[Federal Register Volume 76, Number 80 (Tuesday, April 26, 2011)]
[Notices]
[Pages 23298-23302]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-10050]
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DEPARTMENT OF COMMERCE
International Trade Administration
[C-580-866]
Bottom Mount Combination Refrigerator-Freezers From the Republic
of Korea: Initiation of Countervailing Duty Investigation
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
DATES: Effective Date: April 26, 2011.
FOR FURTHER INFORMATION CONTACT: Justin Neuman or Dana Mermelstein, AD/
CVD Operations, Office 6, Import Administration, U.S. Department of
Commerce, 14th Street and Constitution Avenue, NW., Washington, DC
20230; telephone: (202) 482-0486 or (202) 482-1391, respectively.
SUPPLEMENTARY INFORMATION:
The Petition
On March 30, 2011, the Department of Commerce (the Department)
received a countervailing duty (CVD) petition concerning imports of
bottom mount combination refrigerator-freezers (bottom mount
refrigerators) from the Republic of Korea (Korea) filed in proper form
by Whirlpool Corporation (the petitioner), a domestic producer of
bottom mount refrigerators. See ``Bottom Mount Combination
Refrigerator-Freezers From the Republic of Korea and Mexico:
Antidumping and Countervailing Duty Petitions on Behalf of Whirlpool
Corporation,'' dated March 30, 2011 (Korea CVD Petition). On April 5,
6, 12, and 14, 2011, the Department issued additional requests for
information and clarification of certain
[[Page 23299]]
areas of the Korea CVD Petition. Based on the Department's requests,
the petitioner timely filed additional information pertaining to the
Korea CVD Petition on April 11, 14, and 18, 2011.
In accordance with section 702(b)(1) of the Tariff Act of 1930, as
amended, (the Act), the petitioner alleges that producers/exporters of
bottom mount refrigerators from Korea received countervailable
subsidies within the meaning of sections 701 and 771(5) of the Act, and
that imports from these producers/exporters materially injure, or
threaten material injury to, an industry in the United States.
The Department finds that the petitioner has filed this CVD
petition on behalf of the domestic industry because it is an interested
party as defined in section 771(9)(C) of the Act, and the petitioner
has demonstrated sufficient industry support with respect to the CVD
investigation that it is requesting the Department to initiate (see
``Determination of Industry Support for the CVD Petition,'' below).
Period of Investigation
The period of investigation (POI) is calendar year 2010, i.e.,
January 1, 2010, through December 31, 2010. See 19 CFR 351.204(b)(2).
Scope of Investigation
The products covered by this investigation are bottom mount
refrigerators from Korea. For a full description of the scope of this
investigation, please see the ``Scope of Investigation'' Appendix to
this notice.
Comments on Scope of Investigation
During our review of the Korea CVD Petition, we discussed the scope
with the petitioner to ensure that it is an accurate reflection of the
products for which the domestic industry is seeking relief. Moreover,
as discussed in the preamble to the regulations (See Antidumping
Duties; Countervailing Duties; Final Rule, 62 FR 27296, 27323 (May 19,
1997)), we are setting aside a period for interested parties to raise
issues regarding product coverage. The Department encourages all
interested parties to submit such comments by May 9, 2011, twenty
calendar days from the signature date of this notice. All comments must
be filed on the records of the Korea and Mexico antidumping duty
investigations as well as the Korea countervailing duty investigation.
Comments should be addressed to Import Administration's APO/Dockets
Unit, Room 1870, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW., Washington, DC 20230. The period of scope
consultations is intended to provide the Department with ample
opportunity to consider all comments and to consult with parties prior
to the issuance of the preliminary determination.
Consultations
Pursuant to section 702(b)(4)(A)(ii) of the Act, the Department
held consultations in Washington, DC with the Government of Korea (GOK)
with respect to the Korea CVD Petition on April 13, 2011. See
Memorandum to the File, ``Consultations With the Government of Korea
Regarding the Countervailing Duty Petition on Bottom Mount Combination
Refrigerator-Freezers From Korea,'' dated April 14, 2011, a public
document on file in the Central Records Unit (CRU), Room 7046 of the
main Department of Commerce building.
Determination of Industry Support for the Petition
Section 702(b)(1) of the Act requires that a petition be filed on
behalf of the domestic industry. Section 702(c)(4)(A) of the Act
provides that a petition meets this requirement if the domestic
producers or workers who support the petition account for: (i) At least
25 percent of the total production of the domestic like product; and
(ii) more than 50 percent of the production of the domestic like
product produced by that portion of the industry expressing support
for, or opposition to, the petition. Moreover, section 702(c)(4)(D) of
the Act provides that, if the petition does not establish support of
domestic producers or workers accounting for more than 50 percent of
the total production of the domestic like product, the Department
shall: (i) Poll the industry or rely on other information in order to
determine if there is support for the petition, as required by
subparagraph (A); or (ii) determine industry support using a
statistically valid sampling method to poll the industry.
Section 771(4)(A) of the Act defines the ``industry'' as the
producers as a whole of a domestic like product. Thus, to determine
whether a petition has the requisite industry support, the statute
directs the Department to look to producers and workers who produce the
domestic like product. The International Trade Commission (ITC), which
is responsible for determining whether ``the domestic industry'' has
been injured, must also determine what constitutes a domestic like
product in order to define the industry. While both the Department and
the ITC must apply the same statutory definition regarding the domestic
like product (see section 771(10) of the Act), they do so for different
purposes and pursuant to a separate and distinct authority. In
addition, the Department's determination is subject to limitations of
time and information. Although this may result in different definitions
of the like product, such differences do not render the decision of
either agency contrary to law. See USEC, Inc. v. United States, 132 F.
Supp. 2d 1, 8 (CIT 2001), citing Algoma Steel Corp., Ltd. v. United
States, 688 F. Supp. 639, 644 (CIT 1988), aff'd 865 F.2d 240 (Fed. Cir.
1989), cert. denied 492 U.S. 919 (1989).
Section 771(10) of the Act defines the domestic like product as ``a
product which is like, or in the absence of like, most similar in
characteristics and uses with, the article subject to an investigation
under this title.'' Thus, the reference point from which the domestic
like product analysis begins is ``the article subject to an
investigation'' (i.e., the class or kind of merchandise to be
investigated, which normally will be the scope as defined in the
petition).
With regard to the domestic like product, the petitioner does not
offer a definition of domestic like product distinct from the scope of
the investigation. Based on our analysis of the information submitted
on the record, we have determined that bottom mount refrigerators
constitute a single domestic like product and we have analyzed industry
support in terms of that domestic like product. For a discussion of the
domestic like product analysis in this case, see Countervailing Duty
Investigation Initiation Checklist: Bottom Mount Combination
Refrigerator-Freezers from Korea (Korea CVD Initiation Checklist) at
Attachment II, ``Analysis of Industry Support for the Petitions
Covering Bottom Mount Combination Refrigerator-Freezers,'' on file in
the CRU.
In determining whether the petitioner has standing under section
702(c)(4)(A) of the Act, we considered the industry support data
contained in the petition with reference to the domestic like product
as defined in the ``Scope of Investigation'' section above. To
establish industry support, the petitioner provided its production
volume of the domestic like product in 2010, and compared it to the
estimated total production of the domestic like product for the entire
domestic industry. See Volume I of the Korea CVD Petition, at 8-11,
Volume 2A of the petition, at Exhibits 4 and 5, and Supplement to the
AD/CVD petitions, dated April 11, 2011 at 2-4 and Exhibits S-1, S-2,
and S-3. The petitioner estimated 2010 production of the domestic like
product by non-
[[Page 23300]]
petitioning companies based on its knowledge of its competitors and
their production capacity. We have relied upon data the petitioner
provided for purposes of measuring industry support. For further
discussion, see Korea CVD Initiation Checklist, at Attachment II.
Our review of the data provided in the petition, supplemental
submissions, and other information readily available to the Department
indicates that the petitioner has established industry support. First,
the petition established support from domestic producers (or workers)
accounting for more than 50 percent of the total production of the
domestic like product and, as such, the Department is not required to
take further action in order to evaluate industry support (e.g.,
polling). See section 702(c)(4)(D) of the Act and Korea CVD Initiation
Checklist, at Attachment II. Second, the domestic producers (or
workers) have met the statutory criteria for industry support under
section 702(c)(4)(A)(i) of the Act because the domestic producers (or
workers) who support the petition account for at least 25 percent of
the total production of the domestic like product. See Korea CVD
Initiation Checklist, at Attachment II. Finally, the domestic producers
(or workers) have met the statutory criteria for industry support under
section 702(c)(4)(A)(ii) of the Act because the domestic producers (or
workers) who support the petition account for more than 50 percent of
the production of the domestic like product produced by that portion of
the industry expressing support for, or opposition to, the petition.
Accordingly, the Department determines that the petition was filed on
behalf of the domestic industry within the meaning of section 702(b)(1)
of the Act. See id.
The Department finds that the petitioner filed the petition on
behalf of the domestic industry because it is an interested party as
defined in section 771(9)(C) of the Act and it has demonstrated
sufficient industry support with respect to the countervailing duty
investigation that it is requesting the Department initiate. See id.
Injury Test
Because Korea is a ``Subsidies Agreement Country'' within the
meaning of section 701(b) of the Act, section 701(a)(2) of the Act
applies to this investigation. Accordingly, the ITC must determine
whether imports of the subject merchandise from Korea materially
injure, or threaten material injury to, a U.S. industry.
Allegations and Evidence of Material Injury and Causation
The petitioner alleges that imports of the subject merchandise are
benefitting from countervailable subsidies and that such imports are
causing, or threatening to cause, material injury to the U.S. industry
producing the domestic like product. In addition, the petitioner
alleges that subject imports exceed the negligibility threshold
provided for under section 771(24)(A) of the Act.
The petitioner contends that the industry's injured condition is
illustrated by reduced market share, reduced shipments, underselling
and price depression or suppression, decline in financial performance,
lost sales and revenue, and increase in the volume of imports and
import penetration. See Volume I of the Korea CVD Petition, at 114-138,
Volume 2A of the petition, at Exhibit 6, Volume 2B of the petition, at
Exhibits 35 and 38-42, and Supplement to the AD/CVD petitions, at 5-10
and Exhibits S-1, S-2, S-4, and S-5. We have assessed the allegations
and supporting evidence regarding material injury, threat of material
injury, and causation, and we have determined that these allegations
are properly supported by adequate evidence and meet the statutory
requirements for initiation. See Korea CVD Initiation Checklist at
Attachment III, ``Analysis of Allegations and Evidence of Material
Injury and Causation for the Petitions Covering Bottom Mount
Combination Refrigerator-Freezers from the Republic of Korea and
Mexico.''
Initiation of Countervailing Duty Investigation
Section 702(b)(1) of the Act requires the Department to initiate a
CVD investigation whenever an interested party files a CVD petition on
behalf of an industry that: (1) Alleges the elements necessary for an
imposition of a duty under section 701(a) of the Act; and (2) is
accompanied by information reasonably available to the petitioner
supporting the allegations.
The Department has examined the countervailing duty petition on
bottom mount refrigerators from Korea and finds that it complies with
the requirements of section 702(b)(1) of the Act. Therefore, in
accordance with section 702(b)(1) of the Act, we are initiating a CVD
investigation to determine whether Korean producers/exporters of bottom
mount refrigerators receive countervailable subsidies. For a discussion
of evidence supporting our initiation determination, see Korea CVD
Initiation Checklist.
We are including in our investigation the following programs
alleged in the Korea CVD Petition to provide countervailable subsidies
to producers/exporters of the subject merchandise:
1. Korean Export-Import Bank (KEXIM) Subsidy Programs
a. KEXIM Short-Term Export Credit
b. KEXIM Export Factoring
c. KEXIM Export Loan Guarantees
d. KEXIM Trade Bill Rediscounting Program
2. Korea Development Bank (KDB) and Industrial Bank of Korea (IBK)
Short-Term Discounted Loans for Export Receivables
3. Korea Trade Insurance Corporation--Export Insurance and Export
Credit Guarantees
a. Short-Term Export Insurance
b. Export Credit Guarantees
4. Production Facilities Subsidies: Gwangju Metropolitan City Programs
a. Tax Reductions/Tax Exemptions
b. Relocation Grants
c. Facilities Grants
d. Employment Grants
e. Training Grants
f. Consulting Grants
g. Preferential Financing for Business Restructuring
h. Interest Grants for the Stabilization of Management Costs
i. ``Special Support'' for Large Corporate Investors
j. Research and Development and Other Technical Support Services
5. Production Facilities Subsidies: Changwon City Subsidy Programs
a. Relocation Grants
b. Employment Grants
c. Training Grants
d. Facilities Grants
e. Grant for ``Moving Metropolitan Area-Base Company to Changwon''
f. Preferential Financing for Land Purchase
g. Tax Reductions and Exemptions
h. Financing for the Stabilization of Business Activities
i. Special Support for Large Companies
6. Gyeongsangnam-do Province and Korea Energy Management Corporation
Energy Savings Subsidies
7. Government of Korea Facilities Investment Support: Article 26 of the
Restriction of Special Taxation Act (RSTA)
8. Government of Korea Targeted Subsidies
a. Research, Supply, or Workforce Development Investment Tax
Deductions for ``New Growth Engines'' Under RSTA Art. 10(1)(1)
b. Research, Supply, or Workforce Development Expense Tax
[[Page 23301]]
Deductions for ``Core Technologies'' Under RSTA Art. 10(1)(2)
c. RSTA Art. 25(2) Tax Deductions for Investments in Energy
Economizing Facilities
d. Targeted Facilities Subsidies through Korea Finance Corporation
(KoFC), KDB, and IBK ``New Growth Engines Industry Fund''
e. Government of Korea Green Fund Subsidies
For a description of each of these programs and a full discussion
of the Department's decision to initiate an investigation of these
programs, see Korea CVD Initiation Checklist.
We are not including in our investigation the following program
alleged to benefit producers/exporters of the subject merchandise in
Korea:
1. Changwon City Provision of Waste Heat Electricity
For further information explaining why the Department is not
initiating an investigation of this program, see CVD Initiation
Checklist.
Respondent Selection
Although the Department normally relies on import data from CBP to
select respondents in countervailing duty investigations, the
Harmonized Tariff Schedule of the United States (HTSUS) categories
under which bottom mount refrigerators may be entered are basket
categories which include many other types of refrigerators and
freezers. Therefore, the CBP data cannot be isolated to identify
imports of subject merchandise during the POI. Accordingly, the
Department must rely on an alternate methodology for respondent
selection.
The petition names two companies as producers and/or exporters in
Korea of bottom mount refrigerators: Samsung Electronics Co., Ltd.
(Samsung) and LG Electronics, Inc. (LG). The petition identifies these
two companies as accounting for virtually all of the imports of bottom
mount refrigerators from Korea. Moreover, we know of no further
exporters or producers of the subject merchandise because, as noted
above, the CBP data does not provide for the isolation of such sales
from the general ``refrigerator-freezer'' or ``household refrigerator''
basket HTSUS categories. Accordingly, the Department is selecting
Samsung and LG as mandatory respondents in this investigation pursuant
to section 777A(e)(1) of the Act. We will consider comments from
interested parties on this respondent selection. Parties wishing to
comment must do so within five days of the publication of this notice
in the Federal Register.
Distribution of Copies of the CVD Petition
In accordance with section 702(b)(4)(A)(i) of the Act, copies of
the public versions of the Korea CVD Petition and amendments thereto
have been provided to the GOK. To the extent practicable, we will
attempt to provide a copy of the public version of the Korea CVD
Petition to each exporter named in the petition, as provided under 19
CFR 351.203(c)(2).
ITC Notification
We have notified the ITC of our initiation, as required by section
702(d) of the Act.
Preliminary Determination by the ITC
The ITC will preliminarily determine, within 45 days after the date
on which the petition was filed, whether there is a reasonable
indication that imports of allegedly subsidized bottom mount
refrigerators from Korea materially injure, or threaten material injury
to, a U.S. industry. See section 703(a)(2) of the Act. A negative ITC
determination will result in the investigation being terminated; see
section 703(a)(1) of the Act. Otherwise, the investigation will proceed
according to statutory and regulatory time limits.
Notification to Interested Parties
Interested parties must submit applications for disclosure under
administrative protective orders in accordance with 19 CFR 351.305. On
January 22, 2008, the Department published Antidumping and
Countervailing Duty Proceedings: Documents Submission Procedures; APO
Procedures (73 FR 3634). Parties wishing to participate in this
investigation should ensure that they meet the requirements of these
procedures (e.g., the filing of letters of appearance as discussed at
19 CFR 351.103(d)).
Any party submitting factual information in an AD/CVD proceeding
must certify to the accuracy and completeness of that information. See
section 782(b) of the Act. Parties are hereby reminded that revised
certification requirements are in effect for company/government
officials as well as their representatives in all segments of any AD/
CVD proceedings initiated on or after March 14, 2011. See Certification
of Factual Information to Import Administration During Antidumping and
Countervailing Duty Proceedings: Interim Final Rule, 76 FR 7491
(February 10, 2011) (Interim Final Rule) amending 19 CFR 351.303(g)(1)
and (2). The formats for the revised certifications are provided at the
end of the Interim Final Rule. The Department intends to reject factual
submissions in any proceeding segments initiated on or after March 14,
2011, if the submitting party does not comply with the revised
certification requirements.
This notice is issued and published pursuant to section 777(i) of
the Act.
Dated: April 19, 2011.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
Appendix
Scope of the 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;
The 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; \1\ and
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\1\ The existence of an interior sub-compartment for ice-making
in the upper-most storage compartment does not render the upper-most
storage compartment a freezer compartment.
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There is at least one freezer or convertible
compartment that is mounted below the 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,
[[Page 23302]]
and 8418.10.0040 of the Harmonized Tariff System of the United
States (HTSUS). Products subject to the 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.
[FR Doc. 2011-10050 Filed 4-25-11; 8:45 am]
BILLING CODE 3510-DS-P