[Federal Register Volume 77, Number 58 (Monday, March 26, 2012)]
[Notices]
[Pages 17410-17413]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-7217]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-580-866]


Bottom Mount Combination Refrigerator-Freezers From the Republic 
of Korea: Final Affirmative Countervailing Duty Determination

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

SUMMARY: The Department of Commerce (the Department) determines that 
countervailable subsidies are being provided to producers and exporters 
of bottom mount combination refrigerator-freezers (bottom mount 
refrigerators) from the Republic of Korea (Korea). For information on 
the estimated subsidy rates, see the ``Suspension of Liquidation'' 
section of this notice.

DATES: Effective Date: March 26, 2012.

FOR FURTHER INFORMATION CONTACT: Myrna L. Lobo, Justin M. Neuman, or 
Milton Koch, AD/CVD Operations, Office 6, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue NW., Washington, DC 20230; telephone: 
(202) 482-2371, (202) 482-0486, and (202) 482-2584, respectively.

SUPPLEMENTARY INFORMATION: 

Background

    The U.S. producer that filed the petition for this investigation is 
Whirlpool Corporation (hereafter, Whirlpool, or ``petitioner''). This 
investigation covers 41 programs. The mandatory respondents in this 
investigation are: (1) Samsung Electronics Co., Ltd. (SEC), and its 
cross-owned affiliates Samsung Gwangju Electronics Co., Ltd. (SGEC) and 
Samsung Electronics Logitech (SEL); (2) LG Electronics (LGE) and its 
cross-owned affiliate, ServeOne Co., Ltd., and (3) Daewoo Electronics 
Corporation (DWE).

Period of Investigation

    The period of investigation for which we are measuring subsidies is 
January 1, 2010, through December 31, 2010.

Case History

    The following events have occurred since the Department published 
the Preliminary Determination.\1\ From September through December 2011, 
the Department issued numerous supplemental questionnaires to all 
parties concerning the New Subsidies Allegations (NSA), cross 
ownership, and other program issues. All parties timely responded to 
the Department's supplemental questionnaires.
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    \1\ See Bottom Mount Combination Refrigerator-Freezers From the 
Republic of Korea: Preliminary Negative Countervailing Duty 
Determination and Alignment of Final Determination With Final 
Antidumping Determination, 76 FR 55044 (September 6, 2011) 
(Preliminary Determination).
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    In September and October 2011, the petitioner filed comments on the 
supplemental responses of LGE and SEC, on the NSA questionnaire 
responses, and on cross-ownership of respondents. On October 17, 2011, 
the Government of Korea (GOK) submitted to the record the public 
version of a verification report from a prior investigation. Also in 
October, SEC filed pre-verification corrections. On October 27, 2011, 
the Department placed independent research on the record. On October 
31, 2011, the Department placed on the record the Preliminary Scope 
Memorandum,\2\ prepared in the companion antidumping duty (AD) 
investigation.
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    \2\ See Memorandum from the Team to Gary Taverman, Acting Deputy 
Assistant Secretary for Antidumping and Countervailing Duty 
Operations, Re: Scope Modification Requests, dated October 26, 2011 
(Preliminary Scope Memorandum).

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[[Page 17411]]

    In November 2011, the petitioner filed new information and comments 
on the NSA supplemental responses of the GOK and DWE, and on suppliers 
and verification issues for LGE and SEC. On November 28, 2011, the 
petitioner met with the Department and filed pre-verification 
comments.\3\ On that date, the Department also issued verification 
outlines to the GOK, LGE, SEC, and DWE.
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    \3\ See Memorandum to the File from Justin Neuman, Meeting with 
Whirlpool Corporation Regarding the Countervailing Duty 
Investigation of Bottom Mount Combination Refrigerator-Freezers from 
the Republic of Korea, dated November 28, 2011.
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    The Department conducted verification from December 5, 2011, 
through December 16, 2011. On December 21, 2011, the Department issued 
its Post-Preliminary Analysis of Cross-ownership and its Post-
Preliminary Analysis of New Subsidy Allegations. On that date, the 
Department also issued its Post-Preliminary Analysis Regarding the 
Restructuring of Daewoo Electronics Corporation.
    On February 2, 2012, the Department issued verification reports for 
LGE and SEC. On February 3, 2012, the Department issued verification 
reports for the GOK and DWE. Also on February 3, 2012, the Department 
met with counsel for SEC.\4\ On February 14, 2012, the GOK, LGE, SEC, 
and DWE filed case briefs. On February 21, 2012, the Department issued 
its Post-Preliminary Analysis: GOK Preferential Lending Under the 
Daewoo Workout, and the GOK, LGE, SEC, and the petitioner filed 
rebuttal briefs. On February 24, 2012, the GOK and DWE filed case 
briefs on GOK Preferential Lending Under the Daewoo Workout. On 
February 27, 2012, the petitioner filed a rebuttal brief on GOK 
Preferential Lending Under the Daewoo Workout. On February 28, 2012, 
the Department held a public hearing, based on the timely requests of 
the petitioner, SEC, LGE, and DWE, filed in September and October 2011. 
On March 5, 2012, the Department met with the GOK and counsel for 
DWE.\5\
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    \4\  See Memorandum to the File from Gary Taverman, Ex Parte 
Meeting with Counsel for Samsung Electronics, Ltd., dated February 
7, 2012.
    \5\ See Memorandum to the File, Ex Parte Meeting with Counsel 
for Daewoo Electronics Corporation Regarding the Countervailing Duty 
Investigation of Bottom Mount Combination Refrigerator-Freezers from 
the Republic of Korea, dated March 7, 2012.
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Scope Comments

    In the Preliminary Determination, the Department stated that it was 
evaluating comments filed by the parties regarding the scope in the 
companion AD investigation. In AD Preliminary Determination,\6\ we did 
not modify the description of the scope of the investigations in the 
manner requested by certain interested parties. Specifically, we did 
not modify the scope to be consistent with the Association of Home 
Appliance Manufacturers definition, nor did we exclude kimchi 
refrigerators or Quatro Cooling Refrigerators from the scope. We did, 
however, clarify the scope to eliminate any ambiguity with respect to 
the inclusion of Quatro Cooling Refrigerators in the scope of the 
investigation. See AD Preliminary Determination, 76 FR at 67690-67691; 
see also Preliminary Scope Memorandum. No party commented on our 
preliminary scope determination. Therefore, we have made no further 
changes to the description of the scope of the investigation.
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    \6\ Notice of Preliminary Determination of Sales at Less Than 
Fair Value, Postponement of Final Determination, and Negative 
Critical Circumstances Determination: Bottom Mount Combination 
Refrigerator-Freezers From the Republic of Korea, 76 FR 67675 
(November 2, 2011) (AD Preliminary Determination).
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Scope of the Investigation

    The products covered by the investigation are all bottom mount 
combination refrigerator-freezers and certain assemblies thereof from 
Korea. For purposes of the investigation, the term ``bottom mount 
combination refrigerator-freezers'' denotes freestanding or built-in 
cabinets that have an integral source of refrigeration using 
compression technology, with all of the following characteristics:
    <bullet> The cabinet contains at least two interior storage 
compartments accessible through one or more separate external doors or 
drawers or a combination thereof;
    <bullet> An upper-most interior storage compartment(s) that is 
accessible through an external door or drawer is either a refrigerator 
compartment or convertible compartment, but is not a freezer 
compartment; \7\ and
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    \7\ The existence of an interior sub-compartment for ice-making 
in an upper-most storage compartment does not render an upper-most 
storage compartment a freezer compartment.
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    <bullet> There is at least one freezer or convertible compartment 
that is mounted below an upper-most interior storage compartment(s).
    For purposes of the investigation, a refrigerator compartment is 
capable of storing food at temperatures above 32 degrees F (0 degrees 
C), a freezer compartment is capable of storing food at temperatures at 
or below 32 degrees F (0 degrees C), and a convertible compartment is 
capable of operating as either a refrigerator compartment or a freezer 
compartment, as defined above.
    Also covered are certain assemblies used in bottom mount 
combination refrigerator-freezers, namely: (1) Any assembled cabinets 
designed for use in bottom mount combination refrigerator-freezers that 
incorporate, at a minimum: (a) An external metal shell, (b) a back 
panel, (c) a deck, (d) an interior plastic liner, (e) wiring, and (f) 
insulation; (2) any assembled external doors designed for use in bottom 
mount combination refrigerator-freezers that incorporate, at a minimum: 
(a) An external metal shell, (b) an interior plastic liner, and (c) 
insulation; and (3) any assembled external drawers designed for use in 
bottom mount combination refrigerator-freezers that incorporate, at a 
minimum: (a) An external metal shell, (b) an interior plastic liner, 
and (c) insulation.
    The products subject to the investigation are currently 
classifiable under subheadings 8418.10.0010, 8418.10.0020, 
8418.10.0030, and 8418.10.0040 of the Harmonized Tariff System of the 
United States (HTSUS). Products subject to this investigation may also 
enter under HTSUS subheadings 8418.21.0010, 8418.21.0020, 8418.21.0030, 
8418.21.0090, and 8418.99.4000, 8418.99.8050, and 8418.99.8060. 
Although the HTSUS subheadings are provided for convenience and customs 
purposes, the written description of the merchandise subject to this 
scope is dispositive.

Analysis of Subsidy Programs and Comments Received

    The subsidy programs under investigation and the issues raised in 
the case and rebuttal briefs by parties in this investigation are 
discussed in Memorandum to Paul Piquado, Assistant Secretary for Import 
Administration, Issues and Decision Memorandum for the Final 
Determination in the Countervailing Duty Investigation of Bottom Mount 
Combination Refrigerator-Freezers from the Republic of Korea (Decision 
Memorandum), which is hereby adopted by this notice. A list of the 
subsidy programs and the issues that parties raised and to which we 
responded in the Decision Memorandum is attached to this notice as an 
Appendix. The Decision Memorandum is a public document, which is on 
file electronically via Import Administration's Antidumping and 
Countervailing Duty Centralized Electronic Service System (IA ACCESS). 
Access to IA ACCESS is available in the Central Records Unit (CRU), 
room 7046 of the main Department of Commerce

[[Page 17412]]

building. In addition, a complete version of the Decision Memorandum is 
also accessible on the Web at http://ia.ita.doc.gov/frn/. The signed 
Decision Memorandum and the electronic versions of the Decision 
Memorandum are identical in content.

Use of Facts Otherwise Available, Including Adverse Inferences

    For purposes of this final determination, we relied, in part, on 
adverse facts available (AFA), as provided for in sections 776(a) and 
(b) of the Tariff Act of 1930, as amended (Act), to determine the 
countervailable subsidy rate for one program under investigation. A 
full discussion of our decision to apply AFA is presented in the 
Decision Memorandum in the section ``Application of Facts Available, 
Including the Application of Adverse Inferences.''

Injury Test

    Because Korea is a ``Subsidies Agreement Country'' within the 
meaning of section 701(b) of the Act, the International Trade 
Commission (ITC) is required to determine pursuant to section 701(a)(2) 
of the Act whether imports of the subject merchandise from Korea 
materially injure, or threaten material injury to, a U.S. industry. On 
May 23, 2011, the ITC published its affirmative preliminary 
determination that there is a reasonable indication that an industry in 
the United States is materially injured by reason of allegedly 
subsidized imports from Korea of subject merchandise.\8\
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    \8\ See Bottom Mount Combination Refrigerator-Freezers From 
Korea and Mexico, 76 FR 29791 (May 23, 2011); and USITC Publication 
4232 entitled Bottom Mount Combination Refrigerator-Freezers From 
Korea and Mexico: Investigation Nos. 701-TA-477 and 731-TA-1180-1181 
(Preliminary) (May 2011).
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Suspension of Liquidation

    In accordance with section 705(c)(1)(B)(i)(I) of the Act, we have 
calculated an individual countervailable subsidy rate for each 
respondent. Section 705(c)(5)(A)(i) of the Act states that for 
companies not individually investigated, we will determine an ``all 
others'' rate equal to the weighted average of the countervailable 
subsidy rates established for exporters and producers individually 
investigated, excluding any zero and de minimis countervailable subsidy 
rates, and any rates based entirely on AFA under section 776 of the 
Act.
    Notwithstanding the language of section 705(c)(5)(A)(i) of the Act, 
we have not calculated the ``all others'' rate by weight averaging the 
rates of DWE and SEC, because doing so risks disclosure of proprietary 
information. Therefore, we have calculated an average rate using other 
information on the record.\9\ Since both DWE and SEC received 
countervailable export subsidies and the ``all others'' rate is an 
average based on the individually investigated exporters and producers, 
the ``all others'' rate includes export subsidies.\10\
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    \9\ See Memorandum to the File, ``Calculation of the All Other 
Rate in the Countervailing Duty Investigation of Bottom Mount 
Combination Refrigerator-Freezers from the Republic Of Korea,'' 
dated concurrently with this notice.
    \10\ See, e.g., Certain Seamless Carbon and Alloy Steel 
Standard, Line, and Pressure Pipe from the People's Republic of 
China: Final Affirmative Countervailing Duty Determination, Final 
Affirmative Critical Circumstances Determination, 75 FR 57444 
(September 21, 2010).

------------------------------------------------------------------------
                                                         Ad valorem net
                        Company                           subsidy rate
                                                            (percent)
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Daewoo Electronics Corporation........................             12.90
LG Electronics Inc....................................              0.30
Samsung Electronics Co., Ltd./Samsung Gwangju                       2.46
 Electronics Co., Ltd.................................
All Others............................................              2.79
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    Because the Preliminary Determination was negative, we did not 
instruct U.S. Customs and Border Protection (CBP) to suspend entries of 
subject merchandise. In accordance with sections 705(c)(1)(B)(ii) and 
(C) of the Act, as applicable, we are directing CBP to suspend 
liquidation of and to require the posting of a cash deposit or bond on 
all imports of the subject merchandise from Korea, other than those 
produced and exported by LGE because LGE's rate is de minimis, that are 
entered, or withdrawn from warehouse, for consumption on or after the 
date of publication of this notice in the Federal Register. The 
suspension of liquidation will remain in effect until further notice.
    If the ITC issues a final affirmative injury determination, we will 
issue a CVD order. If the ITC determines that material injury, or 
threat of material injury, does not exist, this proceeding will be 
terminated and all estimated duties deposited or securities posted as a 
result of the suspension of liquidation will be refunded or canceled.

ITC Notification

    In accordance with section 705(d) of the Act, we will notify the 
ITC of our determination. In addition, we are making available to the 
ITC all non-privileged and non-proprietary information relating to this 
investigation. We will allow the ITC access to all privileged and 
business proprietary information in our files, provided the ITC 
confirms that it will not disclose such information, either publicly or 
under an administrative protective order, without the written consent 
of the Assistant Secretary for Import Administration. In accordance 
with section 705(b)(3) of the Act, because our preliminary 
determination was negative and our final determination is affirmative, 
the ITC will make its final determination within 75 days after the 
Department makes its final determination.

Return or Destruction of Proprietary Information

    In the event that the ITC issues a negative final injury 
determination, this notice will serve as the only reminder to parties 
subject to an administrative protective order (APO) of their 
responsibility concerning the destruction of proprietary information 
disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely 
written notification of the return/destruction of APO materials or 
conversion to judicial protective order is hereby requested. Failure to 
comply with the regulations and terms of an APO is a violation which is 
subject to sanction.
    This determination is issued and published pursuant to sections 
705(d) and 777(i) of the Act.


[[Page 17413]]


    Dated: March 16, 2012.
Paul Piquado,
Assistant Secretary for Import Administration.

Appendix

I. Summary
II. Subsidy Valuation Information
    A. Period of Investigation
    B. Cross-Ownership and Attribution of Subsidies
    C. Allocation Period
    D. Discount Rates and Interest Rate Benchmarks For Loans
    E. Equityworthiness of DWJ and DWE
III. Application of Facts Available, Including the Application of 
Adverse Inferences
IV. Analysis of Programs
    A. Programs Determined To Be Countervailable
    1. Restructuring of Daewoo Electronics Corporation
    a. GOK Equity Infusions under the Daewoo Workout
    b. GOK Preferential Lending under the Daewoo Workout
    2. KDB and IBK Short-Term Discounted Loans for Export 
Receivables
    3. K-SURE Short-term Export Insurance
    4. Tax Programs
    a. Tax Reduction for Research and Manpower Development: RSTA 
10(1)(3)
    b. RSTA Article 25(2) Tax Deductions for Investments in Energy 
Economizing Facilities
    c. RSTA Article 26 Tax Deduction for Facilities Investment
    d. Gwangju Metropolitan City Production Facilities Subsidies: 
Tax Reductions/Tax Exemptions
    e. Gyeongsangnam Province Production Facilities Subsidies: Tax 
Reductions/Tax Exemptions
    5. Grant Programs
    a. GOK Subsidies for ``Green Technology R&D'' and its 
Commercialization
    b. GOK 21st Century Frontier R&D Program/Information Display R&D 
Center Program
    c. R&D Grants Discovered at Verification
    B. Program Determined To Be Not Countervailable
    Gyeongsangnam Province and KEMCO Energy Savings Subsidies/ESF 
Program
    C. Programs Determined To Be Not Used
    1. KEXIM Programs
    A. KEXIM Short-Term Export Credit
    B. KEXIM Export Loan Guarantees
    C. KEXIM Trade Bill Rediscounting Program
    D. KEXIM Export Factoring
    2. K-SURE--Export Credit Guarantees
    3. Gwangju Metropolitan City Programs
    A. Relocation Grants
    B. Facilities Grants
    C. Employment Grants
    D. Training Grants
    E. Consulting Grants
    F. Preferential Financing for Business Restructuring
    G. Interest Grants for the Stabilization of Management Costs
    H. ``Special Support'' for Large Corporate Investors
    I. Research and Development and Other Technical Support Services
    4. Changwon City Subsidy Programs
    A. Relocation Grants
    B. Employment Grants
    C. Training Grants
    D. Facilities Grants
    E. Grant for ``Moving Metropolitan Area-Base Company to 
Changwon''
    F. Preferential Financing for Land Purchase
    G. Financing for the Stabilization of Business Activities
    H. Special Support for Large Companies
    5. Other GOK Programs
    A. Research, Supply, or Workforce Development Investment Tax 
Deductions for ``New Growth Engines'' Under RSTA Art. 10(1)(1)
    B. Research, Supply, or Workforce Development Expense Tax 
Deductions for ``Core Technologies'' Under RSTA Art. 10(1)(2)
    C. Targeted Facilities Subsidies through Korea Finance 
Corporation (KoFC), KDB, and IBK ``New Growth Engines Industry 
Fund''
    D. GOK Green Fund Subsidies
    E. IBK Preferential Loans to Green Enterprises
    F. Gwangju ``Photonics Industry Promotion Project'' (PIPP) 
Product Development Support
V. Analysis of Comments
    Comment 1: Whether RSTA Article 25(2) is De Facto Specific
    Comment 2: Whether RSTA Article 25(2) relates to Subject 
Merchandise
    Comment 3: Whether RSTA Article 26 Benefits are Specific
    Comment 4: Whether RSTA Article 10(1)(3) is De Facto Specific
    Comment 5: Whether the Gwangju Metropolitan City and 
Gyeongsangnam Province Production Facilities Tax Reductions/Tax 
Exemptions are Specific
    Comment 6: Whether KDB/IBK Short-Term Discounted Loans for 
Export Receivables are Specific
    Comment 7: Whether SEC Received KDB/IBK Short-Term Discounted 
Loans for Export Receivables
    Comment 8: Whether D/A and O/A Financing Were Provided in 
Accordance With Market Interest Rates
    Comment 9: Whether K-SURE Charged Adequate Premiums in a Way 
that Covers Its Long-Term Costs and Losses
    Comment 10: Whether the Department Should Apply AFA to Calculate 
a Benefit to SEC from the K-SURE Export Insurance Program
    Comment 11: Whether SEC's K-SURE Payouts Relate to Subject 
Merchandise
    Comment 12: Whether K-SURE Benefits Granted to SEC's U.S. 
Affiliate Are Countervailable
    Comment 13: Whether the Green Technology R&D Program is 
Countervailable
    Comment 14: Whether Green Technology R&D Grants are tied to Non-
Subject Merchandise
    Comment 15: Whether AFA Should be Applied to Grants Received by 
LGE from the 21st Century Frontier R&D Program
    Comment 16: Whether the Department Should Revise the Denominator 
Used to Calculate the Subsidy Rate for LGE's Use of the ``Green 
Technology R&D'' Program
    Comment 17: Whether Grants Received by SGEC for Refrigerator 
Compressor R&D are Countervailable
    Comment 18: Whether the Department Should Apply AFA to Grants 
Received by SGEC for Refrigerator Compressor R&D
    Comment 19: Whether the Department Should Revise Sales 
Denominators to Reflect Changes from Verification
    Comment 20: Whether there is Cross Ownership Among All of the 
Companies in the Samsung Group
    Comment 21: Whether the Attribution Rules Were Correctly Applied 
to the Calculation of Benefits to SGEC, SEL and SEC
    Comment 22: Whether the Department Should Attribute Any 
Subsidies Received by ServeOne to LGE
    Comment 23: Whether the Department Should Continue to Find that 
SEC did not Use Other Programs
    Comment 24: Whether Government Ownership Alone Transforms a 
Financial Institution Into a Government Authority
    Comment 25: Whether the Department Properly Analyzed DWJ's 
Restructuring and Debt Adjustment under CRPA
    Comment 26: Whether Private Investor Participation on DWJ/DWE's 
Creditors' Council Provides a Benchmark
    Comment 27: Whether the Department's Analysis of the 2001 and 
2002 Debt Restructuring Was Correct
    Comment 28: Equityworthiness of DWJ/DWE at the Time of the 2001 
and 2002 Debt-to- Equity Conversions
    Comment 29: Whether the GOK and FSS Used KAMCO to Gain Control 
of DWJ/DWE's Creditors' Council
    Comment 30: Whether the Department Should Establish a Zero Cash 
Deposit Rate for DWE
    Comment 31: Whether the GOK-owned Creditors Held a Supermajority 
in DWE's 29th Creditors' Council Meeting
    Comment 32: Whether the Reclassification of the KAMCO-Held 
Debentures to Long- Term Loans Results in a Countervailable Benefit
    Comment 33: Whether Private Creditors Restructured Their Loans 
on the Same Basis and on the Same Terms

[FR Doc. 2012-7217 Filed 3-23-12; 8:45 am]
BILLING CODE 3510-DS-P