the exporter was selling the subject merchandise at LTFV, and that there was likely to be material injury by reason of such sales in accordance with section 735(a)(3)(A)(ii) of the Act, the Department normally considers margins of 25 percent or more for export price (EP) sales or 15 percent or more for constructed export price (CEP) transactions sufficient to impute knowledge of dumping.
The final dumping margin calculated for LG exceeds the threshold sufficient to impute knowledge of dumping (i.e., 15 percent for CEP sales, which are the vast majority of the sales on which the calculation is based). Therefore, we determine that there is sufficient basis to find that importers should have known that LG was selling the subject merchandise at LTFV pursuant to section 735(a)(3)(A)(ii) of the Act. For Daewoo and Samsung, we calculated final margins of de minimis and 5.16 percent, respectively, which do not meet the 15- and 25-percent thresholds necessary to impute knowledge of dumping for either CEP or EP sales. Finally, for the companies covered by the “All Others” rate, the final calculated dumping margin of 10.29 percent also does not meet the 15-percent threshold necessary to impute knowledge of dumping for CEP sales, which are the vast majority of the sales on which the calculation of the “All Others” rate is based. Therefore, we find that the importer knowledge criterion, as set forth in section 735(a)(3)(A)(ii) of the Act, has been met for LG, but has not been met for Daewoo, Samsung, and the companies covered by the “All Others” rate.
In determining whether an importer knew or should have known that there was likely to be material injury by reason of dumped imports, the Department normally will look to the preliminary injury determination of the ITC. If the ITC finds a reasonable indication of present material injury to the relevant U.S. industry, the Department will determine that a reasonable basis exists to impute importer knowledge that material injury is likely by reason of such imports. See e.g.,
Certain Orange Juice from Brazil. In the present case, the ITC preliminarily found reasonable indication that an industry in the United States is materially injured by imports of bottom mount refrigerators from Korea. See ITC Preliminary Determination. Based on the ITC's preliminary determination of injury, and the final antidumping margin for LG, the Department finds that there is a reasonable basis to conclude that the importer knew or should have known that there was likely to be injurious dumping of subject merchandise for these companies.
In determining whether there are “massive imports” over a “relatively short period,” pursuant to section 735(a)(3)(B) of the Act, the Department normally compares the import volumes of the subject merchandise for at least three months immediately preceding the filing of the petition (i.e., the base period) to a comparable period of at least three months following the filing of the petition (i.e., the comparison period). Accordingly, in determining whether imports of the subject merchandise have been massive, we based our analysis for each of the three companies on shipment data for comparable seven-month periods preceding and following the filing of the petition.
Specifically, the Department requested and obtained from each of the respondents monthly shipment data from January 2008 to October 2011. To determine whether imports of subject merchandise have been massive over a relatively short period, we compared, pursuant to 19 CFR 351.206(h)(1)(i), the respondents' export volumes for the seven months before the filing of the petition (i.e., September 2010-March 2011) to those during the seven months after the filing of the petition (i.e., April through October 2011). These periods were selected based on the Department's practice of using the longest period for which information is available up to the date of the preliminary determination.
According to the monthly shipment information, we found the volume of shipments of bottom mount refrigerators increased by more than 15 percent for LG.
For purposes of our “massive imports” determination, we also considered the impact of seasonality on imports of bottom mount refrigerators based on interested party comments and information contained in the ITC's preliminary determination. In order to determine whether the seasonality factor accounted for the increase in imports observed for each of the respondents in the post-petition filing period (the comparison period), we analyzed company-specific shipment data for a historical three-year period, where possible, using the same base and comparison time periods noted above. As a result of this analysis, we found that there is a consistent pattern of seasonality in the industry, and that seasonal trends account for the increase in imports subsequent to the filing of the petition from each of the respondents. Specifically, with respect to LG, we found that the percentage increase in shipments during the comparison period is not related to the filing of the petition but rather to the consistent seasonal trends in the industry because shipments during the April-October time period were consistently higher than those in the September-March time period, and the shipment increases observed in the April-October time period from year to year decreased. Therefore, for purposes of the final determination, we find that imports from LG during the period after the filing of the petition have not been massive in accordance with section 735(a)(3)(B) of the Act.
In summary, we find that there is a reasonable basis to believe or suspect importers had knowledge of dumping and the likelihood of material injury with respect to bottom mount refrigerators produced and exported from Korea by LG. However, we do not find that there have been massive imports of bottom mount refrigerators over a relatively short period from LG due to seasonality. Therefore, for the reasons stated above, the Department finds that critical circumstances do not exist for imports of the subject merchandise from Korea. For a complete discussion of our final critical circumstances analysis, see the Decision Memorandum at Comment 2 and the March 16, 2012, Memorandum to James P. Maeder, Jr., Director, Office 2, from The Team entitled, “Antidumping Duty Investigation of Certain Bottom Mount Refrigerator Freezers from Korea—Final Determination of Critical Circumstances.”
Analysis of Comments Received
All issues raised in the case and rebuttal briefs by parties in this investigation are addressed in the Decision Memorandum, which is adopted by this notice. Parties can find a complete discussion of the issues raised in this investigation and the corresponding recommendations in this public memorandum, which is on file in the Central Records Unit, room 7046 of the main Department building.
In addition, a complete version of the Decision Memorandum can be accessed directly on the Web at http://ia.ita.doc.gov/frn/index.html. The paper copy and electronic version of the Decision Memorandum are identical in content.
Changes Since the Preliminary Determination
Based on our analysis of the comments received and our findings at verification, we have made certain changes to the margin calculations. For a discussion of these changes, see the “Margin Calculations” section of the Decision Memorandum.
As provided in section 782(i) of the Act, we verified the sales and cost information submitted by the respondents for use in our final determination. We used standard verification procedures including an examination of relevant accounting and production records, and original source documents provided by the respondents.
Continuation of Suspension of Liquidation
Pursuant to 735(c)(1)(B) of the Act, we will instruct U.S. Customs and Border Protection (CBP) to continue to suspend liquidation of all entries of subject merchandise from Korea, entered, or withdrawn from warehouse, for consumption on or after November 2, 2011, the date of publication of the preliminary determination in the Federal Register. CBP shall require a cash deposit or the posting of a bond equal to the estimated amount by which the normal value exceeds the U.S. price as shown below, adjusted for export subsidies found in the final determination of the companion countervailing duty investigation of this merchandise. Specifically, consistent with our practice, where the product under investigation is also subject to a concurrent countervailing duty investigation, we instruct CBP to require a cash deposit or posting of a bond equal to the amount by which the normal value exceeds the EP or CEP, as indicated below, less the amount of the countervailing duty determined to constitute an export subsidy.
Accordingly, for cash deposit purposes, we are subtracting from the applicable cash deposit rate that portion of the rate attributable to the export subsidies found in the affirmative countervailing duty determination for each respondent with a final dumping margin above de minimis (i.e., 1.65 percent for Samsung and 1.60 percent for the companies covered by the “All Others” rate). After the adjustment for the cash deposit rates attributed to export subsidies, the resulting cash deposit rates will be 3.51 percent for Samsung and 8.69 percent for the companies covered by the “All Others” rate. For LG, although its final dumping margin is above de minimis, the Department found no export subsidies for this company and therefore we have not adjusted LG's final cash deposit rate. For Daewoo, because its estimated weighted-average final dumping margin is zero, we are not directing CBP to suspend liquidation of entries of bottom mount refrigerators produced and exported by this company. These instructions suspending liquidation will remain in effect until further notice.
Final Determination Margins
The weighted-average dumping margins are as follows:
|Exporter/manufacturer||Weighted-average margin percentage||Critical circumstances|
|Daewoo Electronics Corporation||0.00||No.|
|LG Electronics, Inc||15.41||No.|
|Samsung Electronics Co., Ltd||5.16||No.|
“All Others” Rate
In accordance with section 735(c)(5)(A) of the Act, we have based the “All Others” rate on the simple average of the dumping margins calculated for the exporters/manufacturers investigated in this proceeding. The “All Others” rate is calculated exclusive of all de minimis margins and margins based entirely on AFA. Because we cannot apply our normal methodology of calculating a weighted-average margin due to requests to protect business-proprietary information, we find this rate to be the best proxy of the actual weighted-average margin determined for the mandatory respondents.
We will disclose the calculations performed within five days of the date of publication of this notice to parties in this proceeding in accordance with 19 CFR 351.224(b).
In accordance with section 735(d) of the Act, we have notified the ITC of our final determination. As our final determination is affirmative, the ITC will determine within 45 days whether imports of the subject merchandise are causing material injury, or threat of material injury, to an industry in the United States. If the ITC determines that material injury or threat of injury does not exist, the proceeding will be terminated and all securities posted will be refunded or canceled. If the ITC determines that such injury does exist, the Department will issue an antidumping duty order directing CBP to assess antidumping duties on all imports of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the effective date of the suspension of liquidation.
Return or Destruction of Proprietary Information
This notice will serve as the only reminder to parties subject to administrative protective order (APO) of their responsibility concerning the destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.
We are issuing and publishing this determination and notice in accordance with sections 735(d) and 777(i) of the Act.
Dated: March 16, 2012.
Assistant Secretary for Import Administration.
Appendix—Issues in Decision Memorandum
1. Targeted Dumping
2. Zeroing in Average-to-Transaction Comparisons
3. Adjustments to Expenses Paid to Affiliated Parties
4. Classification of Return Freight Expenses
5. General and Administrative Expenses for Daewoo
6. LG's Corrected Control Numbers
7. LG's Home Market Rebates
8. LG's Home Market Advertising Expenses
9. LG's Home Market Payment Dates
10. LG's U.S. Payment Dates
11. LG's U.S. Billing Adjustments
12. LG's U.S. Lump Sum and Sell-Out Rebates
13. LG's Non-Product-Specific Accruals for U.S. Rebates
14. LG's U.S. Freight Expenses
15. LG's U.S. Indirect Selling Expenses
16. LG's U.S. Inventory Carrying Costs
17. LG's Materials Purchased from Affiliated Parties
18. LG's Research and Development (R&D) Expenses
19. Critical Circumstances
20. Use of Total Adverse Facts Available (AFA) for Samsung
21. Samsung's Early Payment Discounts in the Home Market
22. Samsung's Home Market Rebates on Discontinued Models and Kimchi Refrigerators
23. Samsung's Remaining Home Market Rebates
24. Samsung's Home Market Advertising Expenses
25. Samsung's Home Market Warranty Expenses
26. Corrections Presented at the Start of Samsung's Sales Verifications
27. Samsung's U.S. Rebates
28. Treatment of Payments for Defective Samsung Merchandise
29. The Denominator of Various Expense Calculations for Samsung
30. Samsung's U.S. Credit Periods
31. Samsung's U.S. Interest Rate
32. Samsung's U.S. Indirect Selling Expenses
33. Classification of Certain Costs as Packaging or Packing for Samsung
34. Corrections Presented at the Start of Samsung's Cost Verification
35. SEC's G&A Ratio
36. Samsung's Scrap Sales
37. Samsung's Financing Costs
38. Samsung's Materials Purchased from Affiliated Parties
39. Samsung's R&D Expenses
[FR Doc. 2012-7237 Filed 3-23-12; 8:45 am]
BILLING CODE 3510-DS-P