Notice of Preliminary Determination of Sales at Less Than Fair Value, Postponement of Final Determination, and Negative Critical Circumstances Determination: Bottom Mount Combination Refrigerator-Freezers From the Republic of Korea, 67675-67688 [2011-28415]
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Federal Register / Vol. 76, No. 212 / Wednesday, November 2, 2011 / Notices
ANTIDUMPING DUTY ORDER ON WELDED ASTM–A312 STAINLESS STEEL PIPE FROM TAIWAN—Continued
Weighted average
margin (percent)
Manufacturer/Exporter
Yeun Chyang Industrial Co., Ltd. ..................................................................................................................................................
All Others .......................................................................................................................................................................................
This notice also serves as the only
reminder to parties subject to
administrative protective orders (APO)
of their responsibility concerning the
return or destruction of proprietary
information disclosed under APO in
accordance with 19 CFR 351.305.
Timely notification of the return or
destruction of APO materials or
conversion to judicial protective orders
is hereby requested. Failure to comply
with the regulations and terms of an
APO is a violation which is subject to
sanction.
We are issuing and publishing the
results and notice in accordance with
sections 751(c), 752(c), and 777(i)(1) of
the Act.
Dated: October 26, 2011.
Paul Piquado,
Assistant Secretary for Import
Administration.
[FR Doc. 2011–28425 Filed 11–1–11; 8:45 am]
BILLING CODE 3510–DS–P
DEPARTMENT OF COMMERCE
International Trade Administration
[A–580–865]
Notice of Preliminary Determination of
Sales at Less Than Fair Value,
Postponement of Final Determination,
and Negative Critical Circumstances
Determination: Bottom Mount
Combination Refrigerator-Freezers
From the Republic of Korea
Import Administration,
International Trade Administration,
Department of Commerce.
ACTION: Notice.
AGENCY:
We preliminarily determine
that bottom mount combination
refrigerator-freezers (bottom mount
refrigerators) from the Republic of Korea
(Korea) are being sold, or are likely to
be sold, in the United States at less than
fair value (LTFV), as provided in section
733(b) of the Tariff Act of 1930, as
amended (the Act). In addition, we
preliminarily determine that there is no
reasonable basis to believe or suspect
that critical circumstances exist with
respect to the subject merchandise
exported from Korea.
Interested parties are invited to
comment on this preliminary
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SUMMARY:
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determination. Because we are
postponing the final determination, we
will make our final determination not
later than 135 days after the date of
publication of this preliminary
determination in the Federal Register.
FOR FURTHER INFORMATION CONTACT:
Henry Almond or Elizabeth Eastwood,
Import Administration, International
Trade Administration, U.S. Department
of Commerce, 14th Street and
Constitution Avenue NW., Washington,
DC 20230; telephone: (202) 482–0049 or
(202) 482–3874, respectively.
Preliminary Determination
We preliminarily determine that
bottom mount refrigerators from Korea
are being sold, or are likely to be sold,
in the United States at LTFV, as
provided in section 733(b) of the Act.
The estimated margins of sales at LTFV
are shown in the ‘‘Suspension of
Liquidation’’ section of this notice. In
addition, we preliminarily determine
that there is no reasonable basis to
believe or suspect that critical
circumstances exist with respect to the
subject merchandise exported from
Korea. The critical circumstances
analysis for the preliminary
determination is discussed below under
the section ‘‘Critical Circumstances.’’
Background
Since the initiation of this
investigation on April 19, 2011 (see
Initiation of Antidumping Duty
Investigations: Bottom Mount
Combination Refrigerator-Freezers From
the Republic of Korea and Mexico, 76
FR 23281 (April 26, 2011) (Initiation
Notice)), the following events have
occurred.
On May 2, 2011, Daewoo Electronics
Corporation (Daewoo) identified itself as
an exporter and producer of the subject
merchandise in Korea and requested
that it be designated as a mandatory
respondent. On May 10, 2011, we
included Daewoo as a mandatory
respondent in this investigation. See
Memorandum to James Maeder,
Director, Office 2, from David
Goldberger, Senior International Trade
Analyst, entitled, ‘‘Inclusion of Daewoo
as a Mandatory Respondent,’’ dated May
10, 2011.
On May 13, 2011, the United States
International Trade Commission (ITC)
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31.90
22.92
preliminarily determined that there is a
reasonable indication that imports of
bottom mount refrigerators from Mexico
are materially injuring the United States
industry. See ITC Investigation Nos.
701–TA–477 and 731–TA–1180–1181
(Publication No. 4232).
On May 20, 2011, we issued section
A of the questionnaire (i.e., the section
covering general information) to
Daewoo, LG Electronics, Inc. (LG), and
Samsung Electronics Co., Ltd.
(Samsung). We issued sections B
through E of the questionnaire (i.e., the
sections covering comparison market
sales, U.S. sales, cost of production
(COP) information, and further
manufacturing information,
respectively) to these respondents on
May 25, 2011.
Also, in May 2011, various interested
parties, including Whirlpool
Corporation (hereafter, the petitioner),
submitted comments on the scope of
this and the concurrent antidumping
and countervailing duty investigations
of bottom mount refrigerators from
Mexico and Korea. See ‘‘Scope
Comments’’ section of this notice.
We received responses to section A of
the questionnaire from Daewoo, LG, and
Samsung in June 2011, and to sections
B, C, and D of the questionnaire in July
2011. No responses to section E of the
questionnaire were necessary.
We issued supplemental
questionnaires from July through
September 2011, and we received
responses to these supplemental
questionnaires from July through
October 2011.
On July 29, 2011, the petitioner
alleged that critical circumstances
existed with respect to bottom mount
refrigerators produced and exported
from Korea. On August 10, 2011, we
requested monthly shipment data from
the respondents for the period January
2008 through July 2011 for purposes of
this analysis.
On August 11, 2011, the petitioner
submitted allegations related to
affiliated party transactions and the
major input rule with respect to subject
merchandise produced and exported
from Korea by LG and Samsung.
Also on August 11, 2011, the
petitioner requested that the date for the
issuance of the preliminary
determination in this investigation be
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fully extended pursuant to section
733(c)(1) of the Act and 19 CFR
351.205(e). On August 16, 2011,
pursuant to sections 733(c)(1)(A) and
(c)(2) of the Act and 19 CFR 351.205(f),
the Department postponed the
preliminary determination until no later
than October 26, 2011. See Bottom
Mount Combination RefrigeratorFreezers From the Republic of Korea
and Mexico: Postponement of
Preliminary Determinations of
Antidumping Duty Investigations, 76 FR
52313 (August 22, 2011).
Also on August 16, 2011, LG objected
to the Department’s request for monthly
shipment data, arguing that the
petitioner’s critical circumstances
allegation did not meet the necessary
statutory criteria. We responded to LG’s
objection on August 18, 2011. Daewoo,
LG, and Samsung submitted the
requisite shipment data on August 24,
2011. In their submissions, LG and
Samsung provided comments on how
the Department should analyze whether
critical circumstances exist with respect
to their imports of bottom mount
refrigerators from Korea.
On September 9, 2011, the petitioner
alleged that targeted dumping was
occurring with respect to bottom mount
refrigerators produced and exported
from Korea by LG and Samsung.
On October 5, 2011, we issued an
additional supplemental questionnaire
regarding Samsung’s section D response.
Although the October 14, 2011,
response to this questionnaire was
timely, it was received too late for
consideration in the preliminary
determination. Moreover, subsequent to
this date, we also received various
submissions from interested parties to
this investigation. As with Samsung’s
supplemental questionnaire response,
these submissions were also received
too late for consideration in the
preliminary determination. We will
consider each of these submissions in
our final determination.
On October 6, 2011, we requested
updated shipment data from Daewoo,
LG, and Samsung for consideration in
our critical circumstances analysis for
the final determination.
On October 18, 19, and 21, 2011,
respectively, Daewoo, Samsung, and LG
requested a postponement of the final
determination.
Also on October 21, 2011, we received
an amendment to the petitioner’s
targeted dumping allegation for LG.
Because the petitioner’s original
allegation was based on data which
were superseded by LG’s supplemental
response, we have accepted this
amendment for purposes of the
preliminary determination.
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Postponement of Final Determination
Section 735(a)(2) of the Act provides
that a final determination may be
postponed until not later than 135 days
after the date of the publication of the
preliminary determination if, in the
event of an affirmative preliminary
determination, a request for such
postponement is made by exporters who
account for a significant proportion of
exports of the subject merchandise, or in
the event of a negative preliminary
determination, a request for such
postponement is made by the petitioner.
The Department’s regulations, at 19 CFR
351.210(e)(2), require that requests by
respondents for postponement of a final
determination be accompanied by a
request for extension of provisional
measures from a four-month period to
not more than six months.
Pursuant to section 735(a)(2) of the
Act, on October 18, 19, and 21, 2011,
respectively, Daewoo, Samsung, and LG
requested that, in the event of an
affirmative preliminary determination
in this investigation, the Department
postpone its final determination until
not later than 135 days after the date of
the publication of the preliminary
determination in the Federal Register,
and extend the provisional measures to
not more than six months. In
accordance with 19 CFR 351.210(b),
because (1) our preliminary
determination is affirmative for LG and
Samsung, (2) LG and Samsung account
for a significant proportion of exports of
the subject merchandise, and (3) no
compelling reasons for denial exist, we
are granting LG’s and Samsung’s
requests and are postponing the final
determination until no later than 135
days after the publication of this notice
in the Federal Register. Suspension of
liquidation will be extended
accordingly.
Period of Investigation
The period of investigation (POI) is
January 1, 2010, through December 31,
2010. This period corresponds to the
four most recent fiscal quarters prior to
the month of the filing of the petition
(i.e., March 2011).
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:
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• 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; 1 and
• 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 refrigeratorfreezers 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 refrigeratorfreezers 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.
1 The existence of an interior sub-compartment
for ice-making in an upper-most storage
compartment does not render an upper-most storage
compartment a freezer compartment.
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Scope Comments
In accordance with the preamble to
the Department’s regulations (see
Antidumping Duties; Countervailing
Duties; Final Rule, 62 FR 27296, 27323
(May 19, 1997)), in our Initiation Notice
we set aside a period of time for parties
to raise issues regarding product
coverage, and encouraged all parties to
submit comments within 20 calendar
days of publication of the Initiation
Notice.
On May 9, 2011, we received timely
comments on the scope of the
investigation from Samsung.
Specifically, Samsung requested that the
Department clarify the current
description of a freezer compartment
and exclude a certain type of
refrigerator-freezer from the scope.
These scope requests are as follows:
1. Samsung requested that the
Department use the Association of
Home Appliance Manufacturers
(AHAM) definition to revise the current
description of a freezer compartment;
and
2. Samsung requested that the
Department determine that a certain
type of refrigerator with four
compartments known as ‘‘Quatro
Cooling Refrigerators’’ be excluded from
the scope due to its upper-left nonconvertible freezer compartment.
On May 18, 2011, Daewoo and LG
submitted comments in response to
Samsung’s May 9 submission. In their
comments, Daewoo and LG agreed with
Samsung that the Department should
amend the scope language to use the
AHAM definition. Alternatively, LG
requested that at a minimum the
Department exclude from the scope any
refrigerator, regardless of freezing
capability, that is specifically designed
to store kimchi.
Also on May 18, 2011, as well as on
June 30, 2011, the petitioner submitted
comments objecting to the requests filed
by Samsung and LG, respectively. As
part of these comments, the petitioner
proposed a modification to the scope
language with respect to the positioning
of the freezer in relation to the uppermost compartment. Samsung submitted
rebuttal comments on July 25, 2011.
Based on our analysis of these issues,
we have preliminarily determined that
the scope of this and the concurrent
antidumping and countervailing duty
investigations on bottom mount
refrigerators from Mexico and Korea
remains fundamentally unchanged. We
have not modified the description of a
freezer compartment in the scope of this
investigation to be consistent with the
AHAM definition, nor have we
excluded kimchi refrigerators or Quatro
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Cooling Refrigerators from the scope of
the investigation. However, as suggested
by the petitioner, we have clarified the
scope to eliminate any ambiguity with
respect to the inclusion of Quatro
Cooling Refrigerators in the scope of
investigation.2 See Memorandum to Gary
Taverman, Acting Deputy Assistant
Secretary for AD/CVD Operations, from
James Maeder, Director, Office 2,
entitled, ‘‘Scope Modification
Requests,’’ dated October 26, 2011, for
further discussion.
Facts Available Related to Samsung’s
Sales of Kimchi Refrigerators
The scope of the investigation
includes all bottom mount refrigerators,
including ‘‘kimchi refrigerators,’’ that
meet the scope definition. As noted in
the ‘‘Scope Comments’’ section of this
notice, above, LG argued that the
Department should modify the scope to
exclude kimchi refrigerators. Therefore,
in order to eliminate any confusion with
respect to our reporting requirements, in
June 2011 we clarified the reporting
requirements of the questionnaire to
include a product characteristic to
specifically identify sales of kimchi
refrigerators. While Daewoo and LG
complied with our instructions and
reported their home market sales of
kimchi refrigerators, Samsung did not,
arguing that its kimchi refrigerators did
not fall within the scope. In July 2011,
we instructed Samsung to report its
sales of kimchi refrigerators and, again,
Samsung refused to do so, repeating its
claim that they were out-of-scope
merchandise.
On September 1, 2011, we instructed
Samsung to provide the technical
specifications of its kimchi refrigerator
models demonstrating that they fall
outside the scope definition. At this
time, we once again provided Samsung
the alternative of reporting its sales of
these models. In its September 29, 2011,
response, Samsung continued to
maintain that these models were not in
scope. Nonetheless, instead of providing
the technical specifications to support
its claim, Samsung reported sales of
kimchi refrigerators totaling many
thousands of units, a figure which
represents the vast majority of
Samsung’s home market sales.
On October 5, 2011, the petitioner
provided further data which it states
demonstrate that Samsung’s kimchi
refrigerators are in-scope merchandise.
2 The scope language has been revised as follows:
The two references to ‘‘the upper-most interior
storage compartment(s)’’ have been replaced with
‘‘an upper-most interior storage compartment;’’ and
the two references in the footnote to ‘‘the uppermost storage compartment’’ have been replaced
with ‘‘an upper-most storage compartment.’’
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Samsung eventually elected to report
its sales of kimchi refrigerators, but
because this new information was not
received until the end of September, the
Department did not have time to issue
an associated supplemental
questionnaire. Our initial analysis,
however, indicates that there are serious
problems with the sales data.
Specifically, we have identified
numerous areas of concern, including
the following:
• There are significant
inconsistencies in the methodology
Samsung used to report its rebates,
packing expenses, and indirect selling
expenses between the kimchi sales
databases and its other home market
sales databases;
• Samsung reported many
complicated schedules which include
discrepancies for which Samsung has
provided no explanation;
• There are inconsistencies between
Samsung’s narrative response and its
reported data;
• Samsung reported kimchi
refrigerator-specific rebate programs,
and given Samsung’s reporting issues
with respect to its home market rebates
(see the ‘‘Calculation of Normal Value
Based on Comparison Market Prices’’
section, below), we cannot presume that
these programs are not similarly
deficient;
• Samsung departed from our specific
instructions regarding the reporting of
its control numbers; and
• Samsung did not separately identify
packing expenses for its kimchi
refrigerator models.
In light of these serious concerns, it
became necessary to determine if the
application of facts available was
warranted.
Section 776(a) of the Act provides that
the Department will apply ‘‘facts
otherwise available’’ if necessary
information is not available on the
record or an interested party: (1)
Withholds information that has been
requested by the Department; (2) fails to
provide such information within the
deadlines established, or in the form or
manner requested by the Department,
subject to subsections (c)(1) and (e) of
section 782 of the Act; (3) significantly
impedes a proceeding; or (4) provides
such information, but the information
cannot be verified.
Pursuant to section 776(a)(2)(B) of the
Act, we find that Samsung failed to
provide information in the form and
manner requested by the Department
and that it is appropriate to resort to
facts otherwise available to account for
the unreported information. In selecting
from among the facts otherwise
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available, section 776(b) of the Act
authorizes the Department to use an
adverse inference if the Department
finds that an interested party failed to
cooperate by not acting to the best of its
ability to comply with a request for
information. The legislative history of
the Act also provides guidance by
explaining that adverse inferences are
appropriate ‘‘to ensure that the party
does not obtain a more favorable result
by failing to cooperate than if it had
cooperated fully.’’ See Statement of
Administrative Action, accompanying
the Uruguay Round Agreements Act,
H.R. Doc. No. 103–465 at 870 (1995).
Information used to make an adverse
inference may include such sources as
the petition, other information placed
on the record, or determinations in a
prior proceeding regarding the subject
merchandise. Id. and 19 CFR 351.308(c).
Furthermore, ‘‘affirmative evidence of
bad faith on the part of a respondent is
not required before the Department may
make an adverse inference.’’ See
Antidumping Duties; Countervailing
Duties, 62 FR 27296, 27340 (May 19,
1997); see also Nippon Steel Corp. v.
United States, 337 F.3d 1373, 1383 (Fed.
Cir. 2003) (Nippon).
Based on the information contained in
Samsung’s questionnaire responses, we
find that Samsung’s kimchi refrigerator
sales data are not useable in their
current form. Although, after numerous
requests, this information was
eventually submitted, it was received
too close in time to the preliminary
determination to permit the Department
to issue a supplemental questionnaire to
Samsung to remedy the deficiencies
noted above. Moreover, because
Samsung could have either reported the
information at issue in the form and
manner requested by the Department at
an earlier date in response to the
Department’s prior questionnaires or
provided the technical specifications to
prove its claim that the models in
question were not in-scope
merchandise, and instead failed to do
either, we find that Samsung has failed
to cooperate to the best of its ability
with our requests for information.
Specifically, we find that an adverse
inference is appropriate because
Samsung: (1) Had the necessary
information within its control and did
not report this information; and (2)
failed to put forth the maximum effort
to provide the requested information.
See, e.g., Nippon, 337 F.3d at 1883; and
Notice of Final Determination of Sales
at Less Than Fair Value: Citric Acid and
Certain Citric Salts from Canada, 74 FR
16843, 16844–45 (April 13, 2009). Thus,
for this preliminary determination,
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pursuant to section 776(b) of the Act, we
find that it is appropriate to apply
adverse facts available (AFA) with
respect to Samsung’s U.S. sales either:
(1) Which had as their closest product
comparison a kimchi refrigerator model;
or (2) for which normal value (NV) was
based on constructed value (CV).3
As AFA for the percentage of U.S.
sales meeting the above criteria, we
have preliminarily used the highest
margin calculated for any U.S.
transaction for Samsung, in accordance
with our practice. See, e.g., Notice of
Final Determination of Sales at Less
than Fair Value: Certain Cold-Rolled
Carbon Steel Flat Products From Brazil,
67 FR 62132 (October 3, 2002), and
accompanying issues and Decision
Memorandum at Comment 1; Static
Random Access Memory
Semiconductors From Taiwan; Final
Results of Antidumping Duty New
Shipper Review, 65 FR 12214 (March 8,
2000), and accompanying Issues and
Decision Memorandum at Comment 1;
Notice of Final Determination of Sales
at Less Than Fair Value: Static Random
Access Memory Semiconductors From
Taiwan, 63 FR 8909, 8912 (February 23,
1998); Final Determination of Sales at
Less Than Fair Value; Stainless Steel
Sheet and Strip in Coils From Germany,
64 FR 30710, 30732 (June 8, 1999); and
Notice of Final Determination of Sales
at Less Than Fair Value: Certain Cut-toLength Carbon Steel Plate From South
Africa, 62 FR 61731, 61747 (November
19, 1997). In selecting a facts available
margin, we sought a margin that is
sufficiently adverse so as to effectuate
the statutory purposes of the AFA rule,
which is to induce respondents to
provide the Department with complete
and accurate information in a timely
manner. We also sought a margin that is
rationally related to the transactions to
which the AFA is being applied and
indicative of Samsung’s customary
selling practices. To that end, we
selected the highest margin on an
individual sale in a commercial quantity
that fell within the mainstream of
Samsung’s transactions (i.e.,
transactions that reflect sales of
products that are representative of the
broader range of models used to
determine normal value).
We intend to issue an additional
supplemental questionnaire to Samsung
to allow it to remedy the deficiencies in
the sales data for kimchi model
refrigerators noted above, and we will
consider this information for purposes
3 We find that it is appropriate to base the margin
for those U.S. sales for which NV is based on CV
on AFA because home market sales of kimchi
refrigerators would be used to determine CV profit
and selling expenses.
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of our final determination. However, if
Samsung fails to respond adequately to
this subsequent request for information,
for purposes of the final determination,
we may consider whether total versus
partial AFA is appropriate for Samsung
given the high percentage of
comparisons affected by these
deficiencies. See the Memorandum to
the File from Elizabeth Eastwood,
Senior Analyst, entitled, ‘‘Calculations
Performed for Samsung Electronics
Corporation (Samsung) for the
Preliminary Determination in the
Antidumping Duty Investigation of
Bottom Mount Refrigerators from
Korea’’ (Samsung Calculation Memo),
dated October 26, 2011.
Targeted Dumping Allegations
The statute 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.
On September 9, 2011, the petitioner
submitted allegations of targeted
dumping with respect to LG and
Samsung and asserted that the
Department should apply the averageto-transaction methodology in
calculating the margins for these
respondents. In its allegations, the
petitioner asserted that there are
patterns of U.S. sales prices for
comparable merchandise that differ
significantly among time periods. The
petitioner relied on the Department’s
targeted dumping test 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) (collectively Nails), as applied in
more recent investigations such as
Multilayered Wood Flooring from the
People’s Republic of China: Preliminary
Determination of Sales at Less Than
Fair Value, 76 FR 30656, 30659–60
(May 26, 2011). See the Petitioner’s
Submission of Targeted Dumping
Allegations dated September 9, 2011, at
pages 8–12.
On October 21, 2011, we received an
amendment to the petitioner’s targeted
dumping allegation for LG. In this
amended allegation, the petitioner
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defined the time period over which
targeted dumping occurred as the fourth
calendar quarter of 2010. The
petitioner’s original allegation covered
essentially the same period, but it
defined the fourth quarter by reference
to weeks. As noted above in the
‘‘Background’’ section, because the
petitioner’s original allegation was
based on data which was superseded by
LG’s supplemental response, we have
accepted this amendment for purposes
of the preliminary determination.
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A. Targeted Dumping Test
We conducted time-period targeted
dumping analyses for LG and Samsung
using the methodology we adopted in
Nails and most recently articulated in
Certain Coated Paper Suitable for HighQuality Print Graphics Using Sheet-Fed
Presses From Indonesia: Final
Determination of Sales at Less Than
Fair Value, 75 FR 59223 (September 27,
2010), and accompanying Issues and
Decision Memorandum at Comment 1
(Coated Paper); and Multilayered Wood
Flooring From the Peoples’ Republic of
China: Final Determination of Sales at
Less Than Fair Value, 76 FR 64318
(October 18, 2011) (Wood Flooring), and
accompanying Issues and Decision
Memorandum at Comment 4.
The methodology we employed
involves a two-stage test; the first stage
addresses the pattern requirement and
the second stage addresses the
significant-difference requirement. See
section 777A(d)(1)(B)(i) of the Act,
Nails, Coated Paper, and Wood
Flooring. In this test we made all price
comparisons on the basis of identical
merchandise (i.e., by control number or
CONNUM). We based all of our targeted
dumping calculations on the U.S. net
price which we determined for U.S.
sales by LG and Samsung in our
standard margin calculations. For
further discussion of the test and
results, see Memorandum to the File
from Henry Almond, Senior Analyst,
entitled, ‘‘Calculations Performed for
LGE for the Preliminary Determination
in the Antidumping Duty Investigation
of Bottom Mount Combination
Refrigerator-Freezers from the Republic
of Korea’’ (LG Calculation Memo); and
the Samsung Calculation Memo. As a
result of our analysis, we preliminarily
determine that there is a pattern of U.S.
prices for comparable merchandise that
differs significantly among certain time
periods for LG and Samsung in
accordance with section 777A(d)(1)(B)(i)
of the Act and our current practice as
discussed in Nails, Wood Flooring, and
Coated Paper.
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B. Price Comparison Method
Section 777A(d)(1)(B)(ii) of the Act
states that the Department may compare
the weighted average of the NV to
export prices (EPs) (or constructed
export prices (CEPs)) of individual
transactions for comparable
merchandise if the Department explains
why differences in the patterns of EPs
(or CEPs) cannot be taken into account
using the average-to-average
methodology. As described above, we
preliminarily determine that, with
respect to sales by Samsung and LG, for
certain time periods there was a pattern
of prices that differed significantly.
For both LG and Samsung, we find
that these differences cannot be taken
into account using the average-toaverage methodology because the
average-to-average methodology
conceals differences in the patterns of
prices between the targeted and nontargeted groups by averaging low-priced
sales to the targeted group with highpriced sales to the non-targeted group.
Therefore, for the preliminary
determination, we find that the standard
average-to-average methodology does
not take into account LG’s and
Samsung’s price differences because the
alternative average-to-transaction
methodology yields a material
difference in the margin. Accordingly,
for this preliminary determination we
applied the average-to-transaction
methodology to all U.S. sales made by
LG and Samsung. See the LG
Calculation Memo and the Samsung
Calculation Memo for further
discussion.
Fair Value Comparisons
To determine whether sales of bottom
mount refrigerators from Korea to the
United States were made at LTFV, we
compared the EP or CEP to the NV, as
described in the ‘‘Export Price/
Constructed Export Price’’ and ‘‘Normal
Value’’ sections of this notice, below. In
accordance with section
777A(d)(1)(A)(i) of the Act, we
compared POI weighted-average EPs
and CEPs to weighted-average NVs for
Daewoo, and in accordance with section
777A(d)(1)(B) of the Act, we compared
transaction-specific EPs and CEPs to
weighted-average NVs for LG and
Samsung.
Product Comparisons
In accordance with section 771(16) of
the Act, we considered all products
produced and sold by the respondents
in Korea during the POI that fit the
description in the ‘‘Scope of
Investigation’’ section of this notice to
be foreign like products for purposes of
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determining appropriate product
comparisons to U.S. sales. We compared
U.S. sales to sales made in the home
market, where appropriate. Where there
were no sales of identical merchandise
in the home market made in the
ordinary course of trade to compare to
U.S. sales, we compared U.S. sales to
sales of the most similar foreign like
product made in the ordinary course of
trade. Where there were no sales of
identical or similar merchandise, we
made product comparisons using CV.
In making product comparisons, we
matched foreign like products based on
the physical characteristics reported by
the respondents in the following order
of importance: Completed unit or
subassembly, unit type, calculated
volume, number of compartments,
refrigerator door/drawer configuration,
other external door/drawer
configurations, icemaker and water
dispenser feature, door finish, type of
compressor, number of evaporators,
type of user interface, existence of a
through-the-door feature, existence of an
interior temperature-controlled subcompartment, and existence of thin-wall
insulation panels.
Export Price/Constructed Export Price
For certain U.S. sales made by
Daewoo, LG, and Samsung, we used the
EP methodology, in accordance with
section 772(a) of the Act, because the
subject merchandise was sold directly to
the first unaffiliated purchaser in the
United States before the date of
importation by the producer or exporter
of the subject merchandise outside the
United States, and the use of the CEP
methodology was not otherwise
warranted based on the facts of record.
For the remaining U.S. sales made by
Daewoo, LG, and Samsung, we
calculated CEP in accordance with
section 772(b) of the Act because the
subject merchandise was first sold (or
agreed to be sold) in the United States
after the date of importation by or for
the account of the producer or exporter,
or by a seller affiliated with the
producer or exporter, to a purchaser not
affiliated with the producer or exporter.
A. Daewoo
With respect to EP sales, we based the
starting price on the packed prices to
unaffiliated purchasers in the United
States. We increased the starting price
by the amount of duty drawback
reported by Daewoo. We made
deductions for movement expenses in
accordance with section 772(c)(2)(A) of
the Act; these expenses included, where
appropriate, foreign inland freight,
foreign brokerage and handling, freight
subcontractor service fees, international
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freight, and marine insurance.
Regarding foreign inland freight,
Daewoo used an affiliated company to
arrange delivery of its merchandise to
the United States. Because Daewoo’s
affiliate did not provide the same
service to unaffiliated parties, nor did
Daewoo use unaffiliated companies to
arrange its deliveries, we were unable to
test the arm’s-length nature of the fees
paid by Daewoo. Therefore, we based
these expenses on the affiliate’s costs.
For further discussion, see the
Memorandum to the File from David
Crespo, Analyst, entitled, ‘‘Calculations
Performed for Daewoo Electronics
Corporation for the Preliminary
Determination in the Antidumping Duty
Investigation of Bottom Mount
Combination Refrigerator-Freezers from
the Republic of Korea’’ (Daewoo
Calculation Memo) dated October 26,
2011.
We based CEP on the packed
delivered prices to unaffiliated
purchasers in the United States. We
increased the starting price by the
amount of duty drawback reported by
Daewoo. We made deductions for
movement expenses for Daewoo’s CEP
transactions, as well, in accordance with
section 772(c)(2)(A) of the Act; these
included, where appropriate, foreign
inland freight, foreign brokerage and
handling, freight subcontractor service
fees (adjusted as noted above),
international freight, marine insurance,
U.S. duties, and U.S. brokerage and
handling.
In accordance with section 772(d)(1)
of the Act and 19 CFR 351.402(b), we
deducted those selling expenses
associated with economic activities
occurring in the United States,
including direct selling expenses (i.e.,
imputed credit expenses and
warranties), and indirect selling
expenses. We recalculated Daewoo’s
U.S. credit expenses to base them on its
U.S. affiliate’s revised U.S. dollar
borrowing rate obtained from page 14 of
Daewoo’s October 4, 2011, response. For
further discussion, see the Daewoo
Calculation Memo.
Pursuant to section 772(d)(3) of the
Act, we further reduced the starting
price by an amount for profit to arrive
at CEP. In accordance with section
772(f) of the Act, we calculated the CEP
profit rate using the expenses incurred
by Daewoo on its sales of the subject
merchandise in the United States and
the profit associated with those sales.
B. LG
LG reported certain U.S. sales of
refurbished merchandise. Because these
sales were unusual and represented an
insignificant quantity of total U.S. sales,
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we disregarded them for purposes of our
analysis.
With respect to EP sales, we based the
starting price on the packed prices to
unaffiliated purchasers in the United
States. We increased the starting price
by the amount of billing adjustments
and duty drawback reported by LG. We
made deductions for discounts and
rebates, as appropriate. We also made
deductions for movement expenses in
accordance with section 772(c)(2)(A) of
the Act; these expenses included, where
appropriate, foreign inland freight,
foreign brokerage and handling,
international freight, and marine
insurance. Regarding foreign inland
freight, LG used an affiliated company
to arrange delivery of its merchandise to
the port of exportation. Because LG’s
affiliate did not provide the same
service to unaffiliated parties, nor did
LG use unaffiliated companies for its
deliveries, we were unable to test the
arm’s-length nature of the expenses paid
by LG. Therefore, we based these
expenses on the affiliate’s costs. For
further discussion, see the LG
Calculation Memo dated October 26,
2011.
We based CEP on the packed prices to
unaffiliated purchasers in the United
States. We increased the starting price
by the amount of billing adjustments
and duty drawback reported by LG. We
made deductions for discounts and
rebates, as appropriate.
We made deductions for movement
expenses for LG’s CEP transactions, in
accordance with section 772(c)(2)(A) of
the Act; these included, where
appropriate, foreign inland freight
(adjusted as noted above), foreign
brokerage and handling, international
freight, marine insurance, U.S.
brokerage and handling, U.S.
warehousing, and U.S. inland freight
expenses.
In accordance with section 772(d)(1)
of the Act and 19 CFR 351.402(b), we
deducted those selling expenses
associated with economic activities
occurring in the United States,
including direct selling expenses (i.e.,
imputed credit expenses, bank charges,
advertising expenses, and warranty
expenses), and indirect selling expenses
(including inventory carrying costs and
other indirect selling expenses). We
recalculated LG’s U.S. inventory
carrying costs using the company’s
reported cost of manufacturing (COM),
revised as stated below. For further
discussion, see the ‘‘Cost of Production
Analysis’’ section of the notice.
Pursuant to section 772(d)(3) of the
Act, we further reduced the starting
price by an amount for profit to arrive
at CEP. In accordance with section
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772(f) of the Act, we calculated the CEP
profit rate using the expenses incurred
by LG on its sales of the subject
merchandise in the United States and
the profit associated with those sales.
See the LG Calculation Memo for further
discussion.
D. Samsung
In accordance with the Department’s
policy, Samsung reported the earlier of
the date of invoice or shipment as its
date of sale for both EP and CEP sales
made during the POI. However,
Samsung did not report its actual date
of shipment from the factory, but rather
it reported the bill of lading date.
Samsung’s methodology is not
consistent with the Department’s
practice of using the date of shipment
from the factory as the date of shipment.
See, e.g., Notice of Final Determination
of Sales at Less Than Fair Value:
Narrow Woven Ribbons With Woven
Selvedge From Taiwan, 75 FR 41804
(July 19, 2010), and accompanying
Issues and Decision Memorandum at
Comment 5. Because Samsung did not
provide the number of days between
shipment from the factory and shipment
from the port, we have accepted the
dates reported as facts available for
purposes of the preliminary
determination, pursuant to section
776(A)(2)(B) of the Act. However,
following the issuance of the
preliminary results, we intend to
request that Samsung report its
shipment dates from the factory, as well
as any additional sales of merchandise
shipped from the factory during the POI
but invoiced afterwards. Should
Samsung provide the Department with
that information in a timely fashion, we
intend to use it for purposes of the final
determination.
In addition, Samsung reported certain
U.S. sales of defective merchandise.
Because these sales were unusual and
represented an insignificant quantity of
total U.S. sales, we disregarded them for
purposes of our analysis.
With respect to EP, we based the
starting price on the packed prices to
unaffiliated purchasers in the United
States. We increased the starting price
by the amount of duty drawback
reported by Samsung. We made
deductions for movement expenses in
accordance with section 772(c)(2)(A) of
the Act; these included, where
appropriate, foreign inland freight,
foreign loading expenses, and foreign
brokerage and handling expenses.
Regarding foreign inland freight and
loading expenses, Samsung used an
affiliated company to load the
merchandise into containers and
arrange its delivery to the port of
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exportation. Because Samsung’s affiliate
did not provide the same services to
unaffiliated parties, nor did Samsung
use unaffiliated companies for these
services, we were unable to test the
arm’s-length nature of the fees paid by
Samsung. Therefore, we based these
expenses on the affiliate’s costs. For
further discussion, see the Samsung
Calculation Memo.
We based CEP on the packed prices to
unaffiliated purchasers in the United
States. We increased the starting price
by the amount of billing adjustments
and duty drawback reported by
Samsung. We made deductions for
discounts and rebates, as appropriate.
We reclassified certain early payment
‘‘rebates’’ as discounts because these
amounts were established in accordance
with Samsung’s normal payment terms
set forth on the invoice.
Regarding Samsung’s remaining
rebates, in a supplemental questionnaire
dated September 1, 2011, we instructed
Samsung to report its rebates on as
customer-specific, product-specific and
time period-specific basis as possible.
However, Samsung declined to report
its U.S. rebates as instructed. While
Samsung reported its U.S. rebates on a
customer-specific basis, based on
information reported in Samsung’s
supplemental questionnaire responses,
we believe that it is possible for
Samsung to report certain rebates (i.e.,
REBATE3U and REBATE4U) on a
product-specific and possibly a time
period-specific basis, as well.4
Therefore, pursuant to section
776(a)(2)(B) of the Act, we find that
Samsung failed to provide information
in the form and manner requested by
the Department and that it is
appropriate to resort to facts otherwise
available to account for the unreported
information. Moreover, we find that,
pursuant to section 776(b) of the Act, an
adverse inference is appropriate
because: (1) Samsung had the necessary
information within its control and did
not report this information; and (2) it
failed to put forth the maximum effort
to provide the requested information.
Therefore, for this preliminary
determination, pursuant to section
776(b) of the Act, we find that it is
appropriate to apply AFA with respect
to these rebates. Specifically, as AFA,
we recalculated both of these rebates by
assigning the highest customer-specific
rebate percentage reported for each
rebate program to all POI sales that were
eligible for a rebate under that particular
rebate program. We intend to request
additional information concerning
4 See, e.g., Exhibit 12 of Samsung’s September 29,
2011, supplemental questionnaire response.
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Samsung’s rebate programs, as well as
its rebate reporting methodologies, prior
to verification for consideration in the
final determination.
We made deductions for movement
expenses for Samsung’s CEP
transactions, in accordance with section
772(c)(2)(A) of the Act; these included,
where appropriate, foreign inland
freight, foreign loading expenses,
foreign brokerage and handling
expenses, ocean freight, marine
insurance, U.S. customs duties
(including merchandise processing fees
and customs broker fees), U.S.
warehousing expenses, U.S. inland
insurance expenses, and U.S. inland
freight expenses. Regarding foreign
inland freight, foreign loading expenses,
and ocean freight, Samsung used the
affiliated company referenced above to
provide the associated freight services.
Therefore, we adjusted the freight
expenses reported for CEP sales in the
same manner as was done for EP sales.
In accordance with section 772(d)(1)
of the Act and 19 CFR 351.402(b), we
deducted those selling expenses
associated with economic activities
occurring in the United States,
including direct selling expenses (i.e.,
imputed credit expenses, advertising
expenses, bank charges, and warranty
expenses), and indirect selling expenses
(including inventory carrying costs and
other indirect selling expenses).
Regarding credit expenses, Samsung
reported the dates that its customers
paid for the merchandise based on the
payment terms of each sale; however,
documentation on the record shows that
payment may occur after this date.
Because Samsung did not report actual
payment dates for its U.S. sales and its
reported methodology was inaccurate
based on record evidence, pursuant to
section 776(a)(2)(B) of the Act, as facts
available, we increased Samsung’s
credit period by the additional time
between the end of the payment terms
and the actual payment for the sale for
which Samsung provided this
information, and we recalculated credit
expenses using this revised information.
For further discussion, see the Samsung
Calculation Memo.
Regarding indirect selling expenses,
we revised the calculation ratio for
Samsung’s U.S. affiliate to remove
certain offsets which were not
adequately substantiated in Samsung’s
response. We also recalculated
Samsung’s U.S. inventory carrying costs
using the company’s reported COM,
revised as stated below. For further
discussion, see the ‘‘Cost of Production
Analysis’’ section of the notice and the
Samsung Calculation Memo.
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67681
Pursuant to section 772(d)(3) of the
Act, we further reduced the starting
price by an amount for profit to arrive
at CEP. In accordance with section
772(f) of the Act, we calculated the CEP
profit rate using the expenses incurred
by Samsung and its affiliate on their
sales of the subject merchandise in the
United States and the profit associated
with those sales. See the Samsung
Calculation Memo for further
discussion.
Normal Value
A. Home Market Viability
In order to determine whether there is
a sufficient volume of sales in the home
market to serve as a viable basis for
calculating NV (i.e., the aggregate
volume of home market sales of the
foreign like product is equal to or
greater than five percent of the aggregate
volume of U.S. sales), we compared
each respondent’s volume of home
market sales of the foreign like product
to the volume of U.S. sales of the subject
merchandise, in accordance with
sections 773(a)(1)(A) and (B) of the Act.
In this investigation, we determined
that Daewoo’s, LG’s, and Samsung’s
aggregate volume of home market sales
of the foreign like product was greater
than five percent of the aggregate
volume of U.S. sales of the subject
merchandise. Therefore, we used home
market sales as the basis for NV in
accordance with section 773(a)(1)(B) of
the Act.
B. Affiliated Party Transactions and
Arm’s-Length Test
During the POI, Daewoo, LG, and
Samsung sold foreign like product to
affiliated customers. To test whether the
sales made by Daewoo and certain sales
by Samsung were made at arm’s-length
prices, we compared, on a productspecific basis, the starting prices of sales
to affiliated and unaffiliated customers,
net of all applicable billing adjustments,
discounts and rebates, movements
charges, direct selling expenses and
packing expenses. Where the price to
the affiliated party was, on average,
within a range of 98 to 102 percent of
the price of the same or comparable
merchandise sold to unaffiliated parties,
we determined that sales made to the
affiliated party were at arm’s-length. See
19 CFR 351.403(c); see also Stainless
Steel Sheet and Strip in Coils From
Japan: Preliminary Results of
Antidumping Duty Administrative
Review, 74 FR 39615 (August 7, 2009),
unchanged in Stainless Steel Sheet and
Strip in Coils From Japan: Final Results
of Antidumping Duty Administrative
Review, 75 FR 6631 (February 10, 2010).
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Sales to affiliated customers in the home
market that were not made at arm’slength prices were excluded from our
analysis because we considered them to
be outside the ordinary course of trade.
See section 771(15) of the Act and 19
CFR 351.102(b)(35).
Because sales of foreign like product
to certain of Samsung’s affiliated
resellers failed the arm’s length test,
Samsung reported its home market sales
by these resellers. Therefore, we used
Samsung’s reported downstream home
market sales data for all affiliates failing
the arm’s length test in our calculations
for the preliminary determination.
Where sales to one or more affiliates
passed the arm’s length test, we
included these sales in our analysis,
rather than the affiliate’s downstream
sales.
With respect to LG, this respondent
reported downstream sales by its
affiliated reseller, rather than both sales
to the affiliate and the affiliate’s
downstream sales. Therefore, we used
the downstream sales in our analysis for
purposes of the preliminary
determination.
C. Level of Trade
Section 773(a)(1)(B)(i) of the Act
states that, to the extent practicable, the
Department will calculate NV based on
sales at the same level of trade (LOT) as
the EP or CEP. Sales are made at
different LOTs if they are made at
different marketing stages (or their
equivalent). See 19 CFR 351.412(c)(2).
Substantial differences in selling
activities are a necessary, but not
sufficient, condition for determining
that there is a difference in the stages of
marketing. Id; see also Certain Orange
Juice From Brazil: Final Results of
Antidumping Duty Administrative
Review and Notice of Intent Not To
Revoke Antidumping Duty Order in
Part, 75 FR 50999, 51001 (August 18,
2010), and accompanying Issues and
Decision Memorandum at Comment 7
(OJ from Brazil). In order to determine
whether the comparison market sales
were at different stages in the marketing
process than the U.S. sales, we reviewed
the distribution system in each market
(i.e., the chain of distribution),
including selling functions, class of
customer (customer category), and the
level of selling expenses for each type
of sale.
Pursuant to section 773(a)(1)(B)(i) of
the Act, in identifying LOTs for EP and
comparison market sales (i.e., NV based
on either home market or third country
prices),5 we consider the starting prices
5 Where NV is based on CV, we determine the NV
LOT based on the LOT of the sales from which we
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before any adjustments. For CEP sales,
we consider only the selling activities
reflected in the price after the deduction
of expenses and profit under section
772(d) of the Act. See Micron Tech., Inc.
v. United States, 243 F.3d 1301, 1314–
16 (Fed. Cir. 2001).
When the Department is unable to
match U.S. sales of the foreign like
product in the comparison market at the
same LOT as the EP or CEP, the
Department may compare the U.S. sale
to sales at a different LOT in the
comparison market. In comparing EP or
CEP sales at a different LOT in the
comparison market, where available
data make it possible, we make an LOT
adjustment under section 773(a)(7)(A) of
the Act. Finally, for CEP sales only, if
the NV LOT is at a more advanced stage
of distribution than the LOT of the CEP
and there is no basis for determining
whether the difference in LOTs between
NV and CEP affects price comparability
(i.e., no LOT adjustment was possible),
the Department shall grant a CEP offset,
as provided in section 773(a)(7)(B) of
the Act. See, e.g., OJ from Brazil, 75 FR
at 51001.
In this investigation, we obtained
information from Daewoo, LG, and
Samsung regarding the marketing stages
involved in making the reported home
market and U.S. sales, including a
description of the selling activities
performed by each respondent for each
channel of distribution. Companyspecific LOT findings are summarized
below.
Daewoo
Daewoo reported that it made EP and
CEP sales through a single channel of
distribution (i.e., sales to distributors),
and performed the following selling
functions for sales to U.S. customers:
Sales forecasting, order input/
processing, freight and delivery
services, warranty services, and
packing. These selling activities can be
generally grouped into four selling
function categories for analysis: (1)
Sales and marketing; (2) freight and
delivery services; (3) inventory
maintenance and warehousing; and (4)
warranty and technical support.
Accordingly, based on the selling
function categories, we find that
Daewoo performed sales and marketing,
freight and delivery services, and
warranty and technical support for U.S.
sales. Because all sales in the United
States are made through a single
distribution channel (i.e., sales to
distributors) and the selling activities to
Daewoo’s customers did not vary within
derive selling expenses, general and administrative
(G&A) expenses, and profit for CV, where possible.
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this channel, we preliminarily
determine that there is one LOT in the
U.S. market.
With respect to the home market,
Daewoo reported that it made sales to
retailers and end users. Daewoo
reported that its home market sales were
made through a single channel of
distribution and that it performed the
following selling functions for sales to
all home market customers: Sales
forecasting, strategic/economic
planning, personnel training/exchange,
engineering services, market research,
sales promotion, advertising, order
input/processing, technical assistance,
direct sales personnel, sales/marketing,
freight and delivery services, inventory
maintenance, warranty services, and
packing. Additionally, for sales to
retailers, Daewoo also provided cash
discounts and distributor/dealer
training. These selling activities can be
generally grouped into four selling
function categories for analysis: (1)
Sales and marketing; (2) freight and
delivery services; (3) inventory
maintenance and warehousing; and (4)
warranty and technical support.
Accordingly, we find that Daewoo
performed sales and marketing, freight
and delivery services, inventory
maintenance and warehousing, and
warranty and technical support at the
same relative level of intensity for all
customers in the home market. Because
all sales in the home market sales are
made through a single distribution
channel and the selling activities to
Daewoo’s customers did not vary
significantly within this channel, we
preliminarily determine that there is
one LOT in the home market for
Daewoo.
Finally, we compared the U.S. LOT to
the home market LOT and found that
the selling functions Daewoo performed
for home market customers are more
advanced than those performed for its
U.S. customers. This difference is
sufficient to determine that the U.S.
LOT is different from the home market
LOT. Therefore, based on the totality of
the facts and circumstances, we
preliminarily determine that sales to the
home market during the POI were made
at a different LOT than sales to the
United States. Additionally, because the
home market LOT is at a more advanced
stage of distribution than Daewoo’s U.S.
LOT and no LOT adjustment is possible,
a CEP offset is warranted.
LG
LG reported that it made U.S. sales
through three channels of distribution
(i.e., direct EP sales to original
equipment manufacturer (OEM)
customers, CEP sales to OEM customers,
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and CEP sales out of inventory of LG
branded products). For all three
channels of distribution, LG reported
that it performed the following selling
functions in Korea for sales to U.S.
customers: Sales and marketing support,
market research, advertising, order
processing, direct sales personnel,
freight and delivery services, warranty
and after sales services, and packing.
These selling activities can be generally
grouped into four selling function
categories for analysis: (1) Sales and
marketing; (2) freight and delivery
services; (3) inventory maintenance and
warehousing; and (4) warranty and
technical support. Accordingly, based
on the selling function categories, we
find that LG performed sales and
marketing, freight and delivery services,
and warranty and technical support for
U.S. sales. Although LG reported sales
through three different channels of
distribution, because the selling
functions performed by LG in Korea do
not differ between channels we
preliminarily determine that there is
one LOT in the U.S. market.
With respect to the home market, LG
reported that it also made sales through
three channels of distribution (i.e., sales
to construction companies, sales to
unaffiliated retailers, and sales to
unaffiliated retailers for which LG was
responsible for delivery and installation
at the end user’s residence).
Additionally, LG reported a fourth
channel of distribution for sales made to
unaffiliated end user customers by its
affiliated retailer, HiPlaza.
LG reported that it performed the
following selling functions for sales to
all home market customers: Sales
forecasting, product development/
market research, advertising, sales
promotion, packing, inventory
maintenance, order input, direct sales
personnel/sales support, warranty
services, payment of commissions, and
arrangement of freight and delivery. In
addition to these activities, LG reported
that its affiliated retailer maintained an
extensive retail presence in Korea
during the POI and performed the
following additional selling functions
for its sales: Sales forecasting,
advertising, sales promotion, order
input, direct sales personnel/sales
support, and the payment of
commissions.
These selling activities can be
generally grouped into four selling
function categories for analysis: (1)
Sales and marketing; (2) freight and
delivery services; (3) inventory
maintenance and warehousing; and (4)
warranty and technical support.
Accordingly, we find that LG performed
sales and marketing, freight and
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delivery services, and inventory
maintenance and warehousing at the
same relative level of intensity for three
of its reported sales channels in the
home market. Regarding sales made by
HiPlaza, we find that it also performed
substantial sales and marketing
activities for sales to its unaffiliated
customers. These activities are sufficient
to determine that the sales made by
HiPlaza were at a more advanced level
of trade than those made by LG.
Accordingly, based on the totality of the
facts and circumstances, we
preliminarily determine that LG made
sales at two levels of trade in the home
market.
Finally, we compared the U.S. LOT to
the home market LOTs and found that
the selling functions LG performed for
home market customers (at both home
market LOTs) are more advanced than
those performed for its U.S. customers.
This difference is sufficient to
determine that LG’s U.S. LOT is
different from the home market LOTs.
Therefore, based on the totality of the
facts and circumstances, we
preliminarily determine that sales to the
home market during the POI were made
at different LOTs than sales to the
United States. Additionally, because the
home market LOTs are at a more
advanced stage of distribution than LG’s
U.S. LOT and no LOT adjustment is
possible, a CEP offset is warranted.
Samsung
Samsung reported that it made EP and
CEP sales through two channels of
distribution (i.e., direct sales to
unaffiliated customers and CEP sales
out of inventory). Samsung reported that
it packed subject merchandise in Korea
for sales to both its EP and CEP
customers. In addition, Samsung
reported that it performed sales/
marketing support and market research
for its CEP sales, while it performed
order input/processing for its EP sales.
Moreover, Samsung sold subject
merchandise to its U.S. affiliate during
the POI (and thus it processed orders for
CEP sales), and the sales listing shows
that Samsung delivered subject
merchandise to U.S. customers. These
selling activities can be generally
grouped into four selling function
categories for analysis: (1) Sales and
marketing; (2) freight and delivery
services; (3) inventory maintenance and
warehousing; and (4) warranty and
technical support. Accordingly, based
on the selling function categories, we
find that Samsung performed freight
and delivery and sales and marketing
activities for U.S. sales. Further, while
Samsung reported sales through two
different channels of distribution,
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because the selling functions performed
by Samsung in Korea do not differ
significantly between channels we
preliminarily determine that there is
one LOT in the U.S. market.
With respect to the home market,
Samsung reported that it made sales
through two channels of distribution
(i.e., sales to unaffiliated customers and
sales to affiliated resellers).
Additionally, Samsung reported a third
channel of distribution for sales made to
unaffiliated end users by its affiliated
resellers. For its sales, Samsung
reported that it performed the following
selling functions for sales to all home
market customers: Sales forecasting,
strategic/economic planning, personnel
training/exchange, provision of
engineering services, advertising,
distributor/dealer training, packing,
inventory maintenance, order input/
processing, employment of direct sales
personnel, sales/marketing support,
market research, technical assistance,
provision of rebates and cash discounts,
payment of commissions, provision of
warranty services, provision of
guarantees, provision of after-sales
services, and provision of freight and
delivery services. In addition to these
activities, Samsung reported that its
affiliated resellers maintained an
extensive retail presence in Korea
during the POI and performed the
following additional selling functions
for sales to the unaffiliated end users:
Sales forecasting, strategic/economic
planning, personnel training/exchange,
advertising, sales promotion, inventory
maintenance, order input/processing,
employment of direct sales personnel,
sales/marketing support, market
research, provision of after-sales
services, and provision of freight and
delivery services.
These selling activities can be
generally grouped into four selling
function categories for analysis: (1)
Sales and marketing; (2) freight and
delivery services; (3) inventory
maintenance and warehousing; and (4)
warranty and technical support.
Accordingly, we find that Samsung
performed sales and marketing, freight
and delivery services, inventory
maintenance and warehousing, and
warranty and technical support at the
same relative level of intensity for both
of its reported sales channels in the
home market. Regarding sales made by
Samsung’s affiliated resellers, we find
that the affiliated resellers performed
sales and marketing, freight and
delivery services, and inventory
maintenance and warehousing for sales
to its unaffiliated customers. The
additional selling functions performed
by the affiliated resellers are sufficient
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to determine that the affiliated resellers’
home market sales were at a more
advanced level of trade than those home
market sales made by Samsung.
Accordingly, based on the totality of the
facts and circumstances, we
preliminarily determine that Samsung
made sales at two LOTs in the home
market.
Finally, we compared the U.S. LOT to
the home market LOTs and found that
the selling functions Samsung
performed for home market customers
(in both home market LOTs) are more
advanced than those performed for its
U.S. customers. This difference is
sufficient to determine that the U.S.
LOT is different from either of the home
market LOTs. Therefore, based on the
totality of the facts and circumstances,
we preliminarily determine that sales to
the home market during the POI were
made at different LOTs than sales to the
United States. Additionally, because
Samsung’s home market LOTs are at a
more advanced stage of distribution
than its U.S. LOT and no LOT
adjustment is possible, a CEP offset is
warranted.
D. Cost of Production Analysis
Based on our analysis of an allegation
contained in the petition, we found that
there were reasonable grounds to
believe or suspect that Daewoo’s, LG’s,
and Samsung’s sales of bottom mount
refrigerators in the home market were
made at prices below their COP.
Accordingly, pursuant to section 773(b)
of the Act, we initiated a country-wide
sales-below-cost investigation to
determine whether Daewoo’s, LG’s, and
Samsung’s sales were made at prices
below their respective COPs.
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1. Calculation of COP
In accordance with section 773(b)(3)
of the Act, we calculated COP based on
the sum of the cost of materials and
fabrication for the foreign like product,
plus an amount for G&A, interest
expenses, and home market packing
costs. See ‘‘Test of Home Market Sales
Prices’’ section below for treatment of
home market selling expenses. Based on
the review of record evidence, none of
the respondents appeared to experience
significant changes in the cost of
manufacturing during the POI.
Therefore, we followed our normal
methodology of calculating an annual
weighted-average cost.
We relied on the COP data submitted
by Daewoo, LG, and Samsung. For LG
and Samsung, we made the following
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adjustments to the companies’ COP
data: 6
A. LG
• We analyzed LG’s transactions with
certain affiliated parties in accordance
with section 773(f)(2) of the Act (the
transactions disregarded rule) to
determine whether the prices paid for
the inputs used in the production of the
merchandise under consideration reflect
arm’s-length prices. Based on our
analysis, we found that the sum of the
extended weighted-average prices paid
by LG for inputs purchased from its
affiliate LG Chemical was less than the
sum of the extended weighted-average
market prices. As such, we increased
LG’s reported COM to reflect market
prices for the input supplied by LG
Chemical.
• We revised LG’s reported R&D
expense ratio for the home appliance
division to exclude internal transfers
from the denominator of the ratio.
• We also revised the denominator of
LG’s common R&D expense ratio to
reflect LG’s unconsolidated cost of sales
(COS) rather than consolidated COS.
• We revised the denominator of LG’s
G&A expense ratio to exclude
unconsolidated scrap offsets and
packing expenses.
See Memorandum to Neal Halper
from Heidi Shriefer entitled, ‘‘Cost of
Production and Constructed Value
Calculation Adjustments for the
Preliminary Determination—LG
Electronics Inc. and LG Electronics
USA, Inc.,’’ dated October 26, 2011.
B. Samsung
• We analyzed Samsung’s
transactions with certain affiliated
parties in accordance with the
transactions disregarded rule to
determine whether the prices paid for
the inputs used in the production of the
merchandise under consideration reflect
arm’s-length prices. Based on our
analysis, we found that the sum of the
extended weighted-average prices paid
by Samsung Gwangju Electronics Co.,
Ltd. (Samsung Gwangju), the producer
of the merchandise under consideration,
for inputs purchased from an affiliated
party was less than the sum of the
extended weighted-average market
prices. As such, we increased Samsung
Gwangju’s reported COM to reflect
6 We have preliminarily determined that a portion
of LG’s and Samsung’s home appliance research
and development (R&D) costs benefit the operations
in Mexico. As a result, these respondents’
submitted R&D costs allocated to Korea should be
adjusted downward. The information needed to
make this adjustment is not currently on the record;
however, we intend to request the necessary
information for consideration in the final
determination.
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market prices for inputs supplied by
these affiliated parties.
• We reclassified the offset reported
for Samsung Gwangju’s sales of scrap
from Samsung Gwangju’s G&A expenses
to the COM. We recalculated Samsung’s
G&A expenses, originally calculated by
Samsung based on the income
statements of its Digital Appliance
Division, based on Samsung’s fiscal year
2010 audited unconsolidated financial
statements.
• We revised the costs reported in
Samsung’s October 3, 2011, COP data
file to exclude packing expenses. We
also revised the calculations of Samsung
Gwangju’s R&D and G&A expense ratios,
used to calculate the per-unit expenses,
to exclude packing costs from the
denominators of those ratios. Likewise,
we revised the denominators of
Samsung’s R&D and G&A expense ratios
to exclude packing expenses.
See Memorandum to Neal Halper from
LaVonne Clark entitled, ‘‘Cost of
Production and Constructed Value
Calculation Adjustments for the
Preliminary Determination—Samsung
Electronic Co., Ltd. and Samsung
Electronics America, Inc.,’’ dated
October 26, 2011.
2. Test of Home Market Sales Prices
On a product-specific basis, we
compared the adjusted weightedaverage COP to the home market sales
of the foreign like product, as required
under section 773(b) of the Act, in order
to determine whether the sale prices
were below the COP. The prices were
exclusive of any applicable billing
adjustments, discounts and rebates,
movement charges, and actual direct
and indirect selling expenses. In
determining whether to disregard home
market sales made at prices less than
their COP, we examined, in accordance
with sections 773(b)(1)(A) and (B) of the
Act, whether such sales were made: (1)
Within an extended period of time in
substantial quantities, and (2) at prices
which permitted the recovery of all
costs within a reasonable period of time.
3. Results of the COP Test
Pursuant to section 773(b)(2)(C) of the
Act, where less than 20 percent of the
respondent’s sales of a given product
during the POI are at prices less than the
COP, we do not disregard any belowcost sales of that product, because we
determine that in such instances the
below-cost sales were not made in
substantial quantities. Where 20 percent
or more of the respondent’s sales of a
given product during the POI are at
prices less than the COP, we disregard
those sales of that product, because we
determine that in such instances the
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below-cost sales represent substantial
quantities within an extended period of
time, in accordance with section
773(b)(1)(A) of the Act. In such cases,
we also determine whether such sales
were made at prices which would not
permit recovery of all costs within a
reasonable period of time, in accordance
with section 773(b)(1)(B) of the Act.
We found that, for certain specific
products, more than 20 percent of
Daewoo’s, LG’s, and Samsung’s home
market sales during the POI were at
prices less than the COP and, in
addition, the below-cost sales did not
provide for the recovery of costs within
a reasonable period of time. We
therefore excluded these sales and used
the remaining sales, if any, as the basis
for determining NV, in accordance with
section 773(b)(1) of the Act.
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D. Calculation of Normal Value Based
on Comparison Market Prices
LG
We calculated NV based on delivered
prices to unaffiliated customers. We
made deductions, where appropriate,
from the starting price for discounts and
rebates. We also made deductions for
movement expenses, including inland
freight, handling, and warehousing,
under section 773(a)(6)(B)(ii) of the Act.
Regarding inland freight, handling, and
warehousing, LG paid an affiliated
company to arrange unaffiliated
subcontractors to perform these
services. Because LG’s affiliate did not
provide the same service to unaffiliated
parties, nor did LG use unaffiliated
companies for these services, we were
unable to test the arm’s-length nature of
the expenses paid by LG. Therefore, we
based these expenses on the affiliate’s
costs. See the LG Calculation Memo for
further discussion.
For comparisons to EP sales, we made
adjustments under section
773(a)(6)(C)(iii) of the Act and 19 CFR
351.410 for differences in circumstances
of sale for direct selling expenses
(including bank charges, direct
advertising and promotional expenses,
and warranties), and commissions.
Regarding advertising expenses, LG
characterized certain home market
advertising expenses as being direct in
nature; however, we have reclassified
these expenses as indirect because they
are not product-specific (i.e., they relate
to a broader class of merchandise than
is covered by this investigation). See the
LG Calculation Memo for further
discussion.
For comparisons to CEP sales, in
accordance with section 773(a)(6)(C)(iii)
of the Act and 19 CFR 351.410, we
deducted from NV direct selling
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expenses (i.e., imputed credit expenses,
bank charges, direct advertising and
promotional expenses, and warranties).
For all price-to-price comparisons,
where commissions were granted in the
comparison market but not in the U.S.
market, we made an upward adjustment
to NV for the lesser of: (1) The amount
of commission paid in the comparison
market; or (2) the amount of indirect
selling expenses (including inventory
carrying costs) incurred in the
comparison market. See 19 CFR
351.410(e).
Furthermore, we made adjustments
for differences in costs attributable to
differences in the physical
characteristics of the merchandise in
accordance with section 773(a)(6)(C)(ii)
of the Act and 19 CFR 351.411. We also
deducted home market packing costs
and added U.S. packing costs in
accordance with section 773(a)(6)(A)
and (B) of the Act.
Finally, for comparisons to CEP sales,
we made a CEP offset pursuant to
section 773(a)(7)(B) of the Act and 19
CFR 351.412(f). We calculated the CEP
offset as the lesser of the indirect selling
expenses on the home market sales or
the indirect selling expenses deducted
from the starting price in calculating
CEP. We reclassified certain advertising
expenses as indirect, as discussed
above. We also reclassified certain
expenses incurred by LG’s affiliated
retailer in maintaining its retail
presence in the Korean market as
indirect selling expenses because these
expenses related to rent, sales staff
salaries, and other overhead expenses
and did not result from or bear a direct
relationship to particular sales. In
addition, we recalculated LG’s home
market inventory carrying costs using
the company’s reported COM, revised as
stated above. See the LG Calculation
Memo for further discussion.
Samsung
We calculated NV based on delivered
prices to unaffiliated customers and/or
prices to affiliated customers that we
determined to be at arm’s-length. We
made deductions, where appropriate,
from the starting price for rebates and
billing adjustments. We disallowed
Samsung’s reported early payment
discounts because Samsung failed to
calculate these discounts on a
transaction-specific basis as instructed
by the Department. We also disallowed
certain rebates which were not
calculated in accordance with the stated
rebate program terms.
Finally, regarding an additional rebate
program, in a supplemental
questionnaire dated September 20,
2011, we instructed Samsung to report
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67685
this rebate on a customer-specific,
model-specific, and time-period-specific
basis and it failed to do so. Based on
information reported in Samsung’s
supplemental questionnaire responses,
we believe that it is possible for
Samsung to report these rebates on a
customer-, model-, and time-periodspecific basis. Therefore, as with U.S.
rebates, pursuant to section 776(a)(2)(B)
of the Act, we find that Samsung failed
to provide information in the form and
manner requested by the Department
and that it is appropriate to resort to
facts otherwise available to account for
the unreported information. Moreover,
we find that an adverse inference,
pursuant to section 776(b) of the Act, is
appropriate because: (1) Samsung had
the necessary information within its
control and did not report this
information; and (2) it failed to put forth
the maximum effort to provide the
requested information. Therefore, for
this preliminary determination, we are
applying AFA with respect to these
rebates. As AFA, we based the amounts
of this additional rebate program on the
lowest percentage calculated for any
home market customer. We intend to
request additional information
concerning Samsung’s rebate programs,
as well as its rebate reporting
methodologies, prior to verification for
consideration in the final determination.
See the Samsung Calculation Memo for
further discussion.
We also made deductions for
movement expenses, including inland
freight and warehousing expenses,
under section 773(a)(6)(B)(ii) of the Act.
Regarding inland freight and
warehousing expenses, these expenses
were charged by an affiliated company
in the home market. Because Samsung’s
affiliate did not provide the same
service to unaffiliated parties, nor did
Samsung use unaffiliated companies for
these services, we were unable to test
the arm’s-length nature of the expenses
paid by Samsung. Therefore, we based
these expenses on the affiliate’s costs.
Finally with respect to inland freight,
we reclassified certain expenses as
indirect selling expenses because they
were related to merchandise returns.
See the Samsung Calculation Memo for
further discussion.
For comparisons to EP sales, we made
adjustments under section
773(a)(6)(C)(iii) of the Act and 19 CFR
351.410 for differences in circumstances
of sale for credit expenses, bank charges,
and warranties. We recalculated EP
credit expenses to base the credit period
on the payment terms offered to the
customer because Samsung’s
explanation of its payment date was not
consistent with the payment terms.
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emcdonald on DSK5VPTVN1PROD with NOTICES
Regarding warranties, we reclassified a
portion of warranty expenses as indirect
because they appeared to be unrelated
to materials or labor expenses. Further,
we based these expenses on the actual
cost of Samsung’s affiliated warranty
provider because Samsung was unable
to demonstrate that the expenses paid to
the affiliate were at arm’s length. For
further discussion, see the Samsung
Calculation Memo.
For comparisons to CEP sales, in
accordance with section 773(a)(6)(C)(iii)
of the Act and 19 CFR 351.410, we
deducted from NV direct selling
expenses (i.e., imputed credit expenses
and warranties (adjusted as noted
above)).
For all price-to-price comparisons, we
made adjustments for differences in
costs attributable to differences in the
physical characteristics of the
merchandise in accordance with section
773(a)(6)(C)(ii) of the Act and 19 CFR
351.411. We also deducted home market
packing costs and added U.S. packing
costs in accordance with section
773(a)(6)(A) and (B) of the Act. We
based the packing expenses for
downstream sales on the amounts
reported for Samsung’s direct home
market sales because Samsung did not
separately report these expenses in its
downstream sales database.
Finally, for comparisons to CEP sales,
we made a CEP offset pursuant to
section 773(a)(7)(B) of the Act and 19
CFR 351.412(f). We calculated the CEP
offset as the lesser of the indirect selling
expenses on the home market sales or
the indirect selling expenses deducted
from the starting price in calculating
CEP. We reclassified home market
advertising expenses as indirect because
they were brand-, but not product-,
specific. We also recalculated
Samsung’s home market inventory
carrying costs using the company’s
reported COM, revised as stated above.
For further discussion, see the ‘‘Cost of
Production Analysis’’ section of the
notice.
E. Calculation of Normal Value Based
on Constructed Value
In accordance with section 773(a)(4)
of the Act, for all of Daewoo’s sales and
for certain refrigerator models sold by
LG, we based NV on CV because there
were no sales in the home market in the
ordinary course of trade that could be
reasonably compared to those U.S. sales.
In accordance with section 773(e) of
the Act, we calculated CV based on the
sum of the respondents’ cost of
materials and fabrication for the foreign
like product, plus amounts for selling,
general, and administrative expenses,
profit, and U.S. packing costs. We
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calculated the cost of materials and
fabrication, G&A and interest based on
the methodology described in the
‘‘Calculation of COP’’ section of this
notice.
For comparisons to EP, we made a
circumstance-of-sale adjustment by
deducting home market direct selling
expenses and adding U.S. direct selling
expenses. For comparisons to CEP, we
deducted from CV the weighted-average
home market direct selling expenses.
We adjusted LG’s direct selling
expenses using the same methodology
noted in the ‘‘Calculation of Normal
Value Based on Comparison Market
Prices’’ section of this notice, above.
With respect to Daewoo, we adjusted
the reported home market sales data to:
(1) Reclassify certain expenses reported
as imputed credit expenses to treat them
as non-imputed direct selling expenses;
and (2) recalculate indirect selling
expenses incurred in Korea to include
certain bad debt expenses which had
been excluded from the calculation. See
the Daewoo Calculation Memorandum
for further information on these
adjustments.
Finally, for comparisons to CEP sales,
we made a CEP offset pursuant to
section 773(a)(7)(B) of the Act and 19
CFR 351.412(f). We calculated the CEP
offset as the lesser of the indirect selling
expenses on the comparison market
sales or the indirect selling expenses
deducted from the starting price in
calculating CEP.
Currency Conversion
We made currency conversions into
U.S. dollars in accordance with section
773A(a) of the Act based on the
exchange rates in effect on the dates of
the U.S. sales as certified by the Federal
Reserve Bank.
Critical Circumstances
On July 29, 2011, the petitioner filed
a timely allegation, pursuant to section
733(e)(1) of the Act and 19 CFR 351.206,
that critical circumstances exist with
respect to imports of the merchandise
under investigation. In accordance with
19 CFR 351.206(c)(2)(i), because the
petitioner submitted its critical
circumstances allegation more than
20 days before the scheduled date of the
preliminary determination, the
Department must issue a preliminary
critical circumstances determination not
later than the date of the preliminary
determination.
Section 733(e)(1) of the Act provides
that the Department will preliminarily
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
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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 under investigation
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
statutory criteria have been satisfied, we
examined the evidence presented in the
petitioner’s submission of July 29, 2011,
the ITC preliminary injury
determination, and the respondents’
shipment volume submissions.
To determine whether there is a
history of injurious dumping of the
merchandise under investigation, in
accordance with section 733(e)(1)(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. See
Preliminary Determination of Critical
Circumstances: Steel Concrete
Reinforcing Bars From Ukraine and
Moldova, 65 FR 70696 (November 27,
2000). The petitioner notes that in 2001,
after finding both dumping and injury,
New Zealand imposed antidumping
duties on the subject merchandise
produced in Korea. However, this order
was terminated in 2006. Moreover, the
petitioner did not identify any
additional proceedings with respect to
Korean-origin products, nor are we
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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 733(e)(1)(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
less than its fair value and that there
was likely to be material injury by
reason of such sales in accordance with
section 733(e)(1)(A)(ii) of the Act, the
Department normally considers margins
of 25 percent or more for EP sales or 15
percent or more for CEP transactions
sufficient to impute knowledge of
dumping. See, e.g., Notice of
Preliminary Determination of Sales at
Less Than Fair Value: Certain Lined
Paper Products From Indonesia, 71 FR
15162 (March 27, 2006) unchanged in
Final Determination of Sales at Less
Than Fair Value and Affirmative Final
Determination of Critical
Circumstances: Certain Lined Paper
Products From Indonesia, 71 FR 47171
(August 16, 2006).
For Daewoo and LG, we preliminarily
determine that there is not a sufficient
basis to find that importers 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
pursuant to section 733(e)(1)(A)(ii) of
the Act, because the calculated margins
were not 25 percent or more for EP
sales, or 15 percent or more for CEP
sales. Because the knowledge criterion
has not been met for these respondents,
we have not addressed the second
criterion of whether or not imports were
massive in the comparison period when
compared to the base period.
With respect to Samsung, however,
we preliminarily determine that there is
a sufficient basis to find that importers
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 pursuant to section
733(e)(1)(A)(ii) of the Act, because
Samsung’s calculated margin exceeded
25 percent or more for EP sales, or 15
percent or more for CEP sales. In
addition, for the companies covered by
the ‘‘All Others’’ rate, we calculated a
preliminary margin of 18.15 percent,
which meets 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, because the
VerDate Mar<15>2010
19:21 Nov 01, 2011
Jkt 226001
knowledge criterion has been met for
Samsung and the ‘‘All Others’’ rate
companies, we must address the second
criterion of whether imports were
massive in the comparison period when
compared to the base period.
In determining whether there are
‘‘massive imports’’ over a ‘‘relatively
short period,’’ pursuant to section
733(e)(1)(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’’). Imports normally will be
considered massive when imports
during the comparison period have
increased by 15 percent or more
compared to imports during the base
period.
The Department requested and
obtained from each of the respondents
monthly shipment data from January
2008 to July 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), Samsung’s
export volumes for the four months
before the filing of the petition (i.e.,
December 2010—March 2011) to those
during the four months after the filing
of the petition (i.e., April through July
2011). These periods were selected
based on the Department’s practice of
using the longest period for which
information is available from the month
that the petition was filed through the
effective 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 Samsung.
In determining whether imports for
the companies subject to the ‘‘All
Others’’ rate were massive, we relied on
the experience of Daewoo, LG, and
Samsung. Because the volume of
imports for Daewoo, LG, and Samsung
increased by more than 15 percent from
April to July 2011 when compared to
the import volume in the base period of
December 2010 to March 2011, we find
that imports for the companies subject
to the ‘‘All Others’’ rate also increased
by more than 15 percent.
For purposes of our ‘‘massive
imports’’ determination, we also
considered the impact of seasonality on
imports of bottom mount refrigerators.
Based on our analysis of the companyspecific shipment data reported for
2008, 2009, 2010, and January–July
2011, we find that there is a consistent
pattern of seasonality evidenced by a
PO 00000
Frm 00020
Fmt 4703
Sfmt 4703
67687
significant increase in shipments during
quarters 2 and 3, in comparison to
quarters 1 and 4 in each year. As a
result, we find that any surge in U.S.
imports of bottom mount refrigerators
during the period after the filing of the
petition in this investigation can be
explained by seasonal trends. Therefore,
we preliminarily determine that imports
of bottom mount refrigerators during the
comparison period were not massive in
accordance with section 733(e)(1)(B) of
the Act. See the Memorandum to James
P. Maeder, Director, Office 2, from The
Team entitled, ‘‘Antidumping Duty
Investigation of Bottom Mount
Combination Refrigerator-Freezers from
Korea—Preliminary Determination of
Critical Circumstances,’’ (Critical
Circumstances Memo) dated October 26,
2011.
In summary, we do not 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 from Korea purchased by
Daewoo or LG, while 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 from Korea purchased from
Samsung and companies covered by the
‘‘All Others’’ rate. However, we do not
find that there have been massive
imports of bottom mount refrigerators
over a relatively short period from
Samsung or the ‘‘All Others’’ rate
companies due to seasonality. Given the
analysis summarized above, and
described in more detail in the Critical
Circumstances Memo, we preliminarily
determine that critical circumstances do
not exist with respect to imports of
bottom mount refrigerators produced in,
and exported from, Korea.
Verification
As provided in section 782(i) of the
Act, we will verify information relied
upon in making our final determination.
Suspension of Liquidation
In accordance with section 733(d)(2)
of the Act, we are directing CBP to
suspend liquidation of all imports of
subject merchandise that are entered, or
withdrawn from warehouse, for
consumption on or after the date of
publication of this notice in the Federal
Register.
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 export price
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Federal Register / Vol. 76, No. 212 / Wednesday, November 2, 2011 / Notices
emcdonald on DSK5VPTVN1PROD with NOTICES
or constructed export price, less the
amount of the countervailing duty
determined to constitute an export
subsidy. See, e.g., Notice of Final
Determination of Sales at Less Than
Fair Value: Carbazole Violet Pigment 23
From India, 69 FR 67306, 67307
(November 17, 2004). In this case,
although the product under
investigation is also subject to a
concurrent countervailing duty
investigation, the Department found no
countervailing duty determined to
constitute an export subsidy. See
Bottom Mount Combination
Refrigerator-Freezers From the Republic
of Korea: Preliminary Negative
Countervailing Duty Determination and
Alignment of Final Determination With
Final Antidumping Determination,
76 FR 55044 (September 6, 2011).
Therefore, we have not offset the cash
deposit rates shown below for purposes
of this preliminary determination.
We will instruct CBP to require a cash
deposit or the posting of a bond equal
to the weighted-average amount by
which the NV exceeds EP or CEP, as
indicated in the chart below. These
suspension-of-liquidation instructions
will remain in effect until further notice.
The weighted-average dumping margins
are as follows:
Henry Almond, Senior Analyst, to the
file entitled, ‘‘Calculation of the All
Others Rate for the Preliminary Results
of the Antidumping Duty Investigation
of Bottom Mount Combination
Refrigerator-Freezers From Korea’’,
dated October 26, 2011.
ITC Notification
In accordance with section 733(f) of
the Act, we have notified the ITC of our
determination. If our final
determination is affirmative, the ITC
will determine before the later of 120
days after the date of this preliminary
determination or 45 days after our final
determination whether these imports
are materially injuring, or threaten
material injury to, the U.S. industry.
Disclosure
The Department will disclose to
parties the calculations performed in
connection with this preliminary
determination within five days of the
date of publication of this notice. See
19 CFR 351.224(b).
Public Comment
Case briefs for this investigation must
be submitted to the Department no later
than seven days after the date of the
final verification report issued in this
proceeding. Rebuttal briefs must be filed
five days from the deadline date for case
WeightedCritical
briefs. See 19 CFR 351.309(d). A list of
Exporter/
average
circumauthorities used, a table of contents, and
Manufacturer
margin
stances
percentage
an executive summary of issues should
accompany any briefs submitted to the
Daewoo Elec0.00 No.
Department. Executive summaries
tronics Corshould be limited to five pages total,
poration.
including footnotes. Case briefs must
LG Electronics,
4.09 No.
present all arguments that continue to
Inc.
be relevant to the Department’s final
Samsung Elec32.20 No.
determination, in the submitter’s view.
tronics Co.,
See 19 CFR 351.309(c)(2). Section 774 of
Ltd.
All Others ..........
18.15 No.
the Act provides that the Department
will hold a public hearing to afford
The ‘‘All Others’’ rate is derived
interested parties an opportunity to
exclusive of all de minimis or zero
comment on arguments raised in case or
margins and margins based entirely on
rebuttal briefs, provided that such a
adverse facts available. Specifically, this hearing is requested by an interested
rate is based on the simple average of
party. See 19 CFR 351.310(c). If a
the margins calculated for LG and
request for a hearing is made in this
Samsung. Because we cannot apply our
investigation, the hearing will
normal methodology of calculating a
tentatively be held two days after the
weighted-average margin due to
rebuttal brief deadline date at the U.S.
requests to protect business-proprietary
Department of Commerce, 14th Street
information, we find this rate to be the
and Constitution Avenue, NW.,
best proxy of the actual weightedWashington, DC 20230. Parties should
average margin determined for these
confirm by telephone the time, date, and
respondents. See, e.g., Certain Frozen
place of the hearing 48 hours before the
Warmwater Shrimp From India: Final
scheduled time.
Results of Antidumping Duty
Interested parties who wish to request
Administrative Review, Partial
a hearing, or to participate if one is
Rescission, and Final No Shipment
requested, must submit a written
Determination, 76 FR 41203, 41205 (July request to the Assistant Secretary for
13, 2011). For further discussion of this
Import Administration, U.S. Department
calculation, see the memorandum from
of Commerce, within 30 days of the
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19:54 Nov 01, 2011
Jkt 223001
PO 00000
Frm 00021
Fmt 4703
Sfmt 4703
publication of this notice. Requests
should contain: (1) The party’s name,
address, and telephone number; (2) the
number of participants; and (3) a list of
the issues to be discussed. Oral
presentations will be limited to issues
raised in the briefs.
We will make our final determination
no later than 135 days after the
publication of this notice in the Federal
Register.
This determination is published
pursuant to sections 733(f) and 777(i) of
the Act and 19 CFR 351.205(c).
Dated: October 26, 2011.
Paul Piquado,
Assistant Secretary for Import
Administration.
[FR Doc. 2011–28415 Filed 11–1–11; 8:45 am]
BILLING CODE 3510–DS–P
DEPARTMENT OF COMMERCE
International Trade Administration
[A–201–839]
Notice of Preliminary Determination of
Sales at Less Than Fair Value,
Postponement of Final Determination,
and Affirmative Critical Circumstances
Determination: Bottom Mount
Combination Refrigerator-Freezers
From Mexico
Import Administration,
International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary
determination of sales at less than fair
value.
AGENCY:
We preliminarily determine
that bottom mount combination
refrigerator-freezers (bottom mount
refrigerators) from Mexico are being
sold, or are likely to be, sold in the
United States at less than fair value
(LTFV), as provided in section 733(b) of
the Tariff Act of 1930, as amended (the
Act). In addition, we preliminarily
determine that there is a reasonable
basis to believe or suspect that critical
circumstances exist with respect to the
subject merchandise exported from
Mexico by Samsung Electronics Mexico,
S.A. de C.V. (Samsung). Interested
parties are invited to comment on this
preliminary determination. Because we
are postponing the final determination,
we will make our final determination
not later than 135 days after the date of
publication of this preliminary
determination in the Federal Register.
FOR FURTHER INFORMATION CONTACT:
David Goldberger or Kate Johnson,
Import Administration, International
Trade Administration, U.S. Department
of Commerce, 14th Street and
SUMMARY:
E:\FR\FM\02NON1.SGM
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Agencies
[Federal Register Volume 76, Number 212 (Wednesday, November 2, 2011)]
[Notices]
[Pages 67675-67688]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-28415]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[A-580-865]
Notice of Preliminary Determination of Sales at Less Than Fair
Value, Postponement of Final Determination, and Negative Critical
Circumstances Determination: Bottom Mount Combination Refrigerator-
Freezers From the Republic of Korea
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: We preliminarily determine that bottom mount combination
refrigerator-freezers (bottom mount refrigerators) from the Republic of
Korea (Korea) are being sold, or are likely to be sold, in the United
States at less than fair value (LTFV), as provided in section 733(b) of
the Tariff Act of 1930, as amended (the Act). In addition, we
preliminarily determine that there is no reasonable basis to believe or
suspect that critical circumstances exist with respect to the subject
merchandise exported from Korea.
Interested parties are invited to comment on this preliminary
determination. Because we are postponing the final determination, we
will make our final determination not later than 135 days after the
date of publication of this preliminary determination in the Federal
Register.
FOR FURTHER INFORMATION CONTACT: Henry Almond or Elizabeth Eastwood,
Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue NW.,
Washington, DC 20230; telephone: (202) 482-0049 or (202) 482-3874,
respectively.
Preliminary Determination
We preliminarily determine that bottom mount refrigerators from
Korea are being sold, or are likely to be sold, in the United States at
LTFV, as provided in section 733(b) of the Act. The estimated margins
of sales at LTFV are shown in the ``Suspension of Liquidation'' section
of this notice. In addition, we preliminarily determine that there is
no reasonable basis to believe or suspect that critical circumstances
exist with respect to the subject merchandise exported from Korea. The
critical circumstances analysis for the preliminary determination is
discussed below under the section ``Critical Circumstances.''
Background
Since the initiation of this investigation on April 19, 2011 (see
Initiation of Antidumping Duty Investigations: Bottom Mount Combination
Refrigerator-Freezers From the Republic of Korea and Mexico, 76 FR
23281 (April 26, 2011) (Initiation Notice)), the following events have
occurred.
On May 2, 2011, Daewoo Electronics Corporation (Daewoo) identified
itself as an exporter and producer of the subject merchandise in Korea
and requested that it be designated as a mandatory respondent. On May
10, 2011, we included Daewoo as a mandatory respondent in this
investigation. See Memorandum to James Maeder, Director, Office 2, from
David Goldberger, Senior International Trade Analyst, entitled,
``Inclusion of Daewoo as a Mandatory Respondent,'' dated May 10, 2011.
On May 13, 2011, the United States International Trade Commission
(ITC) preliminarily determined that there is a reasonable indication
that imports of bottom mount refrigerators from Mexico are materially
injuring the United States industry. See ITC Investigation Nos. 701-TA-
477 and 731-TA-1180-1181 (Publication No. 4232).
On May 20, 2011, we issued section A of the questionnaire (i.e.,
the section covering general information) to Daewoo, LG Electronics,
Inc. (LG), and Samsung Electronics Co., Ltd. (Samsung). We issued
sections B through E of the questionnaire (i.e., the sections covering
comparison market sales, U.S. sales, cost of production (COP)
information, and further manufacturing information, respectively) to
these respondents on May 25, 2011.
Also, in May 2011, various interested parties, including Whirlpool
Corporation (hereafter, the petitioner), submitted comments on the
scope of this and the concurrent antidumping and countervailing duty
investigations of bottom mount refrigerators from Mexico and Korea. See
``Scope Comments'' section of this notice.
We received responses to section A of the questionnaire from
Daewoo, LG, and Samsung in June 2011, and to sections B, C, and D of
the questionnaire in July 2011. No responses to section E of the
questionnaire were necessary.
We issued supplemental questionnaires from July through September
2011, and we received responses to these supplemental questionnaires
from July through October 2011.
On July 29, 2011, the petitioner alleged that critical
circumstances existed with respect to bottom mount refrigerators
produced and exported from Korea. On August 10, 2011, we requested
monthly shipment data from the respondents for the period January 2008
through July 2011 for purposes of this analysis.
On August 11, 2011, the petitioner submitted allegations related to
affiliated party transactions and the major input rule with respect to
subject merchandise produced and exported from Korea by LG and Samsung.
Also on August 11, 2011, the petitioner requested that the date for
the issuance of the preliminary determination in this investigation be
[[Page 67676]]
fully extended pursuant to section 733(c)(1) of the Act and 19 CFR
351.205(e). On August 16, 2011, pursuant to sections 733(c)(1)(A) and
(c)(2) of the Act and 19 CFR 351.205(f), the Department postponed the
preliminary determination until no later than October 26, 2011. See
Bottom Mount Combination Refrigerator-Freezers From the Republic of
Korea and Mexico: Postponement of Preliminary Determinations of
Antidumping Duty Investigations, 76 FR 52313 (August 22, 2011).
Also on August 16, 2011, LG objected to the Department's request
for monthly shipment data, arguing that the petitioner's critical
circumstances allegation did not meet the necessary statutory criteria.
We responded to LG's objection on August 18, 2011. Daewoo, LG, and
Samsung submitted the requisite shipment data on August 24, 2011. In
their submissions, LG and Samsung provided comments on how the
Department should analyze whether critical circumstances exist with
respect to their imports of bottom mount refrigerators from Korea.
On September 9, 2011, the petitioner alleged that targeted dumping
was occurring with respect to bottom mount refrigerators produced and
exported from Korea by LG and Samsung.
On October 5, 2011, we issued an additional supplemental
questionnaire regarding Samsung's section D response. Although the
October 14, 2011, response to this questionnaire was timely, it was
received too late for consideration in the preliminary determination.
Moreover, subsequent to this date, we also received various submissions
from interested parties to this investigation. As with Samsung's
supplemental questionnaire response, these submissions were also
received too late for consideration in the preliminary determination.
We will consider each of these submissions in our final determination.
On October 6, 2011, we requested updated shipment data from Daewoo,
LG, and Samsung for consideration in our critical circumstances
analysis for the final determination.
On October 18, 19, and 21, 2011, respectively, Daewoo, Samsung, and
LG requested a postponement of the final determination.
Also on October 21, 2011, we received an amendment to the
petitioner's targeted dumping allegation for LG. Because the
petitioner's original allegation was based on data which were
superseded by LG's supplemental response, we have accepted this
amendment for purposes of the preliminary determination.
Postponement of Final Determination
Section 735(a)(2) of the Act provides that a final determination
may be postponed until not later than 135 days after the date of the
publication of the preliminary determination if, in the event of an
affirmative preliminary determination, a request for such postponement
is made by exporters who account for a significant proportion of
exports of the subject merchandise, or in the event of a negative
preliminary determination, a request for such postponement is made by
the petitioner. The Department's regulations, at 19 CFR 351.210(e)(2),
require that requests by respondents for postponement of a final
determination be accompanied by a request for extension of provisional
measures from a four-month period to not more than six months.
Pursuant to section 735(a)(2) of the Act, on October 18, 19, and
21, 2011, respectively, Daewoo, Samsung, and LG requested that, in the
event of an affirmative preliminary determination in this
investigation, the Department postpone its final determination until
not later than 135 days after the date of the publication of the
preliminary determination in the Federal Register, and extend the
provisional measures to not more than six months. In accordance with 19
CFR 351.210(b), because (1) our preliminary determination is
affirmative for LG and Samsung, (2) LG and Samsung account for a
significant proportion of exports of the subject merchandise, and (3)
no compelling reasons for denial exist, we are granting LG's and
Samsung's requests and are postponing the final determination until no
later than 135 days after the publication of this notice in the Federal
Register. Suspension of liquidation will be extended accordingly.
Period of Investigation
The period of investigation (POI) is January 1, 2010, through
December 31, 2010. This period corresponds to the four most recent
fiscal quarters prior to the month of the filing of the petition (i.e.,
March 2011).
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; \1\ and
---------------------------------------------------------------------------
\1\ The existence of an interior sub-compartment for ice-making
in an upper-most storage compartment does not render an upper-most
storage compartment 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.
[[Page 67677]]
Scope Comments
In accordance with the preamble to the Department's regulations
(see Antidumping Duties; Countervailing Duties; Final Rule, 62 FR
27296, 27323 (May 19, 1997)), in our Initiation Notice we set aside a
period of time for parties to raise issues regarding product coverage,
and encouraged all parties to submit comments within 20 calendar days
of publication of the Initiation Notice.
On May 9, 2011, we received timely comments on the scope of the
investigation from Samsung. Specifically, Samsung requested that the
Department clarify the current description of a freezer compartment and
exclude a certain type of refrigerator-freezer from the scope. These
scope requests are as follows:
1. Samsung requested that the Department use the Association of
Home Appliance Manufacturers (AHAM) definition to revise the current
description of a freezer compartment; and
2. Samsung requested that the Department determine that a certain
type of refrigerator with four compartments known as ``Quatro Cooling
Refrigerators'' be excluded from the scope due to its upper-left non-
convertible freezer compartment.
On May 18, 2011, Daewoo and LG submitted comments in response to
Samsung's May 9 submission. In their comments, Daewoo and LG agreed
with Samsung that the Department should amend the scope language to use
the AHAM definition. Alternatively, LG requested that at a minimum the
Department exclude from the scope any refrigerator, regardless of
freezing capability, that is specifically designed to store kimchi.
Also on May 18, 2011, as well as on June 30, 2011, the petitioner
submitted comments objecting to the requests filed by Samsung and LG,
respectively. As part of these comments, the petitioner proposed a
modification to the scope language with respect to the positioning of
the freezer in relation to the upper-most compartment. Samsung
submitted rebuttal comments on July 25, 2011.
Based on our analysis of these issues, we have preliminarily
determined that the scope of this and the concurrent antidumping and
countervailing duty investigations on bottom mount refrigerators from
Mexico and Korea remains fundamentally unchanged. We have not modified
the description of a freezer compartment in the scope of this
investigation to be consistent with the AHAM definition, nor have we
excluded kimchi refrigerators or Quatro Cooling Refrigerators from the
scope of the investigation. However, as suggested by the petitioner, we
have clarified the scope to eliminate any ambiguity with respect to the
inclusion of Quatro Cooling Refrigerators in the scope of
investigation.\2\ See Memorandum to Gary Taverman, Acting Deputy
Assistant Secretary for AD/CVD Operations, from James Maeder, Director,
Office 2, entitled, ``Scope Modification Requests,'' dated October 26,
2011, for further discussion.
---------------------------------------------------------------------------
\2\ The scope language has been revised as follows: The two
references to ``the upper-most interior storage compartment(s)''
have been replaced with ``an upper-most interior storage
compartment;'' and the two references in the footnote to ``the
upper-most storage compartment'' have been replaced with ``an upper-
most storage compartment.''
---------------------------------------------------------------------------
Facts Available Related to Samsung's Sales of Kimchi Refrigerators
The scope of the investigation includes all bottom mount
refrigerators, including ``kimchi refrigerators,'' that meet the scope
definition. As noted in the ``Scope Comments'' section of this notice,
above, LG argued that the Department should modify the scope to exclude
kimchi refrigerators. Therefore, in order to eliminate any confusion
with respect to our reporting requirements, in June 2011 we clarified
the reporting requirements of the questionnaire to include a product
characteristic to specifically identify sales of kimchi refrigerators.
While Daewoo and LG complied with our instructions and reported their
home market sales of kimchi refrigerators, Samsung did not, arguing
that its kimchi refrigerators did not fall within the scope. In July
2011, we instructed Samsung to report its sales of kimchi refrigerators
and, again, Samsung refused to do so, repeating its claim that they
were out-of-scope merchandise.
On September 1, 2011, we instructed Samsung to provide the
technical specifications of its kimchi refrigerator models
demonstrating that they fall outside the scope definition. At this
time, we once again provided Samsung the alternative of reporting its
sales of these models. In its September 29, 2011, response, Samsung
continued to maintain that these models were not in scope. Nonetheless,
instead of providing the technical specifications to support its claim,
Samsung reported sales of kimchi refrigerators totaling many thousands
of units, a figure which represents the vast majority of Samsung's home
market sales.
On October 5, 2011, the petitioner provided further data which it
states demonstrate that Samsung's kimchi refrigerators are in-scope
merchandise.
Samsung eventually elected to report its sales of kimchi
refrigerators, but because this new information was not received until
the end of September, the Department did not have time to issue an
associated supplemental questionnaire. Our initial analysis, however,
indicates that there are serious problems with the sales data.
Specifically, we have identified numerous areas of concern, including
the following:
There are significant inconsistencies in the methodology
Samsung used to report its rebates, packing expenses, and indirect
selling expenses between the kimchi sales databases and its other home
market sales databases;
Samsung reported many complicated schedules which include
discrepancies for which Samsung has provided no explanation;
There are inconsistencies between Samsung's narrative
response and its reported data;
Samsung reported kimchi refrigerator-specific rebate
programs, and given Samsung's reporting issues with respect to its home
market rebates (see the ``Calculation of Normal Value Based on
Comparison Market Prices'' section, below), we cannot presume that
these programs are not similarly deficient;
Samsung departed from our specific instructions regarding
the reporting of its control numbers; and
Samsung did not separately identify packing expenses for
its kimchi refrigerator models.
In light of these serious concerns, it became necessary to determine if
the application of facts available was warranted.
Section 776(a) of the Act provides that the Department will apply
``facts otherwise available'' if necessary information is not available
on the record or an interested party: (1) Withholds information that
has been requested by the Department; (2) fails to provide such
information within the deadlines established, or in the form or manner
requested by the Department, subject to subsections (c)(1) and (e) of
section 782 of the Act; (3) significantly impedes a proceeding; or (4)
provides such information, but the information cannot be verified.
Pursuant to section 776(a)(2)(B) of the Act, we find that Samsung
failed to provide information in the form and manner requested by the
Department and that it is appropriate to resort to facts otherwise
available to account for the unreported information. In selecting from
among the facts otherwise
[[Page 67678]]
available, section 776(b) of the Act authorizes the Department to use
an adverse inference if the Department finds that an interested party
failed to cooperate by not acting to the best of its ability to comply
with a request for information. The legislative history of the Act also
provides guidance by explaining that adverse inferences are appropriate
``to ensure that the party does not obtain a more favorable result by
failing to cooperate than if it had cooperated fully.'' See Statement
of Administrative Action, accompanying the Uruguay Round Agreements
Act, H.R. Doc. No. 103-465 at 870 (1995). Information used to make an
adverse inference may include such sources as the petition, other
information placed on the record, or determinations in a prior
proceeding regarding the subject merchandise. Id. and 19 CFR
351.308(c). Furthermore, ``affirmative evidence of bad faith on the
part of a respondent is not required before the Department may make an
adverse inference.'' See Antidumping Duties; Countervailing Duties, 62
FR 27296, 27340 (May 19, 1997); see also Nippon Steel Corp. v. United
States, 337 F.3d 1373, 1383 (Fed. Cir. 2003) (Nippon).
Based on the information contained in Samsung's questionnaire
responses, we find that Samsung's kimchi refrigerator sales data are
not useable in their current form. Although, after numerous requests,
this information was eventually submitted, it was received too close in
time to the preliminary determination to permit the Department to issue
a supplemental questionnaire to Samsung to remedy the deficiencies
noted above. Moreover, because Samsung could have either reported the
information at issue in the form and manner requested by the Department
at an earlier date in response to the Department's prior questionnaires
or provided the technical specifications to prove its claim that the
models in question were not in-scope merchandise, and instead failed to
do either, we find that Samsung has failed to cooperate to the best of
its ability with our requests for information. Specifically, we find
that an adverse inference is appropriate because Samsung: (1) Had the
necessary information within its control and did not report this
information; and (2) failed to put forth the maximum effort to provide
the requested information. See, e.g., Nippon, 337 F.3d at 1883; and
Notice of Final Determination of Sales at Less Than Fair Value: Citric
Acid and Certain Citric Salts from Canada, 74 FR 16843, 16844-45 (April
13, 2009). Thus, for this preliminary determination, pursuant to
section 776(b) of the Act, we find that it is appropriate to apply
adverse facts available (AFA) with respect to Samsung's U.S. sales
either: (1) Which had as their closest product comparison a kimchi
refrigerator model; or (2) for which normal value (NV) was based on
constructed value (CV).\3\
---------------------------------------------------------------------------
\3\ We find that it is appropriate to base the margin for those
U.S. sales for which NV is based on CV on AFA because home market
sales of kimchi refrigerators would be used to determine CV profit
and selling expenses.
---------------------------------------------------------------------------
As AFA for the percentage of U.S. sales meeting the above criteria,
we have preliminarily used the highest margin calculated for any U.S.
transaction for Samsung, in accordance with our practice. See, e.g.,
Notice of Final Determination of Sales at Less than Fair Value: Certain
Cold-Rolled Carbon Steel Flat Products From Brazil, 67 FR 62132
(October 3, 2002), and accompanying issues and Decision Memorandum at
Comment 1; Static Random Access Memory Semiconductors From Taiwan;
Final Results of Antidumping Duty New Shipper Review, 65 FR 12214
(March 8, 2000), and accompanying Issues and Decision Memorandum at
Comment 1; Notice of Final Determination of Sales at Less Than Fair
Value: Static Random Access Memory Semiconductors From Taiwan, 63 FR
8909, 8912 (February 23, 1998); Final Determination of Sales at Less
Than Fair Value; Stainless Steel Sheet and Strip in Coils From Germany,
64 FR 30710, 30732 (June 8, 1999); and Notice of Final Determination of
Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate
From South Africa, 62 FR 61731, 61747 (November 19, 1997). In selecting
a facts available margin, we sought a margin that is sufficiently
adverse so as to effectuate the statutory purposes of the AFA rule,
which is to induce respondents to provide the Department with complete
and accurate information in a timely manner. We also sought a margin
that is rationally related to the transactions to which the AFA is
being applied and indicative of Samsung's customary selling practices.
To that end, we selected the highest margin on an individual sale in a
commercial quantity that fell within the mainstream of Samsung's
transactions (i.e., transactions that reflect sales of products that
are representative of the broader range of models used to determine
normal value).
We intend to issue an additional supplemental questionnaire to
Samsung to allow it to remedy the deficiencies in the sales data for
kimchi model refrigerators noted above, and we will consider this
information for purposes of our final determination. However, if
Samsung fails to respond adequately to this subsequent request for
information, for purposes of the final determination, we may consider
whether total versus partial AFA is appropriate for Samsung given the
high percentage of comparisons affected by these deficiencies. See the
Memorandum to the File from Elizabeth Eastwood, Senior Analyst,
entitled, ``Calculations Performed for Samsung Electronics Corporation
(Samsung) for the Preliminary Determination in the Antidumping Duty
Investigation of Bottom Mount Refrigerators from Korea'' (Samsung
Calculation Memo), dated October 26, 2011.
Targeted Dumping Allegations
The statute 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.
On September 9, 2011, the petitioner submitted allegations of
targeted dumping with respect to LG and Samsung and asserted that the
Department should apply the average-to-transaction methodology in
calculating the margins for these respondents. In its allegations, the
petitioner asserted that there are patterns of U.S. sales prices for
comparable merchandise that differ significantly among time periods.
The petitioner relied on the Department's targeted dumping test 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) (collectively Nails), as applied in more recent
investigations such as Multilayered Wood Flooring from the People's
Republic of China: Preliminary Determination of Sales at Less Than Fair
Value, 76 FR 30656, 30659-60 (May 26, 2011). See the Petitioner's
Submission of Targeted Dumping Allegations dated September 9, 2011, at
pages 8-12.
On October 21, 2011, we received an amendment to the petitioner's
targeted dumping allegation for LG. In this amended allegation, the
petitioner
[[Page 67679]]
defined the time period over which targeted dumping occurred as the
fourth calendar quarter of 2010. The petitioner's original allegation
covered essentially the same period, but it defined the fourth quarter
by reference to weeks. As noted above in the ``Background'' section,
because the petitioner's original allegation was based on data which
was superseded by LG's supplemental response, we have accepted this
amendment for purposes of the preliminary determination.
A. Targeted Dumping Test
We conducted time-period targeted dumping analyses for LG and
Samsung using the methodology we adopted in Nails and most recently
articulated in Certain Coated Paper Suitable for High-Quality Print
Graphics Using Sheet-Fed Presses From Indonesia: Final Determination of
Sales at Less Than Fair Value, 75 FR 59223 (September 27, 2010), and
accompanying Issues and Decision Memorandum at Comment 1 (Coated
Paper); and Multilayered Wood Flooring From the Peoples' Republic of
China: Final Determination of Sales at Less Than Fair Value, 76 FR
64318 (October 18, 2011) (Wood Flooring), and accompanying Issues and
Decision Memorandum at Comment 4.
The methodology we employed involves a two-stage test; the first
stage addresses the pattern requirement and the second stage addresses
the significant-difference requirement. See section 777A(d)(1)(B)(i) of
the Act, Nails, Coated Paper, and Wood Flooring. In this test we made
all price comparisons on the basis of identical merchandise (i.e., by
control number or CONNUM). We based all of our targeted dumping
calculations on the U.S. net price which we determined for U.S. sales
by LG and Samsung in our standard margin calculations. For further
discussion of the test and results, see Memorandum to the File from
Henry Almond, Senior Analyst, entitled, ``Calculations Performed for
LGE for the Preliminary Determination in the Antidumping Duty
Investigation of Bottom Mount Combination Refrigerator-Freezers from
the Republic of Korea'' (LG Calculation Memo); and the Samsung
Calculation Memo. As a result of our analysis, we preliminarily
determine that there is a pattern of U.S. prices for comparable
merchandise that differs significantly among certain time periods for
LG and Samsung in accordance with section 777A(d)(1)(B)(i) of the Act
and our current practice as discussed in Nails, Wood Flooring, and
Coated Paper.
B. Price Comparison Method
Section 777A(d)(1)(B)(ii) of the Act states that the Department may
compare the weighted average of the NV to export prices (EPs) (or
constructed export prices (CEPs)) of individual transactions for
comparable merchandise if the Department explains why differences in
the patterns of EPs (or CEPs) cannot be taken into account using the
average-to-average methodology. As described above, we preliminarily
determine that, with respect to sales by Samsung and LG, for certain
time periods there was a pattern of prices that differed significantly.
For both LG and Samsung, we find that these differences cannot be
taken into account using the average-to-average methodology because the
average-to-average methodology conceals differences in the patterns of
prices between the targeted and non-targeted groups by averaging low-
priced sales to the targeted group with high-priced sales to the non-
targeted group. Therefore, for the preliminary determination, we find
that the standard average-to-average methodology does not take into
account LG's and Samsung's price differences because the alternative
average-to-transaction methodology yields a material difference in the
margin. Accordingly, for this preliminary determination we applied the
average-to-transaction methodology to all U.S. sales made by LG and
Samsung. See the LG Calculation Memo and the Samsung Calculation Memo
for further discussion.
Fair Value Comparisons
To determine whether sales of bottom mount refrigerators from Korea
to the United States were made at LTFV, we compared the EP or CEP to
the NV, as described in the ``Export Price/Constructed Export Price''
and ``Normal Value'' sections of this notice, below. In accordance with
section 777A(d)(1)(A)(i) of the Act, we compared POI weighted-average
EPs and CEPs to weighted-average NVs for Daewoo, and in accordance with
section 777A(d)(1)(B) of the Act, we compared transaction-specific EPs
and CEPs to weighted-average NVs for LG and Samsung.
Product Comparisons
In accordance with section 771(16) of the Act, we considered all
products produced and sold by the respondents in Korea during the POI
that fit the description in the ``Scope of Investigation'' section of
this notice to be foreign like products for purposes of determining
appropriate product comparisons to U.S. sales. We compared U.S. sales
to sales made in the home market, where appropriate. Where there were
no sales of identical merchandise in the home market made in the
ordinary course of trade to compare to U.S. sales, we compared U.S.
sales to sales of the most similar foreign like product made in the
ordinary course of trade. Where there were no sales of identical or
similar merchandise, we made product comparisons using CV.
In making product comparisons, we matched foreign like products
based on the physical characteristics reported by the respondents in
the following order of importance: Completed unit or subassembly, unit
type, calculated volume, number of compartments, refrigerator door/
drawer configuration, other external door/drawer configurations,
icemaker and water dispenser feature, door finish, type of compressor,
number of evaporators, type of user interface, existence of a through-
the-door feature, existence of an interior temperature-controlled sub-
compartment, and existence of thin-wall insulation panels.
Export Price/Constructed Export Price
For certain U.S. sales made by Daewoo, LG, and Samsung, we used the
EP methodology, in accordance with section 772(a) of the Act, because
the subject merchandise was sold directly to the first unaffiliated
purchaser in the United States before the date of importation by the
producer or exporter of the subject merchandise outside the United
States, and the use of the CEP methodology was not otherwise warranted
based on the facts of record.
For the remaining U.S. sales made by Daewoo, LG, and Samsung, we
calculated CEP in accordance with section 772(b) of the Act because the
subject merchandise was first sold (or agreed to be sold) in the United
States after the date of importation by or for the account of the
producer or exporter, or by a seller affiliated with the producer or
exporter, to a purchaser not affiliated with the producer or exporter.
A. Daewoo
With respect to EP sales, we based the starting price on the packed
prices to unaffiliated purchasers in the United States. We increased
the starting price by the amount of duty drawback reported by Daewoo.
We made deductions for movement expenses in accordance with section
772(c)(2)(A) of the Act; these expenses included, where appropriate,
foreign inland freight, foreign brokerage and handling, freight
subcontractor service fees, international
[[Page 67680]]
freight, and marine insurance. Regarding foreign inland freight, Daewoo
used an affiliated company to arrange delivery of its merchandise to
the United States. Because Daewoo's affiliate did not provide the same
service to unaffiliated parties, nor did Daewoo use unaffiliated
companies to arrange its deliveries, we were unable to test the arm's-
length nature of the fees paid by Daewoo. Therefore, we based these
expenses on the affiliate's costs. For further discussion, see the
Memorandum to the File from David Crespo, Analyst, entitled,
``Calculations Performed for Daewoo Electronics Corporation for the
Preliminary Determination in the Antidumping Duty Investigation of
Bottom Mount Combination Refrigerator-Freezers from the Republic of
Korea'' (Daewoo Calculation Memo) dated October 26, 2011.
We based CEP on the packed delivered prices to unaffiliated
purchasers in the United States. We increased the starting price by the
amount of duty drawback reported by Daewoo. We made deductions for
movement expenses for Daewoo's CEP transactions, as well, in accordance
with section 772(c)(2)(A) of the Act; these included, where
appropriate, foreign inland freight, foreign brokerage and handling,
freight subcontractor service fees (adjusted as noted above),
international freight, marine insurance, U.S. duties, and U.S.
brokerage and handling.
In accordance with section 772(d)(1) of the Act and 19 CFR
351.402(b), we deducted those selling expenses associated with economic
activities occurring in the United States, including direct selling
expenses (i.e., imputed credit expenses and warranties), and indirect
selling expenses. We recalculated Daewoo's U.S. credit expenses to base
them on its U.S. affiliate's revised U.S. dollar borrowing rate
obtained from page 14 of Daewoo's October 4, 2011, response. For
further discussion, see the Daewoo Calculation Memo.
Pursuant to section 772(d)(3) of the Act, we further reduced the
starting price by an amount for profit to arrive at CEP. In accordance
with section 772(f) of the Act, we calculated the CEP profit rate using
the expenses incurred by Daewoo on its sales of the subject merchandise
in the United States and the profit associated with those sales.
B. LG
LG reported certain U.S. sales of refurbished merchandise. Because
these sales were unusual and represented an insignificant quantity of
total U.S. sales, we disregarded them for purposes of our analysis.
With respect to EP sales, we based the starting price on the packed
prices to unaffiliated purchasers in the United States. We increased
the starting price by the amount of billing adjustments and duty
drawback reported by LG. We made deductions for discounts and rebates,
as appropriate. We also made deductions for movement expenses in
accordance with section 772(c)(2)(A) of the Act; these expenses
included, where appropriate, foreign inland freight, foreign brokerage
and handling, international freight, and marine insurance. Regarding
foreign inland freight, LG used an affiliated company to arrange
delivery of its merchandise to the port of exportation. Because LG's
affiliate did not provide the same service to unaffiliated parties, nor
did LG use unaffiliated companies for its deliveries, we were unable to
test the arm's-length nature of the expenses paid by LG. Therefore, we
based these expenses on the affiliate's costs. For further discussion,
see the LG Calculation Memo dated October 26, 2011.
We based CEP on the packed prices to unaffiliated purchasers in the
United States. We increased the starting price by the amount of billing
adjustments and duty drawback reported by LG. We made deductions for
discounts and rebates, as appropriate.
We made deductions for movement expenses for LG's CEP transactions,
in accordance with section 772(c)(2)(A) of the Act; these included,
where appropriate, foreign inland freight (adjusted as noted above),
foreign brokerage and handling, international freight, marine
insurance, U.S. brokerage and handling, U.S. warehousing, and U.S.
inland freight expenses.
In accordance with section 772(d)(1) of the Act and 19 CFR
351.402(b), we deducted those selling expenses associated with economic
activities occurring in the United States, including direct selling
expenses (i.e., imputed credit expenses, bank charges, advertising
expenses, and warranty expenses), and indirect selling expenses
(including inventory carrying costs and other indirect selling
expenses). We recalculated LG's U.S. inventory carrying costs using the
company's reported cost of manufacturing (COM), revised as stated
below. For further discussion, see the ``Cost of Production Analysis''
section of the notice.
Pursuant to section 772(d)(3) of the Act, we further reduced the
starting price by an amount for profit to arrive at CEP. In accordance
with section 772(f) of the Act, we calculated the CEP profit rate using
the expenses incurred by LG on its sales of the subject merchandise in
the United States and the profit associated with those sales. See the
LG Calculation Memo for further discussion.
D. Samsung
In accordance with the Department's policy, Samsung reported the
earlier of the date of invoice or shipment as its date of sale for both
EP and CEP sales made during the POI. However, Samsung did not report
its actual date of shipment from the factory, but rather it reported
the bill of lading date. Samsung's methodology is not consistent with
the Department's practice of using the date of shipment from the
factory as the date of shipment. See, e.g., Notice of Final
Determination of Sales at Less Than Fair Value: Narrow Woven Ribbons
With Woven Selvedge From Taiwan, 75 FR 41804 (July 19, 2010), and
accompanying Issues and Decision Memorandum at Comment 5. Because
Samsung did not provide the number of days between shipment from the
factory and shipment from the port, we have accepted the dates reported
as facts available for purposes of the preliminary determination,
pursuant to section 776(A)(2)(B) of the Act. However, following the
issuance of the preliminary results, we intend to request that Samsung
report its shipment dates from the factory, as well as any additional
sales of merchandise shipped from the factory during the POI but
invoiced afterwards. Should Samsung provide the Department with that
information in a timely fashion, we intend to use it for purposes of
the final determination.
In addition, Samsung reported certain U.S. sales of defective
merchandise. Because these sales were unusual and represented an
insignificant quantity of total U.S. sales, we disregarded them for
purposes of our analysis.
With respect to EP, we based the starting price on the packed
prices to unaffiliated purchasers in the United States. We increased
the starting price by the amount of duty drawback reported by Samsung.
We made deductions for movement expenses in accordance with section
772(c)(2)(A) of the Act; these included, where appropriate, foreign
inland freight, foreign loading expenses, and foreign brokerage and
handling expenses. Regarding foreign inland freight and loading
expenses, Samsung used an affiliated company to load the merchandise
into containers and arrange its delivery to the port of
[[Page 67681]]
exportation. Because Samsung's affiliate did not provide the same
services to unaffiliated parties, nor did Samsung use unaffiliated
companies for these services, we were unable to test the arm's-length
nature of the fees paid by Samsung. Therefore, we based these expenses
on the affiliate's costs. For further discussion, see the Samsung
Calculation Memo.
We based CEP on the packed prices to unaffiliated purchasers in the
United States. We increased the starting price by the amount of billing
adjustments and duty drawback reported by Samsung. We made deductions
for discounts and rebates, as appropriate. We reclassified certain
early payment ``rebates'' as discounts because these amounts were
established in accordance with Samsung's normal payment terms set forth
on the invoice.
Regarding Samsung's remaining rebates, in a supplemental
questionnaire dated September 1, 2011, we instructed Samsung to report
its rebates on as customer-specific, product-specific and time period-
specific basis as possible. However, Samsung declined to report its
U.S. rebates as instructed. While Samsung reported its U.S. rebates on
a customer-specific basis, based on information reported in Samsung's
supplemental questionnaire responses, we believe that it is possible
for Samsung to report certain rebates (i.e., REBATE3U and REBATE4U) on
a product-specific and possibly a time period-specific basis, as
well.\4\ Therefore, pursuant to section 776(a)(2)(B) of the Act, we
find that Samsung failed to provide information in the form and manner
requested by the Department and that it is appropriate to resort to
facts otherwise available to account for the unreported information.
Moreover, we find that, pursuant to section 776(b) of the Act, an
adverse inference is appropriate because: (1) Samsung had the necessary
information within its control and did not report this information; and
(2) it failed to put forth the maximum effort to provide the requested
information. Therefore, for this preliminary determination, pursuant to
section 776(b) of the Act, we find that it is appropriate to apply AFA
with respect to these rebates. Specifically, as AFA, we recalculated
both of these rebates by assigning the highest customer-specific rebate
percentage reported for each rebate program to all POI sales that were
eligible for a rebate under that particular rebate program. We intend
to request additional information concerning Samsung's rebate programs,
as well as its rebate reporting methodologies, prior to verification
for consideration in the final determination.
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\4\ See, e.g., Exhibit 12 of Samsung's September 29, 2011,
supplemental questionnaire response.
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We made deductions for movement expenses for Samsung's CEP
transactions, in accordance with section 772(c)(2)(A) of the Act; these
included, where appropriate, foreign inland freight, foreign loading
expenses, foreign brokerage and handling expenses, ocean freight,
marine insurance, U.S. customs duties (including merchandise processing
fees and customs broker fees), U.S. warehousing expenses, U.S. inland
insurance expenses, and U.S. inland freight expenses. Regarding foreign
inland freight, foreign loading expenses, and ocean freight, Samsung
used the affiliated company referenced above to provide the associated
freight services. Therefore, we adjusted the freight expenses reported
for CEP sales in the same manner as was done for EP sales.
In accordance with section 772(d)(1) of the Act and 19 CFR
351.402(b), we deducted those selling expenses associated with economic
activities occurring in the United States, including direct selling
expenses (i.e., imputed credit expenses, advertising expenses, bank
charges, and warranty expenses), and indirect selling expenses
(including inventory carrying costs and other indirect selling
expenses). Regarding credit expenses, Samsung reported the dates that
its customers paid for the merchandise based on the payment terms of
each sale; however, documentation on the record shows that payment may
occur after this date. Because Samsung did not report actual payment
dates for its U.S. sales and its reported methodology was inaccurate
based on record evidence, pursuant to section 776(a)(2)(B) of the Act,
as facts available, we increased Samsung's credit period by the
additional time between the end of the payment terms and the actual
payment for the sale for which Samsung provided this information, and
we recalculated credit expenses using this revised information. For
further discussion, see the Samsung Calculation Memo.
Regarding indirect selling expenses, we revised the calculation
ratio for Samsung's U.S. affiliate to remove certain offsets which were
not adequately substantiated in Samsung's response. We also
recalculated Samsung's U.S. inventory carrying costs using the
company's reported COM, revised as stated below. For further
discussion, see the ``Cost of Production Analysis'' section of the
notice and the Samsung Calculation Memo.
Pursuant to section 772(d)(3) of the Act, we further reduced the
starting price by an amount for profit to arrive at CEP. In accordance
with section 772(f) of the Act, we calculated the CEP profit rate using
the expenses incurred by Samsung and its affiliate on their sales of
the subject merchandise in the United States and the profit associated
with those sales. See the Samsung Calculation Memo for further
discussion.
Normal Value
A. Home Market Viability
In order to determine whether there is a sufficient volume of sales
in the home market to serve as a viable basis for calculating NV (i.e.,
the aggregate volume of home market sales of the foreign like product
is equal to or greater than five percent of the aggregate volume of
U.S. sales), we compared each respondent's volume of home market sales
of the foreign like product to the volume of U.S. sales of the subject
merchandise, in accordance with sections 773(a)(1)(A) and (B) of the
Act.
In this investigation, we determined that Daewoo's, LG's, and
Samsung's aggregate volume of home market sales of the foreign like
product was greater than five percent of the aggregate volume of U.S.
sales of the subject merchandise. Therefore, we used home market sales
as the basis for NV in accordance with section 773(a)(1)(B) of the Act.
B. Affiliated Party Transactions and Arm's-Length Test
During the POI, Daewoo, LG, and Samsung sold foreign like product
to affiliated customers. To test whether the sales made by Daewoo and
certain sales by Samsung were made at arm's-length prices, we compared,
on a product-specific basis, the starting prices of sales to affiliated
and unaffiliated customers, net of all applicable billing adjustments,
discounts and rebates, movements charges, direct selling expenses and
packing expenses. Where the price to the affiliated party was, on
average, within a range of 98 to 102 percent of the price of the same
or comparable merchandise sold to unaffiliated parties, we determined
that sales made to the affiliated party were at arm's-length. See 19
CFR 351.403(c); see also Stainless Steel Sheet and Strip in Coils From
Japan: Preliminary Results of Antidumping Duty Administrative Review,
74 FR 39615 (August 7, 2009), unchanged in Stainless Steel Sheet and
Strip in Coils From Japan: Final Results of Antidumping Duty
Administrative Review, 75 FR 6631 (February 10, 2010).
[[Page 67682]]
Sales to affiliated customers in the home market that were not made at
arm's-length prices were excluded from our analysis because we
considered them to be outside the ordinary course of trade. See section
771(15) of the Act and 19 CFR 351.102(b)(35).
Because sales of foreign like product to certain of Samsung's
affiliated resellers failed the arm's length test, Samsung reported its
home market sales by these resellers. Therefore, we used Samsung's
reported downstream home market sales data for all affiliates failing
the arm's length test in our calculations for the preliminary
determination. Where sales to one or more affiliates passed the arm's
length test, we included these sales in our analysis, rather than the
affiliate's downstream sales.
With respect to LG, this respondent reported downstream sales by
its affiliated reseller, rather than both sales to the affiliate and
the affiliate's downstream sales. Therefore, we used the downstream
sales in our analysis for purposes of the preliminary determination.
C. Level of Trade
Section 773(a)(1)(B)(i) of the Act states that, to the extent
practicable, the Department will calculate NV based on sales at the
same level of trade (LOT) as the EP or CEP. Sales are made at different
LOTs if they are made at different marketing stages (or their
equivalent). See 19 CFR 351.412(c)(2). Substantial differences in
selling activities are a necessary, but not sufficient, condition for
determining that there is a difference in the stages of marketing. Id;
see also Certain Orange Juice From Brazil: Final Results of Antidumping
Duty Administrative Review and Notice of Intent Not To Revoke
Antidumping Duty Order in Part, 75 FR 50999, 51001 (August 18, 2010),
and accompanying Issues and Decision Memorandum at Comment 7 (OJ from
Brazil). In order to determine whether the comparison market sales were
at different stages in the marketing process than the U.S. sales, we
reviewed the distribution system in each market (i.e., the chain of
distribution), including selling functions, class of customer (customer
category), and the level of selling expenses for each type of sale.
Pursuant to section 773(a)(1)(B)(i) of the Act, in identifying LOTs
for EP and comparison market sales (i.e., NV based on either home
market or third country prices),\5\ we consider the starting prices
before any adjustments. For CEP sales, we consider only the selling
activities reflected in the price after the deduction of expenses and
profit under section 772(d) of the Act. See Micron Tech., Inc. v.
United States, 243 F.3d 1301, 1314-16 (Fed. Cir. 2001).
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\5\ Where NV is based on CV, we determine the NV LOT based on
the LOT of the sales from which we derive selling expenses, general
and administrative (G&A) expenses, and profit for CV, where
possible.
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When the Department is unable to match U.S. sales of the foreign
like product in the comparison market at the same LOT as the EP or CEP,
the Department may compare the U.S. sale to sales at a different LOT in
the comparison market. In comparing EP or CEP sales at a different LOT
in the comparison market, where available data make it possible, we
make an LOT adjustment under section 773(a)(7)(A) of the Act. Finally,
for CEP sales only, if the NV LOT is at a more advanced stage of
distribution than the LOT of the CEP and there is no basis for
determining whether the difference in LOTs between NV and CEP affects
price comparability (i.e., no LOT adjustment was possible), the
Department shall grant a CEP offset, as provided in section
773(a)(7)(B) of the Act. See, e.g., OJ from Brazil, 75 FR at 51001.
In this investigation, we obtained information from Daewoo, LG, and
Samsung regarding the marketing stages involved in making the reported
home market and U.S. sales, including a description of the selling
activities performed by each respondent for each channel of
distribution. Company-specific LOT findings are summarized below.
Daewoo
Daewoo reported that it made EP and CEP sales through a single
channel of distribution (i.e., sales to distributors), and performed
the following selling functions for sales to U.S. customers: Sales
forecasting, order input/processing, freight and delivery services,
warranty services, and packing. These selling activities can be
generally grouped into four selling function categories for analysis:
(1) Sales and marketing; (2) freight and delivery services; (3)
inventory maintenance and warehousing; and (4) warranty and technical
support. Accordingly, based on the selling function categories, we find
that Daewoo performed sales and marketing, freight and delivery
services, and warranty and technical support for U.S. sales. Because
all sales in the United States are made through a single distribution
channel (i.e., sales to distributors) and the selling activities to
Daewoo's customers did not vary within this channel, we preliminarily
determine that there is one LOT in the U.S. market.
With respect to the home market, Daewoo reported that it made sales
to retailers and end users. Daewoo reported that its home market sales
were made through a single channel of distribution and that it
performed the following selling functions for sales to all home market
customers: Sales forecasting, strategic/economic planning, personnel
training/exchange, engineering services, market research, sales
promotion, advertising, order input/processing, technical assistance,
direct sales personnel, sales/marketing, freight and delivery services,
inventory maintenance, warranty services, and packing. Additionally,
for sales to retailers, Daewoo also provided cash discounts and
distributor/dealer training. These selling activities can be generally
grouped into four selling function categories for analysis: (1) Sales
and marketing; (2) freight and delivery services; (3) inventory
maintenance and warehousing; and (4) warranty and technical support.
Accordingly, we find that Daewoo performed sales and marketing, freight
and delivery services, inventory maintenance and warehousing, and
warranty and technical support at the same relative level of intensity
for all customers in the home market. Because all sales in the home
market sales are made through a single distribution channel and the
selling activities to Daewoo's customers did not vary significantly
within this channel, we preliminarily determine that there is one LOT
in the home market for Daewoo.
Finally, we compared the U.S. LOT to the home market LOT and found
that the selling functions Daewoo performed for home market customers
are more advanced than those performed for its U.S. customers. This
difference is sufficient to determine that the U.S. LOT is different
from the home market LOT. Therefore, based on the totality of the facts
and circumstances, we preliminarily determine that sales to the home
market during the POI were made at a different LOT than sales to the
United States. Additionally, because the home market LOT is at a more
advanced stage of distribution than Daewoo's U.S. LOT and no LOT
adjustment is possible, a CEP offset is warranted.
LG
LG reported that it made U.S. sales through three channels of
distribution (i.e., direct EP sales to original equipment manufacturer
(OEM) customers, CEP sales to OEM customers,
[[Page 67683]]
and CEP sales out of inventory of LG branded products). For all three
channels of distribution, LG reported that it performed the following
selling functions in Korea for sales to U.S. customers: Sales and
marketing support, market research, advertising, order processing,
direct sales personnel, freight and delivery services, warranty and
after sales services, and packing. These selling activities can be
generally grouped into four selling function categories for analysis:
(1) Sales and marketing; (2) freight and delivery services; (3)
inventory maintenance and warehousing; and (4) warranty and technical
support. Accordingly, based on the selling function categories, we find
that LG performed sales and marketing, freight and delivery services,
and warranty and technical support for U.S. sales. Although LG reported
sales through three different channels of distribution, because the
selling functions performed by LG in Korea do not differ between
channels we preliminarily determine that there is one LOT in the U.S.
market.
With respect to the home market, LG reported that it also made
sales through three channels of distribution (i.e., sales to
construction companies, sales to unaffiliated retailers, and sales to
unaffiliated retailers for which LG was responsible for delivery and
installation at the end user's residence). Additionally, LG reported a
fourth channel of distribution for sales made to unaffiliated end user
customers by its affiliated retailer, HiPlaza.
LG reported that it performed the following selling functions for
sales to all home market customers: Sales forecasting, product
development/market research, advertising, sales promotion, packing,
inventory maintenance, order input, direct sales personnel/sales
support, warranty services, payment of commissions, and arrangement of
freight and delivery. In addition to these activities, LG reported that
its affiliated retailer maintained an extensive retail presence in
Korea during the POI and performed the following additional selling
functions for its sales: Sales forecasting, advertising, sales
promotion, order input, direct sales personnel/sales support, and the
payment of commissions.
These selling activities can be generally grouped into four selling
function categories for analysis: (1) Sales and marketing; (2) freight
and delivery services; (3) inventory maintenance and warehousing; and
(4) warranty and technical support. Accordingly, we find that LG
performed sales and marketing, freight and delivery services, and
inventory maintenance and warehousing at the same relative level of
intensity for three of its reported sales channels in the home market.
Regarding sales made by HiPlaza, we find that it also performed
substantial sales and marketing activities for sales to its
unaffiliated customers. These activities are sufficient to determine
that the sales made by HiPlaza were at a more advanced level of trade
than those made by LG. Accordingly, based on the totality of the facts
and circumstances, we preliminarily determine that LG made sales at two
levels of trade in the home market.
Finally, we compared the U.S. LOT to the home market LOTs and found
that the selling functions LG performed for home market customers (at
both home market LOTs) are more advanced than those performed for its
U.S. customers. This difference is sufficient to determine that LG's
U.S. LOT is different from the home market LOTs. Therefore, based on
the totality of the facts and circumstances, we preliminarily determine
that sales to the home market during the POI were made at different
LOTs than sales to the United States. Additionally, because the home
market LOTs are at a more advanced stage of distribution than LG's U.S.
LOT and no LOT adjustment is possible, a CEP offset is warranted.
Samsung
Samsung reported that it made EP and CEP sales through two channels
of distribution (i.e., direct sales to unaffiliated customers and CEP
sales out of inventory). Samsung reported that it packed subject
merchandise in Korea for sales to both its EP and CEP customers. In
addition, Samsung reported that it performed sales/marketing support
and market research for its CEP sales, while it performed order input/
processing for its EP sales. Moreover, Samsung sold subject merchandise
to its U.S. affiliate during the POI (and thus it processed orders for
CEP sales), and the sales listing shows that Samsung delivered subject
merchandise to U.S. customers. These selling activities can be
generally grouped into four selling function categories for analysis:
(1) Sales and marketing; (2) freight and delivery services; (3)
inventory maintenance and warehousing; and (4) warranty and technical
support. Accordingly, based on the selling function categories, we find
that Samsung performed freight and delivery and sales and marketing
activities for U.S. sales. Further, while Samsung reported sales
through two different channels of distribution, because the selling
functions performed by Samsung in Korea do not differ significantly
between channels we preliminarily determine that there is one LOT in
the U.S. market.
With respect to the home market, Samsung reported that it made
sales through two channels of distribution (i.e., sales to unaffiliated
customers and sales to affiliated resellers). Additionally, Samsung
reported a third channel of distribution for sales made to unaffiliated
end users by its affiliated resellers. For its sales, Samsung reported
that it performed the following selling functions for sales to all home
market customers: Sales forecasting, strategic/economic planning,
personnel training/exchange, provision of engineering services,
advertising, distributor/dealer training, packing, inventory
maintenance, order input/processing, employment of direct sales
personnel, sales/marketing support, market research, technical
assistance, provision of rebates and cash discounts, payment of
commissions, provision of warranty services, provision of guarantees,
provision of after-sales services, and provision of freight and
delivery services. In addition to these activities, Samsung reported
that its affiliated resellers maintained an extensive retail presence
in Korea during the POI and performed the following additional selling
functions for sales to the unaffiliated end users: Sales forecasting,
strategic/economic planning, personnel training/exchange, advertising,
sales promotion, inventory maintenance, order input/processing,
employment of direct sales personnel, sales/marketing support, market
research, provision of after-sales services, and provision of freight
and delivery services.
These selling activities can be generally grouped into four selling
function categories for analysis: (1) Sales and marketing; (2) freight
and delivery services; (3) inventory maintenance and warehousing; and
(4) warranty and technical support. Accordingly, we