WT/DS539/6  
 
17 April 2018  
(18-2480) Page: 1/14 
  Original: English  
 
UNITED STATES – ANTI -DUMPING AND COUNTERV AILING DUTIES ON CER TAIN 
PRODUCTS AND THE USE  OF FACTS AVAILABLE  
REQUEST FOR THE ESTA BLISHMENT OF A PANEL  BY THE REPUBLIC OF  KOREA  
The following communication, dated 16 April 2018 , from the delegation of the Republic of Korea  to 
the Chairperson of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.  
 
_______________  
 
 
1. On 14 February 2018, the Government of the Republic of Korea ("Korea") requested 
consultations with the Government of the United States of America ("United States") pursuant to 
Articles 1 and 4 of the Understanding on Rules and Procedures Governing the Settlement of 
Disputes ("DSU"), Article XXII:1 of the General Agreement on Tariffs  and Trade 1994 
("GATT  1994"), Articles  17.2 and 17.3 of the Agreement on Implementation of Article VI of the 
General Agreement on Tariffs  and Trade 1994 ("Anti -Dumping Agreement"), and Article 30 of the 
Agreement on Subsidies and  Countervailing Measures ("SCM Agreement"), regarding (a) certain  
anti-dumping and countervailing duty measures imposed on products from Korea; (b) certain 
provisions of United States' legislation regarding the use of facts available; and (c) the United 
States' ongoing conduct as well as its practice of using adverse fa cts available as a rule or norm of 
general and prospective application in anti -dumping and countervailing duty investigations and 
reviews.  These measures appear to be inconsistent with the United States' obligations under 
certain provisions of the GATT 19 94, the Anti -Dumping Agreement, the SCM Agreement, and the 
Marrakesh Agreement establishing the WTO.   
2. Consultations were held on 22 March 2018 with a view to reaching a mutually  satisfactory 
solution.  However, these consultations failed to resolve the dispute.  
3. Therefore, Korea respectfully requests, pursuant to Article 6 of the DSU, Article XXIII of the 
GATT 1994, Article 17.4 of the Anti -Dumping Agreement, and Article 30 of th e SCM Agreement, 
that the Dispute Settlement Body establish a panel to examine this matter, with the standard 
terms of reference as set out in Article 7.1 of the DSU.  
4. Pursuant to Article 6.2 of the DSU, Korea proceeds below to identify the specific measure s at 
issue and to provide a brief summary of the legal basis of the complaint.  
I. IDENTIFICATION OF TH E MEASURES  
A. Certain Definitive Anti -Dumping and Countervailing Duty Measures  
5. This request concerns the definitive anti -dumping and countervailing duty meas ures 
imposed by the United States pursuant to the preliminary and final anti -dumping and 
countervailing duty determinations and orders issued by the U.S. Department of Commerce 
("USDOC") in the investigations and administrative reviews listed below . 
6. The me asures include the conduct of those investigations and administrative reviews, any 
preliminary or final anti -dumping and countervailing duty determinations issued in those 
investigations and administrative reviews, any definitive anti -dumping and counterva iling duties 
imposed as a result of those investigations and administrative reviews, as well as any notices, WT/DS539/6  
 
- 2 - 
 
  annexes, decision memoranda, orders, amendments, or other instruments issued by the United 
States in connection with these anti -dumping and counter vailing duty measures:  
 Anti-Dumping Duties on Certain Corrosion -Resistant Steel Products From the 
Republic of Korea (USDOC investigation number A -580-878) ("Corrosion -
Resistant Steel AD Measure") as set forth, among others, in:  
o Final Determination of Sales  at Less Than Fair Value and Final Affirmative 
Determination of Critical Circumstances, 81 Fed. Reg. 35303 (2 June 2016);  
o Issues and Decision Memorandum for the Final Affirmative Determination in the 
Antidumping Duty Investigation of Certain Corrosion -Resistant Steel Products from 
the Republic of Korea (24 May 2016);  
o Antidumping Duty Order, 81 Fed. Reg. 48390 (25 July 2016).  
 Anti-Dumping Duties on Certain Cold -Rolled Steel Flat Products From the 
Republic of Korea (USDOC investigation number A -580-881) ("Col d-Rolled Steel 
AD Measure")  as set forth, among others, in:  
o Final Determination of Sales at Less Than Fair Value, 81 Fed. Reg. 49953 (29 July 
2016);  
o Issues and Decision Memorandum for the Final Affirmative Determination in the 
Antidumping Duty Investigatio n of Certain Cold -Rolled Steel Products from the 
Republic of Korea (20 July 2016);  
o Antidumping Duty Order, 81 Fed. Reg. 64432 (20 September 2016).  
 Countervailing Duties on Certain Cold -Rolled Steel Flat Products From the 
Republic of Korea  (USDOC investigat ion number C -580-882) ("Cold -Rolled Steel 
CVD Measure") as set forth, among others, in:  
o Final Affirmative Determination, 81 Fed. Reg. 49943  (29 July 2016);  
o Issues and Decision Memorandum for the Final Determination in the Countervailing 
Duty Investigation of Certain Cold -Rolled Steel Flat Products from the Republic of 
Korea (20 July 2016);  
o Countervailing Duty Order, 81 Fed. Reg. 64436 (20 September 2016).  
 Anti-Dumping Duties on Certain Hot -Rolled Steel Flat Products From the Republic 
of Korea  (USDOC investi gation number A -580-883) ("Hot -Rolled Steel AD 
Measure") as set forth, among others, in:  
o Final Determination of Sales at Less Than Fair Value, 81 Fed. Reg. 53419 (12 
August 2016);  
o Issues and Decision Memorandum for the Final Affirmative Determination in th e 
Antidumping Duty Investigation of Certain Hot -Rolled Steel Flat Products from the 
Republic of Korea (4 August 2016);  
o Antidumping Duty Order, 81 Fed. Reg. 67962 (3 October 2016).  
 Countervailing Duties on Certain Hot -Rolled Steel Flat Products From the Rep ublic 
of Korea (USDOC investigation number C -580-884) ("Hot -Rolled Steel CVD 
Measure") as set forth, among others, in:  
o Final Affirmative Determination, 81 Fed. Reg. 53439 (12 August 2016);  
o Issues and Decision Memorandum for the Final Determination in the C ountervailing 
Duty Investigation of Certain Hot -Rolled Steel Flat Products from the Republic of 
Korea (4 August 2016);  
o Countervailing Duty Order, 81 Fed. Reg. 67960 (3 October 2016).  WT/DS539/6  
 
- 3 - 
 
   Anti-Dumping Duties on Large Power Transformers From the Republic of Kore a 
(USDOC investigation number A -580-867) ("Large Power Transformers AD 
Measure") as set forth, among others, in:  
o Final Determination of Sales at Less Than Fair Value, 77 Fed. Reg. 40857 (11 July 
2012);  
o Antidumping Duty Order, 77 Fed. Reg. 53177 (31 August 2012);  
o Review determinations and related measures, including:  
 Final Results of Redetermination Pursuant to Court Remand, ABB INC. v. 
United States, Consol. Court No. 16 -00054, Slip Op. 17 -138 (7 February 
2018, remand of second administrative review).  
 Final Results of Antidumping Duty Administrative Review; 2014 -2015 (82 
Fed. Reg. 13432, 13 March 2017,  third administrative review)  
 the Issues and Decision Memorandum for the Final Results of the 
Administrative Review of the Antidumping Duty Order on Large 
Power Transformers from the Republic of Korea; 2014 -2015 (6 
March 2017)  
 Final Results of Antidumping Duty Administrative Review; 2015 -2016 (83 
Fed. Reg. 11679, 16 March 2018,  fourth administrative review)  
 the Issues and Decision Memorandum for the Final Result s of the 
Administrative Review of the Antidumping Duty Order on Large 
Power Transformers from the Republic of Korea; 2015 -2016 (9 
March 2018)  
 Final Results of the Expedited First Sunset Review of the Antidumping Duty 
Order, 82 Fed. Reg. 51604 (7 November 2 017):  
 Issues and Decision Memorandum for the Expedited First Sunset 
Review of the Antidumping Duty Order on Large Power 
Transformers from the Republic of Korea (31 October 2017).  
7. This request also concerns  any modification, review, replacement or amendment  to the 
definitive anti -dumping and countervailing duty measures listed above and any closely connected, 
subsequent measures to determine a dumping margin or subsidy amount, or related anti -dumping 
duty or countervailing duty rates.  
B. Section 776 of the Tari ff Act of 1930 (19 U.S.C. § 1677e) as amended by Section 
502 of the Trade Preferences Extension Act of 2015, and its implementing 
regulations  
8. This request also concerns a number of provisions of U.S. law relating to the use of facts 
available and the drawi ng of adverse inferences in certain situations by the USDOC under national 
legislation including:  
 Section 502 of the Trade Preferences Extension Act of 2015, Pub. L. No. 114 -27;  
 Section 776 of the Tariff Act of 1930, codified at 19 U.S.C. § 1677e;  
 The implementing regulations of the USDOC in 19 C.F.R. § 351, including in particular 
section 351.308; and  
 Any other related, subsequent measures that enable or implement the use of facts 
available in anti -dumping and countervailing duty investigations, administrative reviews 
and other parts of such proceedings.  
C. Use of Adverse Facts Available As Ongoing Conduct, or a Rule or Norm of General 
and Prospective Application  
9. This request also concerns the ongoing conduct or the practice of the USDOC of using 
"adverse facts available" as a rule or norm of general and prospective application when a producer WT/DS539/6  
 
- 4 - 
 
  or exporter is found to have failed to cooperate by not acting to the best of its ability.  Under this 
ongoing conduct or norm, whenever the USDOC makes a findi ng that a producer or exporter has 
failed to cooperate by not acting to the best of its ability, it adopts adverse inferences and, in 
determining the duty rate for this producer or exporter, selects facts from the record that are 
adverse to the interests o f this producer or exporter without establishing (i) that such inferences 
can reasonably be drawn in light of the degree of cooperation received, and (ii) that such facts are 
the "best information available" in the particular circumstances.1 
II. LEGAL BASI S 
10. Korea is concerned that the measures identified above are inconsistent with the WTO 
obligations of the United States, including, among others, under Article 6.8 and Annex II of the 
Anti-Dumping Agreement and Article 12.7 of the SCM Agreement.  
11. The failure  of the United States to comply with its obligations relating to the use of facts 
available when making preliminary and/or final determinations of dumping and/or subsidization 
has a direct consequential effect on other aspects of the investigation or revie w that relate to the 
determination of dumping or subsidization, the determination of injury by dumped or subsidized 
imports, the imposition and maintenance of anti -dumping or countervailing duties, and the level of 
such duties.  
12. In addition, Korea is concer ned that when resorting to the use of adverse facts available in 
the specific investigations and reviews leading to the adoption and maintenance of the above -
listed anti -dumping and countervailing duty measures, the United States failed to comply with a 
number of related procedural and substantive obligations under the Anti -Dumping Agreement and 
the SCM Agreement, as identified below.  
A. As Applied Challenge to Certain Definitive Anti -Dumping and Countervailing Duty 
Measures  
13. With respect to the anti -dumping and countervailing duty measures listed in Section I.A of 
this request, Korea considers that the USDOC resorted to the use of facts available and drew 
adverse inferences in disregard of the obligations set forth in Article 6.8 and Annex II of the Anti -
Dumping Agreement and Article 12.7 of the SCM Agreement.  
14. In the anti -dumping and countervailing duty measures identified above, the USDOC did not 
assess the facts properly and objectively in finding that the affected Korean pro ducers and 
exporters failed to cooperate by not acting to the best of their abilities when allegedly failing to 
provide information necessary to determine a margin of dumping or an amount of subsidization.  
In addition, the USDOC failed to respect the spec ific steps to be followed when resorting to the use 
of facts available and selected from the facts available those facts that were sufficiently adverse to 
the interests of the Korean producers/exporters.  In so doing, the USDOC failed to use the best 
information available in order to arrive at an accurate determination where necessary information 
was allegedly missing and rather applied facts available in a punitive manner, in violation of Article 
6.8 and Annex II of the Anti -Dumping Agreement and Article 1 2.7 of the SCM Agreement.  
15. The above -described violations affect all of the anti -dumping and countervailing duty 
measures that are referred to in Section I.A of this request.2 
                                                
1 The use of adverse facts available has been consistently applied by the USDOC and is undertaken 
pursuant to: (i) Section 502 of the Trade Preferences Extension Act of 2015, Pub. L. No. 114 -27; (ii) Section 
776 of the Tariff Act of 1930, codified at 19 U.S. C. § 1677e; and (iii) the implementing regulations of the 
USDOC in 19 C.F.R. § 351, including in particular section 308.  
It is also evidenced, for example, by the manner in which facts available was used in the measures 
identified in Section I.A of this Re quest.  A preliminary and non -exhaustive list of measures confirming the 
existence of this ongoing conduct or rule or norm of applying adverse facts available whenever a finding is 
made that a producer or exporter has failed to act to the best of its abili ty is attached as Annex I to illustrate 
the practice.  
2 The relevant findings for the use of partial or total AFA made by the USDOC can be found in the Issues 
and Decision Memorandum of each measure, as follows: Corrosion -Resistant Steel AD Measure  – Issue s 
and Decision Memorandum for the Final Affirmative Determination in the Antidumping Duty Investigation of 
Certain Corrosion -Resistant Steel Products from the Republic of Korea (24 May 2016), including section VII, WT/DS539/6  
 
- 5 - 
 
  16. In particular, first, the USDOC failed to make a reasoned and adequate finding th at the 
affected Korean producers and exporters "refused access to" or otherwise did not provide 
"necessary" information or "significantly impeded" the investigation.  Given that Article 6.8 of the 
Anti-Dumping Agreement and Article 12.7 of the SCM Agreemen t limit the possibility of making 
preliminary or final determinations on the basis of facts available to such circumstances only, there 
appears not to have been a valid basis for resorting to the use of facts available in the way the 
USDOC did in any of th e identified investigations and reviews leading to the imposition of anti -
dumping or countervailing duty measures.  
17. In addition, when resorting to the use of facts available, the USDOC in each case (i) failed to 
specify in detail the information required fr om the producers/exporters; (ii) failed to take into 
account all verifiable information submitted by the producers/exporters; (iii) disregarded 
information simply because it was not ideal in all respects; (iv) failed to provide the 
producers/exporters oppo rtunity to provide further explanations when information was rejected; 
and (v) failed to respect the steps to be followed with respect to the use of information from 
secondary sources, such as the need to use such information with special circumspection an d the 
need to check the information from other independent sources at their disposal.  In so doing, the 
USDOC failed to respect the express obligations set forth in paragraphs 1, 3, 5, 6 and 7 of 
Annex  II of the Anti -Dumping Agreement as well as the obliga tion set forth in Article 12.7 of the 
SCM Agreement.  
18. Finally, when selecting from the facts otherwise available, the USDOC resorted to the 
drawing of "adverse" inferences and failed to take into account all substantiated facts on the 
record and all evidenc e that was verifiable and appropriately submitted in a timely manner.  In 
each of these measures, the USDOC based the determination of dumping or subsidization for the 
relevant producers or exporters on certain information, including secondary source infor mation 
from the petitioners, as well as assumptions or speculation with a view to arriving at a result that 
was sufficiently adverse to the interests of these producers or exporters.  The USDOC did not seek 
to replace the allegedly missing information with  the best information available and did not seek to 
corroborate the information in order to arrive at an accurate determination of dumping or 
subsidization.  It unduly disregarded verifiable information that was submitted by the Korean 
producers or exporte rs to the best of their ability.  The USDOC's determinations in the 
investigations and reviews that led to the adoption or continuation of these measures did not 
reflect a valid process of reasoning and evaluation that would support the selection of the fa cts in 
the circumstances of each case.  In sum, Korea is concerned that when determining dumping and 
subsidization on the basis of facts available in the context of the above -listed measures, the 
USDOC used facts available in a punitive manner rather than to seek to arrive at an accurate 
determination, in violation of Article 6.8 and paragraph 7 of Annex II of the Anti -Dumping 
Agreement and Article 12.7 of the SCM Agreement.  
                                                                                                                                                  
and comments 4 and 5; Cold-Rolled Steel A D Measure  – Issues and Decision Memorandum for the Final 
Affirmative Determination in the Antidumping Duty Investigation of Certain Cold -Rolled Steel Products from the 
Republic of Korea (20 July 2016), including comments 12, 15, and 19; Cold-Rolled Steel C VD Measure  – 
Issues and Decision Memorandum for the Final Determination in the Countervailing Duty Investigation of 
Certain Cold -Rolled Steel Flat Products from the Republic of Korea (20 July 2016), including section VI, and 
comments 5, 6, 7; Hot-Rolled St eel AD Measure  - Issues and Decision Memorandum for the Final 
Affirmative Determination in the Antidumping Duty Investigation of Certain Hot -Rolled Steel Flat Products from 
the Republic of Korea (4 August 2016), including comment 8; Hot-Rolled Steel CVD Me asure  – Issues and 
Decision Memorandum for the Final Determination in the Countervailing Duty Investigation of Certain Hot -
Rolled Steel Flat Products from the Republic of Korea (4 August 2016), including section VI, and comments 5, 
6, 7; Large Power Transf ormers AD Measure : for the third administrative review – Issues and Decision 
Memorandum for the Final Results of the Administrative Review of the Antidumping Duty Order on Large Power 
Transformers from the Republic of Korea; 2014 -2015 (6 March 2017), inclu ding sections VI and VII, and 
comments 1, 4 and 5; for the fourth administrative review – Issues and Decision Memorandum for the Final 
Results of the Administrative Review of the Antidumping Duty Order on Large Power Transformers from the 
Republic of Korea ; 2015 -2016 (9 March 2018), including section V, and comments 1, 2, 3, 4, and 5; and for 
the sunset review – Issues and Decision Memorandum for the Expedited First Sunset Review of the 
Antidumping Duty Order on Large Power Transformers from the Republic of  Korea (31 October 2017), including 
sections IV, VI, VII, and VIII; for the remand of the second administrative review – Final Results of 
Redetermination Pursuant to Court Remand, ABB INC. v. United States, Consol. Court No. 16 -00054, Slip Op. 
17-138 (7 Fe bruary 2018), including sections B, C, and D . 
For the sake of clarity, in Annex II Korea briefly summarizes in a non -exhaustive manner some of the 
most relevant findings of each of these measures before linking them to the obligations contained in the 
relevant legal provisions of the Anti -Dumping Agreement and the SCM Agreement.    WT/DS539/6  
 
- 6 - 
 
  19. In sum, the USDOC  appears to have acted in violation of the United States' obligations 
under Article 6.8 and Annex II of the Anti -Dumping Agreement, in particular paragraphs 1, 3, 5, 6 
and 7 of Annex II and Article 12.7 of the SCM Agreement relating to the use of facts ava ilable and 
drawing adverse inferences in selecting from the facts otherwise available in each of the anti -
dumping and countervailing duty measures identified in Section I.A.  
20. Furthermore, Korea is concerned that when resorting to the use of facts available in the 
context of the above -identified anti -dumping and countervailing duty measures, the United States 
failed to comply with the following provisions:  
a. Article 6.1 of the Anti -Dumping Agreement and Article 12.1 of the SCM Agreement because 
the USDOC failed  to give notice of the information which it required and to give ample 
opportunity for interested parties to present in writing all evidence which they considered 
relevant in the investigation;  
b. Article 6.2 of the Anti -Dumping Agreement and Article 12.2 of the SCM Agreement because 
the USDOC failed to provide interested parties with the full opportunity to defend their 
interests;  
c. Article 6.6 of the Anti -Dumping Agreement and Article 12.5 of the SCM Agreement because 
the USDOC failed to satisfy itself as to t he accuracy of the information supplied by 
interested parties upon which its findings were based;  
d. Article 6.7 and Annex I of the Anti -Dumping Agreement and Article 12.6 and Annex VI of 
the SCM Agreement when the USDOC failed to carry out investigations, in cluding on the 
premises of a firm in the territory of other Members, "as required" to verify information 
provided or to obtain further details and because it failed to make available the results of 
verifications to the firms to which they pertain or provid e disclosure thereof;  
e. Article 6.9 of the Anti -Dumping Agreement and Article 12.8 of the SCM Agreement because 
the USDOC failed to inform all interested parties of the essential facts under consideration 
which formed the basis for the decision to apply def initive measures such as, among 
others, the "necessary" nature of the information that was allegedly not provided, the 
factual basis for the finding of failure to act to the best of one's ability, and the s electio n of 
the facts available;  
f. Article 9.4 of t he Anti -Dumping Agreement because in situations where sampling was 
used3 the USDOC determined an all others rate that did not disregard margins established 
under the circumstances of Article 6.8;  
g. Articles 11.2, 11.3 and 11.6 of the SCM  Agreement because the USDOC requested 
information to be provided on "any other forms of assistance" that was not included in the 
application on which the investigation was based, and applied facts available whenever it 
discovered information that was not provided in response to this request, without 
examining whether the information obtained or discovered sufficed to initiate the 
investigation; and  
h. Article 11.4 of the Anti -Dumping Agreement and Article 21.4 of the SCM Agreement 
because the USDOC failed to  act in accordance with the provisions on evidence and 
procedure as outlined above in the relevant reviews.  
21. Moreover, as a consequence of the undue use of adverse facts available when determining 
dumping and/or subsidization, these measures appear to be in consistent with several provisions of 
the Anti -Dumping Agreement and the SCM Agreement relating to the determination of dumping or 
subsidization, the determination of injury and causation, the determination of the amount of the 
duty to be imposed, and the maintenance of the duty, such as Articles 1, 2.1, 2.2, 2.3, 2.4, 3.1, 
3.2, 3.4, 3.5, 5.8, 9.2, 9.3, 9.4, 9.5, 11.1, 11.3, 11.4, and 18.1 of the Anti -Dumping Agreement 
as well as Articles 1, 10, 11.2, 11.3, 11.9, 14, 15.1, 15.2, 15.4, 15.5, 19.1, 19.3, 19.4 , 21.1, 21.3, 
                                                
3 This was the case, for example, in the fourth administrative review in the Large Power Transformers 
AD Measure . WT/DS539/6  
 
- 7 - 
 
  and 32.1 of the SCM Agreement, and Articles VI:1, VI:2 and VI:3 of the GATT 1994.  These 
consequential violations are further summarized below.  
22. In particular, Korea considers that the undue use of adverse facts available in each of these 
meas ures automatically vitiates the determination of dumping or subsidization under Articles 2.1, 
2.2, 2.3 and 2.4 of the Anti -Dumping Agreement and Article 1 and 10 of the SCM Agreement.  
Where normal value, export price and the comparison between the two are  affected by the undue 
use of adverse facts available, the dumping determination is necessarily also flawed.  Similarly, 
where subsidy programs are presumed to be benefiting certain producers based on the undue use 
of adverse facts available, the subsidy d etermination is necessarily inconsistent with Article 1 and 
any countervailing duty measure is thus inconsistent with Article 10 of the SCM Agreement.  
23. In addition, any injury and causation analysis under Article 3 of the Anti -Dumping 
Agreement and Article 15 of the SCM Agreement that seeks to identify the effects of such unduly 
determined "dumped " or "subsidized " imports, is necessarily also flawed since there is no certainty 
that imports would have been found to be dumped or subsidized if the relevant WTO obligations 
were abided by.  In addition, the magnitude of the margin of dumping is a specific injury factor 
that must be examined under Article 3.4 of the Anti -Dumping Agreement.  Given that the improper 
use of adverse facts available inflates the margin of dumping, this automatically vitiates the injury 
analysis under Article 3.4 of the Anti -Dumping Agreement.  Similarly, Article 14 of the SCM 
Agreement sets forth obligations on the calculation of the amount of the subsidy which are 
necessarily violated i f, as was the case in the two countervailing duty measure identified above, 
subsidies are assumed to be provided to exporters or producers based on the undue use of 
adverse facts available.  
24. Furthermore, the amount of the duties is limited by the margin of dumping or subsidization 
under Articles 9.1 and 9.3 of the Anti -Dumping Agreement and Articles 19.2 and 19.4 of the SCM 
Agreement.  In all of the investigations and reviews in question, USDOC determined the amount of 
the duties to be equal to the margin of  dumping or subsidization.  Duties that have been calculated 
based on margins of dumping or subsidization that were inflated as a result of the undue use of 
adverse facts available will necessarily violate these obligations.  
25. In addition, any anti -dumping a nd countervailing duty investigation should have been 
terminated promptly under Article 5.8 of the Anti -Dumping Agreement and Article 11.9 of the SCM 
Agreement where, absent the undue use of adverse facts available, no dumping or subsidization 
above de min imis was found.  In particular, in the context of the above -identified Cold -Rolled Steel 
CVD Measure and Hot -Rolled Steel CVD Measure, the investigations should have been terminated 
promptly since the preliminary determinations concluded that the amount of  subsidization were de 
minimis .  Only as a result of the undue use of adverse facts available did the USDOC make 
findings of subsidization above de minimis  in both investigations.  In addition, the sunset review 
determination in Large Power Transformers AD  Measure is based on an examination of the 
likelihood of recurrence or continuation of dumping that relies on dumping margins established 
through the improper use of adverse facts available.  Such a sunset review examination is 
automatically flawed as it i s not supported by a sufficient factual basis and is not based on a 
determination of dumping that is consistent with Article 2 of the Anti -Dumping Agreement, thus 
violating Articles 11.1 and 11.3 of the Anti -Dumping Agreement.  
26. Finally, the undue applicatio n of adverse facts available vitiates key aspects of the 
challenged anti -dumping and countervailing duty measures, which thus constitute specific actions 
against dumping or against a subsidy that are inconsistent with the provisions of the GATT 1994, 
as interpreted by the Anti -Dumping Agreement and the SCM Agreement respectively.  As a result, 
the listed anti -dumping measures in Section I.A. violate Article 18.1 of the Anti -Dumping 
Agreement and the listed countervailing duty measures in the same section vi olate Article 32.1 of 
the SCM Agreement.  
B. As Such Challenge to Section 776 of the Tariff Act of 1930 (19 U.S.C. § 1677e) as 
amended by Section 502 of the Trade Preferences Extension Act of 2015, and its 
implementing regulations  
27. With regard to Section 776 of  the Tariff Act of 1930, codified at 19 U.S.C. § 1677e, as 
amended by Section 502 of the Trade Preferences Extension Act of 2015, and the above -listed 
related legal provisions of the United States' national legislation governing the use of facts WT/DS539/6  
 
- 8 - 
 
  available,  Korea is concerned that these provisions are inconsistent with the United States' 
obligations under Article 6.8 and Annex II of the Anti -Dumping Agreement, and Article 12.7 of the 
SCM Agreement.  
28. Section 776 of the Tariff Act of 1930 (19 U.S.C. § 1677e), a s amended by Section 502 of the 
Trade Preferences Extension Act of 2015, provides that if the authorities find that an interested 
party has failed to cooperate by not acting to the best of its ability to comply with a request for 
information, the authoriti es may use an inference that is adverse to the interests of that party in 
selecting from among the facts otherwise available.4  In particular, it provides that the authorities 
are not required to determine, or make any adjustments to, a countervailable  subsidy rate or 
weighted average dumping margin based on any assumptions about information the interested 
party would have provided if the interested party had complied with the request for information.5  
It gives full discretion to the authorities to app ly the highest rate or margin available from among 
the available dumping margins or countervailable subsidy rates, without the need to corroborate 
such margins.6  It further clarifies that the authorities are not required to estimate what the 
countervailab le subsidy rate or dumping margin would have been if the interested party found to 
have failed to cooperate had cooperated or to demonstrate  that the countervailable subsidy rate or 
dumping margin used by the administering authority reflects an alleged com mercial reality of the 
interested party.7 
29. Korea considers that these legal provisions unduly permit the United States' investigating 
authorities, and in particular the USDOC, not only to replace the missing necessary information but 
to disregard verifiable  and relevant information that was appropriately submitted by the producers 
or exporters.  They expressly relieve the authorities from the requirement to use "best" 
information available as they permit the USDOC to select from the facts otherwise available  those 
that are adverse to the interest of the party concerned.  They relieve the authorities from the 
requirement to use secondary source information with special circumspection in certain 
circumstances and give full discretion to the authorities to delib erately apply the highest rate or 
margin, without the need to even consider whether this rate has a basis in the commercial reality 
of the producer or exporter in question, or is supported by available other information that relates 
to the producer or expo rter in question.   
30. These provisions thus provide that there is no obligation on the authorities to abide by the 
obligations on the use of facts available imposed by Article 6.8 and, among others, paragraphs 1, 
3, 5, 6 and 7 of Annex II of the Anti -Dumping  Agreement and Article 12.7 of the SCM Agreement.  
These provisions unduly relieve the obligation on the investigating authorities to use facts available 
to reasonably replace missing "necessary information" with a view to arriving at an accurate 
determina tion and permit the use of facts available in a punitive manner.8  Section 776 of the 
Tariff Act of 1930 (19 U.S.C. § 1677e), as amended by Section 502 of the Trade Preferences 
Extension Act of 2015, permits the use of facts available in a manner that is n ot permitted by 
Articles 6.8 and Annex II of the Anti -Dumping Agreement and Article 12.7 of the SCM Agreement 
and thus violate these provisions.  The Anti -Dumping Agreement and the SCM Agreement do not 
permit resorting to facts available in a punitive mann er but require that the authorities take into 
account all substantiated facts on the record and all evidence that was verifiable and appropriately 
submitted in a timely manner and that facts available be used only to replace the "necessary " 
information tha t is allegedly missing with the best information otherwise available in order to 
arrive at an accurate determination of dumping or subsidization.  
31. In addition, Korea considers that the unfettered discretion granted to the authorities to act 
in this manner i s inconsistent with the United States' obligation under Article 18.4 of the Anti -
Dumping Agreement and Article 32.5 of the SCM Agreement, as well as Article XVI:4 of the 
Marrakesh Agreement establishing the WTO to ensure conformity of its laws regulations and 
administrative procedures with the provisions of, in particular, Article 6.8 and Annex II of the Anti -
Dumping Agreement and Article 12.7 of the SCM Agreement.  
                                                
4 19 U.S.C. § 1677e(b)(1)(A).  
5 19 U.S.C. § 1677e(b)(1)(B).  
6 19 U.S.C. § 1677e(c)(2),  § 1677e(d)(1),(2).  
7 19 U.S.C. § 1677e(d)(3).  
8 As confirmed by the practice of the USDOC referred to in Section I.C, the selection of facts that are 
sufficiently adverse to the interests of the party in question rather than seeking  to arrive at an accurate 
determination, is in fact the rule under these legal provisions.  WT/DS539/6  
 
- 9 - 
 
  C. As Such Challenge to the USDOC's  Use of Adverse Facts Available As an Ongoing 
Conduct, or Rule or Norm of General and Prospective Application  
32. Finally, with regard to the USDOC's use of adverse facts available, Korea is concerned that, 
under this ongoing conduct,  or rule or norm, whenever  the USDOC determines that a producer or 
exporter has failed to cooperate by not acting to the best of its ability, the USDOC selects facts 
from the record that are adverse to the interests of the foreign producers or exporters without (i) 
establishing tha t the adverse inferences can reasonably be drawn in light of the degree of 
cooperation received, and (ii) ensuring that such facts are the "best information available" in the 
particular circumstances.  
33. Korea considers that the USDOC's ongoing conduct, or r ule or norm of general and 
prospective application appears to be inconsistent with the United States' obligations relating to 
the use of facts available, because, among other things, the United States disregards verifiable 
and relevant information that was  appropriately submitted by the producers or exporters acting to 
the best of their abilities and fails to act with special circumspection when basing its findings on 
information from secondary sources, thus failing to use the "best information available".  The 
USDOC draws conclusions on whether an interested party fails to act to the best of its ability 
without evidence that "necessary " information is actively being withheld or that the investigation is 
being impeded in a significant and deliberate manner.  Furthermore, and in line with the 
permission granted by Section 776 of the Tariff Act of 1930 (19 U.S.C. § 1677e), as amended by 
Section 502 of the Trade Preferences Extension Act of 2015, the USDOC practice is not to 
determine, or make any adjustments to , a countervailable subsidy rate or weighted average 
dumping margin based on any assumptions about information the interested party would have 
provided if the interested party had complied with the request for information.  It does not 
estimate what the co untervailable subsidy rate or dumping margin would have been if the 
interested party found to have failed to cooperate had cooperated or seek to determine that the 
countervailable subsidy rate or dumping margin used by the administering authority reflects an 
alleged commercial reality of the interested party.  Whenever it relies on a rate reflected in the 
petition or a margin of dumping or subsidization established in a previous segment of the 
proceeding, it does not seek to corroborate or check such inform ation based on the available 
information in the record.  The USDOC's ongoing conduct, or rule or norm is to select a rate that is 
sufficiently adverse to ensure that the allegedly uncooperative party does not obtain a more 
favorable result by failing to co operate than if it had fully cooperated, and thus effectively applies 
facts available in a punitive manner rather than with a view to arriving at an accurate 
determination.  
34. Korea considers that the USDOC's ongoing conduct, or rule or norm of using adverse facts 
available whenever it makes a finding of a failure to cooperate by not acting to the best of its 
ability is inconsistent with the obligation that investigating authorities undertake a process of 
reasoning and evaluation when  selecting the facts avail able that reasonably replace the missing 
"necessary information" to arrive at an accurate determination and thus appears to violate Article 
6.8 and Annex II of the Anti -Dumping Agreement, in particular paragraphs 1, 3, 5, 6 and 7 of 
Annex II, and Article 1 2.7 of the SCM Agreement.  
III. CONCLUSION  
35. The US anti -dumping and countervailing measures identified in Section I.A, the relevant 
legal provisions under US law identified in Section I.B, and the U.S. ongoing conduct,  or rule or 
norm of general and prospective application of applying adverse facts available as identified in 
Section I.C of this request, nullifies or impairs benefits accruing to Korea, directly or indirectly, 
under the cited agreements.  
36. Therefore , Korea respectfully requests, pursuant to Article 6 of the DSU, Article XXIII of the 
GATT 1994, Article 17.4 of the Anti -Dumping Agreement, and Article 30 of the SCM Agreement, 
that the Dispute Settlement Body establish a panel to examine this matter, with the st andard 
terms of reference as set out in Article 7.1 of the DSU.  
37. Korea further asks that this request for the establishment of a panel be placed on the 
agenda of the next meeting of the Dispute Settlement Body to be held on 27 April 2018.  
  WT/DS539/6  
 
- 10 - 
 
  ANNEX I  
 
1. Certain  Uncoated Paper From Portugal: Preliminary Determination of Sales at Less Than Fair 
Value and Postponement of Final Determination , 80 Fed. Reg. 51777 (26 August 2015)  
2. Low-Enriched Uranium From France: Final Results of Antidumping Duty Administrative  
Review; 2013 -2014, 80 Fed. Reg. 55089 (14 September 2015)  
3. Certain Hot -Rolled Steel Flat Products From the Netherlands: Affirmative Preliminary 
Determination of Sales at Less Than Fair Value, Postponement of Final Determination and 
Extension of Provisional  Measures , 81 Fed. Reg. 15225 (22 March 2016)  
4. Circular Welded Carbon -Quality Steel Pipe From Pakistan: Affirmative Preliminary 
Determination of Sales at Less Than Fair Value and Postponement of Final Determination and 
Extension of Provisional Measures , 81 Fed .Reg. 36867 (8 June 2016)  
5. Certain Stilbenic Optical Brightening Agents From Taiwan: Final Results of Antidumping Duty 
Administrative Review; 2014 -2015, 81 Fed. Reg. 43991 (6 July 2016)  
6. Certain Cold -Rolled Steel Flat Products From the United Kingdom: Fi nal Determination of 
Sales at Less Than Fair Value , 81 Fed. Reg. 49929 (29 July 2016)  
7. Certain Carbon and Alloy Steel Cut -to-Length Plate From the Federal Republic of Germany: 
Final Determination of Sales at Less Than Fair Value , 82 Fed. Reg. 16360 (4 April  2017)  
8. Certain Carbon and Alloy Steel Cut -to-Length Plate From France: Final Determination of 
Sales at Less Than Fair Value , 82 Fed. Reg. 16363 (4 April 2017)  
9. Certain Carbon and Alloy Steel Cut -To-Length Plate From Belgium: Final Determination of 
Sales at Less Than Fair Value and Final Determination of Critical Circumstances, in Part , 82 Fed. 
Reg. 16378 (4 April 2017)  
10. Carbon and Certain Alloy Steel Wire Rod From Mexico: Final Results of Antidumping Duty 
Administrative Review and Final Determination of No Sh ipments; 2014 -2015, 82 Fed. Reg. 23190 
(22 May 2017)  
11. Certain Uncoated Groundwood Paper From Canada: Preliminary Affirmative Countervailing 
Duty Determination, and Alignment of Final Determination With Final Antidumping Duty 
Determination , 83 Fed. Reg. 2133  (16 January 2018)  
12. Certain Steel Nails From Taiwan: Final Results of Antidumping Duty Administrative Review 
and Partial Rescission of Administrative Review; 2015 -2016, 83 Fed. Reg. 6163 (13 February 
2018)  
13. Biodiesel From Argentina: Final Determination of Sa les at Less Than Fair Value and Final 
Affirmative Determination of Critical Circumstances, in Part , 83 Fed. Reg. 8837 (1 March 2018)  
14. Silicon Metal From Brazil: Final Affirmative Countervailing Duty Determination , 83 Fed. Reg. 
9838 (8 March 2018)  
15. Polytetraf luoroethylene Resin From India: Preliminary Affirmative Countervailing Duty 
Determination , 83 Fed. Reg. 9842 (8 March 2018)  
16. Large Power Transformers From the Republic of Korea: Final Results of Antidumping Duty 
Administrative Review; 2015 -2016, 83 Fed. Reg . 11679 (16 March 2018)  
17. Carbon and Alloy Steel Wire Rod From the Republic of Turkey: Final Affirmative 
Countervailing Duty Determination and Final Affirmative Critical Circumstances Determination, in 
Part, 83 Fed. Reg. 13239 (28 March 2018)  
18. Stainless Steel  Flanges From India: Preliminary Affirmative Determination of Sales at Less 
Than Fair Value, Preliminary Affirmative Determination of Critical Circumstances, Postponement of 
Final Determination, and Extension of Provisional Measures , 83 Fed. Reg. 132436 (2 8 March 2018)  
  WT/DS539/6  
 
- 11 - 
 
  ANNEX II  
 
19. In the Corrosion -Resistant Steel AD Measure , the USDOC used partial Adverse Facts 
Available ( "AFA") for Hyundai's further manufactured sales of sheet, skelp, blanks, TWBs, and auto 
parts allegedly  because Hyundai failed to submit information by the established deadlines and 
significantly impeded the proceeding.  Moreover, the USDOC considered that an adverse inference 
was warranted under section 776(b) of the Tariff Act of 1930 because Hyundai alle gedly did not 
cooperate to the best of its ability in providing information on these further manufactured sales.  
As a result, the USDOC selected from the facts otherwise available with respect to Hyundai the 
highest rate as calculated in the petition (i.e . a rate of 86.34%).  
20. Korea considers that, among others, the USDOC failed to specify in sufficient detail the 
information that was required to be submitted, failed to provide an adequate and reasoned 
explanation that the information was "necessary " or that  the failure to provide this information 
"significantly impeded " the investigation. The USDOC failed to substantiate its finding that Hyundai 
failed to act to the best of its abilities.  In addition, the USDOC disregarded verifiable information, 
did not pr ovide a meaningful opportunity to Hyundai to provide further explanations and did not 
use special circumspection when resorting to the use of secondary information.  The USDOC did 
not check such information from other independent sources at its disposal.  More in general, the 
USDOC selected the highest rate as calculated in the petition as the basis for the facts available 
because such rate was sufficiently adverse to the interests of Hyundai, and not because it was the 
best information available to arrive at an accurate determination.  In so doing, it appears to have 
acted in violation of Article 6.8 and Annex II of the Anti -Dumping Agreement, as well as Articles 
6.1, 6.2, 6.6, 6.7 and Annex I, and 6.9 of the Anti -Dumping Agreement.  
21. In the Cold-Rolled Stee l AD Measure , the USDOC used partial AFA for Hyundai (i) with 
respect to the reported sales and cost data, including the control numbers that were reported by 
Hyundai; (ii) with respect to the reporting of freight and warehousing services provided by an 
affiliated company; and (iii) with respect to the alleged failure to report warehousing expenses.  
The USDOC found that Hyundai did not cooperate to the best of its ability with regard to these 
three sets of information, and thus drew adverse inferences sele cting from among the facts 
available those that were sufficiently adverse to the interests of the Korean exporter.  In 
particular, it selected as AFA the highest calculated margin for any other reported U.S. sale of 
Hyundai and assigned the highest reporte d total cost of manufacturing for the CONNUMs in 
question as AFA.  Similarly, with respect to the use of AFA for affiliated company services, the 
USDOC applied Hyundai's lowest reported value for its home inland freight and warehousing fields, 
the highest reported values by destination for Hyundai's international freight and U.S. inland 
freight and, for home market inland freight for U.S. sales, the USDOC selected the second -highest 
transaction -specific value as AFA.  Similarly, with respect to the alleged failure to report 
warehousing information, the USDOC appears to have applied as AFA for Hyundai's home -market 
warehousing expenses, its lowest reported value for its warehousing fields for the final 
determination.  
22. Korea  considers that, among others, the US DOC failed to specify in sufficient detail the 
information that was required to be submitted, failed to provide an adequate and reasoned 
explanation that the information was "necessary " or that the failure to provide this information 
"significantly impeded " the investigation.  The USDOC failed to substantiate its finding that 
Hyundai failed to act to the best of its abilities.  In addition, the USDOC disregarded verifiable 
information, did not provide a meaningful opportunity to Hyundai to provide further e xplanations 
and did not use special circumspection when resorting to the use of secondary information.  The 
USDOC did not check such information from other independent sources at its disposal.  More in 
general, the USDOC selected the information to be used  as the basis for the facts available 
because it was sufficiently adverse to the interests of Hyundai, and not because it was the best 
information available to arrive at an accurate determination.  In so doing, it appears to have acted 
in violation of Arti cle 6.8 and Annex II of the Anti -Dumping Agreement, as well as Articles 6.1, 6.2, 
6.6, 6.7 and Annex I, and 6.9 of the Anti -Dumping Agreement.  
23. In the Cold-Rolled Steel CVD Measure , the USDOC used partial AFA in relation to Korean 
producer, POSCO.  In parti cular USDOC applied AFA to POSCO for (1) its failure to report certain 
cross-owned input suppliers; (2) the discovery at verification of facilities allegedly located in a 
foreign economic zone ( "FEZ"); and (3) for the failure of its affiliated trading comp any, Daewoo 
International Corporation, to report certain loans.  As AFA, the USDOC determined that POSCO WT/DS539/6  
 
- 12 - 
 
  benefitted from the majority of the programs in the investigation and instead of a de minimis  rate 
of 0.18% as determined preliminarily, determined tha t the AFA subsidy rate for POSCO was 
58.36%.  T he USDOC requested information to be provided on "any other forms of assistance" 
that was not included in the application on which the investigation was based, and applied facts 
available whenever it discovere d information that was not provided in response to this request, 
without examining whether the information obtained or discovered sufficed to initiate the 
investigation.  
24. Korea considers that, among others, the USDOC failed to specify in sufficient detail t he 
information that was required to be submitted, failed to provide an adequate and reasoned 
explanation that the information was "necessary " or that the failure to provide this information 
"significantly impeded " the investigation.  In particular, a reasonable explanation was provided by 
POSCO of why certain information was not provided.  The USDOC failed to substantiate its finding 
that POSCO failed to act to the best of its abilities.  In addition, the USDOC dis regarded verifiable 
information, did not provide a meaningful opportunity to POSCO and Daewoo International 
Corporation to provide further explanations and did not use special circumspection when resorting 
to the use of secondary information.  The USDOC di d not check such information from other 
independent sources at its disposal.  More in general, the USDOC used as facts available certain 
assumptions that were sufficiently adverse to the interests of POSCO and Daewoo International 
Corporation, and did not seek to apply the best information available to arrive at an accurate 
determination.  In so doing, it appears to have acted in violation of Article 12.7 of the SCM 
Agreement, as well as Articles 12.1, 12.2, 12.5, 12.6 and Annex VI, and 12.8 of the SCM 
Agreement.  In addition, USDOC's failure to examine whether there was sufficient information to 
initiate the investigation with respect to "other forms of assistance " not included in the application 
appears to violate Articles 11.2, 11.3, and 11.6 of the SCM A greement.  
25. In the Hot-Rolled Steel AD Measure , the USDOC applied partial AFA to Hyundai's home 
market inland freight, home market warehousing expenses, international freight, marine 
insurance, and domestic inland freight for U.S. sales because of the alleg ed failure to report such 
information that was in the possession of affiliated companies.  In particular, the USDOC applied 
AFA to Hyundai because it was unable to supply information regarding its affiliates' transactions 
with unaffiliated parties, request ed for the first time at verification, that the agency claimed was 
necessary to benchmark its affiliates' services provided to Hyundai.  For home market inland 
freight and warehousing, the USDOC applied Hyundai's lowest reported values for home inland 
freight and warehousing fields for the final determination.  For marine insurance and international 
freight (including wharfage), it applied the highest reported values for the final determination.  For 
domestic inland freight for U.S. sales, it selected the h ighest value as AFA.  
26. Korea  considers that, among others, the USDOC failed to specify in sufficient detail the 
information that was required to be submitted, failed to provide an adequate and reasoned 
explanation that the information was "necessary " or that  the failure to provide this information 
"significantly impeded " the investigation.  The USDOC failed to substantiate its finding that 
Hyundai failed to act to the best of its abilities.  In addition, the USDOC disregarded verifiable 
information, did not p rovide a meaningful opportunity to Hyundai to provide further explanations 
and did not use special circumspection when resorting to the use of secondary information.  The 
USDOC did not check such information from other independent sources at its disposal.  More in 
general, the USDOC selected the information to be used as the basis for the facts available 
because it was sufficiently adverse to the interests of Hyundai, and not because it was the best 
information available to arrive at an accurate determinati on.  In so doing, USDOC appears to have 
acted in violation of Article 6.8 and Annex II of the Anti -Dumping Agreement , as well as Articles 
6.1, 6.2, 6.6, 6.7 and Annex I, and 6.9 of the Anti -Dumping Agreement .  
27. In the Hot-Rolled Steel CVD Measure , the USDOC  used partial AFA with respect to (1) 
POSCO's alleged failure to report certain cross -owned input suppliers; (2) the discovery at 
verification of facilities allegedly located in a foreign economic zone ( "FEZ"); and (3) for the failure 
of its affiliated tra ding company, Daewoo International Corporation, to report certain loans.  As 
adverse facts available, the USDOC determined that POSCO benefitted from the majority of the 
programs in the investigation and instead of a de minimis  rate of 0.17% as determined 
preliminarily, it determined that the AFA subsidy rate for POSCO was 57.04%.  T he USDOC 
requested information to be provided on "any other forms of assistance" that was not included in 
the application on which the investigation was based, and applied facts  available whenever it WT/DS539/6  
 
- 13 - 
 
  discovered information that was not provided in response to this request, without examining 
whether the information obtained or discovered sufficed to initiate the investigation.  
28. Korea considers that, among others, the USDOC failed t o specify in sufficient detail the 
information that was required to be submitted, failed to provide an adequate and reasoned 
explanation that the information was "necessary " or that the failure to provide this information 
"significantly impeded " the invest igation.  In particular, a reasonable explanation was provided by 
POSCO of why certain information was not provided and was not necessary.  The USDOC failed to 
substantiate its finding that POSCO failed to act to the best of its abilities.  In addition, th e USDOC 
disregarded verifiable information, did not provide a meaningful opportunity to POSCO and 
Daewoo International Corporation to provide further explanations and did not use special 
circumspection when resorting to the use of secondary information.  T he USDOC did not check 
such information from other independent sources at its disposal.  More in general, the USDOC 
used as facts available certain assumptions that were sufficiently adverse to the interests of 
POSCO and Daewoo International Corporation, a nd did not seek to apply the best information 
available to arrive at an accurate determination.  In so doing, it appears to have acted in violation 
of Article 12.7 of the SCM Agreement, as well as Articles 12.1, 12.2, 12.5, 12.6 and Annex VI, and 
12.8 of t he SCM Agreement.  In addition, USDOC's failure to examine whether there was sufficient 
information to initiate the investigation with respect to "other forms of assistance " not included in 
the application appears to violate Articles 11.2, 11.3, and 11.6 o f the SCM Agreement.  
29. In the Large Power Transformers AD Measure , in the third administrative review, the 
USDOC used total AFA with regard to Hyundai.  The USDOC considered that Hyundai failed to 
provide complete and accurate information in particular conce rning service -related revenues, the 
exclusion of certain parts, the failure to report the price and costs for accessories separately, a 
number of other concerns relating to the alleged "selective reporting " by Hyundai.  The USDOC 
found that an adverse infe rence was warranted, as the company significantly impeded the review 
and failed to cooperate to the best of its ability and as a result, the USDOC used the highest 
petition margin to determine the 60.81% anti -dumping duty.  
30. A similar set of findings was ma de in the fourth administrative review.   For the fourth 
administrative review, the USDOC continued to find that Hyundai withheld requested information 
and impeded the review by failing to provide the prices and costs for "accessories ", thus allegedly 
preventing the USDOC from analyzing and determining whether: (1) product matches were based 
on accurate physical characteristics; (2) the difference in costs between similar products could be 
attributed to factors other than the physical c haracteristics; and (3) there was potential for 
manipulation of the dumping margin by inconsistent treatment of accessories between home 
market and U.S. sales.  In addition, Hyundai was found to have inconsistently reported an identical 
component in differ ent sales as foreign like and non -foreign like product which allegedly called into 
question the reliability of its reporting of home market sales.  
31. As AFA, the USDOC assigned Hyundai a dumping margin of 60.81%, the petition rate as 
used also in the third a dministrative review.  USDOC relied on the same arguments for 
corroboration as in the third administrative review.  Similar findings were made with respect to 
Hyosung.  For the fourth administrative review, the USDOC found that Hyosung failed to report 
information essential to the calculation of the average U.S. price, in particular that Hyosung: (1) 
failed to report service -related revenues accurately and completely; (2) failed to explain how a 
single invoice could cover multiple sales that entered into th e United States over multiple periods 
of review; and (3) failed to report all relevant discounts and price adjustments.  Furthermore, the 
USDOC calculated an all others rate based on the margins determined by using AFA.  The USDOC 
explained that it average d the two AFA margins in order to determine the margin for non -selected 
respondents, and that, in its view, this was a reasonable method to determine the all others rate.  
32. In the redetermination of the second administrative review, the USDOC also resorted t o the 
use of AFA with respect to Hyundai.  Specifically, it found that Hyundai failed to report service -
related revenue, despite its agreement with Hyundai's reporting in the final results of the second 
administrative review.  The USDOC did not notify Hyun dai of any deficiency in its reporting during 
the remand proceeding, nor did it offer Hyundai an opportunity to remedy any deficiency.   
33. In the sunset review, the USDOC found that revocation of the antidumping duty order on 
Large Power Transformers from Ko rea would likely lead to continuation or recurrence of dumping, 
and that the magnitude of the dumping margins likely to prevail would be weighted -average WT/DS539/6  
 
- 14 - 
 
  dumping margins up to 29.04% for Hyosung and 14.95% for Hyundai.  The decision that dumping 
was likely  to continue or recur was based on dumping margins calculated by USDOC using AFA in 
subsequent reviews (e.g., the final results of the third administrative review and the preliminary 
results of the fourth administrative review).  The USDOC considered that the dumping margins 
calculated on the basis of AFA provided the best evidence of dumping behavior of these Korean 
companies and there was no evidence that indicated that dumping had ceased.  
34. In respective of the above reviews, Korea considers that, among ot hers, the USDOC failed to 
specify in sufficient detail the information that was required to be submitted, failed to provide an 
adequate and reasoned explanation that the information was "necessary " or that the failure to 
provide this information "significa ntly impeded " the investigation. The USDOC failed to 
substantiate its finding that Hyundai and Hyosung failed to act to the best of their abilities.  In 
addition, the USDOC disregarded verifiable information, did not provide a meaningful opportunity 
to Hyu ndai to provide further explanations and did not use special circumspection when resorting 
to the use of secondary information from the petition.  The USDOC did not check such information 
from other independent sources at its disposal.  More in general, th e USDOC selected the 
information to be used as the basis for the facts available because it was sufficiently adverse to 
the interests of Hyundai and Hyosung, and not because it was the best information available to 
arrive at an accurate determination.  In so doing, USDOC appears to have acted in violation of 
Article 6.8 and Annex II of the Anti -Dumping Agreement,  as well as Articles 6.1, 6.2, 6.6, 6.7 and 
Annex I, and 6.9 of the Anti -Dumping Agreement .  The USDOC determination of an all others rate 
that inc luded margins determined on the basis of the facts available appears to be inconsistent 
with Article 9.4 of the Anti -Dumping Agreement.    
35. In addition, in the sunset review, the USDOC relied on dumping margins that were not 
determined in accordance with Ar ticle 2 of the Anti -Dumping Agreement as a result of their undue 
reliance on AFA.  The USDOC did not identify the necessary information that was missing that 
would have allowed it to effectively apply AFA also in the context of this sunset review and appli ed 
AFA in a manner that does not only violate Article 6.8 and Annex II of the Anti -Dumping 
Agreement but also Articles 11.1, 11.3, and 11.4 of the Anti -Dumping Agreement, as the USDOC 
did not comply with the provisions of Article 6, did not base its determ ination of a likelihood of 
recurrence or continuation of dumping and injury on a sufficient factual basis, and thus maintained 
the measure beyond what was necessary to counteract dumping causing injury.  
 
 
__________