Large Power Transformers From the Republic of Korea: Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination, 9204-9210 [2012-3716]
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DATES:
Federal Register / Vol. 77, No. 32 / Thursday, February 16, 2012 / Notices
Effective Date: February 16,
2012.
FOR FURTHER INFORMATION CONTACT:
Jennifer Moats, AD/CVD Operations,
Import Administration, International
Trade Administration, U.S. Department
of Commerce, 14th Street and
Constitution Avenue NW., Washington,
DC 20230; telephone: (202) 482–5047.
SUPPLEMENTARY INFORMATION: On
September 1, 2011, the Department
initiated a sunset review of the
antidumping duty order on furfuryl
alcohol from the PRC pursuant to
section 751(c) of the Tariff Act of 1930,
as amended (‘‘the Act’’).1
The Department conducted an
expedited sunset review of this order.
As a result of its review, the Department
found that revocation of the
antidumping duty order would be likely
to lead to continuation or recurrence of
dumping and notified the ITC of the
magnitude of the margins likely to
prevail were the order to be revoked.2
On February 6, 2012, the ITC
published its determination pursuant to
section 751(c) of the Act that revocation
of the antidumping duty order on
furfuryl alcohol from the PRC would be
likely to lead to continuation or
recurrence of material injury to an
industry in the United States within a
reasonably foreseeable time.3
Scope of the Order
The merchandise covered by the order
is furfuryl alcohol (C4H3OCH2OH).
Furfuryl alcohol is a primary alcohol,
and is colorless or pale yellow in
appearance. It is used in the
manufacture of resins and as a wetting
agent and solvent for coating resins,
nitrocellulose, cellulose acetate, and
other soluble dyes.
The product subject to the order is
classifiable under subheading
2932.13.00 of the Harmonized Tariff
Schedule of the United States
(‘‘HTSUS’’). Although the HTSUS
subheading is provided for convenience
and customs purposes, our written
description of the scope of this
proceeding is dispositive.
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Continuation of the Order
As a result of the determinations by
the Department and the ITC that
1 See Initiation of Five-Year (‘‘Sunset’’) Review, 76
FR 54430 (September 1, 2011); see also Notice of
Antidumping Duty Order: Furfuryl Alcohol From
the People’s Republic of China (PRC), 60 FR 32302
(June 21, 1995).
2 See Furfuryl Alcohol From the People’s Republic
of China: Final Results of Expedited Third Sunset
Review of the Antidumping Duty Order, 76 FR
78613 (December 19, 2011).
3 See Furfuryl Alcohol From China, 77 FR 5844
(February 6, 2012).
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revocation of the antidumping duty
order would be likely to lead to
continuation or recurrence of dumping
and material injury to an industry in the
United States, pursuant to section
751(d)(2) of the Act, the Department
hereby orders the continuation of the
antidumping duty order on furfuryl
alcohol from the PRC.
U.S. Customs and Border Protection
will continue to collect antidumping
duty cash deposits at the rates in effect
at the time of entry for all imports of
subject merchandise.
The effective date of continuation of
this order will be the date of publication
in the Federal Register of this Notice of
Continuation. Pursuant to section
751(c)(2) of the Act, the Department
intends to initiate the next five-year
review of the order not later than
February 2017.
This five-year (sunset) review and this
notice are in accordance with sections
751(c) and 777(i)(1) of the Act and 19
CFR 351.218(f)(4).
Dated: February 7, 2012.
Paul Piquado,
Assistant Secretary for Import
Administration.
[FR Doc. 2012–3715 Filed 2–15–12; 8:45 am]
BILLING CODE 3510–DS–P
DEPARTMENT OF COMMERCE
International Trade Administration
[A–580–867]
Large Power Transformers From the
Republic of Korea: Preliminary
Determination of Sales at Less Than
Fair Value and Postponement of Final
Determination
Import Administration,
International Trade Administration,
Department of Commerce.
DATES: Effective Date: February 16,
2012.
SUMMARY: The Department of Commerce
(the Department) preliminarily
determines that large power
transformers from the Republic of Korea
(Korea) are being, or are likely to be,
sold in the United States at less than fair
value, as provided in section 733(b) of
the Tariff Act of 1930, as amended (the
Act). The estimated dumping margins
are listed in the ‘‘Suspension of
Liquidation’’ section of this notice.
Interested parties are invited to
comment on this preliminary
determination. Pursuant to requests
from interested parties, we are
postponing for 60 days the final
determination and extending
provisional measures from a four-month
AGENCY:
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period to not more than six months.
Accordingly, we will make our final
determination not later than 135 days
after publication of the preliminary
determination.
FOR FURTHER INFORMATION CONTACT:
David Cordell or Brian Davis, AD/CVD
Operations, Office 7, Import
Administration, International Trade
Administration, U.S. Department of
Commerce, 14th Street and Constitution
Avenue NW., Washington, DC 20230;
telephone: (202) 482–0408 or (202) 482–
7924, respectively.
SUPPLEMENTARY INFORMATION:
Background
On August 10, 2011, the Department
initiated the antidumping duty
investigation on large power
transformers from Korea.1 Petitioners in
this investigation are ABB Inc., Delta
Star, Inc., and Pennsylvania
Transformer Technology Inc.
(collectively, petitioners). The
Department set aside a period of time
for parties to raise issues regarding
product coverage and invited all parties
to submit comments within 20 calendar
days of publication of the Initiation
Notice.2 The Department also set aside
a time for parties to comment on
product characteristics for use in the
antidumping duty questionnaire.3 Since
the Initiation Notice, the following
events have occurred.
On August 10, 2011, the Department
notified all interested parties of its
intent to select mandatory respondents
for this investigation based on U.S.
import data obtained from U.S. Customs
and Border Protection (CBP) and set
aside a period of time for parties to
comment on the potential respondent
selection. Parties were invited to submit
comments within five calendar days
from the date of that memorandum.4
On August 29, 2011, and August 30,
2011, Department officials visited
Canonsburg, Pennsylvania to meet with
officials of Pennsylvania Transformer
Technology Inc., a petitioner in this
proceeding, and their legal counsel, and
also toured their facility.5
1 See Large Power Transformers from the
Republic of Korea: Initiation of Antidumping Duty
Investigation, 76 FR 49439 (August 10, 2011)
(Initiation Notice).
2 See Initiation Notice, 76 FR at 49440; see also
Antidumping Duties; Countervailing Duties, Final
Rule, 62 FR 27296, 27323 (May 19, 1997)
(Preamble).
3 See Initiation Notice, 76 FR at 49440; see also
Preamble, 62 FR at 27323.
4 See Memorandum from Angelica Mendoza,
Program Manager, to All Interested Parties, dated
August 10, 2011.
5 See Memorandum to the File, ‘‘Antidumping
Duty Investigation of Large Power Transformers
from the Republic of Korea: Department Visit to
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Federal Register / Vol. 77, No. 32 / Thursday, February 16, 2012 / Notices
On September 2, 2011, the United
States International Trade Commission
(USITC) published its affirmative
preliminary determination that there is
a reasonable indication that an industry
in the United States is materially
injured or threatened with material
injury, by reason of imports from Korea
of large power transformers.6
On September 16, 2011, we selected
Hyundai Heavy Industries Co., Ltd.
(Hyundai) and Hyosung Corporation
(Hyosung) as the mandatory
respondents in this investigation and
issued the Department’s antidumping
duty questionnaire to both respondents
on September 28, 2011.7
Hyundai and Hyosung submitted
responses to section A of the
Department’s antidumping duty
questionnaire on November 2, 2011 and
on November 16, 2011, both
respondents submitted their responses
to sections B (i.e., the section covering
comparison market sales) and C (i.e., the
section covering U.S. sales) of the
Department’s antidumping duty
questionnaire. Also on November 16,
2011, Hyosung voluntarily reported a
response to section D of the
questionnaire (i.e., the section covering
the cost of production (COP) and
constructed value (CV)).
On November 23, 2011, petitioners
made a timely request pursuant to
section 733(c)(1)(A) of the Act and 19
CFR 351.205(e) for a 50-day
postponement of the preliminary
determination and on December 6, 2011,
the Department postponed the
preliminary determination of this
investigation until February 9, 2011.8
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Hyosung
On November 30, 2011, the
Department received an allegation from
petitioners that home market sales made
by Hyosung were made at prices below
the cost of production and on December
9, 2011, the Department initiated a
sales-below-cost of production
investigation with respect to Hyosung.9
Pennsylvania Transformer Technology Inc.,’’ dated
September 1, 2011.
6 See 76 FR 54790 (September 2, 2011); see also
USITC Publication 4526 (September 2011), titled
‘‘Large Power Transformers from Korea:
Investigation No. 731–TA–1189 (Preliminary).’’
7 See Memorandum to Christian Marsh, Deputy
Assistant Secretary, from Richard O. Weible,
Director, Office 7, titled ‘‘Antidumping Duty
Investigation of Large Power Transformers from the
Republic of Korea (‘‘Korea’’): Respondent Selection
Memorandum,’’ dated September 16, 2011.
8 See Large Power Transformers from the
Republic of Korea: Postponement of Preliminary
Determination of Antidumping Duty Investigation,
76 FR 76146 (December 6, 2011).
9 See Memorandum to Richard O. Weible,
Director, Office 7, titled, ‘‘Petitioners’ Allegation of
Sales Below the Cost of Production for Hyosung
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On November 21, 2011, the
Department issued a supplemental
questionnaire concerning Hyosung’s
section A–C responses. On December
12, and 19, 2011, Hyosung submitted its
response to this supplemental
questionnaire. On December 14, 2011,
the Department issued a supplemental
questionnaire regarding Hyosung’s
section D response.
On December 29, 2011, the
Department issued a second
supplemental questionnaire covering
Hyosung’s section A–C and
supplemental responses. On January 6,
2012, we received the supplemental cost
(i.e., section D) response from Hyosung
and on January 19, 2012, we received
Hyosung’s response to our December 29,
2011, supplemental questionnaire. On
January 6, 2012, we issued a third sales
supplemental questionnaire and on
January 20, 2012, Hyosung submitted its
response to this supplemental
questionnaire. On February 2, 2012, we
requested that Hyosung provide an
updated U.S. sales database which
includes actual shipment dates for all
sales that have been shipped regardless
of whether or not they have been
invoiced, and on February 3, 2012,
Hyosung submitted this revised U.S.
sales database. Also on February 3,
2012, we requested that Hyosung
provide an updated home market sales
database which includes actual
shipment dates for all sales that have
been shipped regardless of whether they
have been invoiced and on February 6,
2012, Hyosung submitted this revised
home market sales database.
Hyundai
On November 21, 2011, the
Department issued a supplemental
questionnaire concerning Hyundai’s
section A–C responses. On December
12, 2011, Hyundai responded to this
questionnaire. Also on December 12,
2011, Hyundai filed its response to the
constructed value sections of the section
D questionnaire.
On December 23, 2011, the
Department issued a supplemental
questionnaire to Hyundai covering
Hyundai’s section B–D responses.
Hyundai responded to this
supplemental questionnaire on January
13, and 18, 2012. On January 9, 2012,
the Department issued a third sales
supplemental questionnaire as well as a
second supplemental cost questionnaire
to which Hyundai responded on January
23, 2012.
On December 30, 2011, the
Department received an allegation from
Corporation,’’ from the Team (Hyosung Cost
Initiation Memo), dated December 9, 2011.
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petitioners that home market sales made
by Hyundai were made at prices below
the cost of production and on February
9, 2012, the Department decided not to
initiate a sales-below-cost of production
investigation.10
Deadline for Submission of Updated
Information
With regard to cost estimates
provided by respondents thus far, the
Department will accept updated
information for actual costs through and
including December 31, 2011, where
available. Further, with regard to
estimates in the sales database, the
Department will accept the
corresponding actual sales information
only through December 31, 2011. The
Department does not expect to request
updated information on sales or cost
estimates for dates subsequent to
December 31, 2011.
Period of Investigation
The period of investigation (POI) is
July 1, 2010, to June 30, 2011. This
period corresponds to the four most
recent fiscal quarters prior to the month
of the filing of the petition. See 19 CFR
351.204(b)(1).
Scope of Investigation
The scope of this investigation covers
large liquid dielectric power
transformers (LPTs) having a top power
handling capacity greater than or equal
to 60,000 kilovolt amperes (60 megavolt
amperes), whether assembled or
unassembled, complete or incomplete.
Incomplete LPTs are subassemblies
consisting of the active part and any
other parts attached to, imported with or
invoiced with the active parts of LPTs.
The ‘‘active part’’ of the transformer
consists of one or more of the following
when attached to or otherwise
assembled with one another: The steel
core or shell, the windings, electrical
insulation between the windings, the
mechanical frame for an LPT.
The product definition encompasses
all such LPTs regardless of name
designation, including but not limited to
step-up transformers, step-down
transformers, autotransformers,
interconnection transformers, voltage
regulator transformers, rectifier
transformers, and power rectifier
transformers.
The LPTs subject to this investigation
are currently classifiable under
subheadings 8504.23.0040,
10 See Memorandum to the File titled,
‘‘Petitioners’ Allegation of Sales Below the Cost of
Production for Hyundai Heavy Industry Co., Ltd.,’’
from the Team to Richard Weible dated February
8, 2012, (Hyundai Sales Below Cost Allegation
Memorandum).
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8504.23.0080 and 8504.90.9540 of the
Harmonized Tariff Schedule of the
United States (HTSUS). Although the
HTSUS subheadings are provided for
convenience and customs purposes, the
written description of the scope of this
investigation is dispositive.
srobinson on DSK4SPTVN1PROD with NOTICES
Scope Comments
In accordance with the preamble to
the Department’s regulations, see
Preamble, 62 FR at 27323, in our
Initiation Notice we set aside a period
of time for parties to raise issues
regarding product coverage, and invited
all parties to submit comments within
20 calendar days of publication of the
Initiation Notice.
On August 23, 2011, we received
comments from Hyundai and Hyosung
concerning the scope of this
investigation. In their submissions, both
Hyundai and Hyosung request that the
scope language be modified expressly to
exclude spare parts when imported
individually, or when imported with a
complete LPT (whether assembled or
unassembled) or with a subassembly,
because they are not integral to the startup or operation of an LPT.
On September 2, 2011, petitioners
filed rebuttal comments regarding the
scope comments by Hyundai and
Hyosung. In their rebuttal comments,
petitioners state that Hyundai and
Hyosung failed to demonstrate the
necessity for any exclusionary language
and that the scope language published
in the Department’s Initiation Notice is
clear and does not require modification.
Petitioners state that the scope correctly
does not exclude spare parts as this
exclusion could be used to evade or
circumvent any antidumping duty order
that may be in place.
We preliminarily find that the
language of the scope of the order is
clear and does not require amendment.
Product Comparisons
We have considered the comments
that were submitted by the interested
parties concerning product-comparison
criteria. In accordance with section
771(16) of the Act, all products
produced by the respondents covered by
the description in the ‘‘Scope of
Investigation’’ section, above, and sold
in Korea during the period of
investigation are considered to be
foreign like product for purposes of
determining appropriate product
comparisons to U.S. sales. We have
relied on the following 18 criteria to
match U.S. sales of subject merchandise
to comparison-market sales of the
foreign like product: (1) Number of
phases; (2) maximum MVA rating; (3)
transformer technology; (4) high line
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voltage; (5) high voltage winding basic
insulation level; (6) number of windings
in transformer; (7) type of tap changer
and percentage regulation; (8) low line
voltage; (9) impedance at maximum
MVA rating; (10) type of core steel; (11)
type of transformer; (12) low voltage
winding basic insulation level; (13) load
loss at maximum MVA rating; (14) noload loss; (15) cooling class designation;
(16) overload requirement; (17) decibel
rating; and (18) frequency. We
compared U.S. sales to sales of the next
most similar foreign like product on the
basis of the characteristics listed above,
which were made in the ordinary course
of trade. Where we were unable to find
a home market match of such or similar
merchandise, in accordance with
section 773(a)(4) of the Act, we based
NV on CV. Where appropriate, we made
adjustments to CV in accordance with
section 773(a)(8) of the Act.
Date of Sale
19 CFR 351.401(i) states that, in
identifying the date of sale of the
merchandise under consideration or
foreign like product, the Secretary
normally will use the date of invoice, as
recorded in the exporter or producer’s
records kept in the ordinary course of
business. Additionally, the Secretary
may use a date other than the date of
invoice if the Secretary is satisfied that
a different date better reflects the date
on which the exporter or producer
establishes the material terms of sale.11
The Department has explained that, ‘‘in
situations involving large custom-made
merchandise in which the parties
engage in formal negotiation and
contracting procedures, the Department
usually will use a date other than the
date of invoice.’’ Preamble, 62 FR at
27349. The Court of International Trade
(‘‘CIT’’) has stated that ‘‘a party seeking
to establish a date of sale other than
invoice date bears the burden of
producing sufficient evidence to ‘satisfy’
the Department that a different date
better reflects the date on which the
exporter or producer establishes the
material terms of sale.’’ 12 Alternatively,
the Department may exercise its
discretion to rely on a date other than
invoice date if the Department
‘‘provides a rational explanation as to
why the alternative date ‘better reflects’
the date when ‘material terms’ are
established.’’ 13 The date of sale is
generally the date on which the parties
11 See 19 CFR 351.401(i); see also Allied Tube &
Conduit Corp. v. United States, 132 F. Supp. 2d
1087, 1090 (CIT 2001) (quoting 19 CFR 351.401(i))
(‘‘Allied Tube’’).
12 See Allied Tube, 132 F. Supp. 2d at 1090–1092.
13 SeAH Steel Corp. v. United States, 25 C.I.T.
133, 135 (Ct. Int’l Trade 2001).
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establish the material terms of the sale.
This normally includes the price,
quantity, delivery terms and payment
terms.14
In this case, Hyosung argued that the
date of sale should be the purchase
order date. See Hyosung’s letter to the
Department dated October 11, 2011.
Hyosung also asked the Department to
modify its reporting period to ‘‘permit
Hyosung to report all U.S. sales that
were invoiced during the POI (i.e.,
between July 1, 2010 and June 30, 2011),
even if the purchase order date falls
before July 1, 2010.’’ Hyundai filed a
similar request on October 12, 2011.
Petitioners initially urged the
Department to have respondents report
all sales based upon purchase order date
and noted that Hyosung concedes that
‘‘sales terms do not change after the
purchase order is issued,’’ and that ‘‘the
purchase order date satisfies the
Department’s definition of the date of
sales because purchase orders nearly
always memorialize all material terms,’’
quoting Hyosung’s October 11, 2011,
letter at 3. Petitioners concluded that
‘‘thus, the date of the purchase order,
not the invoice date, is the proper date
of sale in this proceeding.’’ See
Petitioners letter dated October 14,
2011, at 3. The Department issued a
letter to all parties on October 17, 2011,
noting that ‘‘no party to this proceeding
has placed any information on the
record to call in to question the fact that
purchase order date satisfies the
Department’s definition of the date of
sale,’’ and that ‘‘based upon what is
currently on the record, it appears that
material terms of sale for sales of large
power transformers are established at
the purchase order date.’’ See Letter to
all interested parties from the
Department entitled ‘‘Antidumping
Duty Investigation of Large Power
Transformers from the Republic of
Korea (‘‘Korea’’): Request for Modified
Reporting Period’’ dated October 17,
2011.
Since that time, petitioners have
raised concerns about the reported date
of sale, arguing that we should ‘‘rely on
the earliest document in the sales
process that establishes the essential
elements of a sale’’ and that in this case
this ‘‘is either the date of the alliance (or
other relevant descriptor, e.g., ‘blanket,’
‘long-term,’ etc.) contract, the date on
which the customer transmits a blanket
purchase order to Hyundai or Hyosung,
or the date on which the customer
transmits its production order forecast
to the respondents.’’ See Petitioners
letter to the Department dated January
14 See USEC Inc. v. United States, 31 C.I.T. 1049,
1055 (Ct. Int’l Trade 2007).
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20, 2012, at 2. Petitioners claim ‘‘the
respondents have withheld complete
documentation that would allow
Commerce to establish accurately the
date of sale,’’ and that ‘‘Commerce
should find that record evidence
indicates that the correct date of sale is
established at a point earlier in the sales
transaction process than the ‘purchase
order’ date identified by respondents.’’
Id. at 23–24.
For the purposes of this preliminary
determination, we are using the
purchase order date as the date of sale
because record evidence currently
demonstrates that this date best reflects
the date upon which the material terms
of sale were established. However, we
are excluding from our analysis those
sales which are known to be based on
long term contracts executed prior to the
POI because it is unclear whether the
material terms of these sales were set
during the POI. We will further examine
whether there is other information that
denotes a more appropriate date of sale
as it is unclear from the record whether
the material terms of these sales were
set prior to the POI. We intend to issue
one final supplemental questionnaire to
each respondent regarding the date of
sale issue.
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Fair Value Comparisons
To determine whether respondents’
sales of large power transformers from
Korea to the United States were made at
LTFV, we compared the constructed
export price (CEP) to normal value (NV)
or constructed value, as appropriate and
as described in the ‘‘Constructed Export
Price’’ and ‘‘Normal Value’’ sections of
this notice. In accordance with section
777A(d)(1)(A)(i) of the Act, we
compared POI weighted-average CEPs to
POI weighted-average NVs or
constructed values, as appropriate.
Constructed Export Price
For the price to the United States, we
used CEP, in accordance with section
772(b) of the Act. We calculated CEP for
those sales where a person in the United
States, affiliated with the foreign
exporter or acting for the account of the
exporter, made the sale to the first
unaffiliated purchaser in the United
States of the subject merchandise. See
section 772(b) of the Act. We based CEP
on the packed prices charged to the first
unaffiliated customer in the United
States and the applicable terms of sale.
In accordance with section 772(b) of
the Act, we calculated CEP where the
record established that sales made by
Hyundai and Hyosung were made in the
United States after the date of
importation by or for the account of the
producer or exporter, or by a seller
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affiliated with the producer or exporter,
to a purchaser not affiliated with the
producer or exporter.
Hyundai
In accordance with section
772(c)(2)(A) of the Act, and where
appropriate, we made deductions from
the starting price for certain billing
adjustments, early payment discounts,
quantity discounts, and certain other
discounts, including rebates. We also
made further deductions to price for
certain movement expenses where
appropriate, for foreign inland freight,
inland insurance, foreign brokerage,
U.S. inland freight, certain other
transportation expenses, U.S. customs
duties and U.S. brokerage and handling
expenses, pursuant to section
772(c)(2)(A) of the Act.
Pursuant to section 772(d)(1) of the
Act, we made additional adjustments to
CEP for commissions, credit expenses,
bank charges, direct selling expenses
associated with costs incurred in the
United States, and other indirect selling
expenses in the United States associated
with economic activity in the United
States. Pursuant to section 772(d)(3) of
the Act, we made an adjustment for CEP
profit. For a detailed discussion of these
adjustments, see Memorandum to the
file, through Angelica Mendoza,
Program Manager, from David Cordell
and Brian Davis, International Trade
Analysts, titled ‘‘Analysis Memorandum
for the Preliminary Determination of the
Antidumping Duty Investigation of
Large Power Transformers from the
Republic of Korea: Hyundai Heavy
Industries Co., Ltd.,’’ dated February 9,
2012 (Hyundai Preliminary Analysis
Memorandum).
Hyosung
In accordance with section
772(c)(2)(A) of the Act, and where
appropriate, we made deductions from
the starting price for certain movement
expenses, foreign inland freight, foreign
brokerage, foreign inland insurance,
U.S. inland freight, international freight,
marine insurance, and U.S. brokerage
and handling expenses, pursuant to
section 772(c)(2)(A) of the Act. Pursuant
to section 772(d)(1) of the Act, we made
additional adjustments to CEP for
commissions, credit expenses, warranty
expenses, inventory carrying costs
incurred in Korea, direct selling
expenses associated with costs incurred
in the United States (i.e., oil and
installation expenses), and indirect
selling expenses. Pursuant to section
772(d)(3) of the Act, we made an
adjustment for CEP profit. For a detailed
discussion of these adjustments, see
Memorandum to the file, through
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9207
Angelica Mendoza, Program Manager,
from David Cordell and Brian Davis,
International Trade Analysts, titled
‘‘Analysis Memorandum for the
Preliminary Determination of the
Antidumping Duty Investigation of
Large Power Transformers from the
Republic of Korea: Hyosung
Corporation,’’ dated February 9, 2012
(Hyosung Preliminary Analysis
Memorandum).
Normal Value
A. Home Market Viability and
Comparison-Market Selection
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
respondents’ volume of home market
sales of the foreign like product to its
volume of U.S. sales of the subject
merchandise. See section 773(a)(1)(C) of
the Act. Based on this comparison, we
determined that both respondents had a
viable home market during the POI.
Consequently, we based NV on home
market sales. Although Hyundai has
argued that we should base NV on CV,
based on the record of the case, the
Department is following its normal
methodology and invites parties to
comment on the matches under a priceto-price comparison in their briefs.
B. Affiliated Party Transactions and
Arm’s-Length Test
Pursuant to its regulations, the
Department may use prices from sales
made to affiliated parties if the price is
comparable to the price at which the
exporter or producer sold the foreign
like product to a non-affiliate. See 19
CFR 351.403(c). During the POI,
Hyundai sold foreign like product to an
affiliated customer for its own use and
not for resale. To test whether the sales
made by Hyundai were made at arm’slength prices, and thus comparable to
the prices for non-affiliates, 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, movement
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
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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).
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
and thus not appropriate for
determining normal value. See section
771(15) of the Act and 19 CFR
351.102(b)(35).
C. Level of Trade
In accordance with section
773(a)(1)(B) of the Act, to the extent
practicable, we determine NV based on
sales in the comparison market at the
same level of trade (LOT) as the export
price or CEP. See also section 773(a)(7)
of the Act. Pursuant to 19 CFR
351.412(c)(1)(iii), the NV LOT is based
on the starting price of the sales in the
comparison market or, when NV is
based on constructed value, the starting
price of the sales from which we derive
selling, general and administrative
expenses, and profit. For CEP sales
(which constituted all sales by both
Hyundai and Hyosung), the U.S. LOT is
based on the starting price of the U.S.
sales, as adjusted under section 772(d)
of the Act, which is from the exporter
to the importer. See 19 CFR
351.412(c)(1)(ii).
To determine whether NV sales are at
a different LOT than CEP sales, we
examine stages in the marketing process
and selling functions along the chain of
distribution between the producer and
the unaffiliated customer. See 19 CFR
351.412(c)(2). If the comparison-market
sales are at a different LOT, and the
difference affects price comparability, as
manifested in a pattern of consistent
price differences between the sales on
which NV is based and comparisonmarket sales at the LOT of the export
transaction, we make an LOT
adjustment under section 773(a)(7)(A) of
the Act. For CEP sales, if the NV level
is more remote from the factory than the
CEP level and there is no basis for
determining whether the difference in
levels between NV and CEP affects price
comparability, we adjust NV under
section 773(a)(7)(B) of the Act (the CEPoffset provision). See Notice of Final
Determination of Sales at Less Than
Fair Value: Certain Cut-to-Length
Carbon Steel Plate from South Africa,
62 FR 61731, 61732–33 (November 19,
1997) (applying the CEP offset analysis
under section 773(a)(7)(B)).
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In this investigation, we obtained
information from Hyundai and Hyosung
regarding the marketing stages involved
by both parties making their reported
home market and U.S. market sales,
including a description of the selling
activities performed by the respondents
and/or their affiliates for each channel
of distribution. See Hyundai’s AQR at
pages A–16 through A–21 and
Attachment A–12; see also Hyundai’s
TSQR dated January 23, 2012, at pages
1 through 2 and Exhibit 1 (selling
activities chart); and Hyosung’s AQR at
pages A–17 through A–18; see also
Hyosung’s SQR at pages SA–11 through
SA–17 and Exhibit SA–6 (selling
activities chart). We did not make an
LOT adjustment under section
773(a)(7)(A) of the Act and 19 CFR
351.412(e) because there was only one
home market LOT for each respondent
and we were unable to identify a pattern
of consistent price differences
attributable to differences in LOTs. See
19 CFR 351.412(d). Under section
773(a)(7)(B) of the Act and 19 CFR
351.412(f), we are preliminarily granting
a CEP offset to reduce normal value by
the appropriate amount of indirect
selling expenses for both Hyundai and
Hyosung because the NV sales for each
company are at a more advanced LOT
than the LOT for their U.S. CEP sales.
For a detailed description of our LOT
methodology and a summary of the
company-specific LOT findings for this
preliminary determination, see Hyundai
Preliminary Analysis Memorandum and
Hyosung Preliminary Analysis
Memorandum.
D. Cost of Production Analysis
Based on the Department’s analysis of
the Petitioners’ allegation, we initiated a
sales-below-cost investigation to
determine whether Hyosung had sales
that were made at prices below their
COP pursuant to section 773(b) of the
Act. See Hyosung Cost Initiation Memo.
As stated in the ‘‘Background’’ section
of this notice, above, we declined to
initiate such an investigation for
Hyundai. See Hyundai Sales Below Cost
Allegation Memorandum.
1. Calculation of Cost of Production
We calculated the COP based on the
sum of the cost of materials and
fabrication for the foreign like product,
plus amounts for selling, general, and
administrative (SG&A) expenses and
packing, in accordance with section
773(b)(3) of the Act. We relied on the
COP data submitted by respondents
except where noted below. Based on the
review of record evidence, respondents
did not appear to experience significant
changes in the cost of manufacturing
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Fmt 4703
Sfmt 4703
during the period of investigation.
Therefore, we followed our normal
methodology of calculating an annual
weighted-average cost.
Hyosung
We reclassified certain selling, G&A
and other non-operating income and
expense items that appeared not to be
properly classified by Hyosung and
revised Hyosung’s calculation of the
G&A expense ratio. For additional
details, see Memorandum to Neal M.
Halper from Sheikh M. Hannan titled
‘‘Cost of Production and Constructed
Value Calculation Adjustments for the
Preliminary Determination—Hyosung
Corporation’’ dated February 9, 2012
(Hyosung Preliminary Cost Calculation
Memorandum).
Hyundai
We excluded unconsolidated foreign
exchange gains and losses from
Hyundai’s G&A expenses and included
the corresponding consolidated gains
and losses in the calculation of the
financial expense ratio according to our
normal practice. We disallowed the
offset to Hyundai’s G&A expense for
certain miscellaneous income items. For
additional details, see Memorandum to
Neal M. Halper from Ernest Z. Gziryan
titled ‘‘Cost of Production and
Constructed Value Calculation
Adjustments for the Preliminary
Determination—Hyundai Heavy
Industries Co., Ltd. and Hyundai
Corporation, USA’’ dated February 9,
2012 (Hyundai Preliminary Cost
Calculation Memorandum).
2. Test of Comparison Market Prices
With respect to Hyosung, on a
product-specific basis, pursuant to
section 773(a)(1)(B)(i) of the Act, we
compared the adjusted weightedaverage COP to the home market sales
prices of the foreign like product, in
order to determine whether the sale
prices were below the COP. For
purposes of this comparison, we used
COP exclusive of selling and packing
expenses. The prices were net of billing
adjustments, movement charges,
discounts, direct and indirect selling
expenses and packing expenses, where
appropriate. See Hyosung Preliminary
Analysis Memorandum.
3. Results of COP Test
Section 773(b)(1) provides that where
sales made at less than the COP ‘‘have
been made within an extended period of
time in substantial quantities’’ and
‘‘were not at prices which permit
recovery of all costs within a reasonable
period of time’’ the Department may
disregard such sales when calculating
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NV. Pursuant to section 773(b)(2)(C)(i)
of the Act, we did not disregard belowcost sales that were not made in
‘‘substantial quantities,’’ i.e., where less
than 20 percent of sales of a given
product were at prices less than the
COP. We disregarded below-cost sales
when they were made in substantial
quantities, i.e., where 20 percent or
more of a respondent’s sales of a given
product were at prices less than the COP
and where ‘‘the weighted average per
unit price of the sales * * * is less than
the weighted average per unit cost of
production for such sales.’’ See section
773(b)(2)(C)(ii) of the Act. Finally, based
on our comparison of prices to the
weighted-average COPs for the POR, we
considered whether the prices would
permit the recovery of all costs within
a reasonable period of time. See section
773(b)(2)(D) of the Act.
Therefore, for Hyosung, we
disregarded below-cost sales of a given
product of 20 percent or more and used
the remaining sales as the basis for
determining NV, in accordance with
section 773(b)(1) of the Act. See
Hyosung Preliminary Analysis
Memorandum.
E. Calculation of Normal Value Based
on Comparison-Market Prices
We calculated NV for Hyundai and
Hyosung based on the reported packed,
ex-factory or delivered prices to
comparison market customers. We made
deductions from the starting price,
where appropriate, for billing
adjustments, early payment and certain
other discounts, other revenues
received, inland freight and insurance,
and warehousing expenses, pursuant to
section 773(a)(6)(B)(ii) of the Act.
Pursuant to section 773(a)(6)(C)(iii) of
the Act and 19 CFR 351.410(b), we
made, where appropriate, circumstanceof-sale adjustments (i.e., bank charges
for Hyosung). We added U.S. packing
costs and deducted home market
packing costs, in accordance with
sections 773(a)(6)(A) and (B)(i) of the
Act. Finally, 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 incurred
on the home market sales or the indirect
selling expenses deducted from the
starting price in calculating CEP.
When comparing U.S. sales with
comparison market sales of similar, but
not identical, merchandise, we also
made adjustments for physical
differences in the merchandise in
accordance with section 773(a)(6)(C)(ii)
of the Act and 19 CFR 351.411. We
based this adjustment on the difference
in the variable cost of manufacturing for
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16:31 Feb 15, 2012
Jkt 226001
the foreign-like product and subject
merchandise. See 19 CFR 351.411(b).
F. Price-to-CV Comparison
Where we were unable to find a home
market match of such or similar
merchandise, in accordance with
section 773(a)(4) of the Act, we based
NV on CV. Where appropriate, we made
adjustments to CV in accordance with
section 773(a)(8) of the Act.
G. Constructed Value
In accordance with section 773(e) of
the Act, we calculated CV based on the
sum of Hyundai’s and Hyosung’s
respective material and fabrication
costs, SG&A expenses, profit, and U.S.
packing costs. We calculated the COP
component of CV as described above in
the ‘‘Cost of Production Analysis’’
section of this notice. In accordance
with section 773(e)(2)(A) of the Act, we
based SG&A expenses and profit on the
amounts incurred and realized by the
respondents in connection with the
production and sale of the foreign like
product in the ordinary course of trade,
for consumption in the foreign country.
Currency Conversion
We made currency conversions into
U.S. dollars in accordance with section
773A(a) of the Act and 19 CFR
351.415(a) based on the exchange rates
in effect on the dates of the U.S. sales
as certified by the Federal Reserve Bank.
Verification
As provided in section 782(i)(1) of the
Act, we intend to verify the information
relied upon in making our final
determination for Hyundai and
Hyosung.
Preliminary Determination
The weighted-average dumping
margins are as follows:
Weightedaverage
margin
(percent)
Manufacturer/
Exporter
Hyundai Heavy Industries Co.,
Ltd. ..........................................
Hyosung Corporation ..................
All-others .....................................
21.79
38.07
29.93
Suspension of Liquidation
In accordance with section 733(d)(2)
of the Act, we will direct CBP to
suspend liquidation of all entries of
large power transformers from Korea
that are entered, or withdrawn from
warehouse, for consumption on or after
the date of publication of this notice in
the Federal Register. We will also
instruct CBP to require a cash deposit or
the posting of a bond equal to the
PO 00000
Frm 00012
Fmt 4703
Sfmt 4703
9209
weighted-average dumping margins, as
indicated in the chart below. These
suspension of liquidation instructions
will remain in effect until further notice.
All Others Rate
Section 735(c)(5)(A) of the Act
provides that the estimated ‘‘All Others’’
rate shall be an amount equal to the
weighted average of the estimated
weighted-average dumping margins
established for exporters and producers
individually investigated, excluding any
zero or de minimis margins, and any
margins determined entirely under
section 776 of the Act. Hyundai and
Hyosung are the only respondents in
this investigation for which the
Department has calculated a companyspecific rate that is not zero or de
minimis. Therefore, for purposes of
determining the ‘‘all others’’ rate and
pursuant to section 735(c)(5)(A) of the
Act, we are using the simple average of
the dumping margins calculated for
Hyundai and Hyosung for the ‘‘all
others’’ rate, as referenced in the
‘‘Suspension of Liquidation’’ section,
above. See Seamless Refined Copper
Pipe and Tube From Mexico: Final
Determination of Sales at Less Than
Fair Value, 75 FR 60723, 60724 (October
1, 2010) (using a simple average to
determine the ‘‘All Others’’ rate when
there only two relevant weightedaverage dumping margins because use
of a weighted average risks disclosure of
business proprietary information).15
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).
Postponement of Final Determination
and Extension of Provisional Measures
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
15 While Hyosung provided ranged data of their
quantities and values in its public version, Hyundai
provided indexed data and thus the Department
cannot disclose a weighted-average dumping
margin for the all other’s rate.
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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.
On December 22, 2011, and January 5,
2012, Hyosung and Hyundai,
respectively, requested that in the event
of an affirmative preliminary
determination in this investigation, the
Department postpone its final
determination by 60 days (135 days after
publication of the preliminary
determination) and extend the
application of the provisional measures
prescribed under section 733(d) of the
Act and 19 CFR 351.210(e)(2), from a
four-month period to a six-month
period. In accordance with section
735(a)(2)(A) of the Act and 19 CFR
351.210(b)(2)(ii), because (1) our
preliminary determination is
affirmative; (2) the requesting
producers/exporters account for a
significant proportion of exports of the
subject merchandise; and (3) no
compelling reasons for denial exist, we
are granting this request 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. We are also
granting the request to extend the
application of the provisional measures
prescribed under section 733(d) of the
Act and 19 CFR 351.210(e)(2) from a
four-month period to a six-month
period.
USITC Notification
In accordance with section 733(f) of
the Act, we have notified the USITC of
the Department’s preliminary
affirmative determination. If the
Department’s final determination is
affirmative, the USITC will determine
before the later of 120 days after the date
of this preliminary determination or 45
days after our final determination
whether imports of large power
transformers from Korea are materially
injuring, or threatening material injury
to, the U.S. industry. See section
735(b)(2) of the Act. Because we are
postponing the deadline for our final
determination to 135 days from the date
of the publication of this preliminary
determination, the USITC will make its
final determination no later than 45
days after our final determination.
Public Comment
Interested parties are invited to
comment on the preliminary
determination. Interested parties may
submit case briefs to the Department no
later than seven days after the date of
the issuance of the last verification
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16:31 Feb 15, 2012
Jkt 226001
report in this proceeding. See 19 CFR
351.309(c)(1)(i). Rebuttal briefs, the
content of which is limited to the issues
raised in the case briefs, must be filed
within five days from the deadline date
for the submission of case briefs. See 19
CFR 351.309(d)(1) and 19 CFR
351.309(d)(2). A list of authorities used,
a table of contents, and an executive
summary of issues should accompany
any briefs submitted to the Department.
Executive summaries should be limited
to five pages total, including footnotes.
Interested parties, who wish to
comment on the preliminary
determination must file briefs
electronically using Import
Administration’s Antidumping and
Countervailing Duty Centralized
Electronic Service System (‘‘IA
ACCESS’’). An electronically filed
document must be received successfully
in its entirety by the Department’s
electronic records system, IA ACCESS,
by 5 p.m. Eastern Standard Time.
In accordance with section 774(1) of
the Act, the Department will hold a
public hearing, if timely requested, to
afford interested parties an opportunity
to comment on arguments raised in case
or rebuttal briefs, provided that such a
hearing is requested by an interested
party. See also 19 CFR 351.310.
Interested parties, who wish to request
a hearing, or to participate if one is
requested, must submit a written
request to the Assistant Secretary for
Import Administration, U.S. Department
of Commerce, filed electronically using
IA ACCESS, as noted above. An
electronically filed document must be
received successfully in its entirety by
the Department’s electronic records
system, IA ACCESS, by 5 p.m. Eastern
Standard Time within 30 days after the
date of publication of this notice. See 19
CFR 351.310(c). Requests should
contain the party’s name, address, and
telephone number, the number of
participants, and a list of the issues to
be discussed. If a request for a hearing
is made, we will inform parties of the
scheduled date for the hearing which
will be held at the U.S. Department of
Commerce, 14th Street and Constitution
Avenue NW., Washington, DC 20230, at
a time and location to be determined.
See 19 CFR 351.310. Parties should
confirm by telephone the date, time, and
location of the hearing.
This determination is issued and
published pursuant to sections 733(f)
and 777(i)(1) of the Act.
PO 00000
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Fmt 4703
Sfmt 4703
Dated: February 9, 2012.
Paul Piquado,
Assistant Secretary for Import
Administration.
[FR Doc. 2012–3716 Filed 2–15–12; 8:45 am]
BILLING CODE 3510–DS–P
DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric
Administration
RIN 0648–XB003
International Pacific Halibut
Commission Appointments
National Marine Fisheries
Service (NMFS), National Oceanic and
Atmospheric Administration (NOAA),
Commerce.
ACTION: Notice of nominations.
AGENCY:
NOAA is soliciting
nominations for two individuals to
serve as United States Commissioners to
the International Pacific Halibut
Commission (IPHC). This action is
necessary to ensure that the interests of
the United States and all of its
stakeholders in the Pacific halibut
fishery are adequately represented. The
intended effect of this action is to
improve transparency and stakeholder
participation in the nomination process.
DATES: Nominations must be received
by March 19, 2012.
ADDRESSES: Nominations for U.S.
Commissioners to the IPHC should be
made in writing to Mr. Patrick E. Moran,
Office of International Affairs, National
Marine Fisheries Service, at 1315 EastWest Highway, Silver Spring, MD
20910. Nominations can also be sent via
fax (301–713–2313) or email
(Pat.Moran@noaa.gov).
SUMMARY:
FOR FURTHER INFORMATION CONTACT:
Mr.
Patrick E. Moran, (301) 427–8370.
SUPPLEMENTARY INFORMATION:
Background
The IPHC is a bilateral regional
fishery management organization
established pursuant to the Convention
between Canada and the United States
for the Preservation of the Halibut
Fishery of the North Pacific Ocean and
Bering Sea (Convention). The
Convention was signed at Ottawa,
Ontario, on March 2, 1953, and was
amended by a Protocol Amending the
Convention signed at Washington, DC,
on March 29, 1979. The Convention’s
central objective is to develop the stocks
of Pacific halibut in waters off the west
coasts of Canada and the United States
to levels that will permit the optimum
yield from the Pacific halibut fishery
E:\FR\FM\16FEN1.SGM
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]]>Agencies
[Federal Register Volume 77, Number 32 (Thursday, February 16, 2012)]
[Notices]
[Pages 9204-9210]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-3716]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[A-580-867]
Large Power Transformers From the Republic of Korea: Preliminary
Determination of Sales at Less Than Fair Value and Postponement of
Final Determination
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
DATES: Effective Date: February 16, 2012.
SUMMARY: The Department of Commerce (the Department) preliminarily
determines that large power transformers from the Republic of Korea
(Korea) are being, or are likely to be, sold in the United States at
less than fair value, as provided in section 733(b) of the Tariff Act
of 1930, as amended (the Act). The estimated dumping margins are listed
in the ``Suspension of Liquidation'' section of this notice. Interested
parties are invited to comment on this preliminary determination.
Pursuant to requests from interested parties, we are postponing for 60
days the final determination and extending provisional measures from a
four-month period to not more than six months. Accordingly, we will
make our final determination not later than 135 days after publication
of the preliminary determination.
FOR FURTHER INFORMATION CONTACT: David Cordell or Brian Davis, AD/CVD
Operations, Office 7, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-
0408 or (202) 482-7924, respectively.
SUPPLEMENTARY INFORMATION:
Background
On August 10, 2011, the Department initiated the antidumping duty
investigation on large power transformers from Korea.\1\ Petitioners in
this investigation are ABB Inc., Delta Star, Inc., and Pennsylvania
Transformer Technology Inc. (collectively, petitioners). The Department
set aside a period of time for parties to raise issues regarding
product coverage and invited all parties to submit comments within 20
calendar days of publication of the Initiation Notice.\2\ The
Department also set aside a time for parties to comment on product
characteristics for use in the antidumping duty questionnaire.\3\ Since
the Initiation Notice, the following events have occurred.
---------------------------------------------------------------------------
\1\ See Large Power Transformers from the Republic of Korea:
Initiation of Antidumping Duty Investigation, 76 FR 49439 (August
10, 2011) (Initiation Notice).
\2\ See Initiation Notice, 76 FR at 49440; see also Antidumping
Duties; Countervailing Duties, Final Rule, 62 FR 27296, 27323 (May
19, 1997) (Preamble).
\3\ See Initiation Notice, 76 FR at 49440; see also Preamble, 62
FR at 27323.
---------------------------------------------------------------------------
On August 10, 2011, the Department notified all interested parties
of its intent to select mandatory respondents for this investigation
based on U.S. import data obtained from U.S. Customs and Border
Protection (CBP) and set aside a period of time for parties to comment
on the potential respondent selection. Parties were invited to submit
comments within five calendar days from the date of that memorandum.\4\
---------------------------------------------------------------------------
\4\ See Memorandum from Angelica Mendoza, Program Manager, to
All Interested Parties, dated August 10, 2011.
---------------------------------------------------------------------------
On August 29, 2011, and August 30, 2011, Department officials
visited Canonsburg, Pennsylvania to meet with officials of Pennsylvania
Transformer Technology Inc., a petitioner in this proceeding, and their
legal counsel, and also toured their facility.\5\
---------------------------------------------------------------------------
\5\ See Memorandum to the File, ``Antidumping Duty Investigation
of Large Power Transformers from the Republic of Korea: Department
Visit to Pennsylvania Transformer Technology Inc.,'' dated September
1, 2011.
---------------------------------------------------------------------------
[[Page 9205]]
On September 2, 2011, the United States International Trade
Commission (USITC) published its affirmative preliminary determination
that there is a reasonable indication that an industry in the United
States is materially injured or threatened with material injury, by
reason of imports from Korea of large power transformers.\6\
---------------------------------------------------------------------------
\6\ See 76 FR 54790 (September 2, 2011); see also USITC
Publication 4526 (September 2011), titled ``Large Power Transformers
from Korea: Investigation No. 731-TA-1189 (Preliminary).''
---------------------------------------------------------------------------
On September 16, 2011, we selected Hyundai Heavy Industries Co.,
Ltd. (Hyundai) and Hyosung Corporation (Hyosung) as the mandatory
respondents in this investigation and issued the Department's
antidumping duty questionnaire to both respondents on September 28,
2011.\7\
---------------------------------------------------------------------------
\7\ See Memorandum to Christian Marsh, Deputy Assistant
Secretary, from Richard O. Weible, Director, Office 7, titled
``Antidumping Duty Investigation of Large Power Transformers from
the Republic of Korea (``Korea''): Respondent Selection
Memorandum,'' dated September 16, 2011.
---------------------------------------------------------------------------
Hyundai and Hyosung submitted responses to section A of the
Department's antidumping duty questionnaire on November 2, 2011 and on
November 16, 2011, both respondents submitted their responses to
sections B (i.e., the section covering comparison market sales) and C
(i.e., the section covering U.S. sales) of the Department's antidumping
duty questionnaire. Also on November 16, 2011, Hyosung voluntarily
reported a response to section D of the questionnaire (i.e., the
section covering the cost of production (COP) and constructed value
(CV)).
On November 23, 2011, petitioners made a timely request pursuant to
section 733(c)(1)(A) of the Act and 19 CFR 351.205(e) for a 50-day
postponement of the preliminary determination and on December 6, 2011,
the Department postponed the preliminary determination of this
investigation until February 9, 2011.\8\
---------------------------------------------------------------------------
\8\ See Large Power Transformers from the Republic of Korea:
Postponement of Preliminary Determination of Antidumping Duty
Investigation, 76 FR 76146 (December 6, 2011).
---------------------------------------------------------------------------
Hyosung
On November 30, 2011, the Department received an allegation from
petitioners that home market sales made by Hyosung were made at prices
below the cost of production and on December 9, 2011, the Department
initiated a sales-below-cost of production investigation with respect
to Hyosung.\9\
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\9\ See Memorandum to Richard O. Weible, Director, Office 7,
titled, ``Petitioners' Allegation of Sales Below the Cost of
Production for Hyosung Corporation,'' from the Team (Hyosung Cost
Initiation Memo), dated December 9, 2011.
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On November 21, 2011, the Department issued a supplemental
questionnaire concerning Hyosung's section A-C responses. On December
12, and 19, 2011, Hyosung submitted its response to this supplemental
questionnaire. On December 14, 2011, the Department issued a
supplemental questionnaire regarding Hyosung's section D response.
On December 29, 2011, the Department issued a second supplemental
questionnaire covering Hyosung's section A-C and supplemental
responses. On January 6, 2012, we received the supplemental cost (i.e.,
section D) response from Hyosung and on January 19, 2012, we received
Hyosung's response to our December 29, 2011, supplemental
questionnaire. On January 6, 2012, we issued a third sales supplemental
questionnaire and on January 20, 2012, Hyosung submitted its response
to this supplemental questionnaire. On February 2, 2012, we requested
that Hyosung provide an updated U.S. sales database which includes
actual shipment dates for all sales that have been shipped regardless
of whether or not they have been invoiced, and on February 3, 2012,
Hyosung submitted this revised U.S. sales database. Also on February 3,
2012, we requested that Hyosung provide an updated home market sales
database which includes actual shipment dates for all sales that have
been shipped regardless of whether they have been invoiced and on
February 6, 2012, Hyosung submitted this revised home market sales
database.
Hyundai
On November 21, 2011, the Department issued a supplemental
questionnaire concerning Hyundai's section A-C responses. On December
12, 2011, Hyundai responded to this questionnaire. Also on December 12,
2011, Hyundai filed its response to the constructed value sections of
the section D questionnaire.
On December 23, 2011, the Department issued a supplemental
questionnaire to Hyundai covering Hyundai's section B-D responses.
Hyundai responded to this supplemental questionnaire on January 13, and
18, 2012. On January 9, 2012, the Department issued a third sales
supplemental questionnaire as well as a second supplemental cost
questionnaire to which Hyundai responded on January 23, 2012.
On December 30, 2011, the Department received an allegation from
petitioners that home market sales made by Hyundai were made at prices
below the cost of production and on February 9, 2012, the Department
decided not to initiate a sales-below-cost of production
investigation.\10\
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\10\ See Memorandum to the File titled, ``Petitioners'
Allegation of Sales Below the Cost of Production for Hyundai Heavy
Industry Co., Ltd.,'' from the Team to Richard Weible dated February
8, 2012, (Hyundai Sales Below Cost Allegation Memorandum).
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Deadline for Submission of Updated Information
With regard to cost estimates provided by respondents thus far, the
Department will accept updated information for actual costs through and
including December 31, 2011, where available. Further, with regard to
estimates in the sales database, the Department will accept the
corresponding actual sales information only through December 31, 2011.
The Department does not expect to request updated information on sales
or cost estimates for dates subsequent to December 31, 2011.
Period of Investigation
The period of investigation (POI) is July 1, 2010, to June 30,
2011. This period corresponds to the four most recent fiscal quarters
prior to the month of the filing of the petition. See 19 CFR
351.204(b)(1).
Scope of Investigation
The scope of this investigation covers large liquid dielectric
power transformers (LPTs) having a top power handling capacity greater
than or equal to 60,000 kilovolt amperes (60 megavolt amperes), whether
assembled or unassembled, complete or incomplete.
Incomplete LPTs are subassemblies consisting of the active part and
any other parts attached to, imported with or invoiced with the active
parts of LPTs. The ``active part'' of the transformer consists of one
or more of the following when attached to or otherwise assembled with
one another: The steel core or shell, the windings, electrical
insulation between the windings, the mechanical frame for an LPT.
The product definition encompasses all such LPTs regardless of name
designation, including but not limited to step-up transformers, step-
down transformers, autotransformers, interconnection transformers,
voltage regulator transformers, rectifier transformers, and power
rectifier transformers.
The LPTs subject to this investigation are currently classifiable
under subheadings 8504.23.0040,
[[Page 9206]]
8504.23.0080 and 8504.90.9540 of the Harmonized Tariff Schedule of the
United States (HTSUS). Although the HTSUS subheadings are provided for
convenience and customs purposes, the written description of the scope
of this investigation is dispositive.
Scope Comments
In accordance with the preamble to the Department's regulations,
see Preamble, 62 FR at 27323, in our Initiation Notice we set aside a
period of time for parties to raise issues regarding product coverage,
and invited all parties to submit comments within 20 calendar days of
publication of the Initiation Notice.
On August 23, 2011, we received comments from Hyundai and Hyosung
concerning the scope of this investigation. In their submissions, both
Hyundai and Hyosung request that the scope language be modified
expressly to exclude spare parts when imported individually, or when
imported with a complete LPT (whether assembled or unassembled) or with
a subassembly, because they are not integral to the start-up or
operation of an LPT.
On September 2, 2011, petitioners filed rebuttal comments regarding
the scope comments by Hyundai and Hyosung. In their rebuttal comments,
petitioners state that Hyundai and Hyosung failed to demonstrate the
necessity for any exclusionary language and that the scope language
published in the Department's Initiation Notice is clear and does not
require modification. Petitioners state that the scope correctly does
not exclude spare parts as this exclusion could be used to evade or
circumvent any antidumping duty order that may be in place.
We preliminarily find that the language of the scope of the order
is clear and does not require amendment.
Product Comparisons
We have considered the comments that were submitted by the
interested parties concerning product-comparison criteria. In
accordance with section 771(16) of the Act, all products produced by
the respondents covered by the description in the ``Scope of
Investigation'' section, above, and sold in Korea during the period of
investigation are considered to be foreign like product for purposes of
determining appropriate product comparisons to U.S. sales. We have
relied on the following 18 criteria to match U.S. sales of subject
merchandise to comparison-market sales of the foreign like product: (1)
Number of phases; (2) maximum MVA rating; (3) transformer technology;
(4) high line voltage; (5) high voltage winding basic insulation level;
(6) number of windings in transformer; (7) type of tap changer and
percentage regulation; (8) low line voltage; (9) impedance at maximum
MVA rating; (10) type of core steel; (11) type of transformer; (12) low
voltage winding basic insulation level; (13) load loss at maximum MVA
rating; (14) no-load loss; (15) cooling class designation; (16)
overload requirement; (17) decibel rating; and (18) frequency. We
compared U.S. sales to sales of the next most similar foreign like
product on the basis of the characteristics listed above, which were
made in the ordinary course of trade. Where we were unable to find a
home market match of such or similar merchandise, in accordance with
section 773(a)(4) of the Act, we based NV on CV. Where appropriate, we
made adjustments to CV in accordance with section 773(a)(8) of the Act.
Date of Sale
19 CFR 351.401(i) states that, in identifying the date of sale of
the merchandise under consideration or foreign like product, the
Secretary normally will use the date of invoice, as recorded in the
exporter or producer's records kept in the ordinary course of business.
Additionally, the Secretary may use a date other than the date of
invoice if the Secretary is satisfied that a different date better
reflects the date on which the exporter or producer establishes the
material terms of sale.\11\ The Department has explained that, ``in
situations involving large custom-made merchandise in which the parties
engage in formal negotiation and contracting procedures, the Department
usually will use a date other than the date of invoice.'' Preamble, 62
FR at 27349. The Court of International Trade (``CIT'') has stated that
``a party seeking to establish a date of sale other than invoice date
bears the burden of producing sufficient evidence to `satisfy' the
Department that a different date better reflects the date on which the
exporter or producer establishes the material terms of sale.'' \12\
Alternatively, the Department may exercise its discretion to rely on a
date other than invoice date if the Department ``provides a rational
explanation as to why the alternative date `better reflects' the date
when `material terms' are established.'' \13\ The date of sale is
generally the date on which the parties establish the material terms of
the sale. This normally includes the price, quantity, delivery terms
and payment terms.\14\
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\11\ See 19 CFR 351.401(i); see also Allied Tube & Conduit Corp.
v. United States, 132 F. Supp. 2d 1087, 1090 (CIT 2001) (quoting 19
CFR 351.401(i)) (``Allied Tube'').
\12\ See Allied Tube, 132 F. Supp. 2d at 1090-1092.
\13\ SeAH Steel Corp. v. United States, 25 C.I.T. 133, 135 (Ct.
Int'l Trade 2001).
\14\ See USEC Inc. v. United States, 31 C.I.T. 1049, 1055 (Ct.
Int'l Trade 2007).
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In this case, Hyosung argued that the date of sale should be the
purchase order date. See Hyosung's letter to the Department dated
October 11, 2011. Hyosung also asked the Department to modify its
reporting period to ``permit Hyosung to report all U.S. sales that were
invoiced during the POI (i.e., between July 1, 2010 and June 30, 2011),
even if the purchase order date falls before July 1, 2010.'' Hyundai
filed a similar request on October 12, 2011. Petitioners initially
urged the Department to have respondents report all sales based upon
purchase order date and noted that Hyosung concedes that ``sales terms
do not change after the purchase order is issued,'' and that ``the
purchase order date satisfies the Department's definition of the date
of sales because purchase orders nearly always memorialize all material
terms,'' quoting Hyosung's October 11, 2011, letter at 3. Petitioners
concluded that ``thus, the date of the purchase order, not the invoice
date, is the proper date of sale in this proceeding.'' See Petitioners
letter dated October 14, 2011, at 3. The Department issued a letter to
all parties on October 17, 2011, noting that ``no party to this
proceeding has placed any information on the record to call in to
question the fact that purchase order date satisfies the Department's
definition of the date of sale,'' and that ``based upon what is
currently on the record, it appears that material terms of sale for
sales of large power transformers are established at the purchase order
date.'' See Letter to all interested parties from the Department
entitled ``Antidumping Duty Investigation of Large Power Transformers
from the Republic of Korea (``Korea''): Request for Modified Reporting
Period'' dated October 17, 2011.
Since that time, petitioners have raised concerns about the
reported date of sale, arguing that we should ``rely on the earliest
document in the sales process that establishes the essential elements
of a sale'' and that in this case this ``is either the date of the
alliance (or other relevant descriptor, e.g., `blanket,' `long-term,'
etc.) contract, the date on which the customer transmits a blanket
purchase order to Hyundai or Hyosung, or the date on which the customer
transmits its production order forecast to the respondents.'' See
Petitioners letter to the Department dated January
[[Page 9207]]
20, 2012, at 2. Petitioners claim ``the respondents have withheld
complete documentation that would allow Commerce to establish
accurately the date of sale,'' and that ``Commerce should find that
record evidence indicates that the correct date of sale is established
at a point earlier in the sales transaction process than the `purchase
order' date identified by respondents.'' Id. at 23-24.
For the purposes of this preliminary determination, we are using
the purchase order date as the date of sale because record evidence
currently demonstrates that this date best reflects the date upon which
the material terms of sale were established. However, we are excluding
from our analysis those sales which are known to be based on long term
contracts executed prior to the POI because it is unclear whether the
material terms of these sales were set during the POI. We will further
examine whether there is other information that denotes a more
appropriate date of sale as it is unclear from the record whether the
material terms of these sales were set prior to the POI. We intend to
issue one final supplemental questionnaire to each respondent regarding
the date of sale issue.
Fair Value Comparisons
To determine whether respondents' sales of large power transformers
from Korea to the United States were made at LTFV, we compared the
constructed export price (CEP) to normal value (NV) or constructed
value, as appropriate and as described in the ``Constructed Export
Price'' and ``Normal Value'' sections of this notice. In accordance
with section 777A(d)(1)(A)(i) of the Act, we compared POI weighted-
average CEPs to POI weighted-average NVs or constructed values, as
appropriate.
Constructed Export Price
For the price to the United States, we used CEP, in accordance with
section 772(b) of the Act. We calculated CEP for those sales where a
person in the United States, affiliated with the foreign exporter or
acting for the account of the exporter, made the sale to the first
unaffiliated purchaser in the United States of the subject merchandise.
See section 772(b) of the Act. We based CEP on the packed prices
charged to the first unaffiliated customer in the United States and the
applicable terms of sale.
In accordance with section 772(b) of the Act, we calculated CEP
where the record established that sales made by Hyundai and Hyosung
were made 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.
Hyundai
In accordance with section 772(c)(2)(A) of the Act, and where
appropriate, we made deductions from the starting price for certain
billing adjustments, early payment discounts, quantity discounts, and
certain other discounts, including rebates. We also made further
deductions to price for certain movement expenses where appropriate,
for foreign inland freight, inland insurance, foreign brokerage, U.S.
inland freight, certain other transportation expenses, U.S. customs
duties and U.S. brokerage and handling expenses, pursuant to section
772(c)(2)(A) of the Act.
Pursuant to section 772(d)(1) of the Act, we made additional
adjustments to CEP for commissions, credit expenses, bank charges,
direct selling expenses associated with costs incurred in the United
States, and other indirect selling expenses in the United States
associated with economic activity in the United States. Pursuant to
section 772(d)(3) of the Act, we made an adjustment for CEP profit. For
a detailed discussion of these adjustments, see Memorandum to the file,
through Angelica Mendoza, Program Manager, from David Cordell and Brian
Davis, International Trade Analysts, titled ``Analysis Memorandum for
the Preliminary Determination of the Antidumping Duty Investigation of
Large Power Transformers from the Republic of Korea: Hyundai Heavy
Industries Co., Ltd.,'' dated February 9, 2012 (Hyundai Preliminary
Analysis Memorandum).
Hyosung
In accordance with section 772(c)(2)(A) of the Act, and where
appropriate, we made deductions from the starting price for certain
movement expenses, foreign inland freight, foreign brokerage, foreign
inland insurance, U.S. inland freight, international freight, marine
insurance, and U.S. brokerage and handling expenses, pursuant to
section 772(c)(2)(A) of the Act. Pursuant to section 772(d)(1) of the
Act, we made additional adjustments to CEP for commissions, credit
expenses, warranty expenses, inventory carrying costs incurred in
Korea, direct selling expenses associated with costs incurred in the
United States (i.e., oil and installation expenses), and indirect
selling expenses. Pursuant to section 772(d)(3) of the Act, we made an
adjustment for CEP profit. For a detailed discussion of these
adjustments, see Memorandum to the file, through Angelica Mendoza,
Program Manager, from David Cordell and Brian Davis, International
Trade Analysts, titled ``Analysis Memorandum for the Preliminary
Determination of the Antidumping Duty Investigation of Large Power
Transformers from the Republic of Korea: Hyosung Corporation,'' dated
February 9, 2012 (Hyosung Preliminary Analysis Memorandum).
Normal Value
A. Home Market Viability and Comparison-Market Selection
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 respondents' volume of home market sales of the
foreign like product to its volume of U.S. sales of the subject
merchandise. See section 773(a)(1)(C) of the Act. Based on this
comparison, we determined that both respondents had a viable home
market during the POI. Consequently, we based NV on home market sales.
Although Hyundai has argued that we should base NV on CV, based on the
record of the case, the Department is following its normal methodology
and invites parties to comment on the matches under a price-to-price
comparison in their briefs.
B. Affiliated Party Transactions and Arm's-Length Test
Pursuant to its regulations, the Department may use prices from
sales made to affiliated parties if the price is comparable to the
price at which the exporter or producer sold the foreign like product
to a non-affiliate. See 19 CFR 351.403(c). During the POI, Hyundai sold
foreign like product to an affiliated customer for its own use and not
for resale. To test whether the sales made by Hyundai were made at
arm's-length prices, and thus comparable to the prices for non-
affiliates, 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, movement
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
[[Page 9208]]
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). 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 and thus
not appropriate for determining normal value. See section 771(15) of
the Act and 19 CFR 351.102(b)(35).
C. Level of Trade
In accordance with section 773(a)(1)(B) of the Act, to the extent
practicable, we determine NV based on sales in the comparison market at
the same level of trade (LOT) as the export price or CEP. See also
section 773(a)(7) of the Act. Pursuant to 19 CFR 351.412(c)(1)(iii),
the NV LOT is based on the starting price of the sales in the
comparison market or, when NV is based on constructed value, the
starting price of the sales from which we derive selling, general and
administrative expenses, and profit. For CEP sales (which constituted
all sales by both Hyundai and Hyosung), the U.S. LOT is based on the
starting price of the U.S. sales, as adjusted under section 772(d) of
the Act, which is from the exporter to the importer. See 19 CFR
351.412(c)(1)(ii).
To determine whether NV sales are at a different LOT than CEP
sales, we examine stages in the marketing process and selling functions
along the chain of distribution between the producer and the
unaffiliated customer. See 19 CFR 351.412(c)(2). If the comparison-
market sales are at a different LOT, and the difference affects price
comparability, as manifested in a pattern of consistent price
differences between the sales on which NV is based and comparison-
market sales at the LOT of the export transaction, we make an LOT
adjustment under section 773(a)(7)(A) of the Act. For CEP sales, if the
NV level is more remote from the factory than the CEP level and there
is no basis for determining whether the difference in levels between NV
and CEP affects price comparability, we adjust NV under section
773(a)(7)(B) of the Act (the CEP-offset provision). See Notice of Final
Determination of Sales at Less Than Fair Value: Certain Cut-to-Length
Carbon Steel Plate from South Africa, 62 FR 61731, 61732-33 (November
19, 1997) (applying the CEP offset analysis under section
773(a)(7)(B)).
In this investigation, we obtained information from Hyundai and
Hyosung regarding the marketing stages involved by both parties making
their reported home market and U.S. market sales, including a
description of the selling activities performed by the respondents and/
or their affiliates for each channel of distribution. See Hyundai's AQR
at pages A-16 through A-21 and Attachment A-12; see also Hyundai's TSQR
dated January 23, 2012, at pages 1 through 2 and Exhibit 1 (selling
activities chart); and Hyosung's AQR at pages A-17 through A-18; see
also Hyosung's SQR at pages SA-11 through SA-17 and Exhibit SA-6
(selling activities chart). We did not make an LOT adjustment under
section 773(a)(7)(A) of the Act and 19 CFR 351.412(e) because there was
only one home market LOT for each respondent and we were unable to
identify a pattern of consistent price differences attributable to
differences in LOTs. See 19 CFR 351.412(d). Under section 773(a)(7)(B)
of the Act and 19 CFR 351.412(f), we are preliminarily granting a CEP
offset to reduce normal value by the appropriate amount of indirect
selling expenses for both Hyundai and Hyosung because the NV sales for
each company are at a more advanced LOT than the LOT for their U.S. CEP
sales.
For a detailed description of our LOT methodology and a summary of
the company-specific LOT findings for this preliminary determination,
see Hyundai Preliminary Analysis Memorandum and Hyosung Preliminary
Analysis Memorandum.
D. Cost of Production Analysis
Based on the Department's analysis of the Petitioners' allegation,
we initiated a sales-below-cost investigation to determine whether
Hyosung had sales that were made at prices below their COP pursuant to
section 773(b) of the Act. See Hyosung Cost Initiation Memo. As stated
in the ``Background'' section of this notice, above, we declined to
initiate such an investigation for Hyundai. See Hyundai Sales Below
Cost Allegation Memorandum.
1. Calculation of Cost of Production
We calculated the COP based on the sum of the cost of materials and
fabrication for the foreign like product, plus amounts for selling,
general, and administrative (SG&A) expenses and packing, in accordance
with section 773(b)(3) of the Act. We relied on the COP data submitted
by respondents except where noted below. Based on the review of record
evidence, respondents did not appear to experience significant changes
in the cost of manufacturing during the period of investigation.
Therefore, we followed our normal methodology of calculating an annual
weighted-average cost.
Hyosung
We reclassified certain selling, G&A and other non-operating income
and expense items that appeared not to be properly classified by
Hyosung and revised Hyosung's calculation of the G&A expense ratio. For
additional details, see Memorandum to Neal M. Halper from Sheikh M.
Hannan titled ``Cost of Production and Constructed Value Calculation
Adjustments for the Preliminary Determination--Hyosung Corporation''
dated February 9, 2012 (Hyosung Preliminary Cost Calculation
Memorandum).
Hyundai
We excluded unconsolidated foreign exchange gains and losses from
Hyundai's G&A expenses and included the corresponding consolidated
gains and losses in the calculation of the financial expense ratio
according to our normal practice. We disallowed the offset to Hyundai's
G&A expense for certain miscellaneous income items. For additional
details, see Memorandum to Neal M. Halper from Ernest Z. Gziryan titled
``Cost of Production and Constructed Value Calculation Adjustments for
the Preliminary Determination--Hyundai Heavy Industries Co., Ltd. and
Hyundai Corporation, USA'' dated February 9, 2012 (Hyundai Preliminary
Cost Calculation Memorandum).
2. Test of Comparison Market Prices
With respect to Hyosung, on a product-specific basis, pursuant to
section 773(a)(1)(B)(i) of the Act, we compared the adjusted weighted-
average COP to the home market sales prices of the foreign like
product, in order to determine whether the sale prices were below the
COP. For purposes of this comparison, we used COP exclusive of selling
and packing expenses. The prices were net of billing adjustments,
movement charges, discounts, direct and indirect selling expenses and
packing expenses, where appropriate. See Hyosung Preliminary Analysis
Memorandum.
3. Results of COP Test
Section 773(b)(1) provides that where sales made at less than the
COP ``have been made within an extended period of time in substantial
quantities'' and ``were not at prices which permit recovery of all
costs within a reasonable period of time'' the Department may disregard
such sales when calculating
[[Page 9209]]
NV. Pursuant to section 773(b)(2)(C)(i) of the Act, we did not
disregard below-cost sales that were not made in ``substantial
quantities,'' i.e., where less than 20 percent of sales of a given
product were at prices less than the COP. We disregarded below-cost
sales when they were made in substantial quantities, i.e., where 20
percent or more of a respondent's sales of a given product were at
prices less than the COP and where ``the weighted average per unit
price of the sales * * * is less than the weighted average per unit
cost of production for such sales.'' See section 773(b)(2)(C)(ii) of
the Act. Finally, based on our comparison of prices to the weighted-
average COPs for the POR, we considered whether the prices would permit
the recovery of all costs within a reasonable period of time. See
section 773(b)(2)(D) of the Act.
Therefore, for Hyosung, we disregarded below-cost sales of a given
product of 20 percent or more and used the remaining sales as the basis
for determining NV, in accordance with section 773(b)(1) of the Act.
See Hyosung Preliminary Analysis Memorandum.
E. Calculation of Normal Value Based on Comparison-Market Prices
We calculated NV for Hyundai and Hyosung based on the reported
packed, ex-factory or delivered prices to comparison market customers.
We made deductions from the starting price, where appropriate, for
billing adjustments, early payment and certain other discounts, other
revenues received, inland freight and insurance, and warehousing
expenses, pursuant to section 773(a)(6)(B)(ii) of the Act.
Pursuant to section 773(a)(6)(C)(iii) of the Act and 19 CFR
351.410(b), we made, where appropriate, circumstance-of-sale
adjustments (i.e., bank charges for Hyosung). We added U.S. packing
costs and deducted home market packing costs, in accordance with
sections 773(a)(6)(A) and (B)(i) of the Act. Finally, 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 incurred on the home market sales or the indirect
selling expenses deducted from the starting price in calculating CEP.
When comparing U.S. sales with comparison market sales of similar,
but not identical, merchandise, we also made adjustments for physical
differences in the merchandise in accordance with section
773(a)(6)(C)(ii) of the Act and 19 CFR 351.411. We based this
adjustment on the difference in the variable cost of manufacturing for
the foreign-like product and subject merchandise. See 19 CFR
351.411(b).
F. Price-to-CV Comparison
Where we were unable to find a home market match of such or similar
merchandise, in accordance with section 773(a)(4) of the Act, we based
NV on CV. Where appropriate, we made adjustments to CV in accordance
with section 773(a)(8) of the Act.
G. Constructed Value
In accordance with section 773(e) of the Act, we calculated CV
based on the sum of Hyundai's and Hyosung's respective material and
fabrication costs, SG&A expenses, profit, and U.S. packing costs. We
calculated the COP component of CV as described above in the ``Cost of
Production Analysis'' section of this notice. In accordance with
section 773(e)(2)(A) of the Act, we based SG&A expenses and profit on
the amounts incurred and realized by the respondents in connection with
the production and sale of the foreign like product in the ordinary
course of trade, for consumption in the foreign country.
Currency Conversion
We made currency conversions into U.S. dollars in accordance with
section 773A(a) of the Act and 19 CFR 351.415(a) based on the exchange
rates in effect on the dates of the U.S. sales as certified by the
Federal Reserve Bank.
Verification
As provided in section 782(i)(1) of the Act, we intend to verify
the information relied upon in making our final determination for
Hyundai and Hyosung.
Preliminary Determination
The weighted-average dumping margins are as follows:
------------------------------------------------------------------------
Weighted-
average
Manufacturer/ Exporter margin
(percent)
------------------------------------------------------------------------
Hyundai Heavy Industries Co., Ltd........................... 21.79
Hyosung Corporation......................................... 38.07
All-others.................................................. 29.93
------------------------------------------------------------------------
Suspension of Liquidation
In accordance with section 733(d)(2) of the Act, we will direct CBP
to suspend liquidation of all entries of large power transformers from
Korea that are entered, or withdrawn from warehouse, for consumption on
or after the date of publication of this notice in the Federal
Register. We will also instruct CBP to require a cash deposit or the
posting of a bond equal to the weighted-average dumping margins, as
indicated in the chart below. These suspension of liquidation
instructions will remain in effect until further notice.
All Others Rate
Section 735(c)(5)(A) of the Act provides that the estimated ``All
Others'' rate shall be an amount equal to the weighted average of the
estimated weighted-average dumping margins established for exporters
and producers individually investigated, excluding any zero or de
minimis margins, and any margins determined entirely under section 776
of the Act. Hyundai and Hyosung are the only respondents in this
investigation for which the Department has calculated a company-
specific rate that is not zero or de minimis. Therefore, for purposes
of determining the ``all others'' rate and pursuant to section
735(c)(5)(A) of the Act, we are using the simple average of the dumping
margins calculated for Hyundai and Hyosung for the ``all others'' rate,
as referenced in the ``Suspension of Liquidation'' section, above. See
Seamless Refined Copper Pipe and Tube From Mexico: Final Determination
of Sales at Less Than Fair Value, 75 FR 60723, 60724 (October 1, 2010)
(using a simple average to determine the ``All Others'' rate when there
only two relevant weighted-average dumping margins because use of a
weighted average risks disclosure of business proprietary
information).\15\
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\15\ While Hyosung provided ranged data of their quantities and
values in its public version, Hyundai provided indexed data and thus
the Department cannot disclose a weighted-average dumping margin for
the all other's rate.
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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).
Postponement of Final Determination and Extension of Provisional
Measures
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
[[Page 9210]]
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.
On December 22, 2011, and January 5, 2012, Hyosung and Hyundai,
respectively, requested that in the event of an affirmative preliminary
determination in this investigation, the Department postpone its final
determination by 60 days (135 days after publication of the preliminary
determination) and extend the application of the provisional measures
prescribed under section 733(d) of the Act and 19 CFR 351.210(e)(2),
from a four-month period to a six-month period. In accordance with
section 735(a)(2)(A) of the Act and 19 CFR 351.210(b)(2)(ii), because
(1) our preliminary determination is affirmative; (2) the requesting
producers/exporters account for a significant proportion of exports of
the subject merchandise; and (3) no compelling reasons for denial
exist, we are granting this request 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. We are also granting the request to extend the
application of the provisional measures prescribed under section 733(d)
of the Act and 19 CFR 351.210(e)(2) from a four-month period to a six-
month period.
USITC Notification
In accordance with section 733(f) of the Act, we have notified the
USITC of the Department's preliminary affirmative determination. If the
Department's final determination is affirmative, the USITC will
determine before the later of 120 days after the date of this
preliminary determination or 45 days after our final determination
whether imports of large power transformers from Korea are materially
injuring, or threatening material injury to, the U.S. industry. See
section 735(b)(2) of the Act. Because we are postponing the deadline
for our final determination to 135 days from the date of the
publication of this preliminary determination, the USITC will make its
final determination no later than 45 days after our final
determination.
Public Comment
Interested parties are invited to comment on the preliminary
determination. Interested parties may submit case briefs to the
Department no later than seven days after the date of the issuance of
the last verification report in this proceeding. See 19 CFR
351.309(c)(1)(i). Rebuttal briefs, the content of which is limited to
the issues raised in the case briefs, must be filed within five days
from the deadline date for the submission of case briefs. See 19 CFR
351.309(d)(1) and 19 CFR 351.309(d)(2). A list of authorities used, a
table of contents, and an executive summary of issues should accompany
any briefs submitted to the Department. Executive summaries should be
limited to five pages total, including footnotes. Interested parties,
who wish to comment on the preliminary determination must file briefs
electronically using Import Administration's Antidumping and
Countervailing Duty Centralized Electronic Service System (``IA
ACCESS''). An electronically filed document must be received
successfully in its entirety by the Department's electronic records
system, IA ACCESS, by 5 p.m. Eastern Standard Time.
In accordance with section 774(1) of the Act, the Department will
hold a public hearing, if timely requested, to afford interested
parties an opportunity to comment on arguments raised in case or
rebuttal briefs, provided that such a hearing is requested by an
interested party. See also 19 CFR 351.310. Interested parties, who wish
to request a hearing, or to participate if one is requested, must
submit a written request to the Assistant Secretary for Import
Administration, U.S. Department of Commerce, filed electronically using
IA ACCESS, as noted above. An electronically filed document must be
received successfully in its entirety by the Department's electronic
records system, IA ACCESS, by 5 p.m. Eastern Standard Time within 30
days after the date of publication of this notice. See 19 CFR
351.310(c). Requests should contain the party's name, address, and
telephone number, the number of participants, and a list of the issues
to be discussed. If a request for a hearing is made, we will inform
parties of the scheduled date for the hearing which will be held at the
U.S. Department of Commerce, 14th Street and Constitution Avenue NW.,
Washington, DC 20230, at a time and location to be determined. See 19
CFR 351.310. Parties should confirm by telephone the date, time, and
location of the hearing.
This determination is issued and published pursuant to sections
733(f) and 777(i)(1) of the Act.
Dated: February 9, 2012.
Paul Piquado,
Assistant Secretary for Import Administration.
[FR Doc. 2012-3716 Filed 2-15-12; 8:45 am]
BILLING CODE 3510-DS-P
