Bottom Mount Combination Refrigerator-Freezers From the Republic of Korea: Initiation of Countervailing Duty Investigation, 23298-23302 [2011-10050]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 76, Number 80 (Tuesday, April 26, 2011)]
[Notices]
[Pages 23298-23302]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-10050]


-----------------------------------------------------------------------

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
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

     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